Luxury Briefing Issue 171

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luxury briefing.

Kate PatricK Editor

EditorKate PatrickE: [email protected]

Editorial: Lucy reiter designer: James randallProject manager: Kathryn Giornali

SUBSCriPtioN MANAGErE: [email protected]

Image: A first standalone retail outlet for designer Ian Stuart has opened its doors at the National Trust Blewcoat building in London’s Victoria.

When share prices at major luxury conglomerates hit a blip – LVMH dropped 7.2% one day this month, with richemont down 3% and Kering down 3.7% – the first thing to look at is what could be deterring the two top buying groups: Chinese and russians. For the former, there’s a growing list: political protests in Hong Kong to be avoided, the crackdown on corrupt gifting (particularly affecting luxury watch sales), a strong euro causing goods and services to be more expensive for tourists, even fear of mugging in Paris, reuters said. the russians are travelling less and spending less in Europe due to the Ukraine crisis and falling rouble. Sales growth in the luxury industry bounced back after the financial crisis, but there’s a chill in the air around the view that buoyant demand from China may never return – even with visa requirements slowly relaxing – and only modest growth can be expected from now on.

An interesting big picture, which makes it all the more important for brands to understand as much as possible about the world’s wealth. At Christie’s, record-breaking sales of postwar and contemporary art helped push total sales in the first half of the year up a whopping 12% from a year earlier, to £2.69 billion – so there’s no need to panic. Sarah Cormack, partner at Withers, our regular contributor on legal issues, writes this month (p20) about what they discovered when they surveyed some multi-millionaire and billionaire families in Europe, the US and Asia. Many are using their wealth to effect positive changes in their communities. doing good feels good in 2014 – so have a look at diana Verde Nieto’s piece on p22 about her venture, Positive Luxury, which awards a Butterfly Mark to brands who are taking care of the environment and social aspects of their supply chain. it could be a good place to start, if you haven’t already.

Elsewhere in this month’s issue, we enjoyed talking to dr Erich Schulte – pioneer of science-backed skincare whose products and treatments are increasingly being incorporated by luxury spa hotels keen to be delivering the nearest thing to a miracle fix to their guests. And Andrew Smith from creative agency Partners Andrews Aldridge asks: why are some luxury brands’ digital experience not living up to their physical promise?

We hope you continue to find Luxury Briefing an informative and inspiring asset to your business.

required reading

LB171 Magazine cs6 jr.indd 1 30/07/2014 13:37

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Miracle worKErQMS is a cosmeceuticals business specialising in scientifically-developed skincare products and treatments. it was founded in 1986 by dr EriCh SChULtE, combining his passion for science with a vast experience working as a surgeon in trauma and cosmetic surgery. the business has a London flagship spa and store, the 22 products are sold in hundreds of outlets and the treatments are used in spas and hotels worldwide, including at the Mandarin oriental in Bangkok for which QMS recently created a bespoke menu of treatments. dr Schulte does not promise miracles; but it’s hard to argue with the logic and science behind his approach. he talked to LB about aspects of his life’s work

luxury briefing insight : Dr Erich SchultE, QMS MEDicoSMEticS

Left: Dr Schulte at work in his laboratory in Baden Baden, Germany

Right and overleaf: the full collection of QMS Medicosmetics products and treatments are available at the flagship spa and store in Cadogan Gardens, London


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How do you describe yourself professionally – surgeon, chemist, businessman?My profession was craniofacial surgery and traumatology; and my interest is in bio-chemistry, so that’s why i develop all the products myself, in my own laboratory. whatever you get from us that is under my name, i have developed myself in cooperation with other bio-chemists and professionals. But i started my career in the medical profession as a traumatologist – we did accidents, maxillofacial surgery, craniofacial – everything that is above the neck, including broken bone structures, and so on. we covered the faces, and from there it was a short step into cosmetic surgery because our goal was to reconstruct faces in combination with controlled wound healing to avoid unwanted scarring – and that’s how we came to collagen. without collagen there is no wound healing. Coming from there,i discovered the virtues and properties of the collagens and we put them in our cosmetic products.

What were the circumstances behind the founding of QMS Medicosmetics?when we do a facelift, for example, what you do is cut the skin and you stretch it and that’s it; but you never, ever change the texture of the skin. if you cut into old skin, the risk of unwanted secondary healing is much bigger than when you have well-nutritioned, well blood-supplied skin. So what i did – and what i still do in my clinic – is that every patient who wants to have surgery has to undergo a special pre-treatment for three months with the fruit acid and the collagens to condition the skin, so that when we cut, we have better skin. then, later, we have less risk of unwanted secondary healing. So, by doing this, after one month patients were saying their skin felt so much better and were asking where they could buy the product. i said you cannot buy the product; it’s only made for you by me. twenty-two years ago we decided to make a small in-house production of this fruit acid and collagen set. that is how the business came about. it was never my intention to do what i’m doing now. Luckily enough, as i’m now retired as a surgeon, i can travel around and do more with this.

From that small beginning, what’s the extent of the business today?we’re quite international. we started to build it up in Germany and we were only present there, but we grew to about 450 outlets, and now you fi nd us in virtually every fi ve-star hotel in Austria and Switzerland, then in holland, Belgium – and we retail the products in stores, hotels and beauty spas and we manage the treatments in partner spas. we started to wholesale our products, but we felt that if a store was having a promotion month and you were in a super position

it was easy for us to sell QMS like hot cakes but when you were relegated to a corner somewhere then things went down. So i said,if we want to demonstrate to people what we can do, we have to run a spa where you can control what you do. And if you want to be really international you have to go to London, because that’s the gateway to the world. that’s why, four years ago, we were lucky to get this place here in Cadogan Gardens, and we put the treatments and the retail sales together so that when people come they can see what QMS is about, what we stand for, and we can explain the treatments properly; you can see the clean, medical environment – people have a better impression of what we do. we just have the one spa under our name, in London. then we work with hundreds of other spas like Mandarin oriental, Bangkok, where we train the therapists. Some have the signature QMS treatments as part of the spa menu – some will have three, some will have 10. Beauty by Mandarin oriental is, in fact, a full collection of QMS products and treatments. we also develop signature treatments – for example, in the Alpina in Gstaad we have diff erent treatments from what’s in the Anassa in Cyprus. For the Mandarin oriental we created treatments with a bit of far eastern character. we can do it because we have control of the company –it’s not a big company, it’s mine, so i can make quick decisions.

Do you also own all the research & development facilities?Yes, everything. it’s all in Germany, near Baden Baden, including the laboratory. i’m also on a board of advisors for the government, so we’re advising on legislation. we are literally at the top of the pyramid. we have a certifi cate of good manufacturing practice and my company has a licence to produce pharmaceutical-grade cosmetics as well. So it can’t be better.

If you were to expand further, would it be through products or newspas or retail outlets?it’s not a question of more products. if you have a golf bag, you have 14 clubs. with the 14 clubs you can do everything you need to do in golf. we have around 22 products which i designed, and with these 22 products, in the right order, used in the right way, you can address any cosmetic skin problem. All the technology is bang up to date,and we adapt the formulations but it’s always top of the range.So we’re concentrating on new markets and customers for the products we have. we’re just going into the Middle East – dubai is the next location.

Is the best way for you to access new markets through hotels?it’s one of the best ways because they’re very international and it helps that we can then avoid all the logistical issues. Also, in the case of thailand, the Mandarin oriental in Bangkok is a wonderful hotel with a huge local client database. Experiencing QMS through the spas is a defi nite advantage, but we do also sell very well at retail.the US is a market that we are mainly approaching on the retail side – it depends what works in each case. Germany is our biggest market, but South Africa is huge. it’s been interesting here in the UK because, as a brand, this wasn’t typically English in style. But now we’re operating a great client base here, and the second biggest group we have is aged 25 to 32, because they really like the results.

Can you describe a typical customer to the London spa?it’s actually very hard to describe that, because the one thing that everyone loves about QMS is that it’s very personal. People come to the spa because they’re getting married, having a baby, working very hard, have a specifi c concern – or maybe just because they’re a man and they feel comfortable here. A lot of businesswomen, actors – this is because they are on hdtV and need their skin to look very good, but they’re not going to get into surgery – and sportspeople who are outside a lot. we have a wealth of people but the core value is about the health and wellbeing of their skin. it’s people genuinely concerned about skincare and skin rejuvenation. this actually cuts across all international markets and can cover all ages from 18 to 84. And, in fact, people interested in pursuing facelift surgery rarely come here.


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know they have to do some exercise, shouldn’t smoke or drink, should go to bed early. when people are here and you discuss it, it’s very easy – they say yes, you are right, and they leave and do the opposite. of course the ideal person would be working out, drinking water, taking vitamins... but they won’t do it. they want to sit in a bar, drink, and the next morning look good. this is what you’re fi ghting against. But there is no quick fi x. what you see on the tV channels, promoting cream that will make you look 25 years younger – there is no such thing, and no short cut. we can improve the metabolism of the skin cell, force it a little bit to work better, but not overnight.

How else do you promote the brand?we collaborate with other brands – anything from companies involved in the wedding industry, to local businesses, to big automotive companies like Bentley. we’re also in discussions with another brand right now regarding the possibility of a co-branded sun-focused range. initially we wanted to get the brand a little more known as QMS, but we’ve been approached by this particular brand about developing products around getting your body ready for the sun, being in the sun and post-sun.

We started to wholesale our products, but we felt that if a store was having a promotion month and you were in a super position it was easy for us to sell QMS like hot cakes but when you were relegated to a corner somewhere then things went down. So I said, if we want to demonstrate to people what we can do, we have to run a spa where you can control what you do. And if you want to be really international you have to go to London, because that’s the gateway to the world” “

Have you developed products that take into account cultural diff erences in skincare and approach to ageing?the interesting thing we found in Asia is that the therapists at the Mandarin oriental, at the end of their training, said they had never had a European brand which could deal with ageing skin. i had to develop some products which took into account the fact that oriental skin is much more sensitive. in our normal exfoliating fl uid we use 10% fruit acid which you can put on any caucasian skin; we cannot do that on Japanese skin, so i developed for the Far East special things which we use for irritated skin. A woman from the western world will not mind if you tell her it will sting a bit; the Chinese and Japanese will never tolerate it. So you have to be very careful what you do. we developed special things for the Far East market years ago, and we discovered we could use it on the irritated skin of caucasian people.

Do you discuss nutrition and exercise with clients, as part of a route to better-looking skin?we do. But whoever invents a pill that makes you fi t without having to do anything would be a billionaire overnight. Everybody wants perfect results without putting any eff ort in. we have people who


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What is your approach to sun-protection?the sun is what ages your skin, so an SPF15 is perfect – and we have it in our products. there is a total misunderstanding surrounding sun protection factors. An SPF15 takes, roughly, 82% of the harmful UV rays out. An SPF30 is not double the potency – it takes maybe 85% out. if you go to a sunblock 50 then you get 95% out, but the higher the SPF, the less nice the cream feels – that is because of the fi lters. the cheap ones use any absorbents, like zinc. we use selective fi lters. A simple explanation for this is that you have two sorts of UV rays: UVA (ageing) and UVB (tanning) – you want UVA out because it destroys the collagen bundles, so we have selective fi lters which repel, not absorb – it’s a diff erent thing. it repels the UVA but lets fractions of UVB through, so you have tanning but not ageing. 65% of your skin proteins are collagens responsible for retaining moisture, and that is what depletes. Starting from age 25, the body’s own collagen is getting less in quality and quantity. what the body doesn’t produce, we replace – it’s like collagen replacement therapy.

How did you create a tinted cream that doesn’t look fake?the most diffi cult thing was to fi nd the pigment – we call it intelligent pigment – that adjusts to diff erent skin types. You never will look painted or fake. this works on caucasian, Asian or black skin – South Africans love it, especially the men, because they are outdoors a lot and they drive open-top cars. it’s incredible – if you go on holiday it will take you from day one when you look pale to the end of the holiday. A lot of businesswomen love it for fl ights – they take their make-up off and put it on as moisturiser. it’s a standalone product – doesn’t have to be combined with moisturiser or foundation.

Does the spa off er any more invasive micro-dermabrasion treatments?those treatments where you sandblast the skin, or needling, i’m totally against. we stand for very smart techniques and methods to get ingredients deep into the skin without destroying the barrier function of the skin. with all this mechanical sanding down and needling, where you see blood, they want to make you believe this is the way to get ingredients into the skin – but it’s so ridiculous and you end up with subcutaneous scarring which actually destroys your skin. in a beauty salon you never should see blood – i’m strictly against it. the future will tell me that i’m right because the longterm results will be crucial. it’s very important, especially today where there is pollution or access to germs, virus, fungus – all the things you don’t want. if you use these aggressive methods, you know what happens? You get post-infl ammatory hyper-pigmentation – when you maltreat the skin you get an infl ammation and the body starts to increase healing but it starts to tell you have to produce more pigment and then you get spots. So it may be wrinkle-free but it will also be brown with hyper pigmentation. A lot of people coming here have been using fake tan for too long. if you use fake tan you degrease the skin, or these products don’t hold. then you have to recover it.

Where do you source the raw ingredients?All over the world – mainly now they come to us. once a year you have the world exhibition of raw ingredients. Last year it was in Barcelona, this year it was in hamburg, next year it will be in South America, then Japan. it’s nice to see all these people for four days every year; but equally it is so easy today with the internet – you have a conference, you can talk to someone online. through the fairs we’ve met some amazing guys from San Francisco who are working on a product – they haven’t got it quite right yet – it’s a cream base, you apply it, and the moment it comes into connection with skin and warms up to 36 degrees it becomes a fl uid and goes into the skin – i’ve never seen something like it. the sensation is like putting a sort of paraffi n on and it melts on the skin. it will work particularly as a lip balm.

