Hold the myrrh
Gold and frankincense are so two millennia ago
October 18, 2014
NOT everyone finds Christmas easy. Some people have so much money that they cannot think what to spend it on. Every year Neiman Marcus, a posh department store, takes pity on these unfortunate souls by offering them its Christmas catalogue, stuffed with ideas to empty even the fattest wallet.
For example, sporty couples can buy “His and Hers” Quadskis for $50,000 each. These are jet skis that convert into quad bikes in about five seconds (pictured). And they come in a turtle print. Shoppers who wish to relax can buy an elaborate cocktail shaker for $35,000. It comes with a year’s supply of gin and a class for 20 guests with a “mixology” expert.
Many luxury brands are now ubiquitous, which robs them of their snob value. What the truly rich want is “unique experiences”, says Milton Pedraza of the Luxury Institute, a consultancy. Neiman Marcus offers plenty of those. For $125,000 you can ride a Mardi Gras float in New Orleans. For $425,000 you can attend the Vanity Fair Oscar party, having first been glammed up by a style expert so that the other revellers won’t think you are a gatecrasher.
The costliest item in this year’s book is the “House of Creed Bespoke Fragrance Journey”. For $475,000 you can fly to Paris and have a master perfumier create a scent that perfectly suits you. You also get “white-glove car service, private tours and other experiences befitting the royally amazing you”. Your correspondent tried to expense such a trip, for research purposes, but her Scrooge-like editor said no.
Ginger Reeder, who handpicks all the “fantasy items” for the catalogue, does not expect to sell everything. Selling is not the point. “They are chosen for their uniqueness and their publicity value,” she says. In 1997, for instance, Neiman Marcus was unable to offload first editions of 90 of America’s greatest novels, from “The Great Gatsby” to “Catch-22”, but Ms Reeder found some comfort when she received 600 requests for the book-list.
The shop’s most expensive gift ever was a Boeing jet for $35m in 1999. The most memorable have included a submarine ($20m), a mean-spirited camel who spat a lot (Neiman Marcus no longer includes animals in the catalogue) and “His and Hers” mummy cases for $6,000 in 1971 ($35,000 in modern money). A mummy was unexpectedly discovered in one sarcophagus, which caused a spot of bother. A death certificate had to be issued before it could be delivered. Gift wrapping was optional.
Rita Ora was traveling quasi-incognito when she was snapped this year at Los Angeles International Airport wearing outsize shades, a blush-tone carryall, Air Jordans and a cushy sweatshirt, its hood pulled seductively over her brow.
Olivia Wilde recently strode the same passageways, the picture of ease in a biker coat … and sweatshirt, as did Rosie Huntington-Whiteley, who sallied toward the airport lounge wearing a dark fedora and … hey now, you know the refrain.
At the airport, a hub for the paparazzi, who tend to treat its fluid corridors as a makeshift red carpet, off-duty models and Hollywood A-listers have been flaunting their sweatshirts with careless élan, wearing versions embellished with eye-catching slogans, cartoons and jewels and pretty florettes or, alternately, opting for standard issue, raglan-sleeve varieties meant to signal, one suspects, that the wearer is just like you and me.
Clearly civilians relate, which may be why this cozy insignia of slacker chic, once reserved for furtive cigarette jaunts to the 7-Eleven or late nights on the sofa, binge-watching “Revenge,” has become the would-be style-setter’s trophy of choice, an item for all seasons — and occasions.
Its transition from nondescript wardrobe standby, the fashion equivalent of mac and cheese, to luxurious fashion mainstay now seems to have been all but inevitable. “The world of luxury has gone somewhat casual,” said Milton Pedraza, chief executive of the Luxury Institute, a consulting firm. “A lot of people don’t see sweatshirts as basic items anymore.”
Conversely, Mr. Pedraza noted, “a lot of basic items have gone premium.” He may have had in mind the sumptuous interpretations of this humble item that appeared on fall runways and are sold at Neiman Marcus, Nordstrom and Barneys New York and on upscale websites. Prices veer from $30 for an orchid-printed top by Altuzarra for Target to more than $4,400 for a Fendi version ornamented with fake fur, felt, swaths of mesh and crystal, but then, who’s counting?
