Displaying items by tag: Gucci

Wednesday, 08 December 2021 14:45

The Gen-Z ‘Contemporary Vintage’ Hard Sell

NFTs fashion dolce gabbana investing gen z

There was a time when buying fashion was solely an investment in yourself. You bought fashion, at varying price points, thinking little or nothing of its intrinsic value after you’d finished using or wearing it. If it was lucky it would make a few pounds at a local charity shop after being donated. It was only very special showpieces or clothing worn by famous people that held any real value.

Left - Dolce & Gabbana sold its last Alta Moda Couture collection in NFT format

Today, designer fashion is being spun as ‘Contemporary Vintage’ or ‘Future Vintage’. It is being sold on the promise that it will retain some type of value or even increase. A generation of younger people are being asked to pay increasing prices for trainers and clothes on the pretence that they are an astute investment. Sounding like a giant Ponzi scheme, and adding in things like NFTs, are we seeing a new generation being hoodwinked into ‘investing’ into fashion?

I think it's a complex landscape here, almost half of the UK Generation Z saw some negative alteration to their employment through the pandemic period, and for this generation, it's increasingly hard to get into meaningful work.” says Petah Marian, founder of Future Narrative, a retail, culture and consumer trends expert.

“This sense that the system is rigged against them is leading to all sorts of speculative behaviours, be it trying to get access to limited-edition trainers to flip, or in some cases crypto currencies. Some people do make considerable amounts of money out of selling items, but, unless you know what's going to hold value, it's a risky game, as a lot of the future value lies in how well it will resonate later on.” she says.

In November, London designer fashion retailer, Machine-A, with self-described 'contemporary vintage’ e-commerce site Byronesque, launched a vintage area selling archival and rare runway pieces from the like of Rick Owens and Raf Simons.

As I understand it, contemporary vintage is just a new way of marketing vintage items. The way that Machine B is positioning itself is that the contemporary vintage selection will be key vintage items from a series of iconic designers that have a certain cult appeal.” says Marian.

Called Machine-B, it launched at the Machine-A store in Soho and online. What was interesting was how Machine-A was using these archival pieces to promote its other contemporary designer offering and labelling it as ‘future vintage’. This speculative retail approach included small and lesser known brands such as Stefan Cooke and Kiki Kostadinov.

Kerry Taylor, founder of Kerry Taylor Auctions, the world's leading auction house specialising in vintage fashion, fine antique costume and textiles, says, “I have concerns about people purchasing trainers for hundreds of thousands of dollars – when we know that items made from rubber or plastics in the 1960s have started to revert/disintegrate. High quality artisanal items such as Hermès handbags however are probably only going to increase.” she says. “I would trust vintage vintage as it has an established track record rather than ‘contemporary vintage’ which is a bit of a contradiction in terms. We have no idea of the marketing hype will come true.” says Taylor.

Taylor thinks brands and designers are marketing their clothes and product like this to make them seem more special in a world flooded with brands and garments. If you were to ‘invest’, what would you look for?
They should buy what they like rather than just for an investment. Investments can go up or down – but if you love a piece – then it doesn’t matter so much. Always check condition – avoid anything altered or with damage.” says Taylor.

NFTs fashion dolce gabbana investing gen zMarian thinks brands that have a strong and passionate fan base or items that either speak to a brand's codes or are exceptional examples of where it departs from it are more shrewd investments, as well as items that have a limited release.

“It's part of the broader narrative around circularity and retailers slowing consumption around new items, while also generating buzz around key designers by elevating second-hand items as "archive pieces" that are special and rare.” says Marian.

Right - Burberry's first NFT collection launched in August 2021

Fashion brands are offering other avenues to invest, and making their brands look more attractive in the process. NFTs or non-fungible tokens, offer a chance to buy digital versions of an item. Individuals need to establish a digital wallet to store your cryptocurrency in order to purchase an NFT.

In June, Gucci partnered with Christie’s selling an NFT video called ‘Aria’, the title of its AW21 collection, for $25,000, while in September, Dolce & Gabbana sold an NFT couture Alta Moda suit for £740,000 at auction. The new owner also got a physical suit for that price. Dolce & Gabbana grossed $5.7 million from its first auction of NFT collectibles.

Tying fashion items and collections to NFTs raises the investment levels, but are NFTs likely to be a good long-term investment?

“It's very early to say what the mass uptake will look like.” says Marian. “There's a passionate community of collectors that are driving up the value of NFTs at the moment, but I can't say what the long term value of the current releases of NFTs. I think NFTs are here for the longer term, but it's very early to say what the value or the market will look like for individual assets in a year or two years from now yet.” she says.

Add the growing noise around the Metaverse - the British Fashion Council (BFC) recently announced a brand new category as part of The Fashion Awards 2021—the first ever Fashion Award for Metaverse Design exclusively with Roblox - and the way digital and physical items are blurring, these new ways of owning or consuming as item are selling themselves as investment opportunities to a younger and more engaged consumer.

NFTs fashion dolce gabbana investing gen zAll investments are speculative. By linking and promoting positive examples of fashion items increasing in or holding their value, brands are cleverly giving the illusion that it is a certain. This is targeted at the younger consumer queuing at stores in Soho or entering ballots for items happy to pay significant sums of money with the idea lurking in the background that they will be able to resell it at some point or even flip at a profit. Websites like Stock X continue to propel the hyped hysteria.

Left - Hyped kids? Luxury brands are invested in giving the perception their goods will retain or even increase their value to younger, Gen Z consumers

Fashion has never really been a serious investment before. Fashion, in its nature, is fickle and unpredictable. Implying that something is resellable at a price close to what you paid for it and/or a solid investment is another pull brands are using to activate the purchasing power of their expensive products. It doesn’t feel like you’re chucking your money away like it did in the past to a generation more careful with money. This bubble is getting bigger and we all know what happens to bubbles when they get too big.