Tell us about your groundbreaking ISE treatment?we won the top award for this at the Gala Spa Awards in Baden-Baden this year – an award that we think is worth having because only fi rst-class products and spas are considered. there were

hundreds of entries across the seven awards and we won the treatment Concept category with our ion Skin Equalizer treatment. it’s a 90-minute treatment which starts with a lot of preparation and uses ion Skin Equalizer which is designed to accelerate the rapid fl ow of mineral ions, reviving the look of the skin. if you ionise something then you have a negative and positive load, an electric current. it’s a technique to get some ingredients into the skin. i did a two-component product, zinc ions and copper, and together with a mediator you create a galvanic micro-current which lines up the molecules and gets them straight into the skin. i don’t think there’s anybody else in the world who has done that.

What are you currently working on?Something very special – actually we were nominated for a prize at the raw ingredient Fair; we’re working on the biological ageing process to slow it down. Ageing is not a linear process: it’s an active phase, followed by a passive phase. to explain it simply, in one hour you might have 10 minutes of active ageing, followed by 50 minutes of passive. So you only have to address the active phase to slow down the ageing. this is what we are working on: to stop the active peaks of chrono-biological ageing. that is very, very promising – it will come as a serum and it will come out in November or the beginning of January. From thinking about getting the raw ingredients and doing all the tests it takes about two years to develop a product.

Whom do you view as the main competition?it depends on the market a bit, but i think what’s very good is La Prairie and the guys from Kanebo are very good. Shiseido is over-estimated. there isn’t actually somebody exactly like us – our collagens are 70% natural collagens, there’s no one doing the combination of collagens and science. But i always say that other mothers also have beautiful daughters and that there are a lot of roads leading to rome... it’s just that we do things our way – we are the only people who do it this way and other people copy us, like Coca Cola, and we are very successful, but we don’t promise miracles. we just perform them...! when you do a treatment you will come out and say ‘this man is right’.

WWW.QMSMEDICOSMETICS.COM


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Industry reports

Beauty & wellbeing1

The Organic Pharmacy new New York store London-based organic Pharmacy has strengthened its presence in the US with the opening of a new store in New York’s Bleecker Street. the retailer, which was founded by Margo Marrone, a pharmacist and homeopath, is already in five Barneys stores in the US as well as a standalone store in LA. “we wanted a presence in New York where we could give customers the whole experience. Bleecker Street has such a great vibe, has great energy and there are other great brands there as well,” says Marrone. “it also feels quite European. So when the unit came up, we jumped at it.” the organic Pharmacy is known for its toxin-free, homeopathic, organic solutions across make-up, skin and bodycare, plus herbal supplements. there is also a dedicated area offering ‘super-fast treatments’ as well as skin and make-up consultations. “Everyone in New York is so busy,” adds Marrone. “So we’re targeting the treatments to be super-fast and super-effective.”

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Neom Organics relaunches Neom organics is relaunching with a new look and additional fragrances in its collection. the rebrand is modern and clean, with each Neom scent falling into one of four treatment categories: Energise, relax, de-stress and happiness. it will also introduce new Body and hand blends and a streamlined candle collection.

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Lilou et Loic new home fragrance this summer will see the launch of luxury home fragrance, bath and bodycare brand Lilou et Loic’s new range for men. Lilou et Loic – homme consists of five products: shaving gel, de-stress aftershave balm, hair & body wash, hand & body lotion and bath oil. the brand, which sells candles infused with high quality oils, room diffusers, body butters, scrubs and bath foams, has also extended its range of scents for the summer

positioning stems from having one-to-one relationships with customers. offline, that’s about the conversation they have with an advisor in a department store. online, we needed to offer the same personalised experience, and that was a challenge too.”

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John Barrett new salon New York City’s Bond Street is the location for hair stylist John Barrett’s new salon, due to open its doors later this year. Barrett, known for his penthouse salon at Bergdorf Goodman, has kickstarted an expansion plan that will see six new John Barrett salons open across the US, including Palm Beach later this year, followed by other locations in Manhattan, washington dC, dallas and Las Vegas. the 3,000 sq ft space in the New York Noho neighbourhood will be designed by architect daniel romualdez and will offer premium haircare products, specialist services such as the Barrett’s Braids and Ponytails Bar, and ViP treatment areas. “we are now taking the magic we created at the Bergdorf Goodman salon and bringing it to life across the country as we evolve and expand the John Barrett brand,” says John Barrett, chairman and creative director of John Barrett holdings. “the new location enables us to grow in new directions and expand our offerings. i am excited and ready for this next phase of growth.” the store stands on the site of the old Bouwerie Lane theater.

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Luxe Den spa Luxury Manhattan hair salon Luxe den has announced the opening of its new spa, complementing the salon’s hair and beauty offering. Six types of massage are available as well as body treatments such as the tourmaline detox and a full Moroccan ritual. Beauty products from top brands such as Aveda, Bumble & Bumble and Kerastase are also available to buy.

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Frédéric Malle new boutique French perfumer Frédéric Malle has launched a new Editions de Parfums boutique in New York’s west Village – his second in New York. designed by Steven holl, the store features aluminium foam (a silvery, textured material) throughout the interior, covering the walls and ceilings, and contrasting with the dark walnut furniture. Among the fragrances available will be the newly launched Eau de Magnolia, created by perfumer Carlos Benaim. Malle launched his niche perfumerie in 2000 in Paris, inviting nine top perfumers to create

as well as rolling out new packaging. it has recently launched in Fortnum & Mason and is looking to expand to a wider selection of boutiques and department stores across the UK and Europe. Lilou et Loic was launched in 2011 by two Scandanavian women, Aldis Firman and Malin wright. All products are created in-house, inspired by their travels.

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Jo Malone opens in ChinaJo Malone London has opened its first store in China, at the Mitsukoshi store in Beijing. the fragrance brand expects to open a further two doors this year, in Shanghai and Beijing. “we believe that the understated luxury of Jo Malone London along with the brand’s use of high quality and rare ingredients will appeal to the very discerning Chinese consumer,” says Fabrice weber, president, Asia Pacific at Estée Lauder Companies, which acquired the brand in 1999. “China and our Chinese consumers continue to play a key role in the strategy of our company, and the launch of the Jo Malone London brand reinforces our commitment to this dynamic market.” Maureen Case, global brand president, adds: “Jo Malone London is the epitome of British luxury. the dynamic cities of Shanghai and Beijing, where we will open our highly anticipated new boutiques, perfectly reflect the innovative spirit of Jo Malone London.” Jo Malone London is available in 34 countries worldwide: its first foray into Asia-Pacific was Japan in 2008. China remains one of Estée Lauder Companies’ fastest growing markets.

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La Prairie new e-commerce Luxury Swiss beauty brand La Prairie has recently launched new e-commerce websites for the US, Australian and UK markets and plans to launch an additional 11 online stores by 2016. the aim of the brand, which offers a collection of premium skincare, colour and fragrance products across 90 countries, is to deliver an immersive brand experience, including features such as ‘Your Skincare Advisor’, an interactive tool that guides customers through a personalised skincare consultation and advises them on the best products for their skin. France and Germany will be added later this year, with a roll-out to China expected for 2015. renee tavoularis, vice-president for global e-commerce and digital marketing, explains: “what we call the ‘La Prairie world’ is a luxury experience that offers exquisite attention to detail in product creation and appearance. with our new websites, we are able to extend this brand experience to our digital presence on a global scale. our luxury


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“People approached me for years to do fragrance, but that didn’t make sense to me. I design shoes. I know about toes.When I do the look books for the shoes, I’m always trying to fi nd the best nail colour to work with them. I even painted

the nails white and then tried putting Pantone on them in postproduction, but it didn’t work at all. And I started by painting the bottom of my fi rst shoes with red nail polish”

ChriSTian LoUBoUTin, on the launch of his new beauty line

their own original perfumes giving them complete creative freedom. the fragrances were packaged in bottles featuring the name of the perfumer – a fi rst in an industry where the credit is usually given to the fashion house or celebrity. As in all Frédéric Malle stores, the new boutique will feature portraits of the perfumers, a refrigerated cabinet for storing the fragrances and smelling chambers for testing them. Malle, who is the grandson of Christian dior perfumes founder Serge heftler, says:“My plan to open more freestanding stores around the world allows me to live my childhood dream: ‘publishing’ the work of great architects in the form of Editions de Parfums stores. i will have the same sort of creative relations with architects that i have with perfumers. i will ask them to design their dream shop with no compromise, nor limitation, although this time there will be a budget.” the brand’s fi rst New York store was opened on Madison Avenue in 2010 and there are now three outlets in Paris.

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Zadig & Voltaire new fragrance license Fashion house Zadig & Voltaire has signed a 15-year licensing agreement with Beauté Prestige international (BPi) for the creation, production and worldwide distribution of its ready-to-wear fragrances. BPi, which is owned by the Shiseido Group, will strengthen Zadig & Voltaire’s brand portfolio, creating perfumes for Jean Paul Gaultier, issey Miyake, Narciso rodriguez and Elie Saab. Zadig & Voltaire has been under license with Clarins Fragrance Group since September 2010, having entered the perfume market in 2009 with ‘Volume 1’, a unisex fragrance developed by an in-house team.

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Beauty Avenue locations the dickson Group of Companies will roll out new Beauty Avenue store locations throughout Greater China within the next two years, it has announced. the fi rst prototype of the new megastore beauty retail concept, which opened in Langham Place, Mongkok in November 2013, was visited by over 1.5 million shoppers between its opening and February 2014, according to the company. “Not only did we recognise high market demand for luxury skincare, cosmetic and fragrance products conveniently available in a single location, but an unmet need for superior customer service where multi-lingual experts available at each brand counter cater to each customer’s needs,” says Beauty Avenue CEo Sarah o’donnell. “Beauty Avenue

is the embodiment of this revolutionary concept: the broadest range and depth of product coupled with a personalised and knowledgeable customer service and shopping experience.” the company’s second Beauty Avenue location will open at tsuen wan Plaza in the New territories area of hong Kong with additional locations to follow in hong Kong and mainland China in 2014 through to 2016.

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Ginvera launches into UK Luxury skincare brand Ginvera – a best-selling range in Singapore – has recently launched into the UK. the Ginvera Green tea Skincare, which includes the Exfoliating Marvel Gel and BB Cream, is centred around formulas that use traditional Asian ingredients, including Green tea extract, and beauty rituals. Ginvera Exfoliating Marvel Gel is unique in that it is an exfoliator that is used on dry skin with dry fi ngers, while the Nude Cover BB Cream adapts to the skin tone throughout the day. the range is available from harvey Nichols as well as selected online boutiques.

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Dolce & Gabbana skincare collection dolce & Gabbana has launched its fi rst full skincare collection adding to its existing beauty off ering. developed alongside P&G Prestige, the range uses a new active, naturally-developed complex, the Gold Flavo-Silk tricomplex, along with olive oil and Vitamin B3, which the brand claims delivers moisture, an even tone and healthy-looking skin. “it’s the marriage of the designers’ vision with the scientifi c know-how of the P&G prestige labs. the line has clout and credibility,” says dr Samantha Bunting, the dermatologist who is the ambassador for the brand. “the textures are fantastic, it has plausible and realistic claims and it’s a comprehensive and cohesive line. the amount of in-vitro and in-vivo tests, random assessments and blind trials they’ve done is staggering.”

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Nocibé own-label French beauty retailer Nocibé, which has recently been acquired by douglas, is extending its own-label off ering with the launch of a higher-priced, premium professional make-up range. the line consists of 40 products and is structured around three essential steps of professional make-up application: bases, colours and fi nish. Maylis Grand, private label manager at Nocibé, says: “we wanted professional but accessible make-up for all women in terms of understanding and price.” Nocibé launched its own label in 2012 and now off ers bath products, skincare, accessories and make-up.

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L’Oréal plans Chinaexpansion Cosmetics giant L’oréal is planning a big push into China with its luxury brands over the next two years, particularly into the smaller, tier 3 cities, according to the Paris-based company. over the past decade, the luxury division of the company, which encompasses Lancôme, helena rubenstein, Kiehl’s and Giorgio Armani, has doubled in sales every four years in China, according to Nicolas hieronimus, head of L’oréal’s luxury division. “we are bound to continue at the same pace,” he adds. “in 2014 or 2015, Chinese consumers will be the number one consumer for L’oréal Luxe in the world.” this includes Chinese tourists making purchases outside the country. Jean-Paul Agon, chairman and chief executive of L’oréal , says: “the penetration of luxury is just beginning – we are building the future of luxury in this country.”

Face offUS beauty retailer Sephora has announced the launch of its new 3D Augmented Reality Mirror, which it claims is the fi rst that can simulate cosmetics on a user’s face in real-time and in 3D. Developed by Modiface, an augmented reality virtual makeover technology provider, the ‘mirror’ can be used either in a kiosk or on a mobile device, opening up the potential for try-before-you-buy retail in beauty, which, up until now, hasn’t been an option. “2D try-on can be slow and cumbersome in retail settings since you have to pose for a photo and wait forthe result,” says founder and CEO of ModiFace, Parham Aarabi. But with the 3D technology, he explains, video technology goes beyond these limitations, as it features a live video stream.


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to initiate a dialogue with a London audience,” says creative director Andreas Melbostad. “it represents a truly indigenous atmosphere for the brand’s new cohesive vision, showcasing a complete range of women’s and men’s collections along with their complementing accessories.”

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Kilgour new flagship British menswear tailoring house Kilgour has opened a new Savile row flagship store. Creative director Carlo Brandelli is behind the design, which features three contemporary granite-clad cutting tables as well as a bespoke floor comprised of sprinkled steel shavings and a light installation, which lights up some of the architectural features when the store is closed. Alongside the new flagship, a rebranding will be applied across Kilgour from a subtle change to the logo to new packaging. Kilgour is owned by the hong Kong-based private investment company Fung Capital.

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Roksanda Ilincic rebrands London-based designer roksanda ilincic has followed the opening of her debut Mount Street flagship with the news that the label is to rebrand to support its global expansion plans. the label will be known as roksanda, in an attempt to convey a “sophisticated simplicity that reflects the designer’s vision and strategy for future global growth”, which includes a plan to open further standalone stores. the London 2,500 sq ft boutique, situated in a Grade 2 listed Edwardian building, was designed in partnership with British architect david Adjaye and showcases all of the label’s collections including a ViP area for bridal and bespoke dresses. ilincic says: “opening our first store is a huge milestone for me. it will be the home for the brand in more ways than one, and will be the ideal space for my vision for the label to be fully realised.”

