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Prada Defies Luxury Brand Hand-Wringing in China

Posted by Mark J. Miller on September 25, 2012 05:16 PM

The most populated country in the world has been, until recently, perceived to be a hotbed of conspicuous consumption. Luxury brands rushed in to fill the void and make a bundle. Vuitton, Prada, Burberry — you name it, you could buy it in China. And consumers were happy to show off their ability to buy.

But suddenly things have changed. The tap has been turned off and many of the luxury brands of the West that flooded China are now sitting and waiting for consumers to get back into the spending mood again. With all the consternation over Burberry's lull in its China growth, it's easy for luxury to get rattled.

Prada, however, is trying to keep its investors, employees and calm about what's going on in the Mainland. "I think we must stay calm and be less hysterical. I don't see such a dramatic market," commented Patrizio Bertelli, Prada’s CEO, according to Reuters. "We think that considering all markets at the same level is wrong. We must accept markets' diversity and adapt to different needs and traditions." In effect, Keep Calm and Brand On.Continue reading...

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Chanel Loses Suit to Former Supplier

Posted by Mark J. Miller on September 20, 2012 12:38 PM

The Chanel brand and knitwear company World Tricot used to be pals. Tricot is a former supplier of the Paris-based fashion house, but things went sour back in 2009 when Tricot accused Chanel of wrongfully terminating their business relationship and for “copying one of its designs,” according to British Vogue.

A lawsuit ensued, naturellement, and Chanel now must pay over 200,000 euros ($263,000) as a result of a ruling issued by the Paris Court of Appeals — not a huge amount, to be sure, especially as Tricot had originally sought $4.7 million for breach of contract and counterfeiting.

An attorney for Chanel said at the time that Tricot was just looking for PR, according to Vogue, but Chanel execs, who've been reminding fans this year about the iconic little black jacket, are likely singing a different tune these days.

"This is the first time that we have faced this type of situation, although we work with close to 400 suppliers," said Bruno Pavlovsky, president of Chanel fashion, Vogue reports. "This very specific case is in no way reflection of the quality of our relations with our suppliers."Continue reading...

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Rolls-Royce Joins Audi and BMW in Race to Upgrade Retail Experience

Posted by Barry Silverstein on September 18, 2012 11:56 AM

London may have been the Olympic city this past summer, but it was also "Audi City." The German luxury car brand launched its first digital showroom in London, just in time for the Olympics, pitching it in a movie-style trailer. The innovative concept was designed to digitally present Audi's entire line of cars in a compact space, using such "groundbreaking media technology," says Audi, as the ability for visitors to "digitally select their vehicle from several hundred million possible configurations and experience it in realistic 1:1 scale on screens that almost fill the entire space." More Audi Cities are coming soon.

Audi didn't start the trend of marketing cars in big city downtown areas, however. In May, BMW opened its first "BMW Brand Store" in metropolitan Paris, positioning it as "Future Retail." Unlike the Audi concept, real cars appear in the Paris space, along with an employee BMW unashamedly refers to as a "product genius" in a nod to Apple's retail concept, the "Genius Bar."

Not to be outdone, the iconic Rolls-Royce brand, a motorcar brand many might consider ultra-stodgy, is making a few breakthrough moves of its own. The venerable Rolls-Royce brand, has been around since 1904, but the British icon clearly don't want to be left behind in the 21st Century. In the fourth quarter, Rolls-Royce plans to open a boutique — don't call it a showroom — at Rama 3 in Bangkok, Thailand.

Rolls-Royce already has a Bangkok showroom, but the boutique, the first of its kind to be located in an upscale shopping mall, will feature additional products. Still, why open a "boutique" in Bangkok?Continue reading...

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Burberry Turns Global Flagship Into Living Website Ahead of London Fashion Week

Posted by Mark J. Miller on September 14, 2012 04:51 PM

Since 1856, Burberry has been serving the clothing needs of British and then global big spenders. At the start of the 21st century, the company’s signature plaid is readily identifiable and highly regarded as a symbol of the brand's, and indeed British, craftsmanship.

Burberry has remade its London flagship — which has housed a radio station and a livery stable, among other things, over the last 200 years — into a 44,000 square foot, digitally-enhanced retail experience chock full of tech innovations, while maintaining the bespoke elegance for which the brand is known.Continue reading...

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Is Burberry Slump a Sign of Decline in Luxury Brands?

