Tom Murry | Photo: Danny Clinch

LONDON, United Kingdom — It’s not every day that you get to meet a CEO who oversees a fashion brand which does more than $7 billion in sales at retail. Indeed, Calvin Klein is one of the most successful American fashion businesses of the last 25 years.

But the Calvin Klein business is markedly different from many of its peers (particularly those based in Europe) in that it is almost entirely a licensing business, with scores of different agreements with partners who design, produce and sell Calvin Klein branded products from underwear to jeans to fragrances, and then pay a royalty on sales back to Calvin Klein.

In recent years, while some other fashion brands have been buying back their licensees, Calvin Klein has continued to push forward with a model that was born early in the history of the business, when Calvin Klein himself was still designing for the brand. Based on the success of this model, the Calvin Klein business was acquired by PVH Corporation in 2003, a massive brand conglomerate which also owns other licensed fashion brands Tommy Hilfiger, Van Heusen, IZOD, ARROW and Bass.

The day after a dinner in London to celebrate the Design Museum’s new home at the former Commonwealth Institute, I sat down with Tom Murry, chief executive of Calvin Klein, to learn more about how he makes this licensing model work.

BoF: Having grown up in North America, Calvin Klein was a brand that was everywhere I looked. But here in Europe, the brand doesn’t seem to have as much of a presence. Could you talk a little bit about your priorities for the European market and how this compares to your presence in Asia, where I understand your business is quite big?

Tom Murry: It’s deceiving what you observe, and sometimes this is different from reality. We actually do about 30 percent of our business in Europe, 50 percent in the US and about 20 percent in Asia. So we actually do more business here [in Europe] than we do in Asia.

We also have more free-standing stores here than we have in Asia. Our business model for Europe is primarily a free-standing store model. We do sell to department stores, but the most important part of our business model for Europe and Asia is free-standing stores.

BoF: Stores directly owned and operated by you?

TM: No, not directly owned by us. We operate primarily a licensing model, so we want our licensees to operate a lot of those stores directly. It’s a model that works very well. If you have really good licensees and philosophically they are on the same page — that is, as it relates to protecting the brand while they are growing revenue — then it works very well.

We are fortunate enough to have this today, but it wasn’t always that way. We have been here for 15 years now and we have weeded out the bad [licensees] and replaced them with good ones, Warnaco is our biggest licensee and we have a very good relationship with them, it’s a global jeans license; a global underwear license.

BoF: Yes, I understand that in all there are more than 40 licensing agreements across multiple geographies, and product categories. I’m curious about the decision to operate the business in the way that you do, when so many other brands seem to be buying their licensees out to take things back in-house. When a lot of the operations and consumer-facing elements are managed by others, you might not have as much control as you would were you to own everything. But the flipside is that to grow the business you require less capital to open stores, for example.

TM: Actually the way it works, we have complete control. We control everything. Our contracts are incredibly comprehensive. If you were to walk into a store, there is nothing about that store that we didn’t design or approve. The location, the design of the store, retail fit out, the fixtures, often the product mix that goes in there, all the creative, all the advertising, whether it be institutional or co-op advertising, the visuals.

Now having said that, we have over 700 free-standing stores around the world, and many, many more points of sale and shop in shops, but we really track the free-standing stores as they are really important branding platforms as well as revenue drivers.

BoF: How do you oversee such a vast network of stores to ensure the consumer experience and brand communication are in line with your vision?

TM: It’s difficult. We can’t really keep an eye on 700 different stores and more, so that part relates back to my earlier comments about having a licensee that’s on the same page and understands that it benefits them as much as it benefits us to protect the brand and do the right thing for the brand, and follow the guidelines we set.

We do spot checks all the time, all over the place, and we do have offices in Milan, Hong Kong and Tokyo. If we do see something we are not happy with, or we don’t agree with, then we communicate immediately with the licensee and get it fixed up.

We didn’t really sit back 15 years ago and say, ‘You know what, we are going to operate a licensing model instead of an operating model.’ What happened was we already had a big licensing business.

BoF: From the legacy of Calvin Klein himself?

TM: Yes. I remember sitting with Calvin, probably 14 or 15 years ago, and talking about [our] need to hire people all over the world to watch everything, not quite to that effect, but we need this large army of people to make sure all of licensees are doing the right thing wherever they are.

I said, ‘I understand the concept but it’s not practical, we’d have to hire thousands of people.’ From a financial standpoint that would not be feasible. What we needed was to get rid of some of these bad licensees, and replace them with world class, top quality, professional people that want to protect the brand as much as we want to protect the brand. So that’s what we set out to do..

BoF: And you also control all the marketing in-house?

TM: Yes, we have an in-house advertising agency, we have an in-house PR firm, we have a large in-house design organization, which either designs virtually every bit of product in the whole world or approves it. Philosophically, We don’t always care as much who designs it as long as it’s great product and looks like Calvin and we approve it.