8

Alexander McQueen unveils Japan London-based brand Alexander McQueen has unveiled its first flagship store in Japan. the 4,200 sq ft unit is located in tokyo’s Aoyama district, also home to brands such as Balenciaga, Givenchy, Prada and Marc Jacobs. the flagship’s retail concept was conceived by the brand’s creative director Sarah Burton, along with architect david Collins, and features two floors housing the brand’s men’s and womenswear collections, including catwalk looks, ready-to-wear

Industry reports

Fashion & Accessories1

MrPorter.com launches Kingsman in collaboration with acclaimed film director Matthew Vaughn, MrPorter.com is launching a new menswear label, Kingsman. inspired by Vaughn’s upcoming British spy film, ‘Kingsman: the Secret Service’, which is due out mid-october, the men’s online fashion retailer has designed a 60-piece collection together with Vaughn and Arianne Philipps, costume designer. the range, called Kingsman, is based on the costumes used throughout the film, which stars Colin Firth, Samuel L Jackson and Michael Caine, and will be available exclusively on MrPorter.com from September. it includes suiting, outerwear, shirting, knitwear and accessories. toby Bateman, buying director at Mr Porter, says: “this is a hugely significant development for Mr Porter. we are consistently looking to provide the best in men’s style for our global customers and visitors and the Kingsman label combines the traditional precision of Savile row tailoring with a modern silhouette. we have worked with the best in class for each product category to develop this collection. Men’s style has always been inspired by the look of leading men in film but this is the first time that the costumes for a movie have been conceived with the idea of selling those clothes to the film’s audience. You could literally be sitting in the cinema watching this film and shopping the looks from your mobile device or tablet as you watch.”

2

Matthew Williamson babywear British designer Matthew williamson is due to launch a new addition to his range – babywear. his mother, Maureen williamson, has officially joined the brand and has created the first pieces of the line, which will be available in Matthew williamson stores. “My mum first started knitting when i was born, then more recently she started making baby bonnets for friends and they went down a treat,” explains williamson. “She took inspiration for the colours from my first collection and now she’s got a waiting list.” Consisting of brightly coloured knitted cashmere hats and booties, the line may lead to a fully-fledged childrenswear line.

3

Christian Dior renovations Christian dior has opened two refurbished stores in the US and one in Canada. the outlets in Aspen and New York in the US and in toronto, Canada, have all been

remodeled following the launch of the new global concept, inspired by the dior flagship store in Paris on Avenue Montaigne. this year will also see dior renovating its flagship store on rodeo drive in Beverly hills as well as new store openings in houston, San Francisco and Vancouver.

4

Ian Stuart Blewcoat opens A first standalone retail outlet for designer ian Stuart has opened its doors at the National trust Blewcoat building in London’s Victoria. with the aim of providing “luxurious, stylish and unique bridal, special occasion and red carpet gowns to three generations of glamorous women, within beautiful surroundings”, the luxury outlet also showcases the designer’s brand new London-exclusive collection. it will also offer private consultations, on-site tailoring, bespoke designs and workshop evenings. the building, which is a 300-year-old, Grade 1 listed property, has been renovated, maintaining all the elements of its historical elements: it is the first time a National trust property has been used as a luxury boutique.

5

Diesel Black Gold London flagship diesel Black Gold, the premium label of italian denim-wear company diesel, has launched a new global retail concept with the opening of a flagship store in London. designed by Pierre Beucler and Jean Christophe Poggioli of Architecture & Associés, the 250 sq m Conduit Street, Mayfair store features staggered lighting and bare concrete surfaces juxtaposed with leather furniture. “the Conduit Street store is a unique opportunity


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“Maybe it’s time for a bit of slow luxury. After a period when everyone wants to produce more, do more, use more and launch more bags, it’s now time to see how we can make these bags become staples. In every collection, we like to

design a new Baguette, or a new Peekaboo, but still celebrate the shapes, which are [timeless]”pIetro BeccarI, chief executive of Fendi, in an interview in Business of Fashion

and accessories. “the environment seems a good fit for McQueen – it’s quite an open, contemporary environment, which we like,” says Jonathan Akeroyd, CEo. the label’s presence in Japan up until now has been mainly through its shop-in-shops in department stores, which the company operates, as well as its standalone accessories store, which opened last year in tokyo’s roppongi hills district.

9

Abercrombie & Fitch shake-up Abercrombie & Fitch has named a British retail executive as its new president, as part of a management shake-up in line with its long-term strategy to update the brand. Christos Angelides, who comes from UK-based clothing chain Next where he was group product director, will take up his role at the teen apparel chain in october and will be responsible for products, customer interactions and finances. the company is also currently searching for a brand president to oversee the hollister label, which caters to younger shoppers. Chief executive officer Mike Jeffries, who has been trying to rekindle Abercrombie’s appeal among teen shoppers, says: “Christos’s appointment is a critical step in our long- term strategy of being organised to win and we are excited to welcome him to the Abercrombie team.” the brand is also updating its stores and adding more fashion-forward merchandise while using social media marketing to engage younger shoppers.

10

Coach restructure US retailer Coach is due to close about 70 stores in North America, expecting revenue to fall in the year ending next June, as it struggles against fast-growing rivals such as Kate Spade and Michael Kors. the clothes, shoes and handbags retailer said it expected North America same-store sales to fall in the “high teens” in percentage terms in the coming year. its North American same-store sales fell 21% in the three months to March 29, its fourth straight quarterly decline.

11

Jacques Vert new collaboration high-end occasionwear brand Jacques Vert has launched two new collections in collaboration with former Bellville Sassoon designer Lorcan Mullany, and rachel trevor-Morgan, milliner to hM the Queen. Mullany’s collection of 14 dresses features daywear and cocktail pieces while trevor-Morgan’s range of 15 hats and

headpieces have been designed specifically to complement the dress designs and use delicate netting and floral embellishments. the ranges are retailed through eight stores and online at Jacques-vert.com.

12

Valentino New York flagship A New York flagship for Valentino is set to open in August. Located on Fifth Avenue in a postmodern building that was formerly the takashimaya department Store, the 20,000 sq ft flagship has been designed by creative directors Maria Grazia Chiuri and Pierpaolo Piccioli, together with david Chipperfield Architects. the store features elements of the brand’s newest retail concepts, already seen in boutiques such as rodeo drive, Beverly hills, Madison Avenue in New York and Caesar’s Forum in Las Vegas, but it also adds new elements. these include a new eight-storey façade constructed in black steel and aluminium, inspired by modernist icons such as Mies Van der rohe’s Seagram Building, as well as a 27ft high atrium,

featuring a display wall upon which there are 39 shelves, which are designed to exhibit products. on the first floor is a completely new accessories concept, featuring brass and oak shelves and long marble plinths, while the women’s collections sit on the second level with the menswear on the third. the architecture is designed to complement the pieces on display using materials such as timber, marble, leather, carpet and carbon fibre. the store will carry all product categories, with the accessories offering being the largest worldwide. it will also be the second Valentino boutique (after San Francisco) to carry the men’s collection in the US. the brand currently has 116 freestanding boutiques worldwide with one due to open in Aspen later on this summer and the other to launch in the Miami design district in the autumn.

Dressing up Vogue The Gown is the first in a new range of books drawing from the fashion magazine’s library of images. Due to launch in October, the highly illustrated visual sourcebook, curated by the former features director of British Vogue, Jo Ellison, consists of a collection of images showcasing over 300 gowns. Arranged in five chapters, Classical, Fantasy, Drama, Decorative and Modern, the book celebrates a century of fashion history, as well as featuring the work of top photographers including Mario Testino, Nick Knight, David Bailey, Herb Ritts, Helmut Newton and Cecil Beaton. “The magic of Vogue is in rediscovering how the magazine has recorded so many decades of radical, social and economic change (during which womenswear has undergone similarly seismic revolutions) and yet retained its quietly authoritarian voice,” says Ellison, who is the newly appointed fashion editor of The Financial Times.

Fashion fighting warStella McCartney has joined forces with the charity War Child to launch a campaign called Draw Me To Safety. The international art project has been designed to raise awareness of how children affected by war view the world, and to offer support to the most vulnerable. The campaign will ask young people, aged between eight and 15 in the UK and in conflict-affected countries, to create artwork based on the question: ‘What makes you feel safe?’ McCartney will then create a fashion item based on the finished pieces, the profits from which will go directly to War Child. “There are children across the world who don’t know what safety means because all they have ever seen is conflict,” says Rob Williams, chief executive of War Child UK. “Draw Me to Safety is about the power of children’s voices to talk directly to the world.” McCartney adds: “Children see the world with clarity and honesty. War Child UK and I are excited to share their insights through art that will raise awareness and encourage the world to do more to protect children from war.”

It-collectionModel and it-girl Cara Delevingne has launched a clothing line in collaboration with DKNY. The 15-piece capsule, mostly unisex collection, will feature her signature style and consist of t-shirts, beanies, a leather jacket with removable sleeves and accessories, all with small details that have special meaning to the model. With a launch date of November, Delevingne has also called upon her Instagram followers to post an image of themselves for the opportunity to join her in New York for the campaign shoot for the collection.


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Industry reports

Media & Publishing3

The Luxury PropertyShow collaborates with Waitrose the Luxury Property Show magazine has signed a deal with premium UK grocer waitrose to sell a one-off publication, which is being launched to preview the show of the same name. the magazine, produced by david hall Publishing, will be sold exclusively across 220 waitrose stores from october, ahead of the show in London in November. the 116-page magazine will cover homes from around the world alongside editorial coverage of topics such as investment, executive travel and buying and storing wine. “this is a unique opportunity for brands to reach 10,000 target consumers and to capitalise on the excitement that is building around the show,” says Sean o’driscoll, dhP’s managing director. “distribution in waitrose is a terrifi c endorsement for us, as we increase the levels of investment in the marketing campaign for what is the show’s eighth year.”

4

Stylus Media Group launches Stylus Fashion Marc worth, CEo and founder of research and advisory business Stylus Media Group, has announced the launch of a new advisory service, Stylus Fashion. the new service will launch in September and will off er fashion brands and retailers assistance in discovering original ideas and opportunities that they can bring to market faster than their competitors. Membership, which is invitation-only,will be capped at 100 to maintain a competitive advantage for its members.it will include only the best designer brands and retailers, as well as complementary technology, design and consumer brands from outside the traditional fashion industry. Leaders and creative directors from the Stylus Fashion member organisations will be invited to participate in Stylus Fashion’s Creative Leadership Council, which will meet throughout the year to network, share best practices and address business issuesof the day.

5

D&M Edit debuts Bar group drake & Morgan has launched a customer magazine, to be published bi-annually, with a spring/ summer and an autumn/ winter edition. d&M Edit will be stocked across drake & Morgan’s seven London bars and will feature articles on food and drink, fashion, travel and design. “d&M Edit is all about giving more to our customers, from travel tips and interior inspiration to recipes for our best-selling dishes and drinks,” says head

1

La Maison launches A new service providing luxury brands with consumer insights, content and technology solutions, with an emphasis on helping them keep up with digital innovation and emerging markets, is set to launch. Magazine publisher Condé Nast, communications network Publicis worldwide and Google are behind the new venture, which is called La Maison. Condé Nast’s Branded Content Group (which is separate from its editorial operations) will create original content for La Maison clients, including editorial, photography and digital video. the content will be distributed across Condé Nast’s media channels as well as Google and Youtube. La Maison clients will also have access to Publicis agencies. Charles Georges-Picot, who heads up several agencies within Publicis worldwide, will run the service, while Vogue design director raul Martinez will oversee the creative side. Ariane rivier will lead a luxury team at Google, providing trend analysis and content distribution strategy. “Condé Nast knows how to produce content and Google has a much deeper reach on data then we currently do,” says Georges-Picot. “whether it’s understanding the behaviours of Brazilian luxury buyers and spotting the next big social channel in China, or providing unique fashion fi lms and exclusive editorial content, we will ensure premium brands are at the forefront of innovative marketing and consumer knowledge.” the three-way partnership off ers clients a global package where the agency is the main interface for clients, who otherwise have to deal with several partners on one campaign. La Maison will start with a team of about 15 people for a year and Condé Nast’s revenue will be on a case-by-case basis.

2

100 points byRobert ParkerA new quarterly international lifestyle magazine, aimed at high net worth individuals, has been launched by German magazine and digital media company Burda international in partnership with bi-monthly publication the wine Advocate. 100 points by robert Parker is inspired by the interests of world-famous US wine critic robert Parker and covers, “lifestyle products, services and experiences”. while it features wine-related topics, it doesn’t include wine reviews or critiques and advertises non-wine related brands. An editor has yet to be appointed, although an international team of writers and contributors is on board, with the wine Advocate’s team of writers, including Parker, contributing to the magazine on an ad hoc basis.

of communication Lisa Yearwood. “our customers are always asking about the little touches that make our product so special and this is our way of enabling them to take a little bit of the magic home.” drake & Morgan opened the refi nery, its fi rst bar, in 2008, followed by the Parlour in Canary wharf, the Anthologist and the Folly, both in the City, and the drift in Liverpool Street. More recently, in 2013 it opened the happenstance in St Paul’s, followed by the Fable in holborn, in February 2014.

Moving up Hearst Magazines UK has announced the appointment of Becky Gee in the newly created role of publisher for the fashion, luxury and lifestyle brand Red. Currently strategic director fashion and retail at Grazia and Grazia.co.uk, Gee will join Red in August, working with editor-in-chief Sarah Bailey and group publishing director Ella Dolphin, to drive commercial revenues and develop new revenue streams as well as focusing on strategic partnerships. Gee says: “I’m thrilled to have been given this opportunity. Red is a unique proposition... luxury for real women, and remains a brand with enormous potential.”

