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Tag: designer brands

  • Life after Karl Lagerfeld

    Life after Karl Lagerfeld

    Chanel has named Virginie Viard, Karl Lagerfeld’s closest collaborator for more than 30 years, as its new creative director, the French fashion house said in a statement following the death of the legendary designer. The move muffled speculation over whether Chanel might seek out another big name to replace Lagerfeld, who was 85 years old. Potential successors often cited by industry observers over the years included Hedi Slimane, now ensconced at Celine, as well as Phoebe Philo, the designer he replaced there, and Alber Elbaz, formerly of Lanvin.

    Those designers would likely have sought to bring their own vision to one of the world’s biggest luxury brands, with $9.6 billion in sales in 2017. Instead, Chanel’s owners, the billionaire Wertheimer family, emphasised continuity in appointing Viard, who the brand said in a statement had been “entrusted by chief executive Alain Wertheimer with the creative work for the collections, so that the legacy of Gabrielle Chanel and Karl Lagerfeld can live on.” The decision is in character for the Wertheimers, who waited 12 years after Gabrielle Chanel died in 1971 before appointing Lagerfeld in 1983.

    Viard, who has been called “Karl’s secret weapon,” joined Chanel as an intern in haute-couture embroidery in 1987, four years after Lagerfeld became creative director of the brand. (She was recommended for the job by a chamberlain of Prince Rainier of Monaco.) After working together at Chanel, Viard joined Lagerfeld at Chloé in 1992 — where he was also the head designer — and worked there for five years before returning to Chanel and working her way up to become director of the company’s fashion design studio.

    “Virginie is the most important person, not only for me but also for the atelier, for everything,” Lagerfeld said in a Netflix documentary released in 2018. “She is my right arm and even if I don’t see her, we are on the phone all the time.”

    Still, Viard remained largely in the shadow of her larger-than-life boss. “I hate being in the spotlight,” she said last year.

    In recent seasons, she began taking a bow with Lagerfeld at the end of each Chanel show, including the Chanel Métiers d’Art show in New York in December 2018, which marked the designer’s final runway appearance. At the end of Chanel’s haute couture show in January 2019, Viard stepped out solo to take a bow, raising concerns about Lagerfeld’s health and prompting the brand to issue a press release.

    Other fashion houses have tapped studio heads who have demonstrated their ability to channel a departed designer’s vision after their deaths, most notably Sarah Burton, the late Alexander McQueen’s right-hand, who was named creative director of the London-based fashion house after McQueen’s suicide in 2010.

    LVMH-owned Italian house Fendi, where Lagerfeld was the artistic director of women’s ready-to-wear and couture collections, has yet to announce a succession plan, saying it intends to take its time to pay the designer the homage he deserves. Fendi is to present Lagerfeld’s last collection on Thursday in Milan.

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  • UK Mulberry sales drop rescued by Asia growth

    UK Mulberry sales drop rescued by Asia growth

    Strong Asia performances helped mitigate falling UK Mulberry sales in the latest half year. While the UK fashion house’s total revenue was down 8 per cent to £68.3 million, international sales were up 13 per cent. Within that figure, new entities in South Korea and Japan saw the company’s retail chain expand to 29 stores, compared with just one a year earlier.

    And new digital partnerships in China with Toplife, Secoo and VIP.com also boosted sales. Mulberry says further such reseller agreements are planned.

    The core UK business was profitable, but the company was affected by the administration of House of Fraser and “soft retail conditions” in its home market. Overall UK retail sales were down 11 per cent during the six months.

    Globally, e-commerce sales rose 5 per cent and now representing 17 per cent of Mulberry sales, up from 14 per cent the same period last year.

    The company posted an underlying loss before tax of £3.6 million, compared with a £600,000 loss the previous year.

    However, after one-off costs for House of Fraser (£2.1 million) and the South Korea launch (£2.5 million), the company reported a loss pre-tax loss of £8.2 million.

    CEO Thierry Andretta said the company is delivering on a strategy to develop Mulberry as a global luxury brand and the new South Korean and Japan businesses, along with the creation of the China digital partnerships were big steps on that pathway.

    “We are confident that our focus on international growth is the correct strategy to develop Mulberry.”

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  • New president for Issey Miyake appointed

    New president for Issey Miyake appointed

    Japanese luxury label Issey Miyake has appointed a new company president, following the internal promotion of Takahiko Ise to the top spot. Previously the fashion brand’s head of production, Ise replaces former president Masakatsu Nagatani, who will remain in the company as an advisor.

    The change over was effective since October 1, according to Japanese media reports.

    Ise came to work for Issey Miyake in the early eighties and has continued to establish a flourishing career in planning and production.

    The fashion veteran spent the past 30-plus years working across Issey Miyake lines such as Pleats Please Issey Miyake, Me Issey Miyake, Homme Plissé Issey Miyake and Bao Bao Issey Miyake.

    Ise’s promotion, which coincides with the appointments of Koji Usui and Keisuke Harukiya as managing directors, signals a shift in focus for Issey Miyake.

    The Tokyo-based label, renowned for its experimentation with fabrics and textile innovation, remains focused on technology to an even sharper degree moving forward, with strategies set on innovation, new technology and proprietary techniques.

    Founded by Hiriohima-born Issey Miyake in 1971,the company’s overall creative direction has been led by designer Yoshiyuki Miyamae and his team since 2012.

