Despite 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.
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.
There 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
September is fashion’s month. Once bulging fashion magazine issues - remember those?! - the start of fashion’s most important selling season, and, of course, fashion weeks makes September the most important month of the year for the, estimated, global $1.5 trillion fashion industry.
Above - Louis Vuitton's COVID LV Shield hitting stores in October
Fashion week is the canary in the mine and the biggest to suffer from the pandemic. Events which combine travel and vast numbers of people aren’t going to work right now, and, therefore, puts the traditional idea of fashion weeks into a strange predicament. While many fashion councils are trying to push ‘business as usual’, it is far from it.
New York has started, but few would have realised. Designers sitting out New York Fashion Week, this season, include Marc Jacobs - its biggest draw - plus Ralph Lauren, The Row, Pyer Moss, Michael Kors, Telfar, Oscar de la Renta and Brandon Maxwell. Those still taking part can have a socially distanced crowd of just 30 people, while, before, traditional shows ranged into the multiple of 100s. London's fashion week runs from 17th September - Tuesday 22nd September 2020 with the same strict controls.
Fashion weeks is the fashion business in an event and drives focus and attention from outside its bubble to retail and the idea of purchasing something ‘new’ to consumers. They are also extremely old fashioned and had less and less relevance way before COVID 19.
While the majority of fashion shows are pointless, a few images, brands, designers will emerge that stick and steer the fashion industry into that direction for the next six months. It’s also a coming together of people and a temperature test of the industry. But, they have become bloated and drawn out exercises in wasting time and money when fashion can no longer afford either. Limos driving groups of pampered people all over town for 10 mins feels dated and indulgent.
The major of women’s fashion weeks - New York, London, Milan & Paris - managed to scrape through COVID in February and March at the beginning of the year. This will be the first test of how major fashion weeks will run with a global pandemic hanging over it. Some brands, like Louis Vuitton and YSL, have done separate shows over the past few months, but nothing like previous years.
Left - LFW's Digital Schedule home page
This season, the London Fashion Week the schedule has been split into three sections and includes brands showing digitally, physically or both - ‘phygital’. The gender neutral showcase will run from Thursday 17th to Tuesday 22nd September 2020 and include both digital activations on www.londonfashionweek.co.uk and physical events, adhering to government guidelines on social distancing. The schedule will host over 80 designers including 40 womenswear, 15 menswear, 20 menswear & womenswear and 5 accessories brands. There will be a total of 50 digital only activations, 21 physical and digital, 7 physical only and 3 designers who will activate through a physical evening event only.
The LFW digital platform, launched in June for the men’s calendar, will continue to serve as the Official Digital Hub and will be freely accessible to everyone, industry professionals and global fashion consumers alike. The British Fashion Council says. “LFW is one of the few international events to still be going ahead in London, proving the industry’s resilience, creativity, and innovation in difficult times. Now more than ever, the BFC acknowledges the necessity to look at the future of LFW and the opportunity to drive change, collaborate and innovate in ways that will establish long-term benefits, develop new sustainable business models and boost the industry’s economic and social power. The British Fashion Industry faces enormous challenges due to the impact of COVID-19 and the BFC keeps on calling on Government to support a sector which in 2019 contributed £35 billion to the UK economy and employs over 890,000 people (Oxford Economics, 2020).”
Having a traditional ‘schedule’ for barely 28 shows seems old fashioned. As fashion blogger @bryanboy tweeted to his 502.4K Twitter followers regarding NYFW, this week, “It’s really annoying how designers still get an individual time slot for what essentially is a release for a pre-taped short film. No one cares!! Just do a date and release it on the morning or afternoon of that day and it doesn’t matter if it overlaps with other designers”.
Right - Burberry Horseferry check face mask coming soon
It’s the equivalent of waiting in all day for an e-mail. Nobody has time for this, especially when it feels like most of this stuff won’t be ordered or bought anyway. Maybe just have a single release date, hub for content and publicise that?
The most anticipated London show is Burberry’s. Rumoured to be Riccardo Tisci’s last, it will be held outdoors. Burberry will use Twitch’s ‘Squad Stream' function, which allows users to view multiple perspectives of the show at a time and chat with fellow viewers using the service’s chat window. It will be live-streamed without an audience.
LFW designer Emilio De La Morena is presenting an exhibition rather than a traditional catwalk show. Called ‘Troubles SS’21’, it is an assimilation of fashion, film, and sculpture into a “consolidation of the designers professional and personal journey in conjunction to the global pandemic”.
Fashion’s optimistic hope has been that this pandemic will blow over and we’ll get back to the normal fashion week circus asap. Fashion weeks work in the future and were hoping that by the time the 2021 collections come out this will all feel like a bad dream, but, it’s also realistic to think otherwise. Fashion is fickle, when the pandemic is over any product will instantly feel dated and obsolete. It is difficult to know how much time and money to invest in it.
Adar Poonawalla, CEO of the world’s largest vaccine manufacturer, saying that not enough COVID-19 vaccines will be available to inoculate the global population until at least the end of 2024. According to Poonawalla, pharmaceutical companies are not increasing production capacity quickly enough to vaccinate everyone faster. “It’s going to take four to five years until everyone gets the vaccine on this planet,” Adar Poonawalla, chief executive of the Serum Institute of India, said.