All for oneIPC Media has announced a restructure that removes the business divisions of Connect, Inspire and Southbank, uniting the business as “One IPC”, according to an announcement from Marcus Rich, CEO of IPC Media, who said the changes would off er the business the “strongest possible foundation,” for future growth. The company restructure leads to changes in responsibility among the IPC Media board of directors, with each taking strategic ownership of particular audiences or focusing on driving growth in key sectors. “One IPC describes an approach to how we manage our brands and our business,” adds Rich. “It means that where we create successful revenue enhancing strategies for one brand, or in one market, we immediately look to scale that thinking and develop it across other brands and markets. Where we see well-proven effi ciencies in one part of the business, we instigate that learning across other parts of the portfolio. And clients and agency partners will have a single point of access for IPC’s valuable audiences and brands.”


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luxury inDicator

Brand extensions drive momentum P/E multiples in the luxury sector are currently roughly in line with the historical average, as volatility in exchange rates, Asian GdP growth and travel retail trends – along with management turnover, particularly in design talent, at several major players – have offset a generally solid outlook that continues to benefit from asset price increases.

there was some consolidation in Europe, a pull-forward in spend in Japan into 1h14, and the North American market has seen solid growth, but China’s output trends appear to have bottomed. we believe continued top-line momentum in the luxury goods space will be driven by an increased focus on creating newness in product collections and further development of brand extensions.

As part of the brand’s reinvigoration, coach will unveil its first collection from new executive creative director Stuart Vevers at full-price locations in September, followed by a small initial launch at factory in december with a full roll-out during spring/summer 2015. At louis Vuitton we believe the new creative director, Nicolas Ghesquière, will help inject excitement and a new higher-end positioning for LVMh’s flagship brand, and we are already encouraged by the positive press coverage from his first show and Fall 2014 collection. At tiffany, we believe the brand should continue to benefit from the introduction of new product under design director Francesca Amfitheatrof as well as greater sell-through in fine, solitaire, statement and engagement jewelry categories in addition to improving trends in fashion jewelry (helped by the continued success of the Atlas collection). we are also seeing more newness from richemont, in watches, as a way to drive market share gains through new product launches, including the Calibre de Cartier diver watch.

Under its newly appointed CEo, Christopher Bailey, burberry remains focused on its growth initiatives such as the direct operation of the beauty business and further developing its men’s category as well as underpenetrated markets. Additionally, Michael Kors has just named Mark Brashear, formerly CEo and chairman of the Americas at hugo Boss, to the newly created role of president of men’s. the brand views menswear as a significant opportunity, and is launching a new fragrance in the coming months, as well as introducing a new collection of men’s watches and opening the first flagship store to feature the full men’s offering in Soho in New York this fall.

tELSEY AdViSorY GroUP

Industry reports

Jewellery & watches1

Watches of Switzerland new ad campaign watch retailer watches of Switzerland has launched a brand new ad campaign to celebrate the opening of its new flagship store on London’s regent Street this summer. the campaign takes inspiration from hitchcock’s thriller ‘the Birds’, playing on the concept that magpies covet precious things, and shows watch-wearing models swarmed by the birds, alongside the strapline, ‘the world’s most irresistible selection of luxury watches’. the creative is shot in black and white, with the watches shown in colour, while fake magpies are featured in large window displays next to gold birdcages. Future campaigns will build on the latest ads, as the business looks to push the store’s status as Europe’s largest standalone watch showroom. the store itself is 17,000 sq ft with three storeys devoted exclusively to luxury watches.

2

Swarovski Chinese jewellery Crystal brand Swarovski has launched a China-exclusive jewellery line and is on the lookout to collaborate with more Chinese designers as part of its expansion into the country. the 33-piece Flower of Life collection was launched in Beijing under its luxury line, Atelier Swarovski and was designed by Chinese designer Ye Mingzi, known for her wedding dress designs. Nadja Swarovski says: “China is an incredibly important market for us – we are opening an average of 25 to 30 stores per year in China. it seems to be tapping into its creative dNA right now, and we are seeing some very innovative, exciting and confident work.”

3

Vacheron Constantin opens Moscow Swiss watch brand Vacheron Constantin has launched a boutique in Moscow. the brand says that the store, which is housed in Berlin house close to the Kremlin and Bolshoi theatre, is its largest retail outlet to date. it joins other Vacheron Constantin European boutiques including Paris, Geneva, Lucerne, istanbul, Kiev and London. to celebrate the opening, it also unveiled four limited edition timepieces with matching cufflinks.

4

Bremont x Wright Bremont’s latest limited edition watch release incorporates material from the 1903

Think pink The Argyle Pink Diamonds Tender, held annually since 1984, celebrates its 30th anniversary this year. To mark the occasion, Argyle has created a limited edition collection of pink diamond pendants with each piece comprising Argyle diamonds, pavé-set in fair-mined gold. The 2014 tender, which debuts in Sydney during August, will travel to New York and Hong Kong before closing in October. It comprises 50 to 60 of the world’s most exceptional polished pink diamonds, representing a year’s production from the Argyle Diamond Mine. About 150 specialists worldwide are invited to attend a private viewing and to place a sealed bid on one or more diamonds.

Build-a-collectionWorld-renowned architect Zaha Hadid is to guest curate a showcase of personal highlights from this year’s Goldsmiths’ Fair in London. Hadid will pick 20 pieces from the exhibition of fine jewellery and contemporary silver for the collection, ‘Zaha Hadid Selects’. The display will be unveiled at the show in September, but one piece can already be revealed: a 22ct yellow gold ring by Jennifer Saker. David Mills, head of communications at The Goldsmiths’ Company, says: “As well as being a phenomenal architect, Zaha Hadid is an inspirational figure in the wider world of design and style. We are delighted Zaha has agreed to curate our first guest selection at Goldsmiths’ Fair, an event which celebrates the very best in contemporary British design and craftsmanship.”

wright Flyer, the first ever powered aircraft, designed and built by the wright brothers, wilbur and orville, in dayton, ohio. Just as significantly for the brand, the watch also incorporates Bremont’s first movement made entirely in-house and designed and developed in Britain. wright family member Amanda wright Lane paid tribute to Bremont’s passion for aviation heritage.


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Content brings luxury to life online through content and storytelling, luxury brands can make their exemplary bricks-and-mortar and product experience relevant to the sector’s new tablet and smartphone-wielding audience.

rolls-royce regularly makes content available to enthusiasts and it’s an approach that seems to be working, particularly among a younger demographic. A post on Facebook will generate thousands of likes, a video on Youtube will get hundreds of thousands of views and comments, and a new fi lm on the website increases visits by 200%. this traffi c might not always be from potential customers, but it certainly creates a desire that seems to be translating into sales. rolls-royce had its most successful fi nancial year ever in 2013, the third in succession.

what is the key to this success? Certainly for rolls-royce, a signifi cant part of the answer lies in creating authentic stories that sell craftsmanship. Every piece is seamless, eff ortless and beautifully executed. there is also a unifying creative idea. when rolls-royce launched its wraith model, it created a fi lm that made the world (quite literally) stand still, connecting with people on an emotional level rather than just talking about product. rolls-royce also ensures every digital execution is rewarding. the wraith fi lm was interactive and people could delve deeper to fi nd bespoke stories, opinion and details.

Making luxury accessible digital is also a great democratic platform, off ering eff ortless access to those who still might feel intimidated by the in-store luxury experience. despite a deeply entrenched aspirational approach to marketing, recent reports show that the luxury market could be going through a period of change that requires a fresh evaluation of its approach to potential customers in the post-digital world.

it seems that the most forward-thinking luxury brands are not merely using digital to translate their offl ine luxury persona into appropriate online experiences. they are doing something much cleverer. they are driving passion and engagement amongst us, the hoi polloi. while this might seem blindingly obvious for brands already embracing digital, it marks a sea change for a sector that has traditionally thrived on peddling exclusivity and been notably apprehensive about the accessibility of the web.

one of the most powerful markers of luxury has always been the richness of the experience it off ers. the multi-sensory delight in the touch, feel and quality of a product, as well as the exclusivity of the environment in which it is bought, are what make it worth the price tag.

the numbers underline the fact that ‘brand experience’ is increasingly important for luxury: while overall luxury sales might be in decline, luxury purchases through experiential channels have grown year-on-year by 12%, which is why the channel now accounts for 55% of total luxury marketing spend (source: Boston Consulting Group).

New audience; new experience As the post-recession luxe-buyer becomes younger, the savviest luxury brands know that they will only achieve cut through and engagement by creating great experiences that exploit the emerging tech this audience uses daily.

of course brands can’t survive on engagement alone. An eff ective digital strategy creates desire among those who can aff ord the products by making them more widely acceptable. And it attracts younger customers who are consistently spending 50% more on luxury goods. they are the smarter, digital-fi rst, mobile-always audience who, research shows, ‘are looking for brands that reward them with pride of ownership and send a smart shopper message’ rather than brands that are primarily used as status symbols.

Experiential channels are a vital part of any luxury marketing strategy now, but many brands are overlooking them when it comes to their online presence, failing to match their digital personalities with their physical brand promise, let alone impress in the way luxury should. Yet it can be done. Andrew Smith, chief strategy offi cer at Partners Andrews Aldridge, provides some pointers on how luxury brands can exploit the power of experience in the digital space, using everything from content, partnerships and storytelling to stay true to everything that makes them luxe

cracKing oPen thE ivory toWEr


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The Fabergé Big Egg Hunt it’s just fun isn’t it? Lots of decadent, ostentatious eggs scattered all around various cities in the world. they are beautiful in themselves, making the hunt something of an outdoor gallery hop. the fact there’s a smartphone app to help you fi nd them beautifully unites an offl ine and online experience. it makes an exclusive brand that used to be associated with European royalty available to a younger mass audience and rewards them with great experiences, such as free hotel stays. it’s an idea that keeps giving and that gets our thumbs up.

The Louis Vuitton Pass the world of luxury brands used only to be accessible to the privileged few, but with digital everyone can get involved, which then creates desire amongst the purchasing audience. Louis Vuitton has totally missed the mark in the past. its philanthropic luxury campaign featuring Bono and his missus is best left in the dusty annals of history and was universally panned in social media. the Louis Vuitton Pass is much, much better. it eschews blippar and Qr codes and instead asks people to download the exclusive Louis Vuitton pass. By scanning the campaign images that feature the app’s icon you can experience a virtual world where Louis Vuitton ads are brought to life. it has a touch of arrogance, but that works. this is Louis Vuitton after all. the story telling is excellent and it’s beautifully crafted. oh and david Bowie’s in it. Enough said.

digital can give luxury brands a universal appeal. it also allows them to go beyond the product and tell stories that resonate on a creative, cultural and emotive level. Greater interactivity gives everyone a chance to get involved and voice an opinion.

For long-established luxury brands that could be perceived as a bit, well, fusty, tapping into social channels in particular can be an important step towards democratisation and youthfulness. Luxury, after all, is all about infl uence.

So digital in the luxury market is not just about selling to the purchasing audience. it’s more about creating moments of inspiration that resonate with everyone, especially a younger demographic. if you get that right, the sales will follow.

with this in mind, at Partners Andrews Aldridge we have looked at several luxury brands to see how well they are executing digital to drive passion and create desire to purchase amongst a younger audience… and we haven’t mentioned that ubiquitous luxury fashion brand beginning with B and ending in Y once.

The GoodFendi – Drones and Buggies Fendi is a great example of one of those brands that has been reinvigorated by digital. its live stream of the autumn/winter 2014 fashion show in Milan via drone Cam was an industry fi rst and continued the trend for opening up the fashion show world in an innovative, fun way. then there are the Fendi Buggies, which are a smart move. to sell the ultimate accessory, Fendi creates another accessory. A weird little critter, made of mink. You go online, answer a few easy questions and your ideal buggy appears on your ideal bag which you can then share with your friends. it showcases the collection beautifully and adds a sense of youthful playfulness to what was a rather staid brand.

cracKing oPen thE ivory toWEr

“ Digital is also a great democratic platform, off ering eff ortless access to those who still might feel intimidated by the in-store luxury experience. Despite a deeply entrenched aspirational approach to marketing, recent reports show that the luxury market could be going through a period of change that requires a fresh evaluation of its approach to potential customers in the post-digital world”

Far left: rolls-royce made an interactive fi lm to launch the new wraith model

Left: Fendi live-streamed its autumn/winter 2014 show by drone cam

Above: the Faberge Big egg hunt used a smartphone app to engage younger consumers with a brand previously associated with european royalty


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The Gucci Chime for Change campaign Patrizio di Marco, the CEo of Gucci, has cited fashion, craftsmanship and responsibility as the three pillars of Gucci. the Chime for Change campaign hits on all of them. it’s a universal concept that strikes an emotional chord with everyone, but it also makes people feel good about Gucci and gives those who can aff ord it permission to buy. digital is used brilliantly to give the brand more kudos amongst a younger audience. it launched a new online storytelling platform with a series of fi ve short fi lms. then there was the ‘Chime hack:’ a hackathon, which challenged female techies to participate in an eff ort that created mobile apps to support women around the globe. we think it’s innovative, inclusive and passionate. And we love the mantra too: None of us can move forward if half of us are held back.

Could do better…Tiff any & Co on social media the chicness of Audrey hepburn as holly Go-lightly. the oozing sensuality of Marilyn Monroe performing ‘diamonds are a Girl’s Best Friend’. the plush red carpets underlying the glamorous in-store experience. think tiff any’s and you’ll undoubtedly conjure up a head full of iconic images and defi nitive cultural moments. try and access that magic on social media and you might be sorely disappointed. while tiff any scores well on Facebook engagement, its 2012 what Makes Love true eff ort missed an exciting opportunity to engage with instagram users. on twitter, tiff any & Co has a limited repertoire of minimalist responses and is among a minority of retailers that hasn’t bothered to create a Google+ account.

Alexander McQueen’s online branding the late designer hailed by some as Alexander the Great, by others as a mad futurist, defi ned a unique aesthetic and brand. today, his theatrical, dramatic look lives on with the new face of Alexander McQueen, Kate Moss, going sci-fi in a futuristic online video for the brand’s spring/summer 14 collection. while we can’t fault the brand’s dark, dystopian vision (Mossy with neon orange hair? rocks), the brand’s failure to create a coherent experience elsewhere online is disappointing. Visit the McQueen site, stick a post-it over the logo and you could be on any high street fashion brand’s site. disappointing stuff from a branding perspective.