    Issey Miyake has approximately ten flagship stores globally, with three in its local Tokyo (Shibuya, Chuo and Minato), as well as a store in Osaka and one in Hyogo.

    International stores can be found in Paris, London, New York and Milan and Zurich.

  • Why is Kering buying its shares back?

    Why is Kering buying its shares back?

    Kering, which owns Gucci, Saint Laurent and Balenciaga, said it planned to buy back up to 1 percent of its share capital over a 12-month period. According to the luxury-goods group, the total amount of the share buyback agreement would not exceed €300 million (about $342 million) and the price would not exceed €480 per share.

    A stock buyback, also known as a share repurchase, occurs when a company buys back its shares from the marketplace. This means that by paying shareholders the market value per share, a company like Kering can reabsorb a portion of its ownership that was previously distributed among public and private investors.

    But what are the reasons for this?

    Each share represents a small stake in the ownership of the company. There can be several reasons for a share buyback, such as preserving stock price, but in Kering’s case, the move suggests that the company’s senior management is confident about the business and believes its shares are undervalued.

    Undervaluation can occur for multiple reasons. Kering’s management may believe the business is undervalued due to investors’ jittery sentiment around the China market and their ability to see potential in the company’s long term performance.

    Shares in Kering hit a record high of around €522 in June, but dipped in the past three months over worries that white-hot megabrand Gucci was running out of steam.

    The stock rose again in late October after the group reported a better-than-expected rise in third-quarter revenue.

    Sales growth for the conglomerate had been expected to slow from 31.5 percent a quarter earlier to the 22.5 percent rise forecast in a poll of analysts by Inquiry Financial.

    But Gucci sales proved stronger than expected.

    Buying back shares is also a common way for companies sitting on big cash piles to do something about it, and the ideal time is usually after a drop in the stock price.

    It wasn’t Kering’s stocks alone that fell earlier this month.

    Shares in European luxury-goods companies including French rival LVMH sunk, with analysts citing concerns over a consumer slowdown in China, its single biggest market.

    Part of this is due to a crackdown by customs officials, which limits the amount individual Chinese travellers can bring back from abroad.

    “In the most recent weeks, Kering has suffered more than its fair share of pain on the back of the luxury sector downward adjustment following concerns on Chinese consumer confidence,” said Luca Solca, head of luxury goods at BNP Exane Paribas.

    “This has come as investors wanting to reduce exposure to the sector have chosen to lock in gains in stocks that had performed the most, like Kering.”

    Since Chinese consumers account for 32 percent of the worldwide total of luxury sales and about one third of them shop overseas, this is a worry for brands.

    In addition, there is the continued issue of daigou (grey market shopping agents) and the fact that China’s economy is growing at its slowest pace since the financial crisis.

    Gucci president and chief executive Marco Bizzarri acknowledged these challenges.

    “I control what I can control,” he said.

    “Currency fluctuations, traffic flows, daigou duties. It is something we cannot control as a company, so as a CEO I need to control what I can. I hope that Chinese customers are now going to spend more in China, so we’ll do our best to increase their shopping experience here.”

    Jean-Marc Duplaix, Kering’s financial director, said during Kering’s third-quarter earnings call, which came after luxury stocks fell, that the company was seeing an improvement in the retention of Chinese millennial customers and demand had not dipped.

    “In terms of spending power, the situation is still quite sound in China,” he said. “All the events especially in China we had in September or in October, we saw quite good figures. I think that underlying trends are still very, very, very solid.”

    Earlier this year, Bizzarri said that Gucci’s eventual target is to achieve €10 billion ($11.6 billion) in annual revenue.

    “We don’t expect short-term growth issues at Gucci, and anticipate more positive surprises on operating leverage,” said Solca.

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  • Rebranding for luxury resale site Vestiaire Collective

    Rebranding for luxury resale site Vestiaire Collective

    Vestiaire Collective is refreshing its image as the luxury resale site looks to grow sales in Europe and Asia. The branding changes involve a new, black-and-white logo, that will feature on updated packaging. Vestiaire Collective is also launching a campaign which promotes resale as a modern alternative for the luxury and sustainability-conscious consumer. It will roll out in Europe and Asia Pacific spanning television, print, digital and social media.

    Vestiaire Collective’s new look comes after a US$62 million funding round last year, which the company is using to expand internationally. The past 18 months have seen the company enter Asia, open logistics hubs in France and Hong Kong. This month the company is opening a new head office in Paris, on the back of 100 new hires in 2018.

    “It will allow us to speak to a wider audience,” said chief marketing officer and vice president for EMEA Ceanne Fernandes-Wong of using traditional forms of advertising — including black cabs in London and television in France — alongside digital.

    “Resale is not new, it’s not niche, and we want to bring that education that resale is chic and cool… and bring people who would otherwise say, ‘it’s luxury and not for me.’”

    However, Vestiaire Collective faces increased competition from other players in the luxury resale market, which is on track to hit $6 billion in global sales this year, according to Bain.

    Competitors have piled into the space in recent years, including ThredUp, Poshmark and Grailed. The biggest is TheRealReal, which opened its first permanent retail and consignment space in New York in November 2018, after hosting a pop-up a year earlier, and has raised $173 million funding.

    “We want to extend the category in the right way,” said chief operating officer Olivier Marcheteau. “There is €250 billion worth of luxury product sold every year — we’ve probably only scratched that surface.”

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