Some brands are incorporating PPE protection into their collections. Louis Vuitton has designed a coronavirus face shield which can also be flipped up and used as a sun visor. The LV Shield will be available to purchase from 30th October 2020 in selected Louis Vuitton stores worldwide for around £700. Burberry face masks are coming soon on the brand’s website, strange they haven't released these faster, and are donating 20% from the selling price of each face mask to the Burberry Foundation COVID-19 Community Fund operated by The Burberry Foundation to support communities impacted by the pandemic globally.
Fashion weeks as an idea is still important, it just needs to reinvent itself for life post-pandemic. Mega brands can still blow millions on a pointless extravaganza, but for smaller designers and brands it can be their slim opportunity to be scouted and brought to attention. It also reaffirms the importance of seeing, feeling and experiencing fashion, but with many influencers shunning fashion week and with the amount of traditional magazine press dwindling, who is it for exactly?
We do need to see. Digital is all a bit unreal. We may as well be dressing avatars. You also have a better memory of items in real, it’s the equivalent of a school trip, they’re fully rounded and you can picture yourself wearing it. But, is it that worth £100,000s to brands? Fashion week is a preview and is also important for brands to know what to make and order. We’ve tried ‘See now, buy now’ and now’s the time for digital presentations. Is the future for fashion weeks somewhere in-between? Or does that just take us back to square one?!
Buy TheChicGeek's new book FashionWankers - HERE
As another couturier passes away - Hubert de Givenchy - I wanted to write a piece I’ve been thinking about for a while. With only Lagerfeld and Valentino left, men who have touched or worked with the great couturiers of the 20th century, is it time to leave couture behind?
It feels like couture is out of touch with today. This isn’t about the vast sums of money it costs, even though that is a good point, it’s more about the creative rut that many couture houses have found themselves in.
Left - Hubert & Audrey
It used to be an area for experimentation and fantasy - remember Galliano’s Diorient Express at Dior and all the models dressed like Henry VIII or a Native American chiefs arriving by steam train? - rather than pretty clothes for people with more money than they know what to do with.
You only have to look at ‘Red Carpet’ dressing to see the state of couture. It’s dull. It’s boring. It’s safe. Of course, it’s beautifully made, but what exactly is couture adding to ‘fashion’?
The Oscars used to have a few fashion ‘moments’ worth staying up for, but it became a battlefield of money and sponsorship, but also, with a few rare exceptions, people more interested in their own vanity and safety off the worst dressed lists. Many of these people aren’t sophisticated enough to wear something challenging or directional.
Couture needs a starting point of anything goes. It should be about experimentation and wowing people with technical skills and craft. I know it needs a commercial element, but it’s never going to be a big seller. In its nature it needs to keep the numbers low, otherwise, what else are you paying for?
There are enough ‘dress-makers’ or newer brands like Ralph & Russo for the pretty dress crowd. Brands need to think what it brings to their image and whether it’s relevant going into the 21st century.
When Hedi Slimane was announced as the new Creative Director of Céline, it was also announced he would be doing couture. Really? A house that has never done couture before, does the world need anymore? This is more a case of massaging an ego than bringing anything new. It’ll just be a higher price point of the same things, like what he did at YSL.
Gucci is a brand which would be worth doing as couture because many of the ideas can’t be manufactured to the quality you’d expect of the design. Couture would take the pressure and lid off this and allow the designs to be as good as they should be.
I agree with keeping skills alive and I, wholeheartedly, believe in craft, but couture just doesn’t have the energy it once had. Couture should be a showplace of experimentation rather than a branding exercise to continually pump out the same thing.
I think couture is currently a reflection of the current lack of great designers. Sadly, without more McQueens coming along it will just be more variations of the same beautifully made things.
TheChicGeek took a trip to sunny Marrakech to see the new YSL Museum - read more here - while there, he thought it rude not to show you one of the big trends of the 2018 season - Vertical Stripes.
Think 'stylish deckchair', designers such as Marni, Balmain, Etudes, Haider Ackermann, Paul Smith, Cerruti 1881 and Ami all did their vertical variations on the trend.
With the Jardin Marjorelle as the backdrop, bold vertical stripes are not only a statement, but they elongate the wearer. Don't be scared, you can clash them, as seen here, just make sure they're wide and colourful.
This is perfect for holiday wardrobes in both shorts and T-shirts, as well as shirts and trousers, as seen here on TheChicGeek.
Credits - Trousers - Pretty Green, Shirt - ASOS - T-Shirt - Topman X Stranger Things, Bumbag - Eastpak, Watch - Swatch, Shoes - Dune London, Sunglasses - Vintage Gucci
See more SS18 Menswear Trends - here
Want more Vertical Stripes? here
TheChicGeek was a guest at Le Palais Paysan around 25 minutes from central Marrakech by car with stunning views of the Atlas Mountains and surrounding countryside. See more here
Arguably the greatest fashion designer of the 20th century, Yves Saint Laurent, is synonymous with Marrakech and North Africa. I’d wanted to visit Marrakech for a while, now, and when the new YSL Museum opened in October, it was definitely the thing that cemented my reason for going.