Room for improvement Many luxury brands have now created usable (rather than purely fl ashy) sites and apps. Even Chanel, having famously resisted e-commerce to retain an ethos of exclusivity, now sells selected beauty products via its mobile app. But where luxury still lags behind is in its multi-channel off er.

Few brands have yet nailed their digital experience across devices to off er a positive and seamless omni-channnel experience. it is here, if luxury wants to meet the masses on their own terms in a post-digital world, that work remains to be done.

there’s no doubt that when digital is well executed it gives luxury brands a whole new lease of life. harnessing emerging tech can create experiences that are immersive, fun and playful, which involve people rather than exclude them and attract luxury’s all-important younger audience. the future’s bright – and it’s wearing couture.

PARTNERS ANDREWS ALDRIDGE IS A DIGITAL DIRECT AGENCY, PART OF ENGINE GROUP. THE AGENCY IS A 100-STRONG TEAM OF INNOVATIVE PEOPLE WHO BASE THEIR WORK ON THE MANTRA THAT ‘NONE OF US IS AS CREATIVE AS ALL OF US.’ IT CREATES PROVOCATIVE IDEAS THAT CHANGE BEHAVIOUR, BY ANY MEDIA NECESSARY, JOINING PHYSICAL AND DIGITAL COMMUNICATIONS IN SURPRISING NEW WAYS, BUILDING CONNECTIONS AND EXPERIENCES THAT DRIVE DIRECT CLIENT VALUE. CLIENTS INCLUDE ROLLS-ROYCE, SANTANDER, BMW, RNLI AND THE PAYMENTS COUNCIL.

Right: David Bowie features in brilliant advertising for the

Louis Vuitton pass

Below: Gucci’s Chime for Change campaign has

reached out all over the world and spawned the creative

‘hackathon’ at classroom level


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Shoe Corner is inspired by the boutiques of 1920s London and the original Mayfair Fenwick town house. designed by Shayne Brady of Bradywilliams, the space will feature custom-designed furniture, bespoke carpeting and leather upholstery, and will off er collections from brands such as Valentino, Proenza, Chloé, Jil Sander and Michael Kors. “the vision is to restore the quintessential Mayfair town house to its former glory,” says Brady. “with three architecturally elegant spaces that showcase an evolution over the decades, the rooms will convey classic and beautiful to contemporary.” david walker-Smith, managing director, adds: “Creating a bespoke shoe department on the ground fl oor is something avant-garde to the retail experience – not just at Fenwick but across all UK department stores. our founder Mr J J Fenwick said back in 1891 – ‘it’s not the size of the off er; it’s the quality of the edit’. this is something that remains a fundamental element of the Fenwick ethos. our shopper is time-poor so we have micro-curated a key edit to ensure they have a shoe relevant for every element of their busy life. our goal is to create the ultimate level of service for a unique, refi ned, yet opulent shopping experience.” Fenwick of Bond Street opened in 1891 and is the London fl agship of the Fenwick Group.

4

Dom Reilly/Financial Times Business news organisation the Financial times has collaborated with luxury leather goods brand dom reilly to create a limited edition range of luxury travel accessories, which is available exclusively online.

the range has been developed with the aim of combining functionality, style and innovation and includes a weekend bag, laptop case, iPad case and travel wallet. Each piece is made from top quality leather with the interior of the iPad and laptop case using the same high-density shock-absorbing foam used in the cockpits of Formula one cars. All pieces are stamped with a collaborative logo with prices starting from £195. “the Financial times has a long-standing heritage in providing consumers

1

Case goes fl ying Luxury luggage and travel goods retailer Case has opened a new outlet at the newly launched heathrow terminal 2. off ering collections from over 40 high-end luggage brands including tumi, rimowa, ted Baker, Samsonite, Victorinox, Globe-trotter, Bric’s, Paul Smith and Lulu Guinness, the new store features a 3.5m high light bulb display set against a backdrop of monitors. “this is a futuristic, multi-layered, visionary airside luggage store packed with contrasting elements to stimulate and delight the travelling consumer,” says Nick Short, creative director at raylian, the agency behind the store design. Stephen Spitz, CEo and chairman of Case, adds: “it is a truly iconic store that provides everything a business or leisure passenger could possibly need or desire to enhance their journey.” it is the company’s third airport travel retail site –it already has standalone stores operating in both terminals at Gatwick. Case also owns and operates the luggage halls in harrods, Selfridges, harvey Nichols and hoopers.

2

Galeries Lafayette to openin Milan French department store Galeries Lafayette has confi rmed plans to open a new fl agship in Milan as part of an international expansion plan aimed to attract high-spending tourists from emerging markets. the four-storey building will cover 18,000 sq m and is scheduled to open in 2017-8. it will be the store’s second European opening outside France – it has recently opened in Berlin, Casablanca, dubai, Jakarta and Beijing with further openings planned in doha and istanbul. westfi eld Milan will include 300 stores, 50 restaurants, 14-screen multiplex cinema and a luxury village (see LB167).

3

Fenwick is a shoe-in A new luxury shoe department has launched at London’s high-end department store Fenwick Bond Street. Located on the ground fl oor, the three-room, 4,143 sq ft

with high quality products globally and their competencies align directly with ours,” says dominic reilly, founder and CEo of dom reilly. “we felt our partnership would help push both our brands into new areas.” Catherine Newman, global director of brand & B2B marketing at the Ft, adds: “Since the 1800s we have been providing our readers with high quality products, which has now been extended into luxury accessories with dom reilly. the collection is perfect forour readers who demand functional yet stylish products to help them navigate their busy schedules.”

Bespoke bubblesChampagne By You is a new bespoke service that allows customers to create their own champagne, from the bubbles to the bottle. At a tasting session you receive a case of six diff erent champagnes from Grand Cru to Blanc de Noirs to Rosé, all from two small artisan producers. This comes along with tasting notes and the story of each producer. Having chosen the taste, you design your own aluminium label with the help of Champagne By You’s in-house design team. It can incorporate a favourite photo, design or poem. At the end, you have a tailor-made bottle of champagne – delivered to your door.

Streets aheadRegent Street is the fi rst shopping street in Europe to launch a mobile phone app that delivers exclusive, personalised content to shoppers as they walk down the street. Using Bluetooth technology to communicate with beacons in each store – as shoppers walk past they receive alerts direct to their mobile phone including information about new products, upcoming events and exclusive off ers only available to those shopping on the street that day. Beacon technology is a new innovation only trialled by a handful of retailers and this is the fi rst time the technology has been used across an entire shopping street. As well as providing content, the app also builds a profi le for each shopper so the content they receive is tailored to their individual preferences. It also helps shoppers to plan their visits and introduces them to new brands that match their interests. The app is part of a £1bn regeneration programme by The Crown Estate. Paul Lorraine, UK General Manager of Longchamp, says: “Success in retail in the 21st century is strongly linked to how you engage your customers in store and online. Regent Street already has a reputation as being the place to be for brands like ours and the new mobile app will bring the digital and physical together, providing an exciting new way for us to speak to our customers.” The app, which is free to download from the app store, was developed by digital marketing fi rm Autograph.

the range has been developed with the

Industry reports

Luxury Goods


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Industry reports

Luxury Services3

AndBeyond remodels safari lodge Luxury experiential travel company andBeyond is in the process of reconstructing its Sandibe okavango Safari Lodge. the remodelled and refurbished lodge, which lies at the heart of the Kalahari desert in Botswana, will reopen in September with 12 new suites, including one family unit. the nest-like suites will be raised among the trees and will feature private plunge pools. the new refurbishment is inspired by nature, using organic materials and the latest in alternative energy sources. “the innovative design reflects the sustainable footprint of the lodge while remaining warm and intimate,” says Joss Kent, CEo of andBeyond, which owns and operates 33 lodges and camps in Africa and india.

4

Walk Japan launches into UK the premium cultural tours specialist walk Japan has recently launched into the UK. it offers small-group, luxury, custom-made and off-the-beaten-track tours to Japan, from gastronomy tours taking in Michelin-starred restaurants in tokyo to walking tours such as the Kumano Kodo Pilgrimage and the Nakasendo way walk. it has been described by National Geographic as ‘one of the best 200 adventure companies in the world’ and is already popular in the Australian, Singapore and North America markets. walk Japan director Llewelyn thomas says: “we know there is an appetite for our walking tours with adventurous UK travellers… and now is a particularly good time for visitors from the UK to visit Japan and take advantage of the strength of the pound against the yen.” walk Japan was launched in 1992 by hong Kong University academics tom Stanley and dick irving.

5

Home Grown Hotels expands A new addition to hotelier robin hutson’s growing portfolio of Pig hotels has opened: the Pig on the Beach, in dorset’s Studland Bay. it occupies an 18th-century manor house surrounded by 22 acres of farmland, and has 23 bedrooms. it is the fourth property in the group run by home Grown hotels, which includes the original Pig, based in New Forest, the Pig in the wall in Southampton docks and the Pig near Bath. the hotel, which aims to have a ‘mellow, country house’ feel, features a greenhouse restaurant, a private room for dinner parties and two spa treatment rooms.

1

Heckfield Place to open heckfield Place, a country house retreat in hampshire set in 400 acres of landscaped gardens and Georgian parkland, is due to open later this year. the 60-room hotel will consist of three restaurants headed up by Skye Gyngell, the former head chef at the Petersham Nurseries Café, as culinary director (she will also be heading up a new restaurant opening at Somerset house in London by the same owner). Private events at the 18th-century grade ii-listed property, former home of Charles Shaw-Lefevre, the longest serving Speaker of the house of Commons, will include literary salons, musical recitals and wine tastings. there is also a 65-seat cinema and indoor swimming pool.

2

Selfridges alfresco dining Selfridges has premiered a new dining concept this summer called ‘on the roof with…’, offering a platform for collaborations and events in the setting of an alfresco rooftop restaurant. this year kicks off with restaurateur des Mcdonald’s on the roof with Q, featuring a programme of events and talks from leading chefs and producers. the all-day menu offers seasonal produce as well as a raw food counter and a traditional afternoon tea with the option of classic, sugar-free or gluten-free. A pop-up juice bar, operated by New York health brand the Juicery, will also be making an appearance. “on the roof with Q is a secret foodie haven that offers a fun and fresh dining experience alongside a programme of talks from some of the most innovative and influential people working in the food industry right now,” explains Mcdonald. inspired by Victorian greenhouses and designed by Alexander waterworth interiors, the restaurant has a fantastic view over the London skyline and a retractable roof to protect diners from downpours. “our new concept will serve as a platform for amazing and unique experiences,” adds Linda hewson, Selfridges’ creative director.

6

Seaside Boarding House from Groucho team this autumn will see the opening of the Seaside Boarding house restaurant & Bar in a Victorian cliff-top villa overlooking dorset’s famous Chesil Beach and Lyme Bay. Mary-Lou Sturridge and tony Mackintosh, the duo who set up the Groucho Club in 1985, are transforming the former retirement home into a seven-room clubhouse consisting of a restaurant, a snug library, a bar and a dance floor. “it won’t look like Babington house or those interiors of the moment,” says Sturridge. “No beige, no low sofas. instead i’ll keep it quite old-fashioned with lots of clean colours. it won’t be shabby chic, but it will be a bit kitsch.”

7

APM at Zinc new concept APM at Zinc has launched in London: a members-only, after-hours nightclub, which is open from 2.30am to 7am, at the weekends. Perched on the 31st floor of 101 New oxford Street, APM at Zinc (APM stands for Always Past Midnight) also gives late-night clubbers the chance to dine at a high-end restaurant, having joined forces with culinary magazine Four. the breakfast-inspired menu will change every three months, with a percentage of the revenue donated to the Four foundation, which helps charities fight hunger around the world. APM at Zinc is a collaboration between Zinc General Manager Greg Ballester and nightlife and hospitality entrepreneurs winston douglas Jr and danio domingues.

8

The Noodle House from Jumeirah Jumeirah restaurants has partnered with UK-based EQ group to launch the Noodle house in London. with a home on Soho’s Shaftesbury Avenue, the restaurant – the first Noodle house in the UK – offers Singaporean and Malaysian dishes in a communal setting. the brand was first launched in 2002 at the Jumeirah Emirates towers in dubai, growing to seven further restaurants in dubai, 16 across the Gulf region and eight other outlets in countries


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“Spanish architect Luis Vidal has succeeded in creating clear, naturally lit spaces, relatively intuitive way-finding and an efficient, generously spacious building. It also commendably retains Foster’s (the original architect’s) vision of a green airport,

using 40 % less energy than a standard equivalent. But it also lacks any spark capable of lifting it above the ordinary” edwIn HeatHcote , in The FT, on The newLy openeD TerMinaL 2 aT LonDon’S heaThrow airporT

including russia, Pakistan, Morocco and Cyprus. “we are confident the South-east Asian cuisine and the wide choice of delicious dishes will make a big impression in London,” said Jason Myers, managing director of Jumeirah restaurants, which is the restaurant division of global hospitality business Jumeirah Group. other concepts developed by Jumeirah restaurants include Urbano, Sana Bonta, AllFreshCo, rice + Spice and the Flaming revolution.

9

New Tom’s launches restaurateur and entrepreneur tom Conran has launched New tom’s in London’s Notting hill, in collaboration with chef tom Straker (formerly the dorchester and the Ledbury). Located on the former site of tom’s deli (which had been situated on the site for 24 years), the pop-up bistro-style restaurant will stay open for 12 months, serving avant-garde modern cuisine. the playful interior features original works by British pop artists loaned by Conran’s father Sir terence Conran as

well as a series of 1930s Parisian metro booth seats. “we are taking sophisticated modern cuisine out of the usual formal restaurant environment and placing it in a fresh friendly and relaxed setting,” says Conran. “our kitchen will use honed techniques, craft and artistry to create exquisite modern renditions of timeless classics. we’ve done it all with a real sense of fun and hope that the neighbourhood takes it to its heart.”

