FINANCIAL TIMES | ELIZABETH PATON As New York Fashion Week got under way last week, the Manhattan offices of Tommy Hilfiger were a frenzy of activity.
Sept. 5 (Bloomberg) -- Robert Burke, Chief Executive Officer at Robert Burke Associates, discusses the challenge for retail to find the winning formula combining in-store sales with e-commerce. He speaks on “Bloomberg Surveillance.”
FINANCIAL TIMES | ELISA ANNISS Losing a phone is inconvenient. Losing a £145,000 limited edition Emerald Insane smartphone by Savelli, one of only eight in the world, would be traumatic.
NYT | Vanessa Friedman The list of what the 30-year-old designer Alexander Wang does not look like is long.
In the age of Insta-access, fashion’s calendar lags behind today’s need-it-now shopper. AMY VERNER catches up with the industry mavericks who are attempting revolution.
WWD | DAVID MOIN “We are Canadians. We are based here. We know the Canadian market.”
WASHINGTON POST | ROBIN GIVHAN The American Dream, with all its promise, may have gotten threadbare and worn around the edges, but it still has the power to bring one of its most public champions to tears.
BUSINESS OF FASHION | LISA WANG LONDON, United Kingdom — From his humble roots as the son of a house painter from the Bronx, Ralph Lauren (born Lifshitz) grew a start-up tie business into a global fashion empire with annual sales of over $7 billion.
May 23 (Bloomberg) -- In today's "Morning Must Read," Bloomberg’s Scarlet Fu recaps the op-ed pieces and analyst notes providing insight behind today's headlines on Bloomberg Television's "Bloomberg Surveillance.”
May 23 (Bloomberg) -- Robert Burke, chairman and Chief Executive Officer at Robert Burke Associates, discusses the sales slowdown for teen retail and the overall concerns for retailers following the harsh winter weather. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”
WOMEN"S WEAR DAILY | MILES SOCHA DUBAI — Dubai’s ambitions for tourism are as steep as the Burj Khalifa: almost doubling annual visitors to 20 million by the year 2020.
WWD FOOTWEAR NEWS | JOCELYN ANDERSON Get ready for an all-new Bally.
FINANCIAL TIMES | VANESSA FRIEDMAN Big (literally) news on Monday in the FT that on Sunday, thanks to a government recalculation, Nigeria’s GDP has now become the biggest in Africa, and the 26th biggest in the world, valued at $509bn.
BLOOMBERG BUSINESSWEEK | COTTEN TIMBERLAKE
PARIS, France — Sophie Fiszman, a Paris finance executive with a taste for fashion, used to stick to European brands like Louis Vuitton and Gucci. No longer.
Now she shops at the Michael Kors store on Paris’s tony Rue Saint-Honoré, joining a growing contingent of European consumers who have embraced the American designer. She recently bought a blue python-print bag at the store, pleased that she could find such a purse for less than 300 euros ($412).
“The price is very good for what you get,” said Fiszman, 53, who works as co-director general for OFI Asset Management. “I like the new style they have.”
For Michael Kors Holdings Ltd., the burgeoning appeal is letting the brand outpace European luxury handbag makers in their own backyard. After challenging Coach Inc. in the U.S., Kors is opening stores near those of European rivals, aiming to steal customers with self-described “jet-set” looks and relatively low prices.
The company’s European sales more than doubled to $140.3 million during the holiday quarter, accounting for 14 percent of its total revenue. The European luxury-goods industry, meanwhile, grew just 2 percent last year, slowing from a 5 percent rate in 2012, according to Bain & Co.
Kors’s European store openings are being met with “great anticipation” and goods are selling out, according to Chief Executive Officer John Idol. The designer’s record for getting trends right is appreciated by the European shopper, who is astute about fashion, he said on a February conference call.
Biggest Market
The challenge for Kors now is winning over the holdouts — Europeans who remain leery of American attempts to produce luxury fashion. The company also is less diversified than the industry’s giants and growing from a much smaller base. LVMH Moet Hennessy Louis Vuitton SA sells everything from cognac to fine jewelry, while Kering SA owns brands ranging from Gucci to Saint Laurent.