Such gussied-up sweats can still play down one’s wealth while conferring enough raffishness to suggest that the wearer is too young, too prodigiously gifted or simply too chic to go in for a conventional 9-to-5 uniform. Indeed, these days the only thing inelegant about this once unexceptional garment is its name. And even that has had an upgrade.
Statement sweats, as they’re known in fashion-speak, emerged on the runways over two years ago, making their debut on the runway at Givenchy in the form of a photo-collage sweatshirt, followed last fall with a Bambi-print variation that became an instant fashion hit. The look gained traction in the spring with the parade of high-end sweatshirts at Theory, Kenzo and Alexander Wang, whose white shirt, cheekily inscribed with a “Parental Advisory” legend, was a fashion editor’s favorite.
Sweats were reprised for fall at Rag & Bone, where a satin shirt was paired with paint-splatter jeans; at 3.1 Phillip Lim, with burnt-orange leather hoodies; and at Isabel Marant, where a lustrous camouflage shirt was shown with baggy fatigues. Surviving yet another season, they emerged for spring 2015 in a boxy version with cutoff sleeves at Jil Sander, covered in multihued sequins at Dsquared2, in a sunburst design at Fausto Puglisi, in silver at Norma Kamali and as a sleeveless top with an extravagant bow and as an evening dress at Bottega Veneta.
Like biker jackets, sneakers and skinny jeans before them, statement sweats have proved their staying power.
“Today it would be a misnomer to use the word ‘trend’ in reference to the sweatshirt,” said Tomoko Ogura, the senior fashion director at Barneys. Ever-evolving, it is now cut in sophisticated fabrics, including but by no means confined to cashmere, chiffon, organza, leather and lace, and offered in varying textures and shapes. So lavishly garnished are some that they are hard to place as sweatshirts at all. Yet consumers are responding, Ms. Ogura said, “because, while the designer’s hand is apparent, their utility is not compromised.”
Their utilitarian provenance is a talking point, indeed a boasting point, among luxury consumers who like to wear their shirts subversively with tuxedo pants or furs or, conversely, to throw on a sequin-encrusted versions to lend dazzle to their leggings or jeans. It’s like wearing a Casio watch with your Brunello Cucinelli cashmere pullover, suggesting a kind of inverse snobbery. “Like you’re playing the game without quite really playing the game,” Mr. Pedraza said.
In some quarters, sweatshirts, like sneakers, remain the great fashion leveler. Paraded this summer in men’s shows as diverse as Bottega Veneta, Neil Barrett and Lacoste, they seemed intended to mask distinctions of class and income or to render them obsolete. “Turns out,” as Guy Trebay noted in a New York Times fashion review, “Mark Zuckerberg didn’t need to outgrow his hoodie and shower shoes.” (Which is not to neglect those 99-percenters repurposing their gym togs as everyday wear in apparent deference to Gap’s recent injunction, in a series of fashion ads, to “dress normal.”)
“Sweatshirts flourish because they work for every demographic and every retail category — men’s, kids, junior contemporary and designer,” said Sheila Aimette, a vice president at the trend forecasting company WGSN. “They are cross-generational and cross-gender.”
Madeline Alford, a digital editorial assistant at Luckymag.com, has incorporated sweats into her workday regalia. Taking her style cues from the Lucky fashion staff, she may, on any given day, combine her black tubular jeans or leather midi-skirt with an oversize sweatshirt. “Instead of a chunky sweater, you could definitely wear a fleece,” she said, “something still warm and efficient.”
Function trumps showiness among Ms. Alford’s priorities. Fashion, she noted, has been gradually turning its back on the flamboyant extremes of street style in favor of a more accessible look. “Much as we love all that crazy, out-there style, it’s not for everybody,” she said.
Sweatshirts, on the other hand, merit her unstinting approval. “They’re what real women wear all the time,” she said.
