The Business of Fashion

Creative-Business Partnerships | Team Tank

The potential of creative-business partnerships has long been a topic of interest here at The Business of Fashion. However, the focus to date has been on pairings in the fashion apparel businesses -- high profile partnerships like those of Tom and Dom and Marc and Robert, or emerging success stories like those of Phillip and Wen of 3.1 Phillip Lim and Victoria and Kikka of VPL.

I recently came across a partnership from a different part of the fashion business altogether -- but one with equally remarkable results. Over dim sum and jasmine tea, Masoud and Caroline, the creative-business partners behind Tank, told me how they have developed their fledgling magazine business into a full-service creative agency, described their complementary roles in the business, and shared the (top-secret!) details behind an exciting digital media project which is in the works.

Aseef Vaza | Combatting copying

An article in Friday's Women's Wear Daily highlighted the ongoing battle that young designers are having in preventing their designs from being copied by much larger mass-market rivals. Hence, the CFDA in the United States is spearheading The Design Piracy Prohibition Act, to protect the designs of American fashion designers for a period of three years and impose a fine of at least $250,000 for a successful conviction of fashion copyright infringement.

While the law is still far from being enacted, the high-profile discussion has shed new light on the scale of the problem. The U.S. Chamber of Commerce estimated that $12 billion was lost due to counterfeiting and piracy in the fashion and apparel industry in 2006.

With formal legal recourse hanging in the balance, sometimes designers have to take matters into their own hands. Aseef Vaza, whose shapely clutches have become a must-have for London's fashion insiders, is one example.

Paris Fashion Week: The resurrection of Vionnet

In the 1920's, a young French designer named Madeleine Vionnet created a virtual tornado in the in the fashion industry when she developed the bias cut. By cutting fabric against the grain, she enabled it to cling, drape and give in a way that was flattering to the body. Vionnet went on to build an enviable and innovative business, dressing clients such as Marlene Dietrich, Katharine Hepburn, and Greta Garbo.

The house was shut down during the Second World War, but since then, Vionnet's technique has been widely used by numerous acclaimed designers, including Azzedine Alaia and John Galliano, who has made the bias-cut dress one of his own signatures.

Now, almost 70 years after it faded into oblivion, the House of Vionnet may not be dead for much longer. Not if Vionnet CEO Arnaud de Lummen has something to say about it. Over the past few years, he has been quietly laying the foundation to resurrect this once-great house to its former glory. De Lummen's father bought the rights to the Vionnet business 20 years ago and has waited until now to task his son, a Harvard-trained lawyer, to make this ambitious vision a reality.

Valentino: Fashioning change from private equity

This week's Economist ominously warns of "The Trouble with Private Equity" at a time when many in the fashion world are wondering how the infusion of private capital will impact their industry. In the last month alone, La Perla, Samsonite and Valentino have all been snapped up by private equity funds. Just today, The Sunday Times broke the news that Prada has also been in talks with private investors. (Not surprisingly, Prada has denied these reports, but it is not hard to see why this would be a natural option for Patrizio Bertelli, especially given several failed attempts at taking Prada public.)

The recent investment exuberance around fashion brands is a dramatic departure from the stance that many professional investors took even just a few years ago. Back then, they said there was too much "fashion" risk and that without predictable and stable revenue streams, their highly-leveraged (heavy on debt, light on equity) investment strategies were untenable. Now, with more and more money fighting for fewer investment opportunities, it seems much of this wisdom has been thrown out the window. 

Men's luxury: Time for an (arm)revolution?

That oft-ignored market for men's luxury has been popping up on my radar screen a lot more often in the last few months. Up until now, men's luxury spending has been dominated by expensive watches. But, as a generation of high net-worth men with a taste for modern design is growing up, more players are reaching out to meet their sophisticated needs in innovative ways.

It brings to mind a casual gathering of friends that took place in my kitchen on a recent Saturday evening. Over wine and cheese, I watched in awe as hedge fund managers, private equity investors and investment bankers from London's burgeoning financial community were comparing, discussing and examining each other's (expensive) watches in excruciating detail. Some were taking pride in the beautiful pearl dialfaces, others in the high-tech mechanics, and still others in having a Swiss watch brand that nobody else had heard of. Digits were exchanged. Prices were quoted. Statistics were cited. Still, it wasn't so different from the groups of professional women I have seen cooing over their friend's new Chloe bag. Could the same passion for those watches and handbags be transferred to cufflinks, tailor-made suits and high-tech men's cosmetics?