BoF: Do you think the consumer understands the relationship between all of the Calvin Klein sub-brands? You’ve even launched apparel off CKOne, which itself started as a fragrance line. With so much different branding around Calvin Klein, how do you keep it straight in the consumer’s mind?

TM: Anytime you operate in multiple price zones, there is a risk of some confusion, whether it’s us, Armani, Ralph Lauren or any others. Ralph Lauren is an incredible company, and they have even more zones than we do.

In the research that we do, when speaking to consumers [we find that] they look at it more simplistically than we in the industry do. To them it’s all Calvin Klein and if they come into a store and they like the product, they buy it. They don’t think ‘Oh wow this is confusing to me, because which Calvin Klein is this?’ It’s Calvin Klein and they purchase it.

We’ve done seven or eight studies over the years, not only in the US but throughout Europe, I think that’s the way it breaks down. But each one of our sub-brands stands for something different: the prices ranges are different; the target consumer range is different.

But having said that, I think we are in all the businesses, for the most part, that we should be in. We get requests every week. Almost anything you can think of comes across my desk and of course we turn things down. The first thing we [ask] in any new business category is: ‘Is this going to be brand enhancing?’ And if we are sure it’s going to enhance the brand then we will start to think about the revenue opportunity.

BoF: Of course, the one business that you do own and operate in house is Calvin Klein Collection, designed by Francisco Costa and Italo Zucchelli. And just based on my very rough, back-of-the-envelope calculations, it’s a very small part of your overall business and probably represents quite a large cost: the shows, the advertising, the designers. What is the role you see for Calvin Klein Collection as a marketing tool and what role does it play as a business that actually contributes to the bottom line?

TM: Well it’s not a business that contributes to the bottom line and it probably never will be. For us, it’s a marketing expense and we generate an incredible amount of editorial that is based on being in that business. The PR department creates over $400 million a year in equivalent editorial, which is massive and which we believe has a very significant impact on our brand image globally. It’s a very small business, but a very important business. It’s the only business we are in that doesn’t lend itself to the licensing model. The reason for that primarily is that it requires a lot of investment to do it right and it’s usually not a money maker, and if it is a money maker it’s fairly minimal in terms of the return.

The business was slowly going down, so we brought it back in house with Spring 2009 and we’ve steadily been improving the business: the execution, the delivery, the quality, the consistency, all of those things which requires a lot of capital. But, we feel that it’s worth it and we are still not anywhere near where we expect to be. It’s a ten year project, it’s not a five year project. We are very, very committed to it because we really want to develop a commercial success that matches the press success that we are currently enjoying and that’s going to take time.

Right now, our fastest growing business is in Asia. We are doing very well there and we are talking to a luxury retailer over there about them taking over all of Asia, opening flagships in Shanghai, Beijing.

I spend more time on that little business than any single little business, because (a) it’s very important and (b) because it’s the most complicated business we’re in.

BoF: If Calvin Klein Collection is generating $400 million of press coverage for you, is that ultimately what drives the sale of underwear and fragrance? Have you been able to draw links between the two?

TM: It’s very hard to quantify. What we do hear when we do consumer research is that it impacts what they think about the brand; what they see as the brand image. From a practical standpoint, every time we dress one of these celebrities they end up in all of the grocery tabloids. Those absolutely influence the department store consumer for example. The people that generally shop in grocery stores and read those magazines aren’t luxury consumers, but that consumer is influenced by that and we get a tremendous amount of coverage. This year, the increase in coverage we had at all of the awards shows was amazing. It was like three or four times the previous year, so that’s really important, really significant. We believe as a return, it’s probably more brand image than it is driving someone to a store to buy something, but we still consider it to have very significant value.

BoF: If they can’t buy a Calvin Klein Collection gown, then maybe they can afford Calvin Klein underwear?

TM: Underwear is usually how a young person is introduced to this brand, more on the men’s side than the women’s side. We’ve learnt this from research too. The first item they’d have was a pair of Calvin Klein underwear.

BoF: When I think of Calvin Klein underwear I think of those Kate Moss ads; those Marky Mark ads. It was really the first aspirational product for that kind of consumer with that kind of fashion branding. But that model has been rolled out, not just by fashion companies like Armani and D&G, but by all sorts of other companies. Can you tell me a little bit about how you see your position in the market and how you protect the equity that you’ve built?

TM: There is more competition and it is more difficult, yet it’s still great business and it’s still growing between five and ten percent every year off a big, big base. The way that we do that is through very frequent product innovation and very powerful marketing that supports it. That’s the way you stay ahead.

CEO Talk is BoF’s forum for in-depth discussions with the fashion industry’s global decision makers, conducted by BoF founder and editor-in-chief, Imran Amed.

Steven Kolb | Photo: Carly Otness/BFAnyc.com

PARIS, France — The fashion world is in a tizzy. Ever since the Camera Nazionale della Moda Italiana (CNMI) laid down the gauntlet, scheduling next autumn’s Milan Fashion Week from September 19th to 24th, a massive rift has emerged amongst the fashion fraternity.

