Kanye West is a man with many thoughts. Thoughts about art, thoughts about Kim Kardashian, thoughts about his own brilliance and, as it turns out, thoughts about Louis Vuitton. West once regularly referred to himself as the “Louis Vuitton Don” in his lyrics, but those days have passed us by. These days, Kanye thinks about Vuitton what many of you seem to think: that the brand could use a little price adjustment. (more…)
In The News(Page 3)
For an experience that’s supposed to be so lovely and luxurious, shopping for fashion can be everything from frustrating to dehumanizing, and it can be those things all too often for some shoppers. Over the past week, Barneys’ New York flagship store has been hit by allegations that it surreptitiously called the cops on two paying customers for nothing other than having the temerity to be black while buying something expensive. One of those customers, Kayla Phillips, says she was targeted after buying a Celine Luggage Tote.
Unless you fit the narrow, impeccably dressed profile of what many luxury stores consider to be the kind of people to whom they’d like to cater, you probably know what it’s like to get a dirty look or be totally ignored while trying to spend your hard-earned dollars on a handbag. As a young, non-skinny woman with pink hair, I rarely get attention from sales associates at high-end stores unless I’m carrying an uber-conspicuous handbag or a large shopping bag from an equally elite store. As embarrassing as it can be to try to flag down assistance from someone who has already judged you as poor, distasteful or both, I can’t even imagine what it would be like to complete a purchase with your own money, leave the store and then get stopped by the cops. I can’t fathom that sort of humiliation while shopping, or why store employees feel they have a right to treat anyone like that.
Barneys, for its part, denies that any of its associates called the cops on anyone and that it was the NYPD itself that decided to question the African-American shoppers once they left the store. The NYPD, on the other hand, insists that they were summoned by employees. No matter who started the ball rolling down hill, the assumptions inherent in both incidents are clear: if a young black person has enough money to buy something expensive, it’s not because she worked hard and saved money, or she, like so many people in New York City, just has money to spend on silly things like handbags. It’s because she stole something. In the end, the implication is that nice things aren’t meant for those people. Fashion certainly benefits monetarily from its close association with hip-hop (an association which is only getting closer), but if you want to stroll into a high-end store and expect high-end service, you best be Rihanna.
Over the weekend, several fashion industry vets on Twitter linked to Horacio Silva’s 2007 New York Times Critical Shopper column about the opening of the Tom Ford boutique on Madison Avenue. Silva didn’t have the cops called on him, but he was treated like he didn’t belong in the store on his first visit, shoo’d away from personal shopping areas and mostly left to wander the store without assistance, as though no employees wanted to encourage him to remain in the store longer than he might otherwise be inclined. (On a second visit, after the staff had been tipped off to his place of employment, Silva got the white glove treatment.) Fashion retail has had a tough time walking the line between “exclusive” and “exclusionary” for quite some time, and it looks like scant progress has been made. If you don’t look the part, down to the color of your skin, good luck finding someone to help you lighten your wallet.
Have you been profiled at a high-end boutique or department store because of your ethnicity, weight or general appearance? Let us know about it in the comments.
It’s been a big week for luxury theft in the news. First, a woman in England was found guilty of stealing nearly 1,000 designer handbags, one by one, over a period of three years. If that weren’t enough, yesterday came word that an entire Hermes collection had been stolen off the back of a truck in Milan, forcing the cancellation of an Hermes press preview that had been scheduled. It seems as though, when it comes to luxury goods, fingers the world over just keep getting stickier and stickier. (more…)
Considering how many luxury boutiques have reputations for staffs that seem to purposefully ignore customers who don’t fit a very narrow profile, it’s perhaps surprising that more people don’t simply pick up bags and trot right out the door with them. After all, if a salesperson is busy pretending you don’t exist, it must be hard for him or her to make sure you don’t get a case of the sticky fingers. Apparently a woman in England has been using that behavior to her advantage to the tune of 904 handbags for the price of free ninety-nine. (more…)
According to the Telegraph, third quarter growth for LVMH weakened to just two percent, an outcome which the conglomerate’s recent shift in strategy probably predicted. Although that’s still growth, it’s certainly a marked shift from what the world’s largest luxury company is used to and the kind of growth its counted on in the past. In LVMH’s heyday, quarterly grown was often as high as ten percent, and it had fallen to five to six percent earlier this year.
Although LVMH, which owns Louis Vuitton in addition to noted handbag purveyors like Celine, Dior and Givenchy, doesn’t break results down by brand, it does indicate which product categories have been weakest, and apparently this decline in growth is a result of decreased sales in the formerly cash-flush categories of fashion and leather goods, perfume and cosmetics and watches and jewelry. Those are the “Big Three” categories that luxury companies can usually rely on to bring in the steadiest cash flow.