Prada: A lookbook to inspire

People talk about Miuccia Prada as an intellectual designer. Up there with Martin Margiela, Dries van Noten and Rei Kawakubo, Ms. Prada is a heavyweight in the world of conceptual fashion. Season after season she manages to surprise and inspire the notoriously critical and fickle fashion crowd.

What's less cool to talk about is Miuccia Prada's knack for marrying the creative with the commercial. No other designer seems to be as able to take the most high-falutin' catwalk looks and translate them into a commercial product in the showroom. For Prada and her infamous husband Patrizio Bertelli, "commercial" is not a dirty word. Buyers rave about Prada's ability to provide the right balance between the consistent core items that form the foundation for her collection as well as the on-trend items that push the brand's creative ideas forward. In more ways than one, she is a leader not a follower.

How cool it was then for me to see this stunning lookbook for Prada's S/S 2007 collection, which once again strikes this inimitable creative-commercial balance. So many lookbooks are just boring shots of androids- cum-models with a white backdrop. Often, the logic behind this is that its best to let the clothes speak for themselves and allow buyers to focus on editing. Instead, Prada has seamlessly combined this season's vibrant rich colour palette, key pieces and trends  (fringe bags, turbans, ruffled leather and pared-down chic), landscape and cityscape images reflecting the global footprint of her brand, and seamlessly integrated these with runway looks to deliver a strong message about what she might have been thinking as she conceived of her collection.  The technique she used reminded me of the recent Gilbert and George exhibition put on at the Tate Modern, where everyday photos were infused with saturated colours and political messages.

For someone who honestly was a big fan of neither the turban nor the fringe, she somehow makes it work for me. The products look completely different now because Ms. Prada has let us into her amazing little head.

Photos courtesy of the Prada website.

© 2007 Copyright Imran Amed - The Business of Fashion.

 

Tom Ford in person: Go Beta First, New York

On my last trip to New York, I finally managed to see the new Tom Ford flagship store in person. After all of the hubbub about its "Hermes and Oprah" similarities, I wanted to judge for myself. Was Cathy Horyn right in criticising the high price-points as being out of reach even for the most discerning male customers? Was Horacio Silva on the mark for panning the store for its overly-exclusive environment?

I'm afraid the answer is yes. In spades.

For all of the talk about the luxurious feel of the store, I have to say it all felt quite ordinary to me. That is to say, it didn't feel different from most of the other masses of luxury stores that are out there. The grey colour palette and silver store fittings reminded me a bit of the old Gucci store formats (that are now being phased out). Sure, the furniture and materials, based on Ford's London home, were sumptuous and very tasteful. However, the store lacked that special something that makes truly unique retail formats stand out. When you walk into a Chanel store - any Chanel store -  you feel like you have truly entered the world of Chanel and all that it stands for. When you walk into Abercrombie & Fitch, there is a certain electricity in how the product and store environment go hand-in-hand to speak about the brand. 

This, the Tom Ford store did not have. Not yet, at least. For now, customers need to get through glass cabinets that hold many of the clothes more like museum pieces, than sumptuous articles of clothing. How is a customer going to feel the need to buy a beautiful cashmere sweater if he can't even touch it before asking someone's permission? This is akin to taking a child to a petting zoo and saying, "no petting allowed, unless you ask me first. "

The most disappointing thing for me is that Mr. Ford has completely misjudged the consumer he is going after. After having nailed it at Gucci, he has completely missed the mark here. Ford has insulted the intelligence of the customer by assuming he will pay the steep prices just because of all the frills. Frills or no frills, most luxury customers are very discerning about the product, and by making it so hard to form a judgment, the customer is forced to judge based on the store itself, not the product. The Gucci formula of glamour and sex won't work when you are asking a man to spend $5000+ on a suit. It's no wonder the store was completely empty.

My expections for this store were very high, even with the unfavourable media coverage that I had seen in advance. Mostly, this is because Tom Ford has been selling the idea of his eponymous brand to us for the past year and half.  It is also because I respect the man a great deal for his creativity, business acumen and personal style. So, you can say I felt rather disappointed than critical.

Many industry observers have been waiting with baited breath to see what he would come up with. Maybe this is another lesson learned for Mr. Ford, the erstwhile master of PR and spin. Be careful what you say (and how long you say it for, and how often you say it) about a big project in advance of its launch. You might just be setting yourself up for a different kind of high-profile PR than you had expected: the negative kind. Perhaps it would have been better for Mr. Ford to take a listen from the Internet world and go beta first, testing out the concept and honing it carefully before making the big splash.

© 2007 Copyright Imran Amed - The Business of Fashion.