Europe’s residents and tourists buy 34 percent of the world’s luxury goods, according to Bain, making the region the single biggest battleground for high-end brands. Globally, the industry generated about $300 billion in sales last year, Bain estimates.
The European inroads have helped send Kors’s stock up almost fivefold since its initial public offering in 2011. The shares fell 2.5 percent to $92.64 yesterday in New York.
Before the financial crisis in 2008, more luxury consumers were loyal to their favorite high-end European brand and wore it head-to-toe, said Lorna Hall, head of retail and strategy for the London fashion forecasting firm WGSN.
“They wouldn’t slum it,” she said.
Mixing Brands
Then came the recession, followed by a slow recovery. The euro region’s economy contracted again in 2012 and barely grew in 2013 after an initial rebound.
In recent years, many European consumers have been adopting more “contemporary” fashion, which often costs less than designer goods, Hall said. The Internet also has fueled an internationalization of taste, she said. That means the typical European consumer may be wearing a mix of high- and low-end brands.
“She is more open-minded,” Hall said, “She might have a Michael Kors bag and Gucci loafers and a Zara top.”
European brands have sought to tout their exclusivity by opening fewer new stores and pushing up prices, said Robert Burke, founder of a New York-based luxury consulting firm. That’s created a particularly good opportunity for Kors to step in with more affordable merchandise, he said.
Mulberry’s Struggles
Mulberry Group Plc, for instance, tried to make its brand more expensive and suffered for it. After embarking on a plan to court more upscale shoppers globally, the Somerset, England- based handbag maker saw sales shrink in its last fiscal year. Mulberry lost two-thirds of its market value, and CEO Bruno Guillon announced plans to step down last month.
A Michael Kors bag is seen as a status symbol for “smart shoppers,” since it suggests that they spent less and got more, said Pam Danziger, founder of luxury research firm Unity Marketing Inc. in Stevens, Pennsylvania.
Not everybody is a fan. Maria Maortua, a 29-year-old developer of pop-up stores in Madrid, said she has never bought a Kors purse because she feels the label is overexposed and doesn’t produce true luxury.
“The brand name appears everywhere,” she said. “That is why I don’t like it very much.”
While Kors’s European blitz hasn’t appealed to everyone, it’s helped elevate the brand from relative obscurity two years ago. In February 2012, its European holiday quarter sales amounted to barely $28 million, and just 35 percent of survey respondents in the region were aware of the designer.
‘Project Runway’
That compared with 70 percent in the U.S., where celebrities wear the brand and it has wider distribution. Michael Kors himself had gained fame for appearing as a judge on reality TV show “Project Runway.” The 54-year-old designer, who is based in New York, left that job in 2012.
Kors sought to boost its European recognition by increasing marketing and opening stores in high-profile locations. It ended last quarter with 76 European stores and plans to add 36 this fiscal year.
Idol believes the region can support 200 Kors retail locations in total, generating revenue in excess of $1 billion. Two years ago, he had only foreseen 100 stores.
Coach, based in New York, has opened stores in Europe as well, though it only has about as third as many. Kors also is expanding in the region faster than fellow American design houses such as Kate Spade & Co. and Tory Burch. Kors’s upscale locations include New Bond Street in London and Via della Spiga in Milan.
Overhead Costs
The company’s selling, general and administration expenses jumped almost 55 percent last quarter to $254.6 million, partly because of its higher store count and advertising spending.
The marketing is hard to miss, said Allegra Perry, an equities analyst at Cantor Fitzgerald in London.
“I was amazed at how much advertising there was for Michael Kors in Paris in the subway, at the bus stops, on the streets, everywhere,” she said.
At Kors stores open at least a year, sales increased 73 percent last quarter. LVMH and Kering remain much larger, though they don’t report directly comparable figures.
“We’re starting to take market share there,” Idol said on the call. Kors declined to comment for this story, as did LVMH and Kering, both of which are based in Paris.