10

Suján Rajmahal Palace opens in Jaipur November will see the opening of the grand Suján rajmahal Palace in Jaipur, india. Consisting of 20 suites and rooms, two restaurants, a bar, swimming pool and spa, the palace has been completely redesigned and refurbished by designer Adil Ahmad. originally built in 1729 by the Maharaja of Jaipur, the palace is set in vast gardens,

and features the original marble staircase, intricate chandeliers and mirrored ceilings. Ahmad, who was commissioned by the royal family of Jaipur, has included the use of traditional royal motifs and family crests combining classic architecture with modern colours. Suján palaces, camps and lodges offers a range of unique destination experiences.

11

Santa Marina Resort & Villas renovated the three-year renovation of Santa Marina resort & Villas, a Starwood-owned property, has finally been completed, in time for this year’s summer season. the Luxury Collection resort in Mykonos features redesigned guest accommodation, public spaces and restaurants led by Greece-based SMK interiors. Situated just a few minutes from Mykonos town, Santa Marina sits on a private beach and features 100 guest rooms and suites – some with private pool. its renovation reflects Starwood’s broader strategy of investing in the restoration of its Luxury Collection hotels and resorts in Europe. “the redesign of Santa Marina is perfectly poised to cater to a new generation of luxury travellers,” says Paul James, global brand leader, the Luxury Collection, St regis and w hotels worldwide. “that Greece is the Luxury Collection’s third largest market globally is a clear indication that the country’s rich culture, distinctive heritage and indigenous treasures make it a ‘must’ for the most discerning travellers.”

12

Avani Hotels & Resorts opens Malaysia Luxury hotel brand Avani hotels & resorts has added a fifth property to its portfolio. the Avani Sepang GoldCoast resort on Malaysia’s west coast has been designed in the shape of a palm tree with five restaurants, two bars and an Avani spa. the beachfront property offers 392 Polynesian-inspired guest rooms and villas as well as a Malaysian-Chinese coffee shop, a Chinese fine dining restaurant and beachfront restaurant featuring live music in the evenings. Avani hotels & resorts is owned by the thai-based Minor hotel Group and was launched in 2011 as a sister brand to Anantara hotels, resorts & Spas to consolidate the group’s presence in city and resort locations across Asia, the indian ocean, the Middle East and Africa. other Avani properties can be found in Sri Lanka, Vietnam and Malaysia, with further openings due in thailand, Sri Lanka and indonesia. Minor international is a hotel owner, operator and investor, with

a portfolio of over 10,000 rooms across more than 80 hotels, resorts and serviced suites under the Anantara, Marriott, Four Seasons, Elewana, oaks and Minor international brands.

13

Pottinger Hong Kong boutique launch A 68-room luxury boutique hotel called the Pottinger hong Kong has opened in hong Kong’s Central district. owned by Sino Group of hotels, the property is situated in a Grade i historic residence with interiors designed by Australian interior designer Suzy Annetta and features photography by acclaimed photographer and director Fan ho in the rooms and public spaces. Established in 1994, Sino Group of hotels is the hospitality management arm of Sino Group, and operates and manages a growing portfolio of hotels, a yacht club, serviced apartments and residential food and beverage club houses.

Driving force Luxury travel specialist Abercrombie & Kent has joined forces with British brand Land Rover to create a new adventure travel partnership, Land Rover Adventure Travel by Abercrombie & Kent. The collaboration will offer guests the chance to explore landscapes that are well off-the-beaten track, taking the driver’s seat for themselves so they can directly experience the full capability of the Land Rover Discovery. The programme kicks off with a Best of British Tour aimed at overseas guests, followed by tours in Africa and India; travellers will be accompanied by qualified instructors and receive expert tuition.

Art room Inspired by the culture of its location, the East London luxury boutique hotel Andaz Liverpool Street is launching Room With a View, a collaboration with four diverse British artists. Chris Price, Patrick Vale, ILoveDust and Patrick Morgan will create hand-painted murals in the hotel’s Large King guest rooms, depicting their interpretation of East London’s past, present or future. The first has been created by London-based illustrator Chris Price and his wife and collaborator Delisia Howard. The second, by Patrick Vale, will launch early October, while multi-disciplinary English artists ILoveDust will create the third room in January 2015. The final one will be created by Patrick Morgan in April 2015. “We strive to find new ways to support and celebrate local art, design and British artists,” says Tim Flodin, general manager.


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on Madison Avenue, nars is going uptown, taking no 971 for its fi rst Upper East Side shop. ermenegildo Zegna’s latest outpost will be at

no 825. Just off the avenue at 57 East 57th Street, Kiton has its second store in the city inside the Four Seasons hotel.

on Fifth Avenue, infi nite beauty will open at no 1031 to showcase a variety of skincare collections featuring organic products, elements from the dead Sea, gold, diamond powder and more.

on the Upper west Side, Michael Kors is coming to the Shops at Columbus Circle, the latest step in what seems to be a plan for world domination. Canada’s Judith & charles opened its second store in the US, at 188 Columbus Avenue. in Chelsea/Meatpacking, ayr, Bonobos’s line for women, now has its fi rst shop/fi tting room at 45 west 25th Street.in Greenwich Village, 3.1 Phillip lim will open at 48 Great Jones Streetin August.

in Soho, bonpoint soho has debuted at 398 west Broadway. Woolrich, a casual apparel mainstay in Philadelphia, will take its fi rst New York City location at 125 wooster Street. david yurman will open his second boutique at 112 Prince Street. Artist damien hirst’s fi rst retail store, other criteria, is located at 458 Broome Street. Will leather goods launched its shop at 29 Prince Street, its fi rst on the east coast. google’s fi rst brick-and-mortar shop is joining the high fashion fl ocking to Greene Street, at no 131 – realising that this particular street is one of the places to establish a brand.

in Nolita/tribeca/LES, la garçonne has fi nally opened at 465 Greenwich Street. in lower Manhattan, the rebuilding of South Street Seaport area will include an innovative series of rotating pop-up shops in stacked shipping containers, courtesy of dossier, an arts and culture publication from just across the East river in Brooklyn. Among the retailers is selima optique. this area continues to recover, and is attracting more brands by the minute.

in Brooklyn, Kinfolk off ers a clubhouse feel for its menswear, accessories and a few assorted gift items such as candles, at 94 wythe Avenue in williamsburg.

in the hamptons, the retailers and designers are opening for the summer season. Buy fi tness apparel and music at bandier, 44B Main Street in Southampton. cruciani

d’s jewelry and accessories have a summer home at 28d Jobs Lane. over in East hampton, designer swimwear is sold at orlebar brown, 23 Newtown Lane. la Perla’s shop is at 66 Newtown Lane. interior designer west Chin has a showroom, West/out east at 25 Newtown Lane. Peloton, which sells indoor cycles that have live on-line classes, has its outpost at the former tiff any’s, 53 Main Street. White’s apothecary now off ers make-up artists and facials at 81 Main Street. then fi nd more beach items at lisa Perry’s summer store at 67 Main Street. Stacey Fraser’s apparel and accessories for women and children are at Pink chicken, 156 Main Street, Amagansett. Natural fragrance company lurK is moving into retail at 28 west water Street in Sag harbor.

FAith hoPE CoNSoLo, ChAirMAN thE rEtAiL GroUPdoUGLAS ELLiMAN rEAL EStAtEtel: 001 212 418 2000 e: [email protected]

KEith wiLSoN, wiLSoN MChArdYtel: +44 (0)20 7439 1666

New York trend: FiDi rivalryAs noted above, the Financial District is one of the busiest in the city, with two major retail developments (Westfi eld’s World Trade Center rebuilding and Brookfi eld Place), and smaller projects as well. On the WTC front, announcements include: Armani, Apple, Bose, Breitling, Canali, Hugo Boss, John Varvatos, Kusmi, Longines, Michael Kors, Montblanc, Stuart Weitzman, Tiff any, Tumi, Tom Ford, Aritzia, Sephora and Victoria’s Secret. Aspinal of London is joining the huge luxury component at Brookfi eld Place. This is one rivalry that will be fascinating to see play out.

lonDonrEtail ProPErty

nEW yorkrEtail ProPErty

the press has a habit of focusing upon the launch of new stores acquired with multi-million pound key money

premiums, seven-fi gure rentals per annum and global marketing campaigns to ensure successful arrival in London. For the new entrant to the capital a more modest boutique is usually the initial target. For those in this category here is a quiet walk through the key luxury locations.

burlington arcade, Mayfair, has always provided a high footfall. rents have moved on (again) in the last year. Expect to pay £160,000 pax for a single boutique (158 sq ft). there are a number of new openings in the pipeline as historic tenants refl ect upon a 200% increase in rents over fi ve years, and discreetly move on. 10-12 Burlington Gardens (by the Albany) attracts about the same level of rent (£165,000 pax) but the fl oor space is double at ground fl oor (320 sq ft). the boutique is highly visible along Savile row.

Elsewhere in Mayfair, on albemarle street, adjacent to royal Arcade, no 14 has been leased to Grimoldi Jewellers from italy. the 500 sq ft boutique was let at a rent of £155,000 pax. For a larger space the rent would be £200,000 pax, for example at 37 Albemarle Street (848 sq ft) adjacent to the new Globe-trotter store. Allegedly 40 Albemarle Street (Prêt à Manger) is under off er at a staggering £400,000 pax for a relatively modest ground fl oor area of 630 sq ft. Admittedly, in addition there’s a fi rst fl oor and basement.

in bruton street, home to Stella McCartney, Matthew williamson, temperley and diane von Furstenberg, the smallest boutique is no 21. the current Miller harris has been on and off the market for approximately six months. the ground fl oor is 580 sq ft. Anticipate a guideline rent ona new lease of £150,000 pax.

the natural pedestrian link between bond street and regent Street has for many years been relatively quiet in terms of leasing activity but most recently conduit street has seen the arrival of Christian dior (no 16), the scheduled openings of John Varvatos (no 16-17), dSquared (no 50-51) and most recently announced Christian Liaigre in the former issey Miyake store (now fi tting out 10 Brook Street). 55 Conduit Street has just been launched to the market, directly opposite the new John Varvatos store. the ground fl oor is 619 sq ft. two off ers at £150,000 pax have been reported.

in davies street, at the gateway to Mount Street, a boutique in the same block as Vivienne westwood would rent at £125,000 pax (approximately 400 sq ft). Anticipate the current tenant seeking a key money premium of at least £200,000; this no doubt infl uenced by the Mount Street factor where the same boutique would cost £100,000 pax in rent and £1m key money!

At brompton cross – where Brompton road meets Fulham road and Sloane Avenue – a small boutique in Brompton road of approximately 400 sq ft ground fl oor will cost £125,000 pax in rent and a key money premium of £250,000. 3.1 Phillip Lim, Acne and Carven have all launched in Pelham Street adjacent Chanel and opposite Carolina herrera. J Crew (draycott Avenue) and James Perse (178 walton Street) have also opened in the area.

on sloane street, no 35 (375 sq ft ground fl oor) is available at a rent of £71,250 pax with key money premium invited above £750,000.

As the key money premiums and rents would suggest there is still a complete imbalance in the demand and supply equation, even for the more modest-sized boutiques. And if such a space (approximately 500 sq ft) appeared on Bond Street... £500,000 pax and off ers over a small fortune please.


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Issue 171

oslo has a population of 625,000, higher than düsseldorf, Copenhagen, Antwerp or Zurich. the

population is expected to increase by 30% over the next 13 years. it has the second highest GdP per capita in Europe after Luxembourg. the total retail consumption is higher in Norway than it is in denmark or Sweden. oslo was the world’s second wealthiest city in 2011.it has the fourth highest average income in the world.it is the fastest growing city in Europe, followed by Brussels, Stockholm, Copenhagen and Luxembourg.A new fi nancial district called the Bjorvika Project will be directly connected to the centre of oslo.

despite these impressive fi gures, oslo has a less developed luxury retail off er compared to the other Scandinavian capital cities, although demand from luxury brands is increasing. oslo has very few luxury boutiques in relation to the scale and wealth of the city, which represents a signifi cant opportunity.

Karl Johans Gate is the main shopping street in oslo. it is mainly a mass market street but it is home to a high-end shopping gallery called eger, which has been open since 2009 and has 10,500 sq m of retail space. retailers include tommy hilfi ger, nespresso, hoyer luxury and follestad. Michael Kors will open a 200 sq m temporary boutique with frontage onto the street in autumn 2014. it will then relocate to a corner fl agship location on Karl Johans Gate in 2016.

the side streets running off Karl Johans Gate, including Akersgata, Nedre Slottsgate and ovre Slottsgate, are becoming the luxury retail pitch in the city.

steen & strom department store occupies anentire block with frontage onto Nedre Slottsgate, Karl Johans Gate, Prinsensgate and Kongensgate. the department store is in the process of being completely remodelled and it will have new concessions when it is fully complete.

acne has a fl agship store at ovre Slottsgate 11. louis Vuitton is located on Akersgata, adjacent to Mulberry. however there is a general movement towards Nedre Slottsgate. gucci has recently signed up next to hermès in the Steen & Strom building with frontage onto the street. armani will replace Lexington, also on Nedre Slottsgate. bottega Veneta has opened at the southern end of Nedre Slottsgate on the corner with Prinsensgate. burberry is moving in further along the street and currently fi tting out its store. French contemporary fashion brands, such as sandro, Maje and Zadig & Voltaire, are looking to open stores in this area.

ANdrEw BAthUrSt, dirECtorhArPEr dENNiS hoBBstel: +44 (0) 207 462 9100 e: [email protected]

EuroPE // oSlorEtail ProPErty

Brabus/ Mercedes collaboration Brabus has made a business out of turning Mercedes-Benzes into even more powerful and luxurious modes of transportation. the latest word from Germany is that Mercedes will use Brabus to build its upcoming top-of-the-line S-Class limousine. Expected to revive the Pullman name, the vehicle is set to compete with the rolls-royce Phantom and Bentley Mulsanne at the top of the market with a price as high as $1 million. it wouldn’t be the fi rst time Mercedes has called on the talents of Brabus for such a vehicle, the two having already collaborated on top-of-the-line versions of the Smart city car.