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Published in Comment
Monday, 29 November 2021 23:02

Film House of Gucci

House of Gucci film review geekTheChicGeek says, "If you received a Teddy Ruxpin in the 1980’s your parents had money. Alessandra Gucci, the daughter of Maurizio and Patrizia Gucci, in the new film, House of Gucci, unwraps the talking teddy bear at their ski chalet in St. Moritz just as her parents’ marriage is starting to disintegrate.

The film centres on the grandson of the Gucci founder and his rollercoaster relationship and ultimate murder under his wife’s auspices, played by Lady Gaga.

Left - The Gucci Mob

Gaga is intense and totally commited, down to the bad make-up, Jared Leto is unrecognisable as Maurizio’s cousin, Paolo Gucci. Al Pacino is like a mob boss as his uncle, Aldo, while Jeremy Irons adds some class as Rodolfo Gucci, Maurizio’s father, who early on knew the true motivation for Patrizia.

The film has a great soundtrack, though it doesn’t correspond exactly with the timeline, add in New York, disco and glamour and it brings to mind the recent Halston series with Ewan McGregor. I didn't realise Maurizio was still at Gucci when Tom Ford arrived to completely reinvent the brand.

The styling is good. Gucci’s famous snaffle loafers make a starring role, plus there’s a few Jackie bags and monogrammed prints. This will only propel the mega-brand to even greater exposure and popularity. Even the bad 1980’s jewellery. This film is a reseller’s dream. 

The only jarring moments were the disco scene at the beginning - it wasn’t very 70s and looked like a made- for-movie set with strange dance floor - and Domenico de Sole’s white socks - not sure any Italian of taste would wear white sports socks with black shoes.

Paolo Gucci’s eccentric and mocked designs could surely have found at home with the Etro family?! And the budget Wintour and Leon Talley are funny.

The film is hammy, but that’s okay because every actor is committed. I thoroughly enjoyed it."

House of Gucci film review geek

House of Gucci film review geek

House of Gucci film review geekFrom Top:

Lady Gaga as Patrizia Reggiani (Gucci)

Jared Leto as Paolo Gucci

Adam Driver as Maurizio Gucci

Salma Hayek as 'psychic' Pina Auriemma

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Published in News

Gucci Tom Ford Red Velvet Suit

The sign of a confident and secure designer is one who acknowledges the strengths and triumphs of their predecessors. If you were into fashion in the mid 1990s, then there would have been no avoiding Tom Ford’s first collection for Gucci and its luxe and louche velvet suits. This collection was almost as significant as Dior’s New Look in 1947 at catapulting a brand into the spotlight. Tom Ford’s Gucci was sexy as hell.

Over 25 years later, and in Gucci’s 100th year, designer Alessandro Michele has paid homage to this pinnacle of the Tom Ford’s Gucci era and it's looking as timeless as ever. Though it would probably be cheaper buying a 90s original from a vintage seller or auction, not to mention a better investment.

Left & Below - Gucci - Stretch Velvet Jacket With Padded Shoulders - £ 2,250

www.gucci.com

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Gucci Tom Ford Red Velvet Suit

Published in Men

balenciaga gucci hackNo creative worth their salt will ever admit to being out of ideas. Even no idea is an idea these days. Collabs. have become the go-to to fill the gaps in fashion’s creativity and its continual appetite for product over the past decade. Two empty heads are always better than one?

Fashion is a cycle and like the Ouroboros, an ancient symbol depicting a serpent or dragon eating its own tail, it goes around and around. But, today, that coil has become so tight it has almost devoured itself. In a ‘pop will eat itself’ moment, former rivals are now collaborating and even swapping creative roles, while retailers, desperate for new ideas are trying to incubate new designers, labels and ideas to fill the ideas vacuum. 

Is fashion officially out of ideas?

The biggest ‘hacking’ of the season, (not a collab. anymore - FYI), was the tie up between Balenciaga and Gucci. Both Kering brands, and in Gucci’s centenary year, Gucci’s ‘Aria’ collection, meaning air in Italian, featured no-doubt sell out product the resellers will only dream about. 

Left - Balenciaga & Gucci's 'Hack' in retail form

Tagged as Balenciagucci or (Gucciaga), the internet blew up in April when Alessandro Michele added Balenciaga’s silhouettes and branding across Gucci product. 

Two of the biggest and most desirable names in luxury fashion merging like this is unprecedented. A classic Jackie bag was emblazoned with the diagonal Balenciaga font, while Balenciaga’s Triple S was reimagined with the recognisable Gucci Flora print.

If this wasn’t enough rehashing of ideas, the collection also mined the famous Tom Ford era of the mid to late 90’s, reproducing some of his vintage looks from the Gucci archive. Balenciaga’s creative director, Demna Gvasalia said on Instagram Stories after the Gucci show with regards to the homage to Tom Ford’s Gucci. “It really defined the decade in fashion, I think. But I love how today everything mixes in together — ’70s, ’90s, ’00s, etc. Anything is really possible and fashion is such a melting pot of the past, present, and future. That’s what makes it so special and intriguing I guess.” 

This product will be in great demand - it isn’t currently available on the main Gucci website - and is therefore guaranteed that it will be swapping hands for a premium when it enters the market. While fun, it does a reek of an ideas cul-de-sac.

Mario Abad, Fashion Editor at Paper Magazine wrote on Twitter (Nov 8th) “Something about Balenciaga tagging their stores with “Gucci” to mark the collab’s launch is making me lose it.”

fendi fendace versace swapThe biggest ‘swap’ of the SS22 season, (not a collab. anymore - FYI), was Fendi by Versace, Versace by Fendi. Donatella Versace and Fendi’s Kim Jones swapped roles and designed collections for each other’s brands. Versace and Fendi, Capri Holdings and LVMH brands, respectively, unveiled “two iconic collections that celebrate their friendship and the cultural impact of Versace and Fendi.” 