New York Fashion Week, organised by the Council for Fashion Designers of America (CFDA), is scheduled to start on the 13th of September and conclude on the 20th. London Fashion Week, organised by the British Fashion Council (BFC), is supposed to run from the 21st to the 24th. But based on the dates currently being proposed for Milan Fashion Week, which the CNMI insist were communicated back in 2010, Milan would not only conflict with the end of New York Fashion Week, but completely overlap with London. Paris Fashion Week, organised by the Fédération française de la Couture, du Prêt à Porter des Couturiers et des Créateurs de Mode (known informally as the Chambre Syndicale), would follow Milan, and begin on the 25th. In short, it’s a jumble of acronyms and national organisations trying to oversee what is effectively a fashion month for a global industry.

In response to this serious scheduling problem, Jonathan Newhouse, Chairman of Condé Nast International issued a statement: “We at Condé Nast do not want the schedule to be changed. We very much oppose moving the Milan shows earlier so that they overlap or conflict with the London fashion shows — or with the New York fashion shows or those of any market,” he said, adding that various international editors of Vogue would not attend a Milan Fashion Week that conflicted with its counterparts. Milan has not budged on the 2012 dates, but they have proposed to discuss the 2013 dates.

Contrast this dispute with my surroundings as I sat down for tea with Steven Kolb, chief executive of the CFDA, on a park bench in Paris’ Palais-Royal, surrounded by stores from fashion brands from all over the world. It was clear proof of the global nature of our industry, as CFDA President Diane von Furstenberg articulated a few days ago in an open letter to the fashion community. “We share the same goals as Milan, Paris, and London,” she wrote. In other words, pitting fashion weeks against each other is like the fashion industry feeding upon itself.

Mr. Kolb was in town for “Americans in Paris,” inspired by the British Fashion Council’s “London Showrooms” concept, a perfect example of how fashion weeks can learn from each other. It’s the latest in a slew of CFDA initiatives designed to support America’s burgeoning young fashion talents, including Prabal Gurung (Nepali), Sophie Theallet (French) and Simon Spurr (British), all of whom came to America from other countries. It’s an international fashion world after all.

I met with Mr. Kolb while all this fashion week in-fighting was only just simmering, and had yet to reach boiling point. But nonetheless, it became an important part of our conversation, along with the future of fashion week more generally and the prospects for young fashion designers in America.

BoF: I’d be remiss if I didn’t ask you first about the ongoing hubbub around fashion week scheduling. What is the status of the discussions with other fashion weeks, and what do you think the resolution will be?

SK: No one agreed to a short term [agreement], why would we? Since we negotiated the second Thursday start, the idea was to get it as far away from Labour day as possible. 2012 is the first year that we actually benefited from [NYFW] not being the Thursday after Labour day, but the following Thursday.

So, we are pretty clear on that. I know that the Brits are really clear on that. I feel that 20 years ago, Milan and Europe could really dictate and New York had to follow, but I feel like it’s time for us to stake what’s important to us. We have enough strength; we have a strong market; we have a lot of really talented designers. Milan might be surprised where editors and buyers decide to go.

BoF: Why?

SK: I think a lot of them would go to London and New York over Milan. I think every city has it’s own creativity, it’s own innovation, it’s own family of designers, but I think that London has invested a lot of energy into fashion week and put a lot of effort into promoting something interesting. I think London and New York are very similar in their approach to supporting the industry and particularly young designers.

Fashion is global and we can’t just plan within our borders. We hope we can all look at it as a fashion season and not individual fashion weeks. Diane and I have been working on [resolving] the conflict and want everyone to win. I can only believe there will be a solution.

BoF: You have taken a leaf out of London’s book and brought ten American designers here to Paris this week. Tell me about what prompted you to come here.

SK: We patterned this whole thing after the London Showrooms. The British Fashion Council is always coming up with new partners and new ways to support young talent and I think we’ve done a similar job of that in New York. It creates a lot of excitement around fashion week.

BoF: You spoke just now about supporting young designers. Everyone throws that phrase around a lot in the industry. In your view what is the single biggest challenge that a designer in New York City faces today? And how is the CFDA playing a part in helping them to address that challenge?

SK: I think you’re right. I do think it gets thrown around a lot and a lot of it is just marketing hype. There is an overabundance of ideas and programmes that are supporting young talent. But with CFDA Vogue Fashion Fund, there is a lot we do publicly [and] there is a lot that we don’t do publicly. You look at someone like Tommy [Hilfiger] — and who’s working with Tommy? Peter Som. That’s not accidental; that’s the Fashion Fund watching out for those designers. A lot of it is individualised, so I know just from the Fashion Fund that everyone has a very specific niche of what they need help with.

The one thing people say mostly, whether they are an emerging designer or not, is that they need an investor, they need money, they need capital. And so whether that’s private equity that actually invests in the company, or consulting work, or a capsule collection at Target — whatever it is, people want money, cash flow, and I think there are a lot of ways to make that happen, but that seems to be a big challenge.