By Sarah Mahoney
September 17, 2014
Talk about the clash of the titaniums: For centuries, nothing has said “Master of the Universe” as elegantly as a five- (or maybe even six-) figure watch. Yet for status-seekers who pride themselves on being early adopters, sporting the neighborhood’s first Apple Watch will be a big deal. (Especially since the tech insiders over at CNET are speculating that while Apple’s entry-level watch will be priced at $349, gold ones might sell for as much as $5,000.)
While Tag Heuer has said it’s working on its own smartwatch (and has already developed a smartphone), most luxury watch brands seem confident that the old-world chic of the Swiss will outlast any Silicon Valley buzz. And why shouldn’t they be? Sales of luxury timepieces are strong, and online interest for luxury watches is up 7% in the second quarter of this year, compared to the same period a year ago, according to the World Watch Report. In the U.S., that growth is relatively faint. But in the developing world, curiosity is rising fast: Online interest in these watches soared 23% in China, 22% in India, and 20% in Saudi Arabia. (Rolex is by far the most search-for brand, it says, followed by Omega, Cartier, Tag Heuer and Patek Phillippe.)
“The Apple Watch is a product that is not useful if you don’t own an iPhone,” says David Sadigh, CEO of the Geneva-based Digital Luxury Group, which publishes the report. “It’s a product that has been launched to bolster iPhones sales and put a first foot in the door into the smartwatch market. It won’t have a dramatic impact on the Swiss watch market at this stage, as the majority of the market is composed of brands at a luxury level,” he tells Marketing Daily in an email.
For now, watch brands seem to agree, and are ignoring the onslaught that so many techies are predicting. Piaget, for example, is unveiling a new “Perfection in Life” global advertising campaign, which positions its sexy timepieces in some of the planet’s prettiest places, including Geneva, Paris, “La Côte d’Azur,” and Los Angeles, and could have been taken straight out of a1960s jet-set travelogue. Shot by photographer Maud Rémy-Lonvis, they make each piece a hero: The world thinnest automatic watch, the Piaget Altiplano, for example, towers above the Manhattan skyline, while the Piaget Limelight Gala, with white gold set with diamonds, sparkles over the Hollywood Hills.
And just to prove it’s not completely unaware of the digital age, the company describes the effort as a “360° brand concept,” supported by social media. Consumers can post pictures of their own favorite cities to Instagram, hashtagged #Piaget and #PerfectionInLife, the submitted photos will be entered into a contest. A special Piaget jury will select 5 winning photos from the 50 that receive the most likes, and says they will be displayed in Piaget boutiques worldwide.
What the designers of smartwatches and wearables are missing, says Milton Pedraza, CEO of the Luxury Institute, “is that smartwatches like the Apple Watch are accessories. They’re functional, but they’re not emotional. Luxury watch buyers see their timepieces as art, an adornment, made with true artisanship. So they’re missing half the equation. Smartwatches don’t have the personality that luxury watches do.”
And while there will doubtless be luxury consumers who already own classic timepieces and who buy smartwatches too, “there’s only so much real estate on the wrist.” That means there a tremendous opportunity for tech companies to partner with luxury watch marketers, “to move beyond the generic, dramatically improve the aesthetic, and increase the appeal.”
For now, though, says Sadigh, “folks at Vacheron Constantin, Rolex and Patek Philippe can still sleep well at night.”
After the shooting of unarmed teenager Michael Brown and the recent clashes in Ferguson, Missouri, racial profiling has returned to the national spotlight.
Department store chain Macy’s reached a $650,000 settlement Wednesday with the New York Attorney General’s office over racial profiling practices, which shows how deep the issue runs. This is the second settlement since 2005 for Macy’s, and the deal comes about a week after a similar agreement was reached with the Madison Avenue luxury store Barney’s.
The most recent investigation has found that African-American and Hispanic shoppers were detained at “significantly higher rates” for alleged shoplifting than white shoppers.
Retail researcher Paula Rosenblum says racial profiling is frequently an afterthought in the industry.
“They mostly advise their store associates to watch out for people who look suspicious,” she says.