Louis Vuitton has long been LVMH’s biggest cash cow, and perception problems with its monogram bags have begun to haunt the brand. Namely, customers at the highest end of the market, those who shop the most frequently and spend the most money, perceive Vuitton to be a brand that caters to a less sophisticated segment of the market, to put it delicately. When you pair that with a market that no longer makes Celine Luggage Totes and Trapeze Bags disappear off the shelves instantly (and with no super-buzzy replacement in sight from Celine), LVMH’s shift in strategy seems well-timed.
As we told you when the story first broke, LVMH’s strategy is to go after those big-fish customers that are now somewhat leery of its marquee brand. That means raising prices overall to discourage low-end customers and renewing the company’s focus on leather instead of monogram canvas. The first indicators of that strategy have already reached the public, including producing the entry-level Neverfull bag in pricey leather and introducing several all-leather bags with more limited use of the company’s logo.
Considering all of that, Marc Jacobs’ recent exodus from the brand comes at what may, in fact, be an opportune time. Even though Jacobs was generally an enormous boon to Louis Vuitton’s handbag business, it appears that his particular brand of magic was beginning to wear off. Fashion is almost always willing to reconsider a historic name with a new creative talent at the helm (hello, Celine), so if LVMH ever gets Nicolas Ghesquiere to sign on the dotted line, we might be in for some fun.
As slow as the luxury industry has been to embrace online shopping, it seems as though some of the traditional high-end heavyweights are looking to get really serious about earning your Internet-purchase dollars. Starting today, both NeimanMarcus.com and BergdorfGoodman.com will be offering free shipping and free returns on almost any online order from here on out. Some restrictions do apply (occasional items shipped directly from manufacturer, for example), but there’s no minimum purchase. There’s also no end date – this isn’t a promotion, it’s a long-term change in shipping and returns policy for both major retailers. That’s welcome news to everyone, but I’m sure it’ll be especially welcome to luxury consumers who aren’t located near the relatively few retail outlets that carry brands like Prada and Givenchy in-store. (I have been one of those shoppers in the past and I know their struggle.)
Late last week when LVMH announced that it had taken a controlling stake in the business of young British shoe designer Nicholas Kirkwood, a good portion of the buzz surrounding the sale centered on which other young company might be next. Even before that sale, rumors flew about LVMH and British ready-to-wear and menswear brand JW Anderson, and now those rumors have come to fruition. Not only does LVMH now own a minority stake in the brand itself, but founder/designer John Anderson will be taking over the creative helm at LVMH-owned Loewe.
Yesterday’s announcement of the simultaneous moves helps bring into focus some of the last bits of a game of designer musical chairs that started when Reed Krakoff left Coach months ago. Emma Hill then left Mulberry, and speculation was rampant that either she would go to Coach, or Marc Jacobs would leave Louis Vuitton at the end of his contract and move on to the American contemporary giant. None of that came to fruition; instead, Stuart Vevers left Loewe out of the blue to take the Coach helm, and although no one knows when he’ll actually start at Coach (or when Krakoff will make his exit final), that left Loewe without a designer. With the brand’s recent momentum, it seemed likely that LVMH wouldn’t want to let Loewe linger without a creative director for long, and sure enough, here comes Anderson to take that spot.
JW Anderson first rose to prominence for his menswear, and as his profile expanded, so did his brand, specifically to women’s wear. Considering his story and background, his aesthetic is approximately what you’d expect – very modern and often a bit sporty, with a note of British traditionalism peeking out every one in a while. Much of it (expect perhaps the men’s shift dresses) is very wearable and fits well with the industry’s current interest in streetwear, but with a more thoughtful finish. It will be interesting to see what kind of marriage it’ll be between the young Londoner and the old Spanish leather goods brand in particular. Here’s hoping that an influx of LVMH money also expands Anderson’s eponymous brand to include handbags is well.
To both invest in JW Anderson and appoint him the head of one of its brands, LVMH must see quite the future for John Anderson. It’s the same kind of setup the conglomerate bestowed upon Marc Jacobs over a decade ago.