Left - Take your ChicGeek selfies before you go in because the exit is on the side
Located on the same street as the famous Jardin Marjorelle – it was acquired by Yves Saint Laurent and Pierre Bergé in 1980 to stop it being developed into a hotel. The new owners decided to live in the Villa Bou Saf Saf, which they renamed Villa Oasis, and undertook the restoration of the garden in order to “make the Jardin Majorelle become the most beautiful garden – by respecting the vision of Jacques Majorelle,” - the new museum is testament to Saint Laurent’s talent, his 40 years career and his connection with the city. Built by the Fondation Pierre Bergé, Saint Laurent’s life and business partner, the two museums bearing his name - there’s another new one in Paris BTW - are preserving his archive and legacy.
The 4,000 m² building includes a 400m² permanent exhibition space devoted to the work of Yves Saint Laurent and designed by Christophe Martin. The museum also includes a hall for temporary exhibitions, a research library with over 5,000 volumes, a 140-seat auditorium, bookshop and terrace café.
Right - The iconic Mondrian dress welcomes you into the main exhibition space
The new building has something of the Frank Lloyd Wrights about it. The low-rise, concrete and brick finish, designed by French architectural, Studio KO, has a 20th century modern feel and is beautiful in its simplicity.
As you enter the circular entrance you’re greeted by the timeless and elegant YSL logo - take all your pictures and selfies now, as you won’t be coming back this way - once inside there is a green tiled fountain in a glazed courtyard.
There is a small, temporary exhibition space, painted Marjorelle blue, currently showing the paintings and illustrations of Jacques Majorelle, the creator of the garden. This space will change up to three times a year with different exhibitions and it was interesting to see what a talent Majorelle was. Think Art Deco Arabia.
In the main exhibition space, everything is dark and meticulously lit. The first thing you see is Yves Saint Laurent’s iconic Mondrian dress, an item of clothing so simple, yet original, and part of the explosion of pop we saw in the mid-sixties. This is, rightly, one of the greatest items of women’s fashion from the 20th century.
Left - There was a strict no pictures policy, I never quite understand why, so here's one of the museum's images of the beautifully lit main exhibition space
There’s a small sketch of the classic logo, designed by Adolphe Mouron Cassandre in 1961, and, then, the room opens out into a timeline charting the life and career of the designer.
At the end of the room is a collection of classic, black ‘Le Smoking’ suits. Saint Laurent revolutionised womenswear by making it acceptable for women to wear black tailored dinner suits.
As you turn, a double height portrait of Yves surveys a collection of looks from his career. There is no chronology here, and even the worst type of 80s gypsy or Russian dresses look great due to the lighting. Towards the end there is a large display cabinet with lots of accessorises and fashion jewellery. The pieces with lots of embroidery and Braque-like birds really sparkle in the black space with the shiny floor adding to the sumptuous feel of the exhibition.
As you leave, you enter into the gift shop with its red lacquered walls. There’s a café across from the auditorium showing catwalk shows from Yves Saint Laurent’s career. The exit is here, with Prickly Pears lining the walk back to the street, letting the small museum flow with visitors.
There isn’t any menswear in the museum, but, if you like fashion, there’s plenty to enjoy. Small touches reinforce the power of this brand. I’m not sure if Kering, the parent company of YSL, had any input here, but they must be very pleased with the result. The brand definitely goes up in your estimation and puts itself in the enviable position of having lots of recognisable brand signatures and designs.
Even the subtle touch of two separate fuchsia pink and tangerine coloured glass windows reflects the small coloured squares on YSL’s ready-to-wear ‘Rive Gauche’ label and no doubt a colour combination taken and inspired by Marrakech.
Left - Born in Algeria, Yves Saint Laurent is synonymous with North Africa
A pioneer, Yves Saint Laurent was the only fashion designer of his generation to systematically archive his work, beginning with the founding of the couture house.
Beginning in 1964, Yves Saint Laurent decided to set aside for safekeeping certain pieces from every collection. The Fondation Pierre Bergé’s holdings include every entire haute couture collection made by Yves Saint Laurent between 1962 and 2002. The Fondation also safeguards 65 Dior garments designed between 1955 and 1960 while Yves Saint Laurent was Christian Dior’s assistant, before becoming the couture house’s creative director.
Right - TheChicGeek outside the recently opened museum
Unfortunately, Pierre Bergé died a few weeks before the museum officially opened. But, with his ashes now in the Jardin Marjorelle, along with Yves, they are both now part of an exciting and stylish cultural quarter in Marrakech which charts the career and development of one of the biggest 20th century brands in fashion. The museum is a definite must if you're visiting Marrakech and the Jardin Marjorelle.
Below - Designed by French architectural firm Studio KO, the museum has a feeling of a Frank Lloyd Wright meets Marrakech aesthetic
TheChicGeek was a guest at Le Palais Paysan around 25 minutes from central Marrakech by car with stunning views of the Atlas Mountains and surrounding countryside. See more here
Check out these Made In Morocco brands - here