Fashion 2.0: What the future holds

About a month ago, I attended the Harvard Business School’s annual Retail and Luxury Goods Conference in Boston. It was an interesting day of speeches and panel discussions, bringing together industry veterans and experts from leading luxury goods and retail companies including Neiman Marcus, Loro Piana, and Holt Renfrew. You can read more about the conference in this news article from HBS’s Harbus Newspaper.

I was honoured to speak on a panel with a diverse group of talented people from across the world of Luxury Goods, including the American designer Peter Som, Olivier Cardon, President of Roche Bobois North America, and Roberto Vedovotto, Chairman of Lehman Brothers Global Luxury Goods practice. I thoroughly enjoyed the back and forth with my fellow panelists. We touched on many topics, but the one that seemed to provoke the most debate was regarding the role that the Internet and so-called "Web 2.0" technologies can play in the branding, marketing and commercial strategies of luxury and fashion companies.

I have to say, it felt like being in a time warp. There was a notion that luxury “customers aren’t on the Internet” and that the Internet “is too risky” for luxury brands. All of a sudden, I knew what it must have been like to be Natalie Massenet (of Net-a-Porter) or Ernst Malmsten (of boo.com) back in 1999, making a case for the potential of Luxury and the Internet, to people who were very risk-averse, conservative and stuck in old mindsets; people who couldn’t see the potential for what the Internet could do for their brands and businesses. Of course boo.com and Net-a-Porter have followed two very different stories. (One, which ended abruptly, was discussed in this post.) Massenet, however, has shown (with her company that is now turning over a reported $80m and growing at 100% per year), that as with all businesses, harnessing the power of the Internet for Luxury comes down to basic business acumen, strong marketing skills, and knowing how to properly manage and grow a start-up, while also understanding technological issues such as the adoption curve and limitations of sophisticated technologies.

As for Luxury customers not being on the Internet, this appears to be an assumption made in the absence of basic facts or data. One need only look at a recent article from the Financial Times to see really how many luxury customers are online:

"A survey of  500 of America's richest families published in 2005 by researchers Doug Harrison and Jim   Taylor found that the respondents spent on average 13.7 hours a week online. The Luxury Institute, in a  survey of 1,000 wealthy consumers published in March, found that 98 per cent used the internet for     shopping, and that 88 per cent read product research and review sites.”

Clearly, these are not just young bucks trying to pick each other up on Myspace or Facebook, but also high net worth communities like asmallworld and focused fashion communities like Iqons.com. Big brands and collections are being discussed passionately on all of these highly-trafficked sites, but also on blogs (purseblog.com, whowhatweardaily) and virtual communities (secondlife.com). The amount of content is mindboggling. 

Obviously not all of it is good content. But, my basic point is that since conversations about Gucci, Prada and Burberry are going on, Gucci, Prada and Burberry might as well figure out a way to be part of those discussions, where it makes sense. The fact of the matter is that the conversations will continue, whether they are involved or not. Of course, not all of those places would make sense for every brand all the time, but to disregard the importance of the Internet outright seems shortsighted.

When it comes to the riskiness of luxury brands on teh internet, I can certainly appreciate this point. Big players have the most at stake, given the energy and money that have been invested in their brands, sometimes over hundreds of years. But that said, where there is risk, there is also opportunity. Thankfully, some big brands have recognised this and started to experiment with some of these new communication channels. Armani and Karl Lagerfeld have brought their fashion show videos to the Internet, iPods and mobile phones, showing that being a pioneer has nothing to do with age, it has to do with attitude. Dior has also experimented with the launch of a jewelry collection on secondlife.com.

That said, some of the most exciting ways to really experience what online luxury might feel like in the future is by visiting the amazing virtual worlds created by emerging designers, who are able take more risks and experiment. Boudicca’s site at platform13.com is like walking right into the fantastical (sometimes incomprehensible) world of the designers, Zoe and Bri an, who share all aspects of themselves and their passions. They have also uploaded all of their fashion shows to Youtube. Other fashion designers are also providing a peek into their everyday lives by keeping regularly updated blogs. New York-based Brit Sue Stemp and dynamic British-Japanese duo Eley Kishimoto are amongst those using blogs to create a space to communicate with their customers.

What the future holds for luxury eCommerce in particular is very exciting indeed, because much of the basic foundation has been laid. Competition is just beginning to heat up.  Since pioneers like Massenet successfully brought luxury online, all of the big retail and luxury players have jumped in. You could say, they have been fashionably late. Neiman Marcus’ direct business (which includes the nm.com, bergdorfgoodman.com and the catalogue business) now generates $700m in revenue. Revenue growth rates for the online boutiques of Coach and Gucci are massive, somewhere in the 60%+ range. Interestingly, partially because of the rush to capture online real estate and market share quickly, almost every online luxury site feels the same. Not much time has really been spent in creating a truly unique destination. Just check out  brittique.com, matchesfashion.com, brownsfashion.com, neimanmarcus.com, eLuxury.com , and bluefly.com and you will see what I mean. For the most part, each site is a one-way interaction with the consumer. They also tend to be organized in the same way, with similar aesthetics using similar fonts and layout. Only Net-a-porter has successfully integrated compelling content into their site (with its magazine) and just Yoox has a truly different look and feel.