BoF: I think it’s so great to see these designers here in Paris, as one of the impressions that I think people have about designers in New York is that they lack creativity. Why do you think that perception exists?

SK: New York has always been the commercial market. A funny thing happened [here in Paris]. Diane [von Furstenberg] and I were having lunch and we were shopping and there was this shop, and in the shop she saw these really fabulous little display ladders, and this beautiful metal chair, and she went in, and there was this French woman in there. Diane said, ‘I love this, where did you get it?’ and the woman said, ‘Well I made them myself.’ Diane said, ‘I love them, can I buy them?’ and the woman said, ‘No, I can’t sell them, I wouldn’t want anyone to have them as they are my personal pleasure. Plus, I know who you are and if you put them in your store everyone will know me.’ Diane said, if we were in the States she would have taken an order for a 1000 of those.

I think New York has always been about selling. But I think that has changed a lot, probably in the last twenty years. I think switching the New York shows from October to the front of the cycle was part of that shift — being first and not necessarily following ideas or trends and really being creative.

The American market was always about the brand. It was never about the designer — and you look at people like Bill Blass, who really started to step out from the backroom and become more upfront. Then you have Calvin, Donna and Ralph and it just continued. In the States, we are very entrepreneurial.

There are 250 shows on the calendar. Anybody can show that has an idea. I think that programs like the Fashion Fund and incubator and the relationships that the buyers or the editors have developed with designers encourages that creativity. Whether you’re an artist or a designer, to make something and not be able to let it go? What’s the point?

BoF: Couldn’t you also argue that you are diluting the week, because, frankly there is a lot of stuff that might not merit that kind of attention? Perhaps having a more curated week — like in London, like in Milan, like in Paris — where an organisation, whether it’s the CFDA or someone else, could play a role in upholding certain standards?

SK: We’ve been talking about that. The calendar is a challenge because we have that number of shows. You’ve got a show back to back with the designers, model call times, production, all of that. That is a big behind the scenes challenge.

But who is the voice of God? Who’s to say that the CFDA or some committee with an opinion should decide who has more talent than somebody else. I think there is a dog eat dog competitiveness that exists.

BoF: In a way it’s a quintessentially American approach. Let the market decide.

SK: Yes, I do believe that. We even talk about the fashion calendar, which frankly is a gated system. We’ve been looking at how you create a back-end system that PRs and designers can use as we do the puzzle of who goes where in the calendar. Then as you look at that, do we give priority to CFDA members? I just don’t think there is anything that can be done fairly. I think it’s just, let the market decide. I think you said it exactly the way it is.

We had a meeting, the summer before last, about the state of fashion week. Everybody has an opinion. I say to people ‘If you can figure it out, I am happy to make it happen. I’m good at executing things.’

BoF: The other issue with the show calendar is the timing of shows versus the timing of arrival of clothes. Everyone seems to have a point of view on it. Do you think a) there is a solution that’s out there? And b) given all the politics between the different fashion capitals, could anyone actually make a decision that would change the system?

SK: I think it takes someone brave like Helmut Lang and Calvin Klein when they switched over to September. I think it takes someone of that stature at this point [who] would be brave enough to do it. I think you can’t look at the shows alone, because a lot of the bigger designers are doing monthly deliveries anyway. The show has really turned into something less about a collection.

BoF: But the lag is still there. Whether the consumer sees the pre-collection images or the main collection, the clothes are still not available for four to five months. The big concern is the supply chain — you also need to be able to compress the supply chain. One suggestion Natalie Massenet made was to skip a season. Instead of doing shows, designers could do small private presentations for the industry, then you do the show when the clothes are actually ready.

SK: So it’s about skipping a season and maybe that’s a nice vacation break for people, but I think that it’s logistically complicated. I don’t know, it could happen one day. It requires someone big enough and powerful enough and influential enough to make that statement.

CEO Talk is BoF’s forum for in-depth discussions with the fashion industry’s global decision makers, conducted by BoF founder and editor-in-chief, Imran Amed.

Maison Martin Margiela by Julien Oppenheim | Source: Maison Martin Margiela

On the eve of Maison Martin Margiela’s Spring/Summer 2012 fashion show in Paris, we are please to publish our latest CEO Talk with Giovanni Pungetti.

PARIS, France – Our CEO Talks with the chief executives of international fashion brands are usually accompanied by photos of the figures who lead these businesses. Things at Maison Martin Margiela are not quite so simple. While Margiela chief executive Giovanni Pungetti was more than willing to sit down and have a discussion about this most-loved of fashion brands, providing a photo of himself was out of the question.

It all goes back to the philosophy of the company’s founder. Margiela himself carefully avoided being photographed. And for a time, the Maison only answered questions via fax or email, once telling Women’s Wear Daily that “the withdrawal of a designer’s profile creates a space that the garments may fill.”