Under 1,000 Euros
Kors uses the European formula of creating high-profile runway fashion, though it produces goods at lower prices and adds a dash of American novelty, Perry said. Most of its bags cost 300 to 1,000 euros, compared with 1,000 to 2,000 euros for its biggest European rivals, she said.
Kors has successfully appealed to the European aspirational customer, who has been hungry for new brands, as well as top-of- the-line shoppers, Burke said. The company also is siphoning off tourists, including Chinese travelers, who had been buying the French and Italian brands, he said.
“It appeals to the customer at the very high tier,” Burke said. “There are European consumers who might be able to afford any bag they want, but they want something that is fashion- forward and that is also very American classic.”
By Cotten Timberlake, with assistance from Andrew Roberts; Editor: Nick Turner
Robert Burke, Chairman & CEO at Robert Burke Associates, and Bloomberg Contributing Editor David Kirkpatrick preview fashion week and examine technology’s role in the fashion industry on Bloomberg Television’s “Bloomberg Surveillance.”
Reed Krakoff
NEW YORK TIMES | RUTH LA FERLA
Dana Taylor, a model, stood straight as a maypole as Reed Krakoff circled, paused, then peered intently at his handiwork. Ms. Taylor was wearing Mr. Krakoff’s cobalt-blue sleeveless officer’s coat, a sample from the fall collection he will show on Wednesday, a piece stripped to its essentials: welted seams, slant pockets and a pair of outsize lapels its only embellishment.
Was it too much? Too little? Mr. Krakoff considered before snatching up a swatch of matching blue leather, attaching it briefly to a lapel, then rejecting that notion, slipping it beneath the coat like a T-shirt. He toyed with the neckline, gathering it in his fingers. Then something clicked. “I like the ruched effect,” he said. “And we might finish it with a little black tape on the top.”
Then again, maybe not. With just two weeks remaining before his runway presentation in Chelsea. Mr. Krakoff was in the fitting phase of his collection, the first he will show since buying his namesake business from Coach last year to introduce a label that was conceived at the outset to compete in the fashion world’s top echelon.
Bound to strike some industry insiders as an act of sheer chutzpah, Mr. Krakoff’s departure from the company that nurtured him and that he helped recast as a global megabrand, has, on the eve of New York Fashion Week, placed him under redoubled scrutiny.
“His timing took guts,” said Robert Burke, a New York retail consultant. “The expertise and the needs in luxury fashion require a different skill set.”
Was he feeling the pressure? Not much, Mr. Krakoff said the other day, though the designer, 50, was, in fact, striving quite visibly to affect an aura of masterly serenity. Pacing his temporary headquarters in the Coach building on West 34th Street, his office a soothing medley of springy gray carpet and gray felt-covered furniture, he pondered a collection that, like Mr. Krakoff himself, is in continual flux.
Inevitably at this juncture, “nothing looks good,” Mr. Krakoff said flatly. “Then something goes well and you’re happy again. Those moments of self-doubt in between are part of the process.”
That candor was unexpected, coming as it did from the former Coach executive creative director whose octopus reach extended into clothing and accessories, advertising, store design and merchandising, and who, during his 16-year tenure at the company’s creative helm, sold handbags, fragrances, jewelry raincoats, shoes and ready-to-wear, elevating the $500 million brand into a retail behemoth with revenues of more than $4 billion.
It was, after all, Mr. Krakoff who, in a New Yorker interview after the debut four years ago of his first high-end collection at Coach, told the writer Ariel Levy, “It’s not that I have the best answer, but I have the right answer.” Indeed, Mr. Krakoff seemed fixed at the time on presenting himself, from his stern black-rimmed glasses to the elongated tips of his John Lobb shoes, as a man with a plan.
But the other day, it was a strikingly low-key, soft-spoken Mr. Krakoff who stood sliding a length of rubber-dotted lace inside a black-and-white shearling aviator coat. “Nothing I do is planful,” he said, making free with the language, as is his wont. “You are always kind of schmooshing things together to see how they feel.
“I don’t think much happens creatively if you are too much in control.”
Letting go, he said, repeatedly, has become integral to his learning curve, his method a developing process of trial and error. “Fashion is a dialogue with your customer,” he said. “You want for people to respond to your work.”