Milton Pedraza, founder and CEO of the Luxury Institute, says retailers have every incentive to train front-line and security staff so every customer feels welcome.
“Even if you didn’t have moral clarity on the issue, at least you should have economic clarity on the issue,” he says.
Pedraza says stealing a shirt is insignificant compared to the additional sales that come from building a reputation as a kind and generous merchant.
For its part, Macy’s has agreed to make several changes, including an effort to improve its anti-shoplifting practices and plans to distribute an anti-racial-profiling memo to workers.
Simma Lieberman, who works with retailers on diversity and what she calls “cultural intelligence” says employers should know profiling is often unconscious. Lieberman trains her clients to monitor their own personal biases. Often, she says, shop clerks are quick to make assumptions, and “they don’t get to behavior, they just look at what somebody looks like.”
The danger, says Lieberman, is in our rush to judgment, when we “assume someone is going to have a certain behavior, which they may not have.”
By: Marina Strauss
The Globe and Mail
August 18, 2014
For Karen McKibbin, getting it right is more important than doing it fast in her latest assignment at upscale U.S. chain Nordstrom Inc.
The president of Nordstrom’s Canadian division has been gearing up for two years for the launch of its first store here on Sept. 19 in Calgary’s Chinook Centre. She watched another U.S. retail giant – discounter Target Corp. – stumble in rapidly introducing its first 124 outlets in this country in 2013 amid customer complaints of empty shelves and overhigh prices.
Nordstrom is taking a decidedly different approach from Target, opening its first six stores gradually over 2 1/2 years, she said.
“We are going to stub our toe – we are not going to get everything perfect,” she said in a telephone interview from Calgary, where she has been spending three or four days a week commuting from Nordstrom’s Seattle headquarters. “You can expect us to make changes and respond in real time. We are certainly not resting on our laurels.”
A lot is riding on Ms. McKibbin making a positive first impression with Nordstrom in affluent Calgary. As Target works to make up lost ground, Nordstrom is investing in a slow, deliberate rollout, betting that its first foray outside its home country will pay off in giving customers reasons to return amid rising competition in the luxury field.
Nordstrom posted $14-million (U.S.) of operating losses last year in Canada and expects $35-million in 2014, chief financial officer Mike Koppel has said. The red ink will flow for “several years” before the division contributes to the retailer’s bottom line, he has warned. Eventually, the company anticipates it can generate $1-billion of annual sales in up to 10 department stores and as many as 20 of its Rack discount outlets.
(Target, for its part, had expected to be in the black in the final quarter of its first year in Canada, but instead it reported an operating loss of almost $1-billion last year and analysts anticipate more red ink in 2014.)
But Nordstrom, which is a relatively strong performer south of the border, will face an increasingly crowded luxury market in Canada. Dominant player Holt Renfrew & Co. and men’s wear specialist Harry Rosen Inc. are expanding their stores, while U.S. rival Saks Inc., which was bought by Toronto-based Hudson’s Bay Co. in 2013, is preparing to launch its first stores in this country next year. HBC is making progress in polishing its existing operations here.
“Nordstrom is going to have to be adaptable because things will evolve in Canada,” said Milton Pedraza, chief executive officer of researcher the Luxury Institute in New York, which has worked with each of Nordstrom, Holts and Saks. “But I think Nordstrom will be a solid competitor.”
In the Institute’s annual survey of luxury retailers’ customer service and store experience, Nordstrom ranked No. 1 this year after coming in second in 2013 and first the previous year.
In Canada, Nordstrom has already shown its cautious approach by delaying the launch of its Rack stores here from a planned 2015 roll out because of the unexpected complexity of building its new systems. Nordstrom also will hold back for now on introducing a separate domestic e-commerce site, said Ms. McKibbin, a veteran of Nordstrom.
“We definitely feel there’s an opportunity for us to serve the customer online and that’s definitely still part of our strategy,” she said. “Although when we’ll be able to offer that to the customer is left to be determined.” Nordstrom allows consumers here to cross-border shop from its U.S. site although steep duty, tax and shipping fees raise the tab about 10 to 20 per cent, a spokeswoman said.