Posted by Barry Silverstein on September 13, 2012 05:03 PM

It may not yet be a major earthquake, but there seem to be rumblings that luxury goods are undergoing some sort of seismic shift.

As Fashion Week was at its height in New York, instead of watching hemlines fashionistas were watching stock prices, as luxury apparel maker Burberry saw its shares drop over 20 percent Tuesday on issuing its first profit warning since 2008. It was an especially bitter pill to swallow for a brand that in January was named "International Retailer of the Year" and, in April, took the mantle of greatness from a bankrupt Aquascutum.

Bloomberg Businessweek labeled Burberry's slide as "an end to a three-year rally in the luxury-goods industry as wealthy shoppers cut back on past indulgences." While Burberry's report may have helped pull down shares of luxury giant LVMH and other luxury brands such as Prada and Richemont, it does appear demand for luxury goods has been softening recently.

Harry Winston indicated last week that there was lower interest in its luxury products, and last month, Tiffany projected lower profits for the year. Stacey Cartwright, Burberry's CFO, told Bloomberg Businessweek that she had spoken with other luxury goods marketers. "We know we are not alone in terms of what we've seen in the last couple of weeks," she said.Continue reading...

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Hermes Defends Brand Against LVMH in "Cultural Fight"

Posted by Barry Silverstein on September 5, 2012 01:04 PM

When French luxury brand conglomerate LVMH acquired a minority share of 127-year old family-owned French luxury brand Hermes in late 2010, it was hardly a match made in heaven. LVMH head, billionaire Bernard Arnault, commented to the New York Times in March 2011, "We are a totally peaceful investor, but as a leader in the best quality products in the world, we believe we can bring a certain savoir-faire to improve the functioning of their business."

Foreshadowing what was to come, however, Hermes CEO Patrick Thomas responded, "We don't want to be a part of this financial world which is ruining companies and dealing with people like they are goods or raw materials. It's not a financial fight, because we would lose that. It's a cultural fight."

That "cultural fight" has now flared up into a renewed legal battle, as Hermes recently filed suit against LVMH for "the way in which LVMH entered the capital of Hermes." The suit also alleges insider trading and manipulation of the share price, reports the Financial Times. LVMH has counter-sued for defamation.

At the heart of the battle is the independence of the Hermes brand itself.Continue reading...

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Hautel Check-In: Luxury Labels Extend Brands to Hotels

Posted by Barry Silverstein on June 21, 2012 12:09 PM

Maybe we haven't seen the return of the roaring global recovery everyone has hoped for. The U.S. economy is sputtering, and the European continent isn't looking very bullish at the moment. But none of this seems to be terribly concerning to the luxury hotel market. There has been a spate of recent openings — hotel extensions of luxury brands — to prove it.

Bulgari, which operates a luxury hotel in Milan, a luxury resort in Bali, and restaurants in Tokyo, has just opened the doors of its fourth Bulgari Hotel, with its latest five-star property opening in a chi-chi pocket of London.

Located in the city's prestigious Knightsbridge section, its well appointed rooms (such as the one above) are opening just in time to take bookings for the London 2012 Olympic Games. Bulgari gushes about the property: "It is a perfect expression of the Bulgari aesthetic of timeless glamour. Innovative artistry and a lavish use of precious marble and silver blend harmoniously, exuding an understated elegance. The quality of the service, magnificent elements such as the spa, pool and private screening room, and the distinguished location beside Harrods and Hyde Park all contribute to an uncompromising sense of excellence."Continue reading...

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Buy the Book — Meta-luxury: Brands and the Culture of Excellence

Posted by Shirley Brady on June 5, 2012 06:57 PM

"I believe excellence has a lot to do with being able to really anticipate customers' needs, and to then transform that deep understanding into the basis for an impeccable execution in terms of service.This, along with quality and distinctiveness, is what luxury should ultimately be about.

Now more than ever before, luxury means self-indulgence and self-reward. And this can be embodied by a made-to-order item or by an absolutely exclusive service or treatment. Luxury has gained a more individual significance, ideally allowing us to choose his, or her, own meaning and way of experiencing it: and that can be interpreted as a desirable item as well as a state of extreme comfort."

— Francesco Trapani, CEO Bulgari, from an interview by Manfredi Ricca and Rebecca Robins featured in their new book, Meta-luxury: Brands and the Culture of Excellence, now available in the U.S. from Palgrave Macmillan

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