Those who have include Julianna Margulies, who wore a modestly embellished Reed Krakoff gown to the Golden Globes last month; the models Stella Tennant and Laetitia Casta, who have featured prominently in Mr. Krakoff’s advertising campaigns; and most influentially, Michelle Obama, who wore Reed Krakoff on inauguration day in 21012 and, again, for her official portrait last year.
They were clients he has never had to chase, Mr. Krakoff all but boasted the other day. When Julianne Moore, like Mr. Krakoff, an aficionado of midcentury and contemporary design, first approached him, “we found we had a lot in common,” he said. “On an aesthetic level, we really connected.”
Designer and actress cemented their friendship in the late 1990s, after he photographed her for a Coach campaign. These days she counts among her go-to pieces a leather “track bag,” an understated tote with a stark white stripe down the side, and a leather-piped black cashmere coat. “They are clean, not tricky, and they have a lot of integrity,” Ms. Moore said. “As a designer, he gets better all the time.”
But his true aesthetic beacon has been Delphine Krakoff, his wife. “Her style,” he said, “is the ultimate expression of my brand.” A gamine figure sheathed in orange or white, according to the season, Ms. Krakoff greets guests at her husband’s shows, and stands beaming her approval as the models saunter along the runway.
“Everything she does is considered, and at the same time everything feels natural,” he said. “We’re both purists.” Mr. Krakoff may consult with her by phone six times a day. “She will tell me what she likes and what she doesn’t like, and why.”
He is otherwise learning to silence the cacophony of critical voices in his head. “To me, it’s the hardest thing in the creative process,” he said. “You have to learn how to trust yourself.”
His confidence, fragile at first, has firmed by degrees. The debut in 2010 of the first Reed Krakoff collection, designed while he was still at Coach, freed him, part of the time, to stop chasing mass appeal and play, rather showily, to a more discerning, moneyed crowd.
There were flaring leather military coats, shearling jackets and belted and buckled frocks, their lines influenced obliquely by Modernists like Alexander Calder and Jean Arp, whose pieces are displayed in his townhouse on the Upper East Side. Still others seemed indebted to Helmut Lang and Phoebe Philo of Céline and industrial designers like Marc Newson, whose work has long been a touchstone and is captured on Mr. Krakoff’s Instagram account.
In all, Mr. Krakoff has positioned himself as a man of protean talents, his multiple passions moving him to create chairs and lamps and a body of black-and-white photography. Portraits of models, boxers and, most glamorously, his wife are hung from a picture rail over his desk.
“I don’t see myself as a fashion designer,” he said, explaining his restless pursuit of things streamlined and austere. “I see myself as a person in design.”
Elements of the art, architecture and furniture design that Mr. Krakoff so visibly champions have found their way into his fashions as well, the sensuous curves of an Arp table filtering onto his runway, and the hand-drawn Sharpie lines reproduced on his new porcelain collection meandering onto a shirt for fall.
That visible cross-pollination, and an adamantine refusal to be categorized, represents “a new way of doing things,” Mr. Krakoff said. So new to some that his earliest collections were greeted with skepticism or dismissed outright as starchy, pretentious and, most damningly, unwearable.
“Krakoff has a way to go,” Women’s Wear Daily wrote of his inaugural collection. “Cut from thick-looking leather, long skirts and wide pants read heavy. More significantly, often they felt like cover for a clear point of view.”
In assembling a creative team that included Valérie Hermann, formerly the president and chief executive of Yves Saint Laurent, Mr. Krakoff invited complaints of dilettantism. As Cathy Horyn put it in a review in The New York Times, Ms. Hermann “will leave her dream job to run the vanity label of Reed Krakoff, the creative director of Coach, whose one dream is apparently to be successful.”
The comments stung. They were reflected in what was widely considered a poor retail performance. Coach declined to provide sales figures. Looking back, Mr. Krakoff acknowledged that he flailed at first. “Those earlier collections were just me, trying a lot of things,” he said. “Sometimes they became too forced.”