Its next store opens in Ottawa in March, 2015 and, in Vancouver, six months later. “I’m feeling cautiously optimistic about opening our first store,” Ms. McKibbin said. “The cadence is going to allow us the opportunity to open the doors to our first store and really get to work about making the adjustments, things that customers are telling us they want, and then applying that to our next store.”
By Andrew Roberts and Brooke Sutherland
Bloomberg July 31, 2014
Yoox SpA offers potential suitors a way to combine two of the fastest growing areas of retail: luxury goods and the Internet.
The $1.6 billion company, which operates e-commerce sites for designer brands including Armani and Moncler, is poised to boost sales by about 75 percent over the next three years, according to data compiled by Bloomberg. Affluent consumers from Seattle to Shanghai have more to spend on luxury goods and are increasingly going online to do it, according to Retail Metrics Inc. That may grab the attention of Amazon.com Inc., said CRT Capital Group LLC.
Amazon, whose stock is under pressure after reporting a $126 million quarterly loss last week, has been flirting with high-end goods, most recently selling Burberry Group Plc fragrances. Yoox, which is profitable, could jumpstart the $149 billion company’s luxury business, according to the Luxury Institute LLC. The Italian company’s technological know-how also makes it a possible target for traditional retailers such as department stores that are looking to bolster their online presence, said retail researcher Conlumino.
Yoox is “in a pretty attractive space to be in at this point in the retail cycle,” Ken Perkins, president of Retail Metrics, a Swampscott, Massachusetts-based researcher, said in a phone interview. “It could be on people’s radar in terms of a takeover.”
The stock rose as much as 4.1 percent and traded 2.3 percent higher at 20.64 euros at 9:34 a.m. in Milan. A representative for Yoox declined to comment. Representatives for Seattle-based Amazon didn’t respond to requests for comment.
Since Yoox went public in 2009, the operator of e-commerce for more than 30 brands has nearly tripled its revenue to about $605 million last year. That growth is poised to continue, with analysts projecting sales of more than $1 billion by 2016.
Potential buyers could get the company for a bargain right now. Yoox’s shares have fallen about 40 percent this year, leaving them near their lowest valuation since last May, as one of its closest peers, Asos Plc, reduced profit forecasts.
That slump is unwarranted because Yoox has a wider product offering than Asos, more geographic reach and a more affluent consumer base, according to Chiara Rotelli, a Milan-based analyst at Mediobanca SpA. Yoox said yesterday that net sales in the second quarter climbed 15 percent to 111.5 million euros, topping analysts’ estimates.
“This might be the right time for companies to look to acquire a company like Yoox,” said Milton Pedraza, chief executive officer of the Luxury Institute, a New York-based research and consulting firm. “The mass brands understand that luxury is far more profitable and more resilient. For a company to trade up to the luxury or the premium providers in categories, that would be wise right now.”
Bargains and Designers
Amazon has been building a bigger share of the apparel market and started selling Burberry fragrances. Still, it’s known more for bargains than designer dresses. Buying Yoox would give the e-commerce giant a stronger presence in luxury apparel and accessories, where margins are higher, said Neil Doshi, an analyst at CRT.
“It’s ultimately Amazon’s desire to be able to serve anybody anything that they want on their site,” Doshi said by phone. The company “has probably done a pretty good job in the lower to mid-range for apparel. To cover the full, broad spectrum, I think they’d probably want to get into more high-end stuff.”
Sales of luxury goods have been growing faster than the broader retail industry since the U.S. recession as wealthier shoppers, buoyed by rising real-estate values and equity prices, have more money to spend, said Perkins of Retail Metrics.
EBay Inc., the $66 billion online marketplace operator, may also want to expand its designer and luxury offerings, according to Kerry Rice, an analyst at Needham & Co.