Maserati wins Cartier Style & Luxe at Goodwood A Maserati A6 CGS Berlinetta was named ‘best in show’ at the Goodwood Festival of Speed concours d’elegance, Style et Luxe, sponsored by Cartier. Now in its 20th year, the event, which was held on the Cartier lawn beside Goodwood house, celebrated the best in exquisite automotive design from the dawn of motoring up to the present day. the Maserati, which is owned by Egon Zweimuller Jr, took victory in the coachbuilt Maserati-only Class 3: ‘the height of fashion’, and later beat off competition from the other class winners to be the overall winner. Maserati was celebrating its centenary at this year’s Festival of Speed with a line-up of illustrious road and racing cars. the road cars took over the Stable Yard, while the racers thundered up the hillclimb course that is the central feature of the annual festival. the judging panel - typically drawn from outside the automotive industry - included olympic gold medallists Sir Chris hoy and Sally Gunnell, actor rowan Atkinson, Apple design chief Sir Jonathan ive, Anya hindmarch, and other notable names from the worlds of sport, the arts and design.

Jaguar Land Rover supports Invictus Games 150 Jaguar Land rover employees will have the opportunity to work as volunteers supporting the invictus Games, the international sports event for ‘wounded warriors’ championed by Prince harry. they will make up a quarter of the 600 volunteers helping to run the games, with others coming from the armed services and event sponsors. Jaguar Land rover is the Presenting Partner of the invictus Games, which take place in September at venues made famous by the London 2012 olympic and Paralympic Games. “the company has been inspired by the vision for the invictus Games, and we wanted to give some of our colleagues the chance to help deliver them,” said Simon Lenton, hr director at JLr.

Bentley launches phone with Vertu Bentley has signed a fi ve-year partnership deal with Vertu to produce fi ve luxury smartphones, with the fi rst planned for launch in october 2014.Each will encompass authentic Bentley design elements. the latest Bentley content for owners and enthusiasts will be consolidated in an application on the device. wolfgang dürheimer, chairman and CEo of Bentley Motors, said: “the collaboration expands Bentley’s luxury range into the cutting-edge world of mobile communications and off ers customers a new way to experience the world of Bentley.” the ‘Vertu for Bentley’ partnership will be supported by a joint global marketing campaign, with Vertu working closely with Bentley at both a global and regional level on events, CrM and customer insight activities.

autoluxE


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Faking it the film ‘tim’s Vermeer’ (2014) documents the story of a hacker/inventor, tim Jenison, as he successfully recreates a Vermeer painting using various optical tools that were available to Vermeer in the 17th century. the film makes a convincing case that technological inventiveness, rather than artistic mastery, was the reason why Vermeer’s paintings were so much more vivid and realistic than any of his contemporaries’ work. tim’s use of a cleverly positioned small mirror - to evaluate the difference at any point between an object’s colour and its painted representation - turns the painter’s role into nothing more than an information processor, albeit a very precise and meticulous one.

the academic reaction to this analysis of one of the greatest painters of the dutch Golden Age has been somewhat negative, as you might expect. this is mostly because any assertion on the use of technology in fine art is wrongly interpreted as an accusation of being a ‘faker’, of not really being as great an artist as one pretended to be.

in his book ‘the Age of intelligent Machines’, ray Kurzweil explains the exponential acceleration of technology by arguing that any field of science or engineering that comes into contact with information technology, will itself become an information technology, which then allows it to evolve at the same rate of acceleration as information technology. Since the 1970s, the effect of this acceleration has been visible in just about every sector of industry: planes become flying computers, cars become computers on wheels, and the collective intellectual output of humanity becomes accessible on pocket-sized computers called smartphones.

And yet, Kurzweil’s central claim - that artificial intelligence will surpass human intelligence within the next 25 years - seems to trigger a rather negative reaction among academics. Every time Ai reaches a new groundbreaking result in a field thought to be critical to developing intelligence, ‘true’ intelligence is apparently about something even more elusive, and the method used to achieve the result is derided as ‘faking it’, much in the way that technology in fine art is thought of as ‘faking it’.

technology’s impact has been huge in the luxury sector, too, not only because it has helped some adventurous brands go much further than previously thought possible, but mostly because it has significantly reduced the cost of producing high quality goods, thereby making them available to people who, until not so long ago, would not have been the luxury sector’s target audience.

As a result, a similar kind of denial has been creeping into the luxury sector, belittling the achievements made by newcomers and tech-oriented brands. tesla’s cars, apparently, have no ‘love’. the best new world wines, apparently, have a ‘goût technologique’. Brands like Apple are, apparently, ‘masstige’. Never mind the fact that everyone remembers their jaw dropping when they first got into a tesla, drank a glass of Bonny doon’s ‘Cigare Volant’, or had an iPhone in their hands, true luxury suddenly seems to require many more elusive attributes, and technology is somehow perceived to be just a way of faking it.

is it true you need soul to create great art? Yes. is it true there is more to intelligence than beating Kasparov at chess? Yes. is it true you need culture to create luxury products? Yes. But technology does not fake those human attributes. rather, it augments humans’ ability to leverage those attributes, and to allow more of us to enjoy their fruits. technoluxe doesn’t fake luxe, it augments it.

Withers researches the new meaning of wealth in the 21st century As a law firm, we frequently work with large, wealthy and successful families and their businesses around the world. Just as every family unit is different, so each family business has its own unique hallmarks and varies according to its sector, size, geographical location and the personal vision of the family behind it. we wanted to verify our own assumptions about successful families, the challenges they face, and particularly what they view as the purpose of their wealth in the modern world. we sought out first-hand views from leading international family business members, reflecting a global mix of perspectives. From december 2013 to March 2014, with the assistance of research agency Scorpio Partnership, we spoke to 16 members of multi-millionaire and billionaire families from the US, Europe and Asia. these conversations revealed that generational succession in wealthy families around the world has led to a fundamental re-evaluation of the purposes of wealth and the role of family businesses. in the words of one interviewee: “the most important things are how you make it and how you distribute it. if you can do that in a way that is socially acceptable and keeps your family happy, then you are winning.” For many wealthy families, we found that simply having large amounts of money to invest is not enough to provide purpose and cohesion to the broader family group. Many are responding by re-immersing themselves in active business operations, and/or using their wealth to effect positive changes in their communities. the research established five key lessons that wealthy families have learned through coping with the challenges of succession and working to preserve their assets and family unity.

1. transitions are complicated whether selling a business, setting up a foundation or passing control of wealth to the next generation, families should ask themselves “why are we doing this?” at each transitional stage, to find the common objectives that will keep them and the family wealth intact.“in Asia we have three generations living side by side… the hard business stuff has become the easy stuff, and the soft family stuff has become the hard stuff.”2. take your time As a collection of individuals, and not an organisation, families require a unique leadership style which should involve listening, learning, observing, sharing and understanding.“Family members often think they are unique, with the right skills, so you have to be willing to let go. Sometimes you have to be willing to lead from behind and recognise just because you can do the job, doesn’t mean you have to.”3. leading with principle wealth ownership means that attention is trained on you. Family heads should lead by example and the wider community will view wealth ownership with greater respect when it is used as a force for positive social change. “Values cannot be taught. You have to inculcate them through your own actions.”4. recognise your limits within a family and a family business there are many roles to play; no single person can play them all well. once skills, strengths and motivations are accurately assessed (including one’s own), other family members and professional advisors can be effectively appointed to fill the gaps. “As a leader you have to be open-minded and accept that other people are sometimes smarter and better than you… A business family has to be multi-disciplined and that means accepting outside help sometimes.”5. giving the next generation just enough Each generation should be able to think of itself as the first generation. this means that those in the next generation are given everything they need to be successful and no more. For those in older generations, this also means recognising when to step aside. “it is better to let children find their own way... if they want to come into my family business, they can, but they will have to earn their place, just like everyone else.”

Digital thinkEr Alexander Gallé luxury laW Sarah Cormack

Alexander Gallé is co-founder of the brand design studio Gallé (www.galle.com). Its portfolio includes Yves St Laurent, Fabergé, Marchesa, Corum, Boucheron, Jimmy Choo, Asprey, Garrard, Villa Feltrinelli, Marbella Club, Michael Dyens and many leading luxury hotels

Sarah Cormack is a partner at Withers (tel: +44 (0)20 7597 6165; [email protected]). Withers’ clients in the luxury sector include Matthew Williamson, Aquascutum, David Collins, MaxMara, By Terry, Spencer Hart, Ermenegildo Zegna, Etro and Soho House.

Issue 171

“ A similar kind of denial has been creeping into the luxury sector, belittling the achievements made by newcomers and tech-oriented brands. Tesla’s cars, apparently, have no ‘love’. The best new world wines, apparently, have a ‘goût technologique’. Brands like Apple are, apparently, ‘masstige’”


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liMitED EDitionS

News arrives of a ‘Kickstarter’ project – a bright idea in search of crowd-funding to turn it into a viable business – aimed

at capturing the romance of the handwritten word. Le Guest Book, the creation of two New York designers, Eitan Cohen and Alon Seifert, is a place to collect memories, write down things about your hosts and bring back a sense of old-time hospitality. An eyecatching and quirky short film demonstrates the concept, which says, essentially, we need to write down the important things that make up the stories of our lives, our ‘get-together experiences’.

“in a digital world,” they say, “where the instant and the temporary have become the norm, deep, longlasting experiences are a thing of time long past. we set out to make an ideal gift, something we miss, something that will stay with you and become a part of your social culture.”

it seems the New York designers are not alone in feeling the allure of crisp paper, pen, ink and the need to scribe words and pictures by hand. An enterprising London pair, Emily richards and her husband Ed, in part as a reaction to the prevailing cultural dominance of email and text, have set up an old-fashioned printing business, starting with printed and personalised notecards. these are not only nicer to receive than an email, say Ed and Emily; but also, through handwriting, a more poignant and meaningful way to remember the sender.

that they both gave up successful careers to start this venture says much for the richards’ belief in the ‘full circle’ of the handwritten word. originally trained as a sculptor at Camberwell College, Emily had joined the luxury jewellery world, working for John Ayton and Annoushka dukas when they ran Links of London; and as a buyer for Bec Astley Clarke at astleyclarke.com. Ed worked in the City. Both felt the need for a creative outlet as a counterpoint to their day jobs, so they signed up for a short course in Letterpress printing, thinking it would become a hobby.

“we found it fascinating,” says Emily. “So we decided to start new careers, creating original, unique, high quality stationery which would encourage people to put pen back to paper and have a bit of fun at the same time.”

they bought an Adana eight-by-five Letterpress printer – a machine originally manufactured for amateur printing and first retailed in 1922 – and started to collect the traditional lead typefaces which fit into it. Each lead letter is individually placed to make a word or sentence, which is then fitted into a chase,

a padlock for a logo to remind them of the padlock Ed gave Emily when he proposed to her. A very personal back-story. they have been developing sets of notecards with messages whose sentiment is partly conveyed by the typeface. ‘An old-fashioned thank you’, for example, appears in a mixture of times Bold with old English; ‘totes amazeballs’, on the other hand, is in chunky, bold rockwell Shadow, built to catch the eye of the younger generation. (Catchphrases on the cards are a constantly evolving source of amusement.)

“there are hundreds of different typefaces out there and we are physically collecting the ones we like most, which will make an impact on the card,” says Emily. “they are made of lead or wood, and you can buy them new, secondhand or online. replica versions have become very popular as decorative accessories in the home, but they don’t work in a press unless they are of a certain height.”

Shortly after attending a pre-Christmas rare brands market, Kennington Lane was picked up by online marketplace notonthehighstreet.com, which gave the business the exposure it needed. this has been backed up by activity on social media – FB, twitter, Pinterest – which is having the desired effect, without, of course, running up huge marketing costs. Fairs and fetes are still seen as a good way to spread awareness and meet the customers, and for the customers to be charmed by the tactile quality of the products, and the sense that they are uncovering a bit of a secret.

having recouped their initial investment, the founders are focusing on the hot trend of personalisation, creating ‘From So-and-so’ cards that whimsically allow, say, a newborn baby to announce his or her own arrival. Personalised stationery and bespoke invitations will follow, along with printed gift boxes that can be recycled as treasure troves, holders of memories. it’s still too soon to talk about a retail boutique, but you could just imagine it: a place, like il Papiro in Florence, to revel in lead lettering, coloured inks and rich papers...

“i think it’s something that’s come around again,” says Emily. “Everyone is so busy with texts and emails, it’s lovely to receive something handwritten in the post – it’s becoming more and more popular. it’s also about trying to find something a bit different, a bit quirky, not necessarily found in hundreds of high street stores all looking the same. And i would not underestimate the importance of recording memories by pen. People are going back to the sentimental ways, seeing handwriting as a way to trigger memories.”

the Kennington Lane Press is not alone in doing what it does; but the enterprise has a kind of nostalgic, personal, zeitgeisty appeal which echoes the sentiments behind the Le Guest Book venture in New York. it will be interesting to watch where they go over the months to come.

Email [email protected]

“It’s a time-consuming, manual process, but worth it. Each letter is unique, and each printed card

different from the next, due to the nature of process, the texture of

the paper and the amount of ink you may have”

When it comes to making connections, you can’t beat old-fashioned pen and ink for conjuring up people, places and past events. two businesses are going retro, picking up on the reaction against digital conversations

inkED in

which slots in... And then you ink up a plate and press the paper against the type... As Emily says, “it’s quite a time-consuming, manual process, but definitely worth it. the impression it makes is so much nicer than something coming out of a computer. Each letter is unique, and each printed card is different from the next, due to the nature of process, the texture of the paper and the amount of ink you may have. our paper is italian, Fabriano Mediovalis, with a deckled edge and a lovely feel which highlights the tactile quality of Letterpress and holds the ink, not allowing it to bleed or smudge.”

And so, just over a year ago, the Kennington Lane Press was born – named after the street where the richards have their studio – with

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Luxury Briefing Issue 171

altErnativE viEW

A short while after selling my previous business, global sustainability consultancy Clownfish, i felt that further

action was needed: for most people, positive social and environmental action still felt like a burden. A simple way of integrating good working practices into business and everyday life was required, which would make consumers feel even more enthusiastic about their purchases.

Consumers have little knowledge about the value chain of companies, and frankly it’s not at the forefront of their minds when they buy into a product or service. having said that, people want to do the right thing, so providing consumers with relevant information about a company’s actions, at the point of sale, allows them to make more informed choices and, potentially, generates revenue for the brand. An immediately identifiable trust mark, which stood for recognised values, was needed.

Karen hanton, founder of toptable (sold to Nasdaq-listed opentable in 2010), and i founded Positive luxury. in the past 13 months, more than 300 brands have received a Butterfly Mark – a trust mark awarded to brands in recognition of the responsible way in which they manage product production, environmental resources, employee relations, distribution and other aspects of their operations.

in 1987 Gro harlem Brundtland defined sustainable development in a report called our Common Future as “forms of progress that meet the needs of the present without compromising the ability of future generations to meet their needs”. Companies are recognising that preserving craftsmanship, resources and good working relationships is the only way to ensure enduring success.

by its nature, the luxury industry in particular is geared towards respecting craft and preserving history, and we work with brands across different sectors – such as

Neal’s Yard remedies, iwC Schaffhausen and Essence London, the luxury, ethical concierge service – to promote their achievements and philanthropy.

iwC Schaffhausen has been a member of Positive Luxury for over a year now and has recently launched a programme to help raise funds for the preservation of the Galapagos islands in partnership with the Charles darwin Foundation. iwC’s CEo Georges Kern says of

working with Positive Luxury: “we are delighted to receive the Butterfly Mark because we firmly believe that sustainable action, particularly in the luxury watch segment, not only consolidates our brand’s reputation but also its competitiveness.”

Membership with Positive Luxury is annual and the Butterfly Mark is licensed at a fee that is calculated according to the brand’s turnover. we continually re-evaluate the performance of member brands, and have had to turn down prospective members if they are deemed not to meet strict criteria. each brand is assessed on

“The value of membership is assured, and when consumers buy

something they love they can add to this feelgood impact by knowing that

they’ve bought from a brand that can be trusted to uphold the highest working standards. This will only

serve to encourage future interactions with a brand, and reinforce the loyalty

shown towards it”

a case-by-case basis via an application form that looks in detail at five areas of the brand: governance, environment, community, innovation and Philanthropy. the standards were drawn up in consultation with experienced industry figures such as Sir Jonathon Porritt, co-founder of Forum for the Future, Sylvie Benard, president of institute inspire, and Niall dunne, chief sustainability officer at British telecom.

So the value of membership is assured, and when consumers buy something they love they can add to this feelgood impact by knowing that they’ve bought from a brand that can be trusted to uphold the highest working standards. this will only serve to encourage future interactions with a brand, and reinforce the loyalty shown towards it.

once a brand has been awarded with the Butterfly Mark it is then free to use this anywhere it wishes, such as on packaging, labels, website, third party sites and on all internal and external communications. the award becomes an immediate distinction of quality and mindful production. to accompany the award each brand is also given a profile page on our website where consumers can read more about the brand’s sustainability initiatives in a jargon-free, easily accessible language, view products, campaigns and editorial.

in the age of social media, support or derogation of a company’s ethics can be shared instantly and because of this, consumer trust will only continue to become more important as a driver of profit and loss. in addition, a move towards purchasing goods online and the consequent decline in the number of potential face-to-face encounters with brand ambassadors, means businesses must find simple ways to convey their story and connect with their target audience.

this year Positive Luxury is launching ‘Click to trust’ which will encourage consumers to indicate their support for a brand online. Consumers will also be able to view a brand’s actions before making a purchase. with this online trust network we hope to build a global index of trusted brands, as rated by consumers, for consumers.

the future will not simply see a competition between brands which are sustainable and those which are not: it will be about which brands are trusted to stand by the positive working practices that they allude to within their marketing material. As a result, the brands which succeed will be those that can communicate in a jargon-free way with their loyal shoppers.

Diana Verde Nieto is founder and CEO of Positive Luxury, a Young Global Leader and advisor to the World Economic Forum

Diana Verde Nieto

the feelgood factor: driver of consumer loyalty


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Following almost a 3% decline in May, the tAG Luxury index has been roughly flat (down 0.5%) since June 6, performing better than the major global indices which declined 2.0% on average. the biggest gains were reported by Mulberry group (up 6.5%), hermès international (up 4.4%), ralph lauren (up 4.1%) and Prada (up 2.9%), while the largest declines were at coach (down 12.5%), blue nile (down 8.9%), brunello cucinelli (down 8.5%), and tod’s (down 7.8%). Year-to-date, the tAG Luxury index is down almost 13% compared to the 1.4% increase on average registered by the major global indices.

tiffany shares improved 0.8% over the past month following its appointment on March 19 of ralph Nicoletti as CFo. Management remains committed to driving long-term annual sales growth in the low-double-digits range, driven by mid- to high-single-digit same store sales growth and 3%-4% square footage growth, with the opening of 15 stores per year. Moreover, management believes Europe remains underdeveloped and sees the potential to reach approximately 50 stores in the region over time, compared to 38 stores as of 1QC14. on the other hand, Japan reported revenue declines in April and May following a pull-forward of sales ahead of a consumption tax increase on April 1. As a mature market, Japan is expected to post low-single-digit annual growth over time. Looking ahead, we expect the 2QC14 comparable sales to benefit from: (1) an easier comparison of 5% (vs 8% in 1Q13); (2) healthy demand for fine, statement and solitaire jewelry; (3) continued improvement in fashion jewelry, helped by the ongoing success of Atlas; and (4) price increases implemented over the past year; partially offset by (1) still-lackluster trends in Europe given softness in both local and tourist demand; and (2) a slower performance in Japan due to the pull-forward in sales ahead of the consumption tax increase.

burberry group shares declined 3.9% over the past month prior to its 1QF15 sales report, but bounced back 3.2% on the day of the release of its latest quarterly sales results, which were better than expected. Burberry reported a first quarter retail revenue increase of 9.1% to £370m, topping the Street estimate for a 3.9% increase to £352m. on an underlying basis (ex currency), sales improved 17% vs a Street expectation for an 8.4% gain. the

17% like-for-like increase was comprised of a 12% same-store sales increase and 5% square footage growth. the company saw double-digit growth in Asia Pacific (led by mainland China and hong Kong) and the Americas (where digital contributed significantly), while the EMEiA saw softer performance with a low-single- digit gain resulting from slower spending in the Eurozone from both domestic markets and tourists (strength in Chinese tourists was an exception). russian tourist spending remained a drag to the retail topline. the company also saw double-digit growth across all three main product categories (men’s, women’s and accessories). traffic remained softer, but conversion increased, in line with prior trends. the comp growth was roughly evenly split between volume and pricing gains. Management is now working with the

assumption of capturing pricing increases in the low- to mid-single-digit range going forward. digital performance also continues to add to the topline, and online traffic and conversion both increased.

Although lVMh (down 3.4% over the past month) saw weakness during 1Q14 in wines & Spirits from the destocking of cognac inventory in China, we are encouraged by the solid sales acceleration of Fashion & Leather Goods (+9% at constant currency vs +7% in 4Q13), helped by the turnaround efforts of louis Vuitton and the other fashion brands. Also, Selective retailing (+10% at constant currency vs +13% in 4Q13) surprised on the upside thanks to healthy momentum of both dfs and sephora, where the Sephora US comp maintained an approximate 10% growth pace, which should bode well for ulta and the prestige beauty players, such as estée lauder and l’oréal. wines & Spirits (-3% at constant currency vs +4% in 4Q13) witnessed the largest shortfall due to the impact of cognac destocking in China. however, management expects the magnitude of destocking to ease through the year amidst steady customer demand and low inventory levels. watches & Jewelry (+5% at constant currency vs +6% in 4Q13) continues to benefit from upbeat retail sales and solid jewelry demand, which is an encouraging read-across for tiffany, while wholesale remains impacted by cautious orders from multi-brand watch retailers.

coach shares continue to remain under pressure, falling 12.5% over the past month, putting the shares down 37.5% Ytd, after the company hosted an investor day in NYC. the primary takeaway for the event was the disappointing guidance outlook, driving the stock down 9%. Management expects revenues for FY15 to decline in the low-double-digit range compared to the prior consensus expectation for a 2.2% decrease. Coach expects to close 70 underperforming North American full-line stores in 2hC14, while investing significantly in its international segment (currently 30% of total revenues) through growing its footprint over the next two to three years.

Swiss watch exports in May rose 1.2% to ChF 1,870.5m (or $2.11bn). the ChF 3,000+ category outperformed the other price segments. Sales in the US, Japan and Singapore helped to offset negative growth in hong Kong, China and Germany.

the tag luxury stock index

tIFFany Management believes europe remains underdeveloped and sees the potential to reach approximately 50 stores in the region over time, compared to 38 stores as of 1QC14

BurBerry The company saw double-digit growth across all three main product categories (men’s, women’s and accessories). Traffic remained softer, but conversion increased, in line with prior trends

LVMH weakness during 1Q14 in wines & Spirits from the destocking of cognac inventory in China, but acceleration of Fashion & Leathergoods helped by turnaround at LV and other fashion brands

taG Luxury stock ( ) Ftse 100 ( ) s&p 500 ( ) France cac ( )

“Coach expects to close 70 underperforming North American

full-line stores in 2HC14, while investing significantly in its

international segment”

Issue 171

Financial rEPort

dana teLsey, Luxury Goods anaLyst

Telsey Advisory Group (TAG)Tel: 001 212 584 4606/4632

Luxury Briefing

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DoWn

0.5 %June 2014 - August 2014

2012 2013 2014


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Issue 171

it’s happening again! that kind of seismic shift that changes our perceptions and preoccupations, rewriting the luxury rulebook.

we are coming to the end of a cycle that began in the late 1990s and has driven a period of unprecedented growth in the scale, impact and reach of luxury brands, the only blip in this cycle being the economic chaos of 2008, and what chaos! it says something for the power of the cycle that the result was only a blip for most luxury brands. the last 15 years saw growing interest in the luxury sector, a focus on heritage, craft and authenticity, a return to the roots of luxury which stimulated a previously unheard of appetite for the sector, particularly among consumers who would not previously have indulged in the world of luxury and luxury brands.

As this cycle slows we see the polarisation of luxury, creating a distinct dynamic with strong growth in accessible luxury and elite luxury, with brands caught in the middle ground struggling to define their identity and appeal. we have written extensively about this polarisation and its impact; what we have not shared yet is what we expect to happen next. what is the future of luxury? what will drive the value of this sector for the next 10 to 20 years, and what factors will determine who will succeed in a rapidly changing landscape?

context is everything. our brands now exist in a world where most affluent consumers have already over-indulged; they are expert, discerning luxury consumers able to differentiate and evaluate products, brands and experiences based on their own preferences and concerns. the experienced luxury consumer is maturing and becoming more measured in his or her approach, joined by the emerging luxury consumer whose luxury learning curve is breathtakingly steep. And, last but not least, Gen Y, the new generation of luxury consumers, now in their 20s and 30s, are the fastest growing group of luxury consumers worldwide. in fact Gen Y is the fastest growing demographic in the marketplace, accounting for 25% of the

world’s population (compared to Gen X 21%, Boomers 18%). in developed economies the percentage is slightly lower: 20% in the UK for example, with a higher proportion in emerging economies.

Gen Y attitudes are a major influence on this zeitgeist moment and they are remarkable for their contrast with those of Gen X and the Baby Boomers, the demographic groups responsible for the meteoric rise of the luxury brand. gen y consumers are confident, they have a voice, their own opinions and a healthy disregard for authority. this means they are looking for brands they can engage with, brands that listen to them and with which they can enjoy a two way dialogue. they are focused on making meaning in their lives rather than making money, and for them the traditional status of a luxury brand is not as motivating as finding a brand with aligned values, a transparent philosophy and shared cultural perspective. they are generally distrustful and have the lowest trust scores in their assessment of the media, corporations and governments. to this consumer, your brand is guilty until proven innocent! the group has multiple interests and passions and is much harder to pin down in traditional marketing terms. they are also tech-dependent, they expect instant access, gratification and an unprecedented degree of personal integration.

branD MattErS

“As this cycle slows we see the polarisation of luxury, creating a

distinct dynamic with strong growth in accessible luxury and elite luxury,

with brands caught in the middle ground struggling to define

their identity and appeal”

So what will this mean for luxury in the next 10 to 20 years? what are the macro trends we will need to understand and exploit?

we are all aware of the growing influence of consumers as advocates and the requirement for greater transparency in our businesses. We have observed the increasing importance of experience, with brand experiences vying with products for share of luxury spend. we are also about to undergo a fundamental shake-up in luxury retail with digital platforms overtaking traditional retail formats in performance and importance, and with this change a re-evaluation of the role of the flagship – with smart brands accelerating the convergence of the source of creation with ‘flagship’ experiences.

what happens next is no less exciting or demanding. if old luxury was about escape, new luxury will be about acceptance. consumers will want luxury brands to possess a clear philosophy; luxury will be defined by meaning; new luxury will be that which can exist in the real world rather than providing an escape from it. if old luxury was about network, new luxury will be about knowledge. We will be drawn to luxury brands capable of providing us with a deeper engagement in our interests no matter what tribe or peer group we belong to.

And if old luxury was about heritage, new luxury will be about innovation. Creativity, technology and innovation will drive growth in the sector as they did when the sector emerged at the turn of the last century. For the last 20 years luxury has been left behind in the innovation race. brands capable of playing catch-up and embracing new ideas will lead the category, creating a new breed of luxury products and services. Consumers will care less about a brand’s heritage and more about its plans for the future.

the exciting thing about this change is the optimism it brings: a forward-thinking agenda and a higher degree of consumer involvement than we have experienced since the luxury sector evolved from a collection of small businesses focused on providing largely bespoke services. Luxury brands have been slower to respond to these changes, creating an opportunity for new brands to emerge and challenge the status quo or established brands to challenge their past and create a previously unprecedented speed of growth.

time to forget everything you thought you knew about luxury. welcome to tomorrow, it’s time to enter the world of low impact luxury!

Georgia Fendley is the founder of brand consultancy Construct

www.constructlondon.com

Georgia FendleyGeorgia Fendley

here coMes tomorrow


Luxury Briefing Issue 171

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