There are signs, though, that Mr. Krakoff is loosening up. His spring 2014 collection was compelling, said Mr. Burke, the retail consultant. “There were plenty of luxurious silks, cashmeres and leathers that were sophisticated and modern, but not stiff,” he said.
Milton Pedraza, the chief executive of the Luxury Institute, a brand consulting firm, chalked up Mr. Krakoff’s bumpy ride to growing pains. “The experience of having some pushback is part of a designer’s maturation process,” he said. “I don’t think he’s been damaged by any of this.”
Certainly, Mr. Krakoff has toughened. “To get on this business,” he allowed the other day, “you need a really thick skin.”
“You need to think it doesn’t matter what other people think,” he continued, “to believe that you can invent something that’s nonnegotiable.”
And then, like a gridiron hero, to run with it.
WASHINGTON POST | Roxanne Roberts It started with sneakers. When he was about 10, Brett Johnson began customizing his white Nike Air Force 1’s, adding fabrics and touches to make them one-of-a-kind. “I felt they told a story,” he says. “And my mom would preach that women always look at a man’s shoes.”
Then again, the son of BET founders Bob and Sheila Johnson always had a leg up on other kids when it came to exploring his creative side. His personal shoe collection now numbers 600 pairs, and last fall he launched the Brett Johnson Collection, a line of luxury streetwear for men.
“Dude, I didn’t know you were ballin’ like this!” says former Redskin Darrell Green. “I look good.”
Green showed up at Johnson’s trunk show Saturday in Middleburg, where he slipped on a baby soft leather bomber vest with sheepskin trim. At $1,695, it’s the most expensive item in Johnson’s small collection; Green was also eyeing a black wool vest with leather trim ($695) and another casual jacket. According to its young creator, it’s contemporary clothing designed for fashion-savvy guys who rarely slip on suits but like high-end fabrics and craftsmanship: artists, celebrities, tech moguls and athletes of any age.
“I’m 54 next month and I’m still cool,” Green says with a laugh.
Sold. Johnson is one more satisfied customer closer to his dream.
His self-made parents are worth $1 billion or so, which they split when they divorced a decade ago. That fortune launched their children into a world of almost unlimited choices, with all the advantages and pitfalls extreme wealth can bring. Daughter Paige, 28, fell in love with horses as a young girl and is a champion equestrian; Brett, 24, wanted to be a fashion designer — one of the most challenging and competitive businesses out there.
“Brett always knew he wanted to do this, but I didn’t pay much attention to it because I thought it was just a phase he was going through,” his mother says. Loving fashion — and wearing Louis Vuitton and Lanvin — didn’t mean he could design clothes himself. Both parents insisted he go to college, where he studied sociology instead of business because, as he explains, “I have two of the best professors at home.”
But he quickly bored of classrooms and was itching to start a career in design. His mother was skeptical: “Do you understand what you’re really getting yourself into?” It took two years and a “bit of a tussle” before his parents finally agreed to let him, at age 21, dive into the fashion business.
At first, he just focused on shoes, trying to create a high-end sneaker that sold for $295, something between Nike and Gucci. He started with three styles — all with a signature orange footprint — which he shopped around. The feedback? Cool, but he needed more to create a viable line. Johnson added outerwear and polos for his first collection. (And then pants, sweaters, belts and scarves for the second.)
He headed to Florence, where he picked out leathers and fabrics and began the “very intricate” manufacturing process. Spliting time between his Arlington County home, a Bethesda office and a New York showroom, he’s both boss and student — up at 4 a.m. to micro-manage details via Skype with the Italian factory, touring tanneries to discover new leathers and finishes.
His vision: A line of “contemporary luxury” for “creatives,” all those young power players in hoodies. His designer role models are Brunello Cucinelli, the Italian designer who specializes in cashmere, and London-based Ozwald Boateng, best known for his classic bespoke suits. Johnson is trying to create a brand that blends the best fabrics with a street sensibility. “I look at it as art,” he says. “I’m tired of seeing terrible product.”
Affable but a little shy, he’s humble enough to admit he hit the family lottery and smart enough to understand how hard it will be to be taken seriously. “Being the son of Bob and Sheila Johnson creates another hurdle,” he says. “I just want my work to speak for itself.”