But while this approach enabled the Margiela brand to build a cult following amongst fashion insiders, the high-concept style and secretive communications strategy seemed to hinder financial stability. Enter Only the Brave, part of the Diesel jeans empire founded by Italian fashion dynamo Renzo Rosso, who acquired the brand in 2002. To some, it was an odd pairing, bringing together a highly-respected conceptual talent with a commercial fashion powerhouse.

At first, the partnership seemed to work well, bringing more structure to the business and allowing Mr. Margiela to focus on the creative process. But, in October 2009 the Maison announced the departure of Martin Margiela from his namesake brand. To this day, the company maintains that Mr. Margiela left on good terms, but fashion observers have always wondered whether the strong (and seemingly opposed) commercial and creative forces could no longer co-exist.

Since then, it’s been all systems go for MMM, which is now designed by a creative team. The business has continued to expand into new geographies and product categories. The retail network was reorganised, a fragrance license with L’Oréal was signed, the leather goods collections was restructured, and an eyewear range was launched.

BoF sat down with Giovanni Pungetti at the Hotel La Maison Champs Élysées, part of which was re-designed by the Margiela team, to learn about Mr. Pungetti’s plans for the brand’s future, and to better understand “the Margiela way” of doing business.

BoF: First things first, Mr. Pungetti. I know that Martin Margiela was always secretive, but why must you also be secretive?

Giovanni Pungetti: We don’t have a designer talking, so sometimes we have to deal with this kind of anonymous system. Sometimes we speak in a more evident way, even if I’m saying ‘Please don’t say my name, don’t quote me.’ But someone has to talk. In the end we are only two people talking: the president and shareholder (Renzo Rosso) and me. But we know the press also has some needs, so we cannot be too, too strict in our philosophy.

BoF: How did you first come to work in the fashion business?

GP: It was by chance. My first job was at General Motors in the administrative department. Then I did an MBA, where I discovered marketing and decided to switch my career. I had the chance to join Unilever where I started to do real brand management. I spent eight years there doing classical marketing, going step-by-step until I became marketing manager.

And then, suddenly I received a proposal to join Diesel and I decided to take this challenge. Of course in the beginning it was just jeans, so not the kind of fashion that we are talking about today, but it was a good beginning.

BoF: Yes, clearly, working on a brand like Diesel and working on a brand like Margiela are different?

GP: I’m quite provocative in saying this but the reality is a brand is a brand. What is different is managing people. This is completely different; this is another world. Managing the people in a company like Margiela is the key difference.

BoF: What makes it different?

GP: In high fashion companies you work 99 percent with creative people, and managing creative people is like managing artists. In industrial companies you manage other managers. The kind of mentality, the kind of thinking of managers – even if they are a little bit creative – is different to managing an artist. Artists by definition are unmanageable, so you have to try to manage them, try to lead them, try to guide them without managing them and this is the most challenging part.

BoF: It begs the question. After seven years of working together with Mr Margiela, he decided to leave. Can you comment a bit on the nature of his decision to leave, and the impact that has had on the business? He was secretive, but his aura was always there in the clothes, and in the way things were presented and in the way the brand communicated. How has Maison Martin Margiela dealt with departure of its visionary founder?

GP: We have a policy not talk about this. He left. This [was] his decision, and we respect it. The only thing that I can say is that his departure was progressive and did not happen from one day to the next. He was very good in delegating. At the time I started at the company, he was also designing for Hermès. He had three days a week at Hermès – and this was for five years. After the contract with Hermès, his attitude didn’t change. He was not so present in the company and was very, very good in delegating and making people grow behind his vision. This is the only thing that I can and want to say about him.

The brand is so strong. The philosophy of the brand is 360 degrees. The team was able to go ahead without problems. Of course we miss him, but the system that he put in place since the beginning gave us the possibility to go on.

BoF: So what you’re saying is that because his vision was so clear and his philosophy was so embedded in the culture of the organization, that today, perhaps the visionary founder isn’t as required? You need that person at the beginning to set everything in place, but things can continue on without him.

GP: Yes, absolutely. He created a system of work. I don’t want to say that art is only a system of work, but it is a little bit. I think all the artists have a method; not only a vision and natural creativity. He helped us to go on and of course what [we have done] is to reinforce the team in terms of talent, because talent is the key in this job. His right hand, [who] worked with him for 20 years, is leading the team today. We are not a studio in which everybody is doing what he or she wants. There is a person leading the team just as Martin was leading before. In a way, this person was leading the team before, as Martin was in and out.

BoF: Let’s shift focus for a moment. I’m really interested to learn about the expansion of the business, both in terms of distribution and in terms of product. Can you describe what the business was like when you first came into it and how has it changed and grown since 2002?

GP: The company was small. It was about €15m [in revenue] but with all the ingredients already. It had a very strong reputation, strong image and strong customer loyalty, but was very small. There were already accessories; there was already the casual line; there were already retail stores, department stores, and we were already present in nearly all the developed countries. Everything was there, but nothing was [fully] exploited; nothing was developed. The company is about five times as big today, with more than €75m in turnover.

