NEW YORK, United States – It’s a new year, but the news hasn’t changed all that much for the luxury business. In fact, as the numbers roll in from the holiday season and for the fourth quarter of 2008, many executives’ worst fears are playing out. It’s a good thing the industry has leaders like Alex Bolen around to keep us all optimistic.
A few seasons ago, I received an invitation to the Oscar de la Renta show in New York. It was a surprise because I hadn’t requested a ticket and I didn’t know anybody at the company. After the show, I met Alex for the first time and learned that he reads The Business of Fashion daily newsletter every morning on his Blackberry, while walking his dog. Invitation explained.
While this was a huge compliment, I am not telling you this to boast. Rather, it demonstrates that Alex is one of those rare executives in fashion who is literally switched on to new technology and new media. Alex recently answered a few questions to give us the latest news from Oscar de la Renta and explain his bullishness about the Internet in our first CEO Talk for 2009.
BoF: How are things going for Oscar de la Renta in this tough economic environment? What is your overall mood about the prospects of fashion and luxury?
Obviously this is a difficult environment for many industries, especially luxury goods and retail. That said, we feel quietly confident that we are well-positioned, and with the right product, to still be successful in this environment. We are still performing well in our own retail stores, and at wholesale, especially relative to many of our peers. There is a general sense that people will buy fewer items of better quality for the foreseeable future. Customers will demand uniqueness and good value, which is not to say inexpensive. We must deliver luxury – great design, the best fabrications and finest make, all at the appropriate price. We think this all suits our business well.
BoF: Your business is predominantly an American one — with significant Wholesale volume — not the easiest place to be right now. When last we spoke, you were contemplating a European retail push to build the Oscar de la Renta business internationally. Where do you stand on this now? What about establishing a presence in emerging markets like China and India which are still growing, or Japan, where Oscar de la Renta has no presence?
It’s no secret that some of our US wholesale partners are currently challenged, but our brand has been one of the few that are actually performing on their floors. Our international wholesale growth has been explosive – we have expanded our international doors from five to seventy five in the last six years. We opened our first international freestanding stores in Athens and Madrid this October, and they are both proving successful, considering the climate. We are also scheduled to open in Moscow in 2009, and we feel confident that we have a strong customer base in all of these markets, based on our demand at wholesale. We are still actively considering real estate opportunities in other European capitals, especially London. That said, we are being cautious about signing long-term lease commitments in this climate. My feeling is that there will be closings in key locations; rents should be dropping. The Middle East, China, India, Turkey and Japan are all still high priorities, and we are actively developing our relationships with the right partners in these markets.
BoF: Retailers are reporting the it is ready-to-wear and apparel that has been hardest hit. Are you doing anything to offset this in other categories?
Ready-to-wear is our core business, but we have not had the same experience as many other brands for precisely this reason. The Oscar de la Renta brand has always been more about quality than seasonal fashion. Nonetheless, we are still growing our accessories business, and developing a strong statement in shoes and hangbags, and that remains a priority for us.
BoF: You recently launched a new website. What roles will ecommerce and web 2.0 play for Oscar de la Renta?
I am a huge believer in the Internet, both in terms of branding and as a commercial vehicle. We have a lot of original content, with Oscar discussing different aspects of the house, and we will continue to add more. We launched the e-commerce site in September and we are now seeing sales, especially since the holiday season started. We have already had one sale over one hundred thousand dollars through our site. As for the interactivity…I think that this is where the real power of the Internet lies. We are looking at ways to incorporate these elements into the current site.
BoF: Finally, how would you describe the relationship you have with Oscar himself? As he is also your father-in-law, does this help or hinder the relationship at work?
This is Oscar’s company, and his name on the door, and he has been very successful for much longer than I have been around. As he is arguably the best designer in the world, I feel that the best thing that I can do for this company is to keep him very excited and interested in coming into the office. As for the personal relationship, I think that Oscar knows that he can really trust me, and that I would never consider anything not in the best interests of the company or himself.
CEO Talk is BoF’s forum for in-depth discussions with the fashion industry’s global decision makers, conducted by founder and editor-in-chief Imran Amed.