Right - Versace's Medusa looks very natural with Fendi's Greek key

Labelled ‘Fendace’, the collection saw Fendi directors Kim Jones and Silvia Venturini Fendi create 25 Versace looks while Donatella Versace reciprocated with 25 Fendi ensembles. Items included Fendi Baguette bags with Medusa heads and Versace’s signature safety pins scattered across Fendi looks all set to hit stores next spring.

fendace kim jones donatella versaceConsidering Kim Jones only joined Fendi as artistic director of women's collections in September 2020, we’ve yet to clearly see what he can do with the brand. He is also men’s creative director at the giant, LVMH owned, Dior. Fashion conglomerates are finding it increasingly hard to attract big names designers to their houses. Note Daniel Lee just exciting Bottega Veneta.

Left - Kim Jones & Donatella Versace at the launch of 'Fendace'

On the retailer front, MRPORTER.COM announced a competition to find the next menswear design stars to celebrate its 10th anniversary in April 2021. Called MR PORTER FUTURES, the three lucky candidates could not already own a registered or trademarked business with an annual turnover of over €10,000 and was open to anybody regardless of experience of background.

Sam Kershaw, Mr Porter buying director, “We have always been committed to championing a diverse mix of new and emerging designers throughout Mr Porter's decade in business, but if this year has taught us anything, it is that we have the responsibility to use our global platform to give equal opportunities to all new aspiring menswear voices, no matter their experience or background”

Announcing the winners in September 2021, MRPORTER said. “Fashion, after all, can be a tough place to succeed, and, if we’re being honest, isn’t quite as diverse as it could be. For all that it speaks to a global audience, the industry that drives it is largely centralised in just a handful of cities – historically New York, London, Milan and Paris – while talent is disproportionately drawn from a small number of high-profile schools.”

The winners began a year-long design programme to turn their ideas into reality. At the end of the year, they will debut their very own menswear collections exclusively on MR PORTER.

Exclusivity is the way forward for multi-brand luxury sites all battling for the same customers. This also offers MR PORTER the potential of a fresh wave of ideas and a newness that isn’t just another collaboration. It also looks as though it is supporting the fashion industry and diversity.

Tiffany SupremeAnother brand desperate for cool is Tiffany & Co. A much-rumoured high profile collaboration between Supreme and Tiffany & Co. is set to drop this week.

 Right - Would you return this to Tiffany? Tiffany & Co.s collab with Supreme

The VF and LVMH owned businesses’ collection called ‘Return To Tiffany’ is inspired by pieces originally launched in the 1960s and comprised of pendants, necklaces, bracelets, earrings, rings, and keyrings. Tiffany’s new CEO, Alexandre Arnault, was also the head of Rimowa when they did a collaboration with Supreme.

Fashion consumers have reached collaboration fatigue and this is why the big brands are spinning these as ‘hacks’ or ‘swaps’. It is also why they are upping the ante by partnering with brands of equal stature. Collaborations needed to get bigger to have any impact. Collaborations before were always a David and Goliath type relationship of big brand supporting little. There was no threat there and everybody knew who was the bigger and more important of the two. Where will the brands go from here?

These do look like a desperate grappling for new ideas and attention. Brands not coming up with fresh ideas and therefore not impressing the retailers is making them look elsewhere to nurture a new crop of ideas and designers, especially outside of the main fashion capitals. Considering fashion had something of a pandemic break, for the last 18 months, the latest round of shows in September didn’t feel like a group of creatives burgeoning with fresh ideas. It felt like an industry fully burnt out and these partnerships do nothing to argue against that.

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Published in Comment
Wednesday, 03 November 2021 11:45

The Only Pre Fall 22 Gucci Menswear Look I Liked

Gucci Prefall Menswear 2022 LA Hollywood

"Hollywood is the American Olympus," Alessandro Michele said of why he wanted to show in L.A, but where were the god-like looks?

Gucci just unveiled another mammoth pre-fall show - Gucci's Love Parade - as it took its latest collection to Los Angeles. With over 100 looks of women's, men's, and everything in between, there was only one that I liked - the pink cowboy. Perfect for a Vegas wedding.

We are all used to Gucci's eclecticism, and, when the looks work, they really work, but this felt like it needed more focus or theme to tie everything in. With Hollywood cited as an inspiration, and all eyes on the brand for the soon-to-be-released film House of Gucci, this collection was a disappointment, especially when there is so much inspiration and characters to mine from Tinseltown's past and present.

Gucci does fantastical and retro so well, so why not take inspiration from the Hollywood Walk of Fame the cast walked on?

I found this picture of Mick Jagger (below) wearing a pop-art style star shirt from the 1970s which would have been perfect to replicate on suiting and separates. Gucci love to rip-off vintage looks and this is pure Harry Styles eat your heart out with a bombastic Elton John kapow psychedelic look.

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Mick Jagger Gucci Prefall Menswear 2022 LA Hollywood

Published in Men
Monday, 01 February 2021 12:59

Get The Look The Dig

the dig film basil brown ralph fiennes netflix brown floppy hatIf Christopher Bailey made a film it would be The Dig. The story of Basil Brown and his discovery of the ancient Anglo Saxon treasure of Sutton Hoo, it is a master class in washed out 1930s style. That end of summer, sliding into autumn feeling of swaying grasses and bleached out countryside.

The style takeaways are numerous from Robert Pretty’s rocket knit to Basil’s floppy gardening hat to Peggy Preston’s Roman coin necklace. Dig in!