I remember having a conversation with the team and Martin, and I said, ‘Listen guys you do beautiful things, but nobody sees this, so let’s try and show what you are able to do.’ At the time, they didn’t want to be too visible, because the idea was that more visible they were, the less cool they were. For me, this was the key mistake in the company at this time, thinking that only by being invisible could [they] have been successful. This is not true.

So, we did not increase the distribution, but we started to be present in the right stores and also [started] exploiting all the new countries that they were developing. We didn’t launch any new collections, we simply organised and structured the accessories, bags and shoes that were already there, not only offering just a couple of shoes, but a collection of shoes. Not only offering a couple of bags, but a collection of bags. In the end we simply improved and increased the [existing] offer.

BoF: You made it viable as a business?

GP: Exactly, exactly. We do beautiful things, why should we hide them? Why? Even if we want to consider ourselves as a ‘dream.’ We are far away from, some centuries ago, where there were some artists doing things on the last floor and nobody was able to see them. We were trying not to destroy the philosophy of the company. A big, big merit of our shareholder, has been letting us develop the business in our way, not [just] using a ‘copy-paste’ system.

BoF: So this wasn’t about taking the Diesel approach, saying, ok let’s just do the same thing as Diesel?

GP: I remember when Diesel bought Margiela, everybody was worried that we would launch a jeans line and all that. We [would just] be destroying our philosophy. On the inside this was not a real worry. He [Renzo Rosso] is too clever not to understand that changing the ingredients of the company, would have changed the company itself. So we did it our way.

BoF: You mentioned developing countries before. I understand the Margiela brand has a growing following in China. How do you adjust your strategy for a market that is, at least amongst some consumers, still focused on logos?

GP: We don’t change our strategy for China, we use a consistent approach. Asia-Pacific has always been a key market for Margiela, and we are choosing partners there who understand the Margiela way.

BoF: Speaking of growth opportunities, how does a brand like Margiela exist in the digital space?

GP: The world is changing. The world today is so fast in terms of communication with all kinds of tools and you cannot stay hidden, it’s impossible. We are prudent with regards to digital and we are doing what we need to do, because we have to do it, in our way again. There is always a Margiela way to do things, but we are not [yet] completely exploiting this medium.

For me, this [is] one of the most important revolutions after the industrial revolution, and it was happening at the end of the 90s. So we simply started to say, let’s show what we are able to do.

BoF: But still, you must have lost some of the cult following; that core clientele that was loyal to Margiela for all those years, because they liked that it was ‘invisible’?

GP: Surely we have lost some of them, the fanatic ones that were looking for something only because it was [impossible to find.] Let’s leave them to look for someone else. The world is big enough. We have so many consumers, new clever consumers that understand us.

Today, consumers are very clever, in comparison to when I started in the business. You cannot lie to them. You cannot say things that are not true, you have to be honest, and we always have been honest with them. If you are transparent, honest, they will understand you.

Imran Amed is founder and editor-in-chief of The Business of Fashion

Alessandro Benetton | Source: Benetton Group

MILAN, Italy — It’s not always easy running the family business, especially when that business is an Italian fashion powerhouse, operating in 120 countries around the world and earning more than 2 billion euros in annual revenue from its more than 4,000 directly-operated and franchised store locations.

That’s exactly what Alessandro Benetton, 47 year-old scion of the Benetton fashion dynasty has been doing for the past few years. He returned to the family fold as Executive Deputy Chairman in 2007 after earning an MBA at Harvard, putting in a few years in M&A at Goldman Sachs, and successfully running his own private equity fund, 21 Investimenti S.p.A, which today has over 1.2 billion euros in assets under management.

The Benetton brand was in great need of new energy from someone who could navigate the family dynamics, but also bring an outsider’s expert perspective. In the context of increased global competition from the likes of Zara, H&M and Uniqlo, and rising raw materials prices, Benetton Group operating profit has fallen from €145m in 2007 to €102m in 2010, on total revenues which have remained flat.

Now firmly esconced in his role, Mr. Benetton is looking to re-assert the company’s position as source of high-quality fashion basics, while further emphasising Benetton’s ethical operating principles and provocative and colourful marketing strategies. To drive this creative repositioning, Benetton announced in June that You Nguyen, formerly of Levi Strauss & Co., would become chief merchandising officer and creative director.

I chatted with Mr. Benetton by phone from Milan to learn more about his vision for reshaping Benetton for the 21st century.

BoF: I wanted to start by asking you about returning to the family business. You’ve had a very successful career in other business areas, including private equity. What was it that motivated you to return to the family business in 2007, and why at that particular point in time?

AB: It was a completely unexpected move. In order to be an entrepreneur, you need to be on your own. After I graduated from business school, instead of joining the family business, I went into the world of private equity and things went well. I was expecting to move on with my career, seeing my little baby, the private equity company, grow.

But in 2007 something unexpected happened. Since the beginning of this century, maybe earlier, the middle of the 90s, our family company started diversifying. My family has always been very active in new ventures, a new phase; discovering. If you move into new fields it’s much better to have a strong management. It is the beginning of a new era for our company. In the end, my family asked me. It was not my decision.