So now, as with any other business where the product/service starts to become commoditised, the key players will have to take it to the next level and differentiate themselves to keep up with the rapid pace of what’s going on. It's not a zero sum game yet because the industry's growth is so high, but with so many players in the game, its bound to be more competitive. This is where Web 2.0 can play a role. Luxury ecommerce sites which differentiate themselves through unique product assortments, clever editorial and content, and interactive community development, will be the ones that succeed. On the other hand, with retail it always comes down to number of visits and average purchase size, so its also important that the interactivity and community don’t detract from the primary objective at hand, which is to drive sales.

Tom Ford: Niche Luxury with all the trimmings

Last week, Tom Ford launched his much-awaited menswear collection at a brand new New York flagship, where he provided personal tours to the fashion elite, including Bernard Arnault of LVMH and Cathy Horyn of the New York Times.

It seems that while Cathy was impressed, she didn't necessarily understand the business rationale for Tom's decision to focus solely on the most elite niche of the menswear market, i.e. men who are willing to spend upwards of $3000 on a suit. Tot top it all off, Ford has supplemented the purchase of the suit with a truly luxurious environment (read expensive capital expenditure and rent) to provide a truly unique tailoring experience.

Will Mr Ford be able to work his Gucci magic again? There is an interesting discussion speculating on this topic in the comments section of Cathy Horyn's post.

Barking Irons: Authentic Americana, New York

 
While in New York this past week, I ended up in New York's Bowery District several times, completely unknowingly and without any forward planning. People just invited me there for dinner or lunch at the very cool restaurant called Freemans and the sweet brunch spot called the Five Points Restaurant.

Once upon a time, The Bowery was home to high European culture and then was the centre of a grassroots movement of artists and musicians in America's new melting pot in the late 1800's. However, since the early 1900's the area has languished as a skid row zone of brothels, run-down buildings and grime. Today, the Bowery remains one of the few areas in Manhattan yet to be gentrified and therefore has a feeling of authenticity and realness that I crave, especially in the context of the rest of the city, which can sometimes feel like it is is hurtling quickly towards a feeling of Disneyfied homogeneity.

The highlight of my Bowery visits, by far, was a visit to the Barking Irons (19th century slang for "pistols") studio, in the heart of the Bowery. Barking Irons is the creative offspring of two brothers, Daniel and Michael Cassarella, who have used a combination of the Bowery's historical artistry and legends, beautiful design, and an appreciation for functional clothing that all guys can appreciate, to create a budding young business that deserves attention. Having secured important stockist relationships like Barney's in New York and Isetan in Tokyo, they are beginning to get their message out.

Yet, I believe this is a brand with so much more potential than that. Up until now, Barking Irons have really been known for their graphic t-shirts, not least because of TV appearances on coveted chests of Hugh Laurie on House, Adrien Grenier on Entourage and Mathew Fox on Lost. And while the t-shirts are great, what really stood out to me were the ingenious jackets and hoodies with a twist. They have taken iconic American street clothes and twisted them so that the wearer knows they have something special on their backs. As Michael took me through the studio with its original dark wood flooring and passionately recounted the stories and history of the Bowery, and how it is manifested in their clothes and design, I saw so much more than t-shirts and streetwear.

This is a business with that rare authenticity that can form the essence of a real brand, with all of the meaning to last beyond trends and new competitors. And, they offer a lesson to all young designers that if you stick to the meaning behind what inspired you to set up your company in the first place, it is bound to shine through in your products, your workspace, and the way you communicate what your brand is all about.

Sellouts need not apply.

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Daniel giving me the scoop on some of the 19th century spoons that form the inspiration for the new BI jewelery collection.

Cool tuxedo detailing on a soft cotton shirt. An original costume from the Gangs of New York.

A full view of the back of the studio. The original Dutch spelling of Brooklyn on a BI t-shirt.

Barking Irons riffs on the classic hoodie and plaid work shirt.

Some more Barking Irons T-shirt graphics.

I have put in an order for this jacket

© 2007 Copyright Imran Amed - The Business of Fashion. Adrien Grenier photo courtesy of Popsugar.