Left - Ralph Fiennes as Basil Brown in The Dig on Netflixthe dig film basil brown gucci brown floppy hat

the dig film robert pretty rocket jumper

 

 

 

 

Left- Gucci - Ribbon-trimmed Fedora - £380 from Matchesfashion.com

 

 

 

 

 

 

 

 

 

Left - Robert Pretty in his intarsia rocket jumper

Below - Maison Kitsuné - 3D Rockey iPhone Case - £25 from The End

menswear product to buy now stefan cooke embroidered slashed jumper

 

 

 

the dig film robert pretty rocket jumper

 

 

 

 

 

Left - Stella McCartney Kids - Rocket Ship Intarsia Jumper - £56 from Farfetch

the dig film asprey silver rocket cocktail shaker mr porter

 

 

 

 

 

 

 

 

Left -  Asprey - Rocket Sterling Silver and Enamel Cocktail Shaker - £9250 from MRPORTER.COM

 

 

 

 

 

 

 

the dig film robert pretty rocket jumperLeft - Gucci X Disney - Rocket Charm Single Earring - £250 from Farfetch

the dig film Burberry 2009 ad campaignLeft - Burberry ad. campaign circa 2009

Left - Jamieson’s of Shetland - Fair Isle Tank Top - £127the dig film fair isle jumper

the dig film roman coin gold Monica Vinader necklaceLeft - Monica Vinader - Siren Large Coin Gemstone Pendant Charm - £95 

 

 

 

 

 the dig film basil brown barbour bag

 

 

 

 

 

 

 

 

 

 

 

 

 

 Left - Barbour - Wax Leather Tarras Bag - £129

 

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the dig film barbour tarras bag

Published in Men
Wednesday, 04 November 2020 13:23

ChicGeek Comment How Will Fashion Wake?

how will fashion wake post covidHibernation, coma, mothballed; however you want to label it, fashion would have been in a very deep sleep before all of this is over. Even if we’re being optimistic, and life returns to a sense of normality in the spring, it would have been nearly a full year of disruption. Fashion would continue to be affected well into 2021, without fashion and trade shows in at that time to show AW22 and and we would be not fully back to normal until spring 2022 at the earliest, when the fashion cycle would have resumed.

Left - Sleeping Beauty woke up to something good, but what about fashion?

In the classic fairytale, when the princess was cursed to sleep for a hundred years she was awakened by a handsome prince, but what will be waiting for ‘fashion’ and what state or style will it be in?

Let’s recap where we were at the beginning of this disaster. All the Kering brands - Saint Laurent, Gucci, Balenciaga - were flying. Gucci was slowing but still steaming ahead and was hopeful on becoming the world’s largest luxury brand. Bottega Veneta was gaining momentum and hype was translating into sales.

At LVMH, Louis Vuitton was still the major cash cow, Dior seemed to be doing well in sales rather than critical success and Celine was doing a stealth commercialism which, I’m sure, was being reflected in sales and exactly what Slimane was hired for and what he did previously at Saint Laurent. The main style was a mix of Gucci’s dress-up maximalism and embellishment and contemporary sportswear based on fugly chunky trainers and overpriced loungewear.

So, what can we predict for the future?

It might be worth casting an eye back in history. We’re told by the Bank of England boffins that this will be biggest recession in 300 years. Based on the bank's own best estimate and historical data, the coronavirus crisis could push the British economy into the fastest and deepest recession not seen since the huge economic slump of 1706 and the Great Frost of 1709. This was a baroque period at the beginning of Georgian Britain when fashion designers became more recognisable and fashion magazines appeared for the first time. While we’re too far away to know the minutiae of hemline changes, but it was certainly the beginning of a new era of British style and design.

The most popular comparison has been with Spanish Flu in 1918-19. After that came the Roaring Twenties, one of the most modern and dynamic decades of the 20th century. After WWII we got Christian Dior’s New Look. And while it was a feminine look back, it propelled fashion forward into the next decade and was hugely influential.

China luxury fashion gdp

The troubles of the 1970s gave us punk and the recession of the early 90s was reflected in American Grunge.

The most recent 2008 financial crash was all about the rise of China, and, undoubtedly, the growth in billon dollar brands and the associated logos and status.

Right - GDP growth of the world's three biggest economies - USA, Japan & China

While this is all simplistic, it offers some form of hope.

During the 20th century many economists cited the 'Hemline Theory'. It being the current fashion’s skirt length are a predictor of stock market direction. According to the theory, if short skirts are growing in popularity, it means the markets are going to go up.

Probably lucky everybody is wearing tracksuits right now.

And then there’s the ‘Lipstick Effect’, which is when consumers still spend money on small indulgences during recessions, economic downturns. For this reason, companies that benefit from the lipstick effect tend to be resilient even during economic downturns.

Market research firm Kline found evidence for the lipstick effect through four recessions from 1973 to 2001. Though during the financial crisis of 2008 lipstick sales dipped disproving this theory. Add a face mask and it doesn’t look like lipstick sales will be picking up anytime soon...

So, where does that leave any predictions post-COVID?

Here goes:

1) China will dominate even more. GDP Annual Growth Rate in China averaged 9.23 percent from 1989 until 2020. China’s gross domestic product expanded by 4.9 percent over the third quarter of 2020 on rising trade and consumption. According to the Wall Street Journal, it is “putting China’s economy back toward its pre-coronavirus trajectory half a year after the pandemic gutted its economy.” Brands are using China and Asia to currently support their businesses and as such more products will be tailored to these markets. China will fuel the growth in ‘Power Brands’ owned by the big groups and events like the Christian Dior, Designer of Dreams exhibition opening in Shanghai, following its success in Paris and London, will help to further educate and create this branding magic within this market.