BoF: Did it take a lot to convince you, because I can imagine that as difficult as it is managing a two billion euro business, it’s even more complicated managing a two billion euro business in which you share ownership with members of your own family.

AB: I think the real question for me, the way I interpreted it was, that I was taking some time off from my private equity activity. I have to do this for the family. Why? Because Benetton is at a new stage.

BoF: Has Benetton always been run by a Benetton?

AB: Yes, up until today, where we have two strong Managing Directors, it was always run by the family.

BoF: Now, Mr Benetton, it’s been a few years since you’ve come back into the family business. What were your impressions of the business when you returned, and what was your strategy for reinvigorating this incredible, historic business, with such a huge global presence?

AB: I think it took a couple of years to understand a map of the situation. My approach was that if you write a new chapter of the same book you always have to get started from the last line of the previous chapter, so a sense of appreciation, a sense of recognition, and look for the point of strength in the company was my first part of analysis. You must always start from your strengths.

At the same time there was an analysis of our weaknesses. In a changing world, Benetton has written the history of franchising, and colours and communication. But at the same time the environment is changing. So I think the hardest part has been to develop new projects that could start by respecting the past but imagining the future.

BoF: I grew up wearing Benetton. The things that were really on offer were lots of knitwear, lots of colour, in a way it was a basic approach to fashion. Then there was a fashion element to it as well, really rooted in an Italian aesthetic.

Now on the High Street we see two things happening. On one end of the spectrum, I see companies like Zara and H&M which are operating at this extremely fast pace in regards to refreshing fashion assortments. And then there are businesses like Uniqlo, which are really about basics. Where in this spectrum of the High Street do you see Benetton today? And how has that changed from where Benetton might have been in the past?

AB: I guess this is another part of discussion. What we want with [Mr Nguyen] is to bring back this image and perception to the consumer. Go back to basics, trendy, Italian, fashion orientated, colourful at a democratic price.

The question is, did we lose a bit of that over the last few years? I don’t think we have lost it, I think what has happened is that our business model has not allowed us to show entirely, all these values.

We see Benetton where it belongs, which is a company that wants to have a psychological communication, an emotional dialogue with its consumer, which is a sharing of a point of view, which has some social implications, which means our campaigns mean something. We do it because we have been doing it for 30 years. This so-called disposable fashion is not for us. We have reached a point where consumers prefer to throw away a garment after using it three times because taking it to the dry cleaner would cost more.

I think fashion, colour, the natural fabrics, stylish. This is where Benetton belongs.

BoF: When you talk about Benetton being a socially responsible company what does that mean to you in practice?

AB: I could give you a list of the very many things we do, but just to give you an indication, we had air conditioning in the factories 50 years ago, we have been recycling paper within the company for more than 25 years, we’ve had underground parking lots since the 80s in order to respect the [land]. We even check the source of energy of some of our suppliers in order to give a judgment of how they operate their own companies. What I like about what my father and his brothers have done is that everybody is conscious about this issue. It’s not just a marketing tool, it’s not a gimmick, it’s something that has always been a part of this company.

BoF: I find this so fascinating because I am a pretty savvy consumer of fashion, and this is such an amazing story you are telling me, but it’s not something that instantly comes to mind for me as a consumer when I think about Benetton. Why is that?

AB: Yes. I think you’re right. I think we may have lost partially the perception of being a socially conscious company. One possible explanation is that we have missed the change in media technology and we have been leveraging our ability to communicate social issues, but have not been able to capitalise enough on the changing manner of communication as the new media era began. It’s just speculation, I’m not sure.

BoF: One thing that comes to mind for me when I hear Benetton is those extremely provocative ads from the 1980’s and 1990’s where Benetton owned the consumer space for provoking interesting debate and conversation. I think there is potentially a huge amount that can be done with digital strategies and approaches to regaining that position again of being the company that is socially responsible but also understands how to provoke conversations that lead to interesting discussions with consumers…Is digital what you’re looking at, can you tell us a little bit about your plans for that?

AB: I launched a programme where I would love to see 80 percent of our communication be digital within the next, let’s say three years. I have encouraged our managing directors to create a new division for new media. I think it would be an efficient tool to reaffirm many of the topics that you and I have underlined today. The social aspect and the courage to be out of the scheme, are values we can share with our consumer.