Easier said than done: One of the few VIP heirs with a serious fashion career is Stella McCartney — daughter of the Beatles’ Paul McCartney — who got her start in 1995 when supermodel friends Naomi Campbell and Kate Moss modeled her design school collection; just two years later, she was named head designer at Chloe. Some groused that the McCartney name jump-started her rise, but the designs established her as a talent in her own right.
Johnson has a famous name, famous friends and, like almost every other newcomer in fashion, his family as primary investors and cheerleaders.
As chairman of New York’s Parsons The New School for Design for seven years, his mother introduced him to designer friends such as Donna Karan and Tim Gunn, loaned her private plane and traveled with him to Italy to tour factories. “He had more knowledge than I had ever thought,” she says. “It was a matter of me sitting back and letting him blossom.”
Although she stayed in the background, Saturday’s trunk show was held at Sheila Johnson’s new Salamander Resort & Spa in Middleburg. Waiters offered prosecco and hors d’oeuvres as well-heeled men and women wandered in the resort’s gift shop, where Brett Johnson’s outerwear and sneakers were set up amid sweet-smelling designer soap and golf shirts. The party was something of a two-fer: A couple of family friends dropped by to offer Johnson congratulations and to wish his mother a happy birthday.
His father put up most of the start-up capital for his son’s venture. “Brett’s business model is not just a wealthy dad indulging his son,” says Bob Johnson, well aware that that’s how a lot of people might see it. “He believes in it, I believe in it, and I have some smart outside people who are advising him and encouraged by what he’s trying to achieve.”
As the biggest investor (he declined to discuss the amount), the elder Johnson required his son to come up with a business plan and said he was persuaded by his son’s passion, work ethic and design team. He’s not concerned that Brett didn’t go to design school because, well, he didn’t go to business school before founding BET, and that worked out just fine.
As investors go, a designer couldn’t ask for more: There’s no timetable in years or cap on financial support. “He’ll have time,” Bob Johnson says. “Some things will work and some things will fail, but he’ll have the time and resources to recover.”
Money, time, even fame are no guarantee of success: Rapper Kanye West had all three when he launched a women’s line in 2012. It was largely mocked by fashion insiders as a disaster, mostly because West had the resources to do anything he wanted — and (shocker) didn’t listen to advice.
Most designers last three seasons or less, doomed by a crowded field and store buyers reluctant to give floor space to unproven brands. African American designers have a harder time getting recognition: Only a handful appear in New York’s Fashion Week, and even fewer are featured in top department stores. Tracy Reese, one of the most successful black designers in business today, failed at her first attempt to launch her line. Despite all the talented African American designers working behind the scenes at major labels, none has won a prestigious Council of Fashion Designers of America award, the industry’s top prize — except Sean “P. Diddy” Combs, a celebrity who does not design his own line.
“Breaking into the market today can be challenging for young designers because there are so many brands competing for attention, but there are definitely opportunities for designers that make a strong statement or offer niche collections,” says Robert Burke, chief executive of Robert Burke Associates, a luxury retail consulting group. “If we think about designers like Alexander Wang or Jason Wu, they’ve both achieved success and recognition because they offered fresh perspectives and distinguished themselves from what others were doing.” Johnson’s resources will certainly help, he says, “but the success of that label will ultimately depend on how strong the product is, how focused it is and if it captures the attention of its target audience.”
At this point, nobody knows whether Brett Johnson will be another Stella McCartney or simply another rich kid with his logo on some shoes. The big challenge now is to win over store buyers and then customers. The collection was introduced in a soft launch at parties last fall, and he’s hoping for a New York show. There’s a Web site, ads in luxury magazines and famous friends (the Redskins’ Josh Morgan and Pierre Garcon, celebrities Kevin Hart and Bradley Cooper) interested in helping out. Johnson says he’s sold about 40 pieces of outerwear and 200 pairs of sneakers in the past two months.
“Some good traction,” he says, with a relieved smile. Or, as his father aptly put it, “He’s got runway.”