2) Fashion will be more woke when it wakes, but the progress we were making on greening fashion will slow as many firms fight for survival and any expensive new initiatives will be put on the back burner. This is a fight for survival so we’ll see inexpensive greenwashing.

3) We’ll see a whole raft of new start-ups in the middle of next year, to launch later on that year, or in 2022. Many will be kitchen table brands with a strong and individual personality behind them.

4) Local will continue to be a focus and we’ll see more ‘luxury’ Bond Street type brands consider smaller stores in affluent neighbourhoods and design them in a less international and generic style and more of the locale.

5) They’ll be a slower reaction to the bad quality of most ‘luxury’ fashion, which will further fuel ‘fast fashion’.

On a purely aesthetic level, will people continue to want the escapist approach from brands like Gucci and what we saw during the glam 1970s downturn, or will we see a more austere and minimal look mirroring the rise in unemployment and shrinking of people’s disposable incomes? Well just have to see. Whatever happens it can't be too literal or obvious. The consumer is more sophisticated than that.

Fashion is too big now to follow the dictatorial approach of hemlines and lipsticks theories of the previous century. But, what is positive is the desire for consumption. That hasn't gone anyway. While remaining, big brands will try and monopolise for a while, we’ll see fast growing start-ups, from the most unexpected of places, give them a run for their money in a less competitive landscape which will have plenty of scope for growth due to brands disappearing.

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Published in Comment

Diagou reseller DiorDespite the unprecedented turbulence in the world’s retail markets the luxury conglomerates reported strong bounce back results this month. Both LVMH and Kering, two of the world’s largest luxury goods groups, reported extremely strong sales in the third quarter of 2020.

Left - Dior AW20 - Many luxury brands no longer have limits on how much people can buy

Considering many people aren’t even leaving the house, letting alone travelling, it was surprising to see that LVMH saw sales at its fashion and leather goods division rise 12 per cent to €5.9 billion. This was much higher than market expectations and saw standout performances from the Louis Vuitton and Dior houses. The LVMH results said Christian Dior “showed remarkable momentum.” while Louis Vuitton “continued to display exceptional momentum and creativity”.

Kering too reported better than expected results. Revenue in the third quarter totalled €3.72 billion, a fall of 4.3 per cent, but representing only a decline of 1.2 per cent in comparable terms. This represented a sharp rebound after second-quarter comparable sales had plunged by 43.7 per cent.

Kering’s main cash cow, Gucci, saw revenues rise sharply in the third quarter, compared with Q2, with revenue only down 12.1 per cent, whilst retail sales were down 4 per cent on a comparable basis. Gucci reported a 43.7 per cent rise in North America and a 10.6 per cent growth in Asia-Pacific. LVMH too saw strong spending and growth in Asia and the US.

What could be behind this huge recovery surge?

Luxury companies always had a good ‘problem' in the Chinese phenomenon of ‘Daigou’. Daigou or 'Surrogate Shopping' is a term used to describe the cross-border exporting in which an individual or a syndicated group of exporters outside China purchases commodities for customers in China. Often these are luxury goods from big-name designer houses. The main reason Diagou exists is because of the price differential in the Chinese market and buying abroad is often far cheaper even after the middle men take their cut. There is a huge amount of money to be made because of the volumes and value of the goods.

Many luxury companies tried to limit the amounts sold to Diagou so as to preserve their exclusivity and not flood the market. Rarity and scarcity naturally make things more desirable. But, it appears that some of the biggest fashion houses have opened the floodgates to these buyers and organisations, no longer limiting the amounts they can purchase. Having buyers queuing up and wanting to buy as much as you can give them looks like a temptation few brands could resist as they saw their sales fall off a cliff due to COVID 19.

At the end of 2018 it was announced that Kering was ending its joint venture with Yoox Net-a-Porter and taking charge of the e-commerce for its brands including Alexander McQueen, Saint Laurent, Balenciaga and Bottega Veneta. The partnership was slated for renewal in 2020, by which time Kering’s digital operation, which looked after Gucci separately, would have, hopefully, matured to an advanced level.

Diagou reseller Dior

While many of the world’s busiest luxury streets have been quiet since the beginning of 2020, Kering has been using its stores to process online orders rather than its warehouse in Bologna, as it had done previously.

Right - Diagou sending Dior gifts to China?

These ‘distance sales’ are up 25 to 30 per cent throughout the group and, according to an unnamed source, they are now letting the Korean and Chinese Diagou traders buy everything they want.

“The fact that the traders are now allowed to get what they want definitely helps those brands. Even at Dior, they can buy without restrictions now.” they say.

“Some companies do it everywhere. Particularly Louis Vuitton. And Dior. For the Kering Group, before the confinement, they had vague procedures that were changing depending on what items were selling. For example, for whatever reasons, some stores were selling huge amounts of the same item (usually cheaper leather goods with a logo, like pouches). When that happened, some accounts were flagged by the directors. There is a system at Kering called ‘Luce’ where you can see who bought a particular item. Every time, a trader would come, the sales assistant had to check their purchase history.

"At one point, they also checked that the credit card they use matched their profile name. (Companies would send different people who would all use the same company card. That was flagged during audits). After the confinement, every company has relaxed the procedures. I know some traders and they told me that for instance, at Gucci or Moncler, there are no limits on items purchased.

“Even Dior doesn’t do limits of items anymore. Although I hear that Louis Vuitton and Goyard still check accounts. At Saint Laurent, there is a limit of 3 of the same item per transaction. (But they can come every day and buy 3 items - they couldn’t do that before). I understand it is happening everywhere. Also, brands like Dior have resumed doing export sales. But Saint Laurent still refuse export sales unless the client has a good reason (if there is no store in their country that carries what they want to buy). It used to be a huge market for the brands until about 2 years ago when they decided to stop it all ‘to protect the markets in Asia and the Middle East’ mostly.”