Yoox’s focus on e-commerce makes it “very valuable” to existing luxury retailers as well, according to Maureen Hinton, global research director at Conlumino. A department store would be the “perfect owner,” strengthening the potential buyer’s sales channels while preserving Yoox’s independence, she added. Yoox also runs three multi-brand Web stores.
Exane BNP Paribas projects that e-commerce will account for about 40 percent of global luxury expansion in the next five years.
Yoox “is well positioned for this growth, with exposure across different segments of online luxury and unparalleled expertise,” Exane BNP Paribas analyst Luca Solca wrote in a report.
Kering SAcould be interested in buying Yoox, should the owner of Saint Laurent dresses and Bottega Veneta handbags decide to take its relationship with the company one step further, said Rotelli of Mediobanca. Yoox runs the online operations for most of Kering’s brands.
Cie. Financiere Richemont SA, which last year sought to quash speculation that it was in talks to sell its online fashion retailer Net-a-Porter to Yoox, may instead decide to buy Yoox, said Pedraza of the Luxury Institute. Such a move would enable the Swiss company to take the cost-cutting and revenue benefits of a deal for itself.
Kering may prefer to continue its joint venture rather than acquire Yoox, and Richemont may be content with its Net-a-Porter operations and not want to get bigger in online fashion.
Representatives for San Jose, California-based EBay and Paris-based Kering declined to comment, as did a representative for Richemont.
Still, Yoox sits at the confluence of luxury and e-commerce, and that makes it desirable for both Internet giants and retailers, said Pedraza of the Luxury Institute.
“To me, Yoox is about premium and luxury,” he said. It’s “an extremely attractive candidate for a strategic acquirer.”
Bellezza mentioned Tiffany & Co. as a good example of a company executing the policy outlined in her and Keinan’s report. Some store locations offer side entrances and private viewing rooms to physically separate the élite shoppers from those looking to purchase a seventy-five-dollar Heart Tag Charm. The core Tiffany users, Bellezza says, are therefore defined by their access to privileged retail space, while the company can still grant a degree of access to the masses without tarnishing the brand. In 2013, the Luxury Institute, a research and consulting firm, conducted a survey that revealed that Tiffany was the jewelry brand most widely purchased by American women with a minimum net worth of five million dollars.
As Amy Merrick noted in April, Burberry recovered from its overexposure problem. Following the arrival of Angela Ahrendts as its C.E.O., in 2006, (who has since left for Apple), Burberry began scaling back its licensing agreements and removing its signature check from about ninety per cent of its items. A sense of sustainability has returned, thanks to a clear balance of insiders enjoying their cachet and outsiders looking in.
Shares of Tiffany & Co., whose name has been synonymous with luxury since before the Civil War, fell Friday after the second-largest luxury retailer said its earnings would be less than analysts had expected.
The New York-based company expects to earn $3.65 to $3.75 per share in the fiscal year ended January 31. While that forecast is unchanged from a previous forecast, it was below the $3.79 that analysts surveyed by Bloomberg News had forecast.
This is the latest sign of the uneven performance of many retailers during the holiday season despite the improving performance of the U.S. consumers. Wealthy consumers appear to be less enthused about buying goods and services than many experts predicted.
Paper towels embossed to look like cloth. Tampon packages with a glossy metallic sheen. Designer ice cubes for $75 a bag. Marketers are going glam with everyday products, taking them upscale as they give up on selling to the middle class.
Companies have reacted for years to the shrinking middle class by developing both top shelf and bargain versions of their product lines. Toyota has been successful with the Lexus. Frito-Lay has introduced Olive Coast, kettle-cooked chips with a Mediterranean flavor, as well as “Taqueros,” a discount tortilla chip. Apple’s new iPhone comes in both a $199 version and a $99 one with cheaper components.
For the wealthy, a 20 percent markup is a small price to pay for “luxury.” For some in the middle class, it’s a way to feel affluent, at a cost. For the poor? There’s the bargain brands. In an economic recovery that has magnified income inequality, consumers are either spending at the Family Dollar stores of the world, or at the Nordstroms.
Click the link to read the entire article which includes multiple quotes from Milton Pedraza, CEO of Luxury Institute: