The French house announces Shang Xia, a new luxury brand in China

Paris December 21 – Patrick Thomas, Head of Hermès International unveiled that the French luxury brand is about to launch a new label called “Shang Xia” which literally means upside-down (source la Tribune and Capital.fr). Shang Xia will be a true luxury house with a cultural Chinese heritage in terms of patterns, fabrics and know-how. The brand management and the design studio will be based in Shanghai and the art direction will be under the responsibility of the Chinese designer Jiang Qionger, daughter of a famous local architect. For the launching of its “me too” company, Hermès will start to communicate during spring 2010.

New impulse or remedy?

According to the consulting firm Bain & Co, Chinese will be the main contributor to the luxury sector growth in 2010. Analysts are questioning if this launch represent a major change in Hermès strategy which failed to success in China. The company arrived too late in this huge country and has only 16 shops when competitors such as Louis Vuitton or Gucci have twice as many. Even if the new brand will be extremely luxurious, products crafted in China will be at a competitive price compared to imported goods from Europe.

In order to give some credibility to Shang Xia, Patrick Thomas explained that Hermès is currently discussing with a famous Parisian department store, mandatory visit for Chinese tourists in Paris.

Let’s hope that Shang Xia will be more successful than Shanghai Tang, the luxury fashion brand acquired by Richemont in 1998 which is still chasing success.

Yvon Le Gall

Luxury-world

http://france.hermes.com

Maison Martin Margiela uses Michael Stipe as celebrity collaboration

The avant-garde label Maison Martin Margiela (MMM) is known for not using the usual marketing tricks of the other fashion brands. This is why this collaboration with Michael Stipe, lead vocalist of the 90’s rock band REM, came as a surprise.

The result of this collaboration is a 925 sterling silver microcassette identified as MS09. The jewel comes with a ribbon referring to a cassette tape so that it can be worn as pendant, armband or belt. This is a limited edition: only 199 pieces coming with a special notebook numbered by Maison Martin Margiela and signed by Stipe. This collaborative piece is sold in December in selected points of sales such as concept-stores for a price close to EUR 400.

A consistent partnership

If, at the first glance, this collaboration looks like another celebrity endorsement for a luxury brand, it is actually a very consistent partnership between two very innovative labels.

Martin Margiela founded the eponym brand in 1988 which quickly became one the leading labels of the new avant-garde coming from Belgium where he studied with other designers such as Dries Van Noten or Ann Demeulemeester. Established in Paris, he turned to be the master of deconstruction and reconstruction, mixing innovation and wearability. Margiela himself never appeared during the fashion shows and took care of not being exposed to the usual fame surrounding fashion designers. Thirty years after the creation of his own label, Margiela’s departure was confirmed by Renzo Rosso, CEO of Diesel and main shareholder of MMM (source English Vogue: 3/10/09).

Michael Stipe founded the American rock band R.E.M in the 80’s and the band is often viewed as a pioneering alternative rock band. But Stipe is also a visual artist interested into immortalizing in bronze usual objects such a Polaroid camera, a clock radio or a tape recorder. Also fond of photography, Stipe already collaborated in 2008 with Lacoste to create a special edition, photo printed, of the famous polo shirt of the crocodile brand.

Finally, it makes sense that two very innovative universes join their views in order to create a piece that will surely become a collector for the fans of fashion, music or contemporary art.

Yvon Le Gall

Luxury-world

http://www.maisonmartinmargiela.com

Lorenz Bäumer makes Vuitton shine

PARIS – In October, the French company Louis Vuitton introduced its first high jewelry collection called “L’âme du Voyage”, created by Lorenz Bäumer.  The 43-year old French-German designer is not exactly a new kid on the block: he had been creating jewelry collections for Chanel for the last fifteen years but without any advertisement. He worked for Baccarat too and he also founded his own eponymous company. But this time, Louis Vuitton put him under the spotlights.

In the past, Vuitton experienced fashion jewelry with the in-house art director Marc Jacobs who created small pieces such as rings or charms bracelets to accessorize his fashion shows. In 2007, the brand even collaborated with rapper Pharrell Williams who designed some flashy rings but the consistency with Vuitton’s image was then very questionable.

Today, Yves Carcelle, the CEO of Vuitton, explains that this very exclusive collection results from a long matured strategy (source: Challenges). “L’âme du Voyage” proposes thirty pieces which are the result of three years of work. A new complex diamond cut was specially created for Vuitton: the LV cut with a monogram flower shape. This cut is extremely expensive because it causes a leakage between 40% and 60% says Albert Bensoussan, director of the watch and jewelry division (source: Le Nouvel Observateur). But the result is dazzling: between 65 and 77 facets are playing with the light when a classical brilliant cut offers only 58 facets. The LV shaped diamond is exclusively hand cut in a Tel-Aviv studio. Finally, “L’âme du Voyage” is a breathtaking collection of unconventional pieces mixing precious stones (diamonds and sapphire) and semi-precious (spinels, tsavorites, garnets, opals, aquamarines) with a culminating price of EUR 1.8 million for a necklace called “Ombrelles and eventails”.

Vuitton targets high-end luxury

With this collection, Louis Vuitton clearly positions itself in the very exclusive arena of the top jewelers such as Cartier, Boucheron, Bulgari or Harry Winston.  In terms of image, it is la crème de la crème for a  brand mainly known for handbags and leather goods. High jewelry represents the ultimate luxury in many cultures across the world, especially in the emerging markets, and potentially it can create a strong value for the brand.

This sense of prestige was already identified and targeted by Chanel and Dior which had a similar approach many years ago. For these generalist fashion houses coming from the traditional French haute-couture, they already expanded their offering to fragrances, cosmetics, shoes and accessories. Jewelry was therefore the ultimate brand stretching. But for a long time, Chanel proposed somewhat classical design with mostly white diamonds and Victoire de Castellane, in Dior, focused her creativity on colorful funny pieces mainly in semi-precious stones. Even if these brands performed reasonably well, their creations were not exactly a threat for the major jewelers of the Place Vendôme. In the case of Vuitton, appointing a recognized designer and launching a collection impressive in terms of design, material and price, should create a strong positioning for the brand in an extremely demanding market segment.

Yvon Le Gall

Luxury-world

http://www.louisvuitton.com/hautejoaillerie/

Oct 9: Japanese fashion designer Yohji Yamamoto files for bankruptcy protection

TOKYO (AP) Japanese fashion design house Yohji Yamamoto says it has filed for bankruptcy protection. The company said its sales had been battered by sluggish demand amid the global economic slowdown with debts totaling six billion yen ($67 million). Under Japan’s corporate rehabilitation law, the designer house will continue its business at home and abroad. The company said designer Yohji Yamamoto will continue his work (source: Yahoo News).

Brand history

The label was founded in 1972 and first arrived on the international circuit in 1981. Along with Rei Kawakubo at COMME des Garçons, he spearheaded the avant-garde movement then emerging from Japan. Yamamoto created recognizable pieces with masculine shape inspired by Japanese workwear and country clothing. Most of the pieces came in black and were known for their studied simplicity hiding the complexity of the work. Yamamoto has diversified his activities by collaborating with brands such as Addidas and creating labels such as Y’S or Y-3.

Recession claimed another fashion victim

Many reasons can explain the fall of the Yamamoto’s house.

“I concentrated too hard on making clothes and left too much responsibility to higher management” the designer told a press conference in Tokyo early October (source: The Independent). Even if the strength of the yen can be blamed, it is surely not sufficient to explain a $67 million debt.

From a sales perspective, the high price tags became a handicap when the market shrank.  The recession is profitable to labels selling basic pieces with nice design, good quality and reasonable prices. The very affordable Japanese brand Uniqlo is about to make a record year. COS, the premium subsidiary launched in 2007 by H&M, seems also on track to deliver solid results with an excellent notoriety.

Marketing also contributed to the plight. A lack of diversification in some lucrative segments such as leather goods, cosmetics and fragrances contributed to the brand decline. Interesting enough, the same analysis applies to the French fashion house Christian Lacroix which is currently facing the same critical situation. It seems that after some years of existence, an international expansion requires to be funded by brand stretching as did Gucci or Dior.

Last but not least, the “Hiroshima Chic” style of Yamamoto grew old and so did his unconditional customers. His style was an intelligent alternative to the European classical design inspired by the traditional French Haute-Couture. And it perfectly matched with the global trends in design, music and architecture of the eighties: black, sharp and industrial. But times changed and this aesthetics passed away

As many other designers, Yamamoto’s focus on clothing is noble and respectable but fashion is also a business and profitability is not an option.

Yvon Le Gall
Luxury-world

http://www.yohjiyamamoto.co.jp/

Paris – A new bidder created the surprise this week by announcing an offering to takeover the French fashion house

After a 22 years loss-making business and a negative result of 10 million euros ($14.3 million) in 2008, the French fashion house Christian Lacroix filed for bankruptcy last May. During the summer, the administrator received offers from three companies proposing to take over the fashion house from the current shareholder, Falic Group, which owns U.S. retail group Duty Free Americas

The designer made a joint bid with the Italian group Borletti, main shareholder of the department stores Rinascente (Milan) and Printemps (Paris). Borletti was said to be the preferred solution and on Sept 7, Reuters reported that “the administrator for Christian Lacroix hopes owners Falic Group can reach an agreement with Italian businessman Maurizio Borletti on a rescue plan for the French fashion house by the end of the month”.

Another bid was submitted in July by the French turnaround investment group Bernard Krief Consulting which is known to takeover medium-sized companies in bankrupt. The administrator announced to reuters that Bernard Krief Consulting reinforced its proposal by submitting a revised bid, last week, with a financial partner from the U.A.E. (source Reuters 22/09/09)

The third competitor is the Financiere Saint-Germain, which acquired china and cut-glass makers Haviland, Lalique and Daum.

Then, on Sept 21, Le Figaro announced that the administrator talked about “new candidates, apparently credible and wealthy” and, according to the newspaper, it is the ruling family of Ajman, the smallest of the seven Arab emirates. Sheikh Hassan ben Ali al-Naimi, nephew of the ruler, sent a letter of intent to the administrator and is finalizing an offer of more than 50 million euros. The sheikh plans to make the brand profitable within the next three years, in particular by creating synergies with other activities such as real-estate and luxury yachts. (source Le Figaro 21/09/09)

The sheikh would be ready to discuss with the Falic brothers but an alliance would be unlikely because the new comer wants to be the sole decision-maker.

Ajman is a micro state of 460 km² and 250,000 habitants located close to Dubai.

Decision in a very near future  

Officially, the deadline decided by the administrator for bid submission is Sept 25. But as this case is highly visible in France, the prevailing logic may be political as much as financial. 125 jobs are at stake, not mentioning the fact that Christian Lacroix is one of the very last fashion houses playing in the Haute-Couture arena.

During the last weeks, the designer met the Ministry of Industry twice, on July 28 and Sept 7, and in the current economical context, the Ministry may push for a French solution rather than giving the lead to foreign investors.


Yvon Le Gall
Luxury-world

http://www.borlettigroup.com/

http://www.krief-group.com/