Export sales are by a foreign buyer asking for it to be shipped to their territory from a store overseas. The Korean and Chinese traders often buy closer to home in other Asian markets. The Koreans are now the biggest traders selling into China.

“When they used to call stores and ask for an export sale, they would be able to have the VAT off and the European price.” says the source.

Many Daigou are or work with sales staff, using their staff discount as an extra price differential. But, it is not really possible anymore at some brands, like YSL, because they've put a limit on staff purchases. However, the limits are not imposed throughout the Kering group and Gucci doesn’t have limits. I regularly see or hear of people buying the same products. The directors have started to flag it.” says the source.

“One would think the procedures would be the same throughout the group, but it varies drastically and depends on the CEO/ Director’s decision. There are so many odd decisions though. For instance, I heard that Gucci had cancelled the VIP discounts ... which doesn’t make a lot of sense.

Diagou reseller YSL China Chinese consumer Covid luxury brandsThere are limits in the stores but not online for Kering.... which is beyond stupid. Again, something that doesn’t make sense.

“At Kering, there is a separate online system called 'Sellsy' which is like ordering online, but through the store stock. The directors can check the accounts and stop some people from buying (if they suspect that it is for resale), but the traders can call the stores (if they cannot find items in the website) and use a different name. The credit card used cannot be checked by the stores.” says the source.

Left - Saint Laurent AW20

“Although they are starting to check the accounts again. I heard that one Korean trader got flagged and is not allowed to buy anymore. But I am sure he still does.... using various names. Some clients have more than a dozen profiles.... with same email but variations of their name. Quite surreal.” the source says.

Speaking to a Diagou reseller in China, via WeChat, they say they have direct cooperation with many of the brands, but nothing is ever ‘official’. Louis Vuitton is the best seller, followed by Dior, then Gucci. They say that COVID 19 has forced the luxury goods companies into this loose cooperation. 

As for the end consumer, “Most of the clients don’t know anything about luxury. They just want to show off”. says the owner of the Diagou store on WeChat. “They don’t even have passports.”

Asked which products were most in demand at the moment and from which brands. “Every season is different. Which one is best depends how we promote.” they say.

Diagou buy and then export the goods themselves with their commission priced in. It will be interesting how the UK Tax Free shopping changes - Read more here - alters things for Daigou buying in the UK. But, then, the vast majority of reselling sales are made in more localised markets to China, hence the huge uplift in Asia.

What it does signify is the continued huge demand for named luxury goods. Which is a good sign for the industry overall.

Daigou has always been a game of cat and mouse for the brands. In one respect, this great demand is flattering for any brand, but they also want to be extremely protective of their image and how their goods are sold. COVID 19 was a massive jolt for any business and it’s understandable why many brands panicked and became more relaxed about knowingly selling to Daigou for resale into China. It could explain some of the huge bounce back in Q3 sales.

COVID created a vacuum and distorted the balance between buyer and seller. The luxury brands have turned the taps on for the Daigou market. Just don’t expect them to be on for too long.

Buy TheChicGeek's latest book FashionWankers - HERE

Published in Comment
Friday, 16 October 2020 12:21

Can Raf Kickstart Prada to Growth?

can raf simons kickstart Prada to growth

When designer Raf Simons was announced as the new ‘co-creative director’, working alongside Miuccia Prada, at Prada, it was welcomed as a meeting of two intellectual fashion minds. His first show, SS21, shown last week in Milan, in a digital format, was a return to Prada’s minimalist carpeted and matching curtained 1990s aesthetic. It was the most anticipated show of the new womenswear season.

Left - Prada SS21

Prada has had a growth problem in recent years, so, will this new creative impetus make a difference to a luxury group that is in danger of being left behind within the luxury segment?

The Prada S.p.A. group owns the Prada, Miu Miu, Church’s and Car Shoe brands and produces and distributes luxury leather goods, footwear and apparel, benefitting from a supply chain which includes 22 owned industrial sites. It also operates in the food sector with Marchesi 1824 and in the eyewear and fragrance industries under licensing agreements. The group employs nearly 14,000 people and its products are sold in 70 countries worldwide through 641 directly operated stores as of December 31, 2019.

Prada has been trying to inject growth in recent years by reducing wholesale and discounting, but it is trailing its rivals. For example, Prada and Gucci were once neck and neck as brands, both creatively and financially. They were the juggernaut fashion phoenixes of the 1990s. When one was name checked, the other wasn’t far behind. What changed?

In the 12 months ended Dec. 31, 2019 revenues at Prada S.p.A. totalled €3.22 billion, up +2.7% compared with €3.14 billion in the same period a year earlier. Retail sales grew +4.1% to 2.63 billion euros. This is for the entire Prada Spa group which also includes Miu Miu, Church’s and Car Shoe.

amber valletta 1997 prada glen luchfordFor the same year, 2019, Gucci revenue was €9.63 billion, revenue climbed by +13.3% on a like-for-like basis (+16.2% reported) and operating income leapt by +19.8%. The brand now accounts for over 60% of it owner Kering's revenues.

Right - Prada 1997

All of Gucci’s growth stems from 2016 when it was comparable in size to Prada in terms of revenue. Over the past 4 years, Gucci has grown its revenues to be three times that of Prada. Admittedly, Gucci has had unusually meteoric growth, but the Prada brand has been pretty much flat over these past 4 years.