Imran Amed is founder and editor of The Business of Fashion

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Harry Wang, Chief Executive Officer, Shiatzy Chen
• Emmanuele Carminati Molina, President, Valextra
• Matteo Marzotto, Chairman, Chairman, Vionnet
• Marigay McKee, Fashion and Beauty Director, Harrods
• Lisa Montague, Chief Executive Officer, Loewe
• Jeff Rudes, Founder and Chief Executive Officer, J Brand Jeans
• Stephanie Phair, Director, TheOutnet.com
• James Gardner, Founder and Chief Executive Officer, CreateThe Group
• Robert Duffy, President, Marc Jacobs International
• Pierre Mallevays, Founder and Managing Partner, Savigny Partners
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill
• Harold Tillman, Chairman, The British Fashion Council
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Brian Hill, Chief Executive Officer, Aritzia
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Stella Iishi, President and Founder, The News Inc.
• Paolo Fontanelli, Chief Executive Officer, Furla
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Natalie Massenet, Chairman and Founder, Net-a-Porter

Harry Wang | Source: Shiatzy Chen

PARIS, France — Long before the question arose about who would create the first Chinese luxury brand, Wang Chen Tsai-Hsia set up Shiatzy Chen to explore her tailoring skills and budding interest in serving the local luxury market in Taiwan.

Fast forward thirty years, and Ms. Wang now has a business with a turnover of more than $60m and growing, built through hard work, perseverance and — in the Chinese tradition — the support of her family, including husband Wang Yuan-hong, and their son Harry Wang, who now acts as the brand’s chief executive.

Mr. Wang believes the business can grow to $200m in revenues by 2020. But rather than focus on growing the business in the West as so many brands from emerging fashion markets tend to do, he has his sights set firmly on Asia. Extending from the brand’s home base in Taiwan to China and Japan is first on his list. Mr. Wang has also brought Shiatzy Chen’s fashion shows to Paris, forcing him to up his communications game and consider the brand’s role and customer targets in a global context.

I caught up with Mr. Wang during the last round of Paris shows to learn more about Shiatzy Chen and to benefit from his firsthand insights on the evolving nature of luxury in China.

BoF: Many of our readers will have never heard of Shiatzy Chen before. Can you tell us about the history of this family fashion business?

Harry Wang: Shiatzy Chen was created by my parents in Taiwan in 1978. My mother was the designer and my father focused on the business side. I was originally brought in around 2001 as my father’s assistant, overseeing almost every department except for design. Then my job was to develop the international market. Given the number of stores we have in Taiwan, I have been focusing on opening more stores in Hong Kong, China and elsewhere. The first boutique outside Taiwan was opened here in Paris in 2000, but we’ve had an office in here since 1990.

BoF: You’ve been showing in Paris for a few seasons now. Apart from international exposure, what were you hoping the Paris show would do for your business?

HW: I was hoping it would bring me some wholesale revenue, which turned out to be not very successful. But apart from that, we wanted to bring into focus the positioning of our brand. In Chinese department stores, we sit on the ground floor, right next to the big players. Our store in Beijing is right next to Fendi; in Hong Kong we are right next to Chanel. So, we are aiming to position ourselves higher on the global stage. We are not trying to fool customers, but rather trying to position the brand differently. We want to position ourselves as the most luxurious Chinese brand.

BoF: Do you see your aesthetic as being Chinese then?

HW: In the beginning, we did something very Chinese. But between 1985 to 1992 we were actually doing something that looked quite Western. It worked at the time because Western labels were not allowed in Taiwan. But after 1992, when all the big Western brands starting coming in, we felt that in order to be different we needed to do something more than just Chinese pieces. Today, we are known for taking Chinese details — embroidery, buttons, collars — and using Western cuts. We purchase all our fabrics from Italy, but more than 50 percent of these are our own designs.

BoF: What’s the biggest challenge you face as a brand based in Asia?

HW: The biggest challenge is internationalising the brand and trying to expand in Europe and the States. Selling in Asia is easier for us of course, because it’s closer and the culture is similar. We talk to our design team and tell them that if we want to be internationalised we need to do something very simple, sexy, the look has to fit Western tastes. Western people still like Western design.

BoF: What about the Chinese customer? When they come to Shiatzy Chen, what are they looking for?

HW: In Taiwan and China, they buy mostly the embroidered pieces. They feel, in terms of the craftsmanship and design, that Shiatzy Chen is very good; probably one of the best, and definitely comparable to the Western brands. They feel proud to wear our designs because we produce a very limited number of the same item. For instance, the jacket you just saw, we produced roughly one hundred pieces across four sizes. We manufacture about 70,000 pieces a year in total across 100 styles.

So, you see, we produce a lot of different styles, but in a very limited quantity.

BoF: And how is the business performing?

HW: Currently, we are making money in all of the markets in which we operate. The margins for the retail business are very good in Taiwan, but a bit less so in China because the expenses there are very high. Hong Kong is the most expensive market, followed by Shanghai.

Our margins in China are lower even though we sell the clothes at higher prices there. If I compare China with Taiwan, in China the rental is at least four times more, and sales tax is 17 percent compared to only 5 percent in Taiwan. Advertising costs are at least four times more per page. So, as an independent brand in China you can earn about 10 to 15 percent in operating profit, depending on your skill. In Taiwan, you can earn more.

BoF: Do you think the major international luxury brands are making money in China?

HW: I think the big players like Louis Vuitton, Chanel, and Gucci are making very good money. Smaller brands like Celine and Chloe, maybe Jimmy Choo, still lose money in China