At the moment, fashion seems flush with young talent – from Prabal Gurung to JW Anderson, it’s easy to imagine the next generation of fashion superstars emerging from their status as independents to do bigger, better and more widely available things. After all, Raf Simons was once just a forward-thinking Belgian menswear designer, and now he’s at the helm of Dior. With news late last week that LVMH has purchased a majority stake in the shoe brand of young Brit Nicholas Kirkwood, he’s just joined the line to get called up to the majors. (more…)
I recently had occasion to try and recall what the price of a Louis Vuitton Speedy Bag was during my college years, which weren’t so long ago, and only when I came up with the number of $560 did I realize how quickly designer handbag prices have crept up in those intervening eight years. (I’m assuming that was the opening price point for the bag around when I became aware of luxury handbags, which was 2005 or so, although I can’t place the number with total certainty.) The Speedy now starts at $855, which is a price increase of almost 53% in less than a decade, far outpacing both inflation and the market-wide price increases for non-luxury consumer goods. What gives?
According to Business of Fashion, a few things are at play. First, Louis Vuitton is far from the only brand to increase prices at such a rapid clip. Marquee pieces from both Hermes and Manolo Blahnik have had price increases of 50-60% in the past decade, and annual or biannual announced price increases of up to 13% at a time are de rigueur for brands like Vuitton and Chanel. BoF reports that the average cost of manufacturing and selling a bag is about 35% of its final retail price, and most brands use the high margins on handbags, along with shoes and beauty products, to balance out their less profitable ventures – namely, the clothing that fleshes out the brand’s luxurious, fashion-forward image and makes people want to buy into the brand via a bag or tube of mascara. And also, you know, to make sure that Roberto Cavalli’s yacht renovations are ready in time for Cannes.
The costs that make up that 35% determine what the 100% price will be, of course, and all of that stuff just keeps getting more expensive. The cost of Chinese labor has nearly doubled in the past decade, and if you think that shouldn’t affect the price of your “Made in Italy” bag, think again. Your bag, in whole or in part, likely made its way through a Chinese laborer’s hands at some point in the manufacturing process. The global prices for leather and cotton are also ever on the rise, with cotton in particular at an all-time high, and those costs are more or less fixed for handbag brands – they can’t forgo the materials entirely, no matter what they do. Some companies have acquired tanneries in order to vertically integrate as much of the process as possible and keep prices for materials manageable, but it doesn’t entirely solve the problem.
Some of the problem, too, is simply our baser instincts as consumers. There’s a bit of voodoo to creating successful luxury accessories, and part of that is making them seem as desirable as possible. The more out of reach something seems, the more fashion customers fetishize it, and that leads the status-conscious and the deep-pocketed alike to make purchases in droves. There is likely a point at which an elevated price tag affects the number of units sold in such a way that it hurts profits, but it seems as though designers have yet to find it – they keep raising prices and we keep buying, and even if the number of units moved decreases a little bit, the higher prices make up for it. And then some.
Lastly, BoF points out, the market for luxury accessories keeps expanding. Burgeoning markets in places like China, Brazil and India mean that more people are interested in a finite amount of goods, which drives prices up no matter the industry. With more customers than ever, designer brands can name their prices, and they are.
To read more, check out the full feature on Business of Fashion.
If you live in Hong Kong, have an impressive handbag collection and find yourself short on cash, you’re in luck – you might be eligible for a handbag loan! According to the Wall Street Journal, one enterprising lender in the burgeoning Chinese luxury retail hub is helping wealthy women, many of them housewives, turn their prized handbags into quick cash, from a couple hundred bucks to many thousands.
The Yes Lady Finance Company is the first of its kind, in Hong Kong or elsewhere. Riva Gold and Chester Yung of the WSJ talked to the lender and some of its clients, and here’s how it works: a client brings a handbag (or many handbags – one of the customers in the story brought in almost 50 Gucci bags) in to the office, and an authenticator from a local luxury resale chain verifies the bag’s origins and assesses value. In general, only bags from Chanel, Hermes, Louis Vuitton and Gucci qualify for Yes Lady loans, and once a value is assigned, the company cuts its client a check for 80% of that number – no income verification or background checks are required. Yes Lady is somewhere between a pawn shop and a traditional lender.
Clients then have four months at 4% interest to pay back the loan and reclaim their designer handbags, and apparently the vast majority do. Only a cursory mention was given to those who try and acquire loans based on fake bags, and the lenders feel confident that they can weed them out. It wasn’t entirely explained why a woman who’s described as “wealthy” and who has a trove of designer bags might need to turn one over for a short-term loan, except that sometimes all of a family’s money is “tied up in stock,” which, to me, would have been an interesting avenue to explore. Something’s missing about why a woman with a Birkin worth over $20,000, like one described in the WSJ article, would need to hawk it, and why there’s enough of those women in the emerging Hong Kong market to support an entire lending company.