While the Prada share price, listed in Hong Kong, has increased recently, it has bobbed along the 24HKD- 35HKD range over the past 5 years. Its highs were back in 2013, when the stock hit around 75HKD. During the five years over which the share price declined, Prada’s earnings per share (EPS) dropped by 18% each year. The TSR (Total Shareholder Return) gives a more comprehensive picture of the return generated by a stock. In the case of Prada, it has a TSR of -23% for the last 5 years. While the Prada share price has struggled to rise, Kering’s and LVMH’s has soared.

can raf simons kickstart Prada to growth adidas

Prada is in that predicament where it is big, but isn’t quite big enough. It’s luxurious, but not luxurious enough and, while it was once a leader, it hasn’t produced much that has stuck in recent years. It felt like Miuccia Prada had checked out, creatively, of the brand years ago. The last show by Miuccia Prada, AW20, before Simons arrived, put the signature triangular logo centre stage and was its most commercial for years.

Above -  A sign of things to come? adidas Consortium + Prada Superstar 450 Leather Sneakers - £400 from MRPORTER.COM

In a statement up to June 30th 2020, Prada CEO, Patrizio Bertelli talks of ‘growth trajectory temporarily interrupted’ due to COVID 19. He said, “The first half of 2020 saw a temporary interruption of our growth trajectory which, in a situation of progressive control of the pandemic, we are confident will gradually resume from the second half of 2020, when our store network will again be fully operational. The excellent response of local consumers after the re-openings, confirms the desirability of our products and the strong relationship with our customers, which has been further strengthened by our continued focus on digital technology. The recent positive trends in all markets, combined with our solid balance sheet and financial position, allow us to look to the future with confidence today.”

On average, 40% of Prada’s retail network was closed from February to May 2020, reaching a peak of 70% in April. Its wholesale channel was heavily reduced, following the strategic decision taken in 2019 to strictly control all distribution channels to protect brand positioning and discounting. Prada said e-commerce had delivered triple-digit sales growth during and after the global lockdowns, while retail sales were down 32% and wholesale sales were down 71%.

Prada has seen double-digit sales growth since April in Mainland China, while South Korea and Taiwan, which didn’t experience store closures, showed a consistent double-digit trend throughout the period. Thanks to the contribution of these markets, the entire Asia Pacific region reported double-digit growth in June. The rest of the world was negative. In April 2020, Prada’s Board of Directors withdrew its recommendation to pay a dividend for 2019.

Prada’s difficulties during the COVID lockdowns aren’t unusual and will have been replicated by other luxury brands, but it doesn’t help its desirability and also the inability for Raf Simons’ new show to make an impact during this difficult time. According to the Business of Fashion, just 10,000 viewers tuned into the Prada Instagram live feed of the SS21 show and, according to analytics firm Tribe Dynamics, the show’s earned media value in the first 48 hours, an industry measure of third-party social media engagement, was 59 percent lower than the Spring/Summer 2020 show a year ago.

Many people have switched off from fashion, currently, and this will not have helped Prada make a splash with Simons’ collection. His first collection received warm reviews in a season without much competition. But, his return to the pared pack 90s Prada doesn’t answer the problem of growth. One good shoe is not enough, you need hundreds, and they need to roll over many seasons like the Gucci model. Gucci’s lack of seasons and huge choice of product shows how maximalism in fashion increases venues. Looks that have more accessories than a Christmas tree are going to generate more sales. More choice is the answer for growth. It also appeals to more customers.

can raf simons kickstart Prada to growth

Prada has followed this model too, previously. Prada only really started to make money and get bigger when it moved from mink trimmed nylon to colourful striped fox fur scarves and crystal embellished dresses in the noughties. When the ‘Pradasphere’ exhibit opened in Harrods in 2014 it illustrated what really sold to the contemporary Prada customer and it wasn’t minimalism. Minimalism hasn’t really made big money for any fashion business. Less isn’t more revenue.

Unfortunately for the brand, the planned Design Museum exhibition in London, planned for 2020, has been cancelled, which would have given it a boost. Details of a new collaboration between the Design Museum and Prada will be revealed in 2021.

Simons is a good designer and an influence, but his track record at Dior and Calvin Klein shows a limited understanding of what is commercial. When commercial, as illustrated with the collab with adidas above, it verges on the repetitive and boring.

Prada CEO, Bertelli’s relationships with past designers, such as Helmut Lang and Jil Sander, once owned by the Prada Group, was turbulent and Simons won’t hang around if the going gets tough (again).

Prada was once one of the world's coolest brands, but it didn’t innovate when the likes of Michael Kors started copying its famous saffiano leather. Simons is undoubtedly cool, but will he be enough for Prada to catch up with its rivals?

Buy TheChicGeek's new book FashionWankers - HERE

Published in News
Tuesday, 29 September 2020 15:18

Can Raf Kickstart Prada to Growth?

can raf simons kickstart Prada to growth

When designer Raf Simons was announced as the new ‘co-creative director’, working alongside Miuccia Prada, at Prada, it was welcomed as a meeting of two intellectual fashion minds. His first show, SS21, shown last week in Milan, in a digital format, was a return to Prada’s minimalist carpeted and matching curtained 1990s aesthetic. It was the most anticipated show of the new womenswear season.

Left - Prada SS21

Prada has had a growth problem in recent years, so, will this new creative impetus make a difference to a luxury group that is in danger of being left behind within the luxury segment?

The Prada S.p.A. group owns the Prada, Miu Miu, Church’s and Car Shoe brands and produces and distributes luxury leather goods, footwear and apparel, benefitting from a supply chain which includes 22 owned industrial sites. It also operates in the food sector with Marchesi 1824 and in the eyewear and fragrance industries under licensing agreements. The group employs nearly 14,000 people and its products are sold in 70 countries worldwide through 641 directly operated stores as of December 31, 2019.

Prada has been trying to inject growth in recent years by reducing wholesale and discounting, but it is trailing its rivals. For example, Prada and Gucci were once neck and neck as brands, both creatively and financially. They were the juggernaut fashion phoenixes of the 1990s. When one was name checked, the other wasn’t far behind. What changed?

In the 12 months ended Dec. 31, 2019 revenues at Prada S.p.A. totalled €3.22 billion, up +2.7% compared with €3.14 billion in the same period a year earlier. Retail sales grew +4.1% to 2.63 billion euros. This is for the entire Prada Spa group which also includes Miu Miu, Church’s and Car Shoe.

amber valletta 1997 prada glen luchfordFor the same year, 2019, Gucci revenue was €9.63 billion, revenue climbed by +13.3% on a like-for-like basis (+16.2% reported) and operating income leapt by +19.8%. The brand now accounts for over 60% of it owner Kering's revenues.

Right - Prada 1997

All of Gucci’s growth stems from 2016 when it was comparable in size to Prada in terms of revenue. Over the past 4 years, Gucci has grown its revenues to be three times that of Prada. Admittedly, Gucci has had unusually meteoric growth, but the Prada brand has been pretty much flat over these past 4 years.

While the Prada share price, listed in Hong Kong, has increased recently, it has bobbed along the 24HKD- 35HKD range over the past 5 years. Its highs were back in 2013, when the stock hit around 75HKD. During the five years over which the share price declined, Prada’s earnings per share (EPS) dropped by 18% each year. The TSR (Total Shareholder Return) gives a more comprehensive picture of the return generated by a stock. In the case of Prada, it has a TSR of -23% for the last 5 years. While the Prada share price has struggled to rise, Kering’s and LVMH’s has soared.

can raf simons kickstart Prada to growth adidas

Prada is in that predicament where it is big, but isn’t quite big enough. It’s luxurious, but not luxurious enough and, while it was once a leader, it hasn’t produced much that has stuck in recent years. It felt like Miuccia Prada had checked out, creatively, of the brand years ago. The last show by Miuccia Prada, AW20, before Simons arrived, put the signature triangular logo centre stage and was its most commercial for years.

Above -  A sign of things to come? adidas Consortium + Prada Superstar 450 Leather Sneakers - £400 from MRPORTER.COM

In a statement up to June 30th 2020, Prada CEO, Patrizio Bertelli talks of ‘growth trajectory temporarily interrupted’ due to COVID 19. He said, “The first half of 2020 saw a temporary interruption of our growth trajectory which, in a situation of progressive control of the pandemic, we are confident will gradually resume from the second half of 2020, when our store network will again be fully operational. The excellent response of local consumers after the re-openings, confirms the desirability of our products and the strong relationship with our customers, which has been further strengthened by our continued focus on digital technology. The recent positive trends in all markets, combined with our solid balance sheet and financial position, allow us to look to the future with confidence today.”

On average, 40% of Prada’s retail network was closed from February to May 2020, reaching a peak of 70% in April. Its wholesale channel was heavily reduced, following the strategic decision taken in 2019 to strictly control all distribution channels to protect brand positioning and discounting. Prada said e-commerce had delivered triple-digit sales growth during and after the global lockdowns, while retail sales were down 32% and wholesale sales were down 71%.

Prada has seen double-digit sales growth since April in Mainland China, while South Korea and Taiwan, which didn’t experience store closures, showed a consistent double-digit trend throughout the period. Thanks to the contribution of these markets, the entire Asia Pacific region reported double-digit growth in June. The rest of the world was negative. In April 2020, Prada’s Board of Directors withdrew its recommendation to pay a dividend for 2019.

Prada’s difficulties during the COVID lockdowns aren’t unusual and will have been replicated by other luxury brands, but it doesn’t help its desirability and also the inability for Raf Simons’ new show to make an impact during this difficult time. According to the Business of Fashion, just 10,000 viewers tuned into the Prada Instagram live feed of the SS21 show and, according to analytics firm Tribe Dynamics, the show’s earned media value in the first 48 hours, an industry measure of third-party social media engagement, was 59 percent lower than the Spring/Summer 2020 show a year ago.

Many people have switched off from fashion, currently, and this will not have helped Prada make a splash with Simons’ collection. His first collection received warm reviews in a season without much competition. But, his return to the pared pack 90s Prada doesn’t answer the problem of growth. One good shoe is not enough, you need hundreds, and they need to roll over many seasons like the Gucci model. Gucci’s lack of seasons and huge choice of product shows how maximalism in fashion increases venues. Looks that have more accessories than a Christmas tree are going to generate more sales. More choice is the answer for growth. It also appeals to more customers.

can raf simons kickstart Prada to growth

Prada has followed this model too, previously. Prada only really started to make money and get bigger when it moved from mink trimmed nylon to colourful striped fox fur scarves and crystal embellished dresses in the noughties. When the ‘Pradasphere’ exhibit opened in Harrods in 2014 it illustrated what really sold to the contemporary Prada customer and it wasn’t minimalism. Minimalism hasn’t really made big money for any fashion business. Less isn’t more revenue.

Unfortunately for the brand, the planned Design Museum exhibition in London, planned for 2020, has been cancelled, which would have given it a boost. Details of a new collaboration between the Design Museum and Prada will be revealed in 2021.

Simons is a good designer and an influence, but his track record at Dior and Calvin Klein shows a limited understanding of what is commercial. When commercial, as illustrated with the collab with adidas above, it verges on the repetitive and boring.

Prada CEO, Bertelli’s relationships with past designers, such as Helmut Lang and Jil Sander, once owned by the Prada Group, was turbulent and Simons won’t hang around if the going gets tough (again).

Prada was once one of the world's coolest brands, but it didn’t innovate when the likes of Michael Kors started copying its famous saffiano leather. Simons is undoubtedly cool, but will he be enough for Prada to catch up with its rivals?

Buy TheChicGeek's new book FashionWankers - HERE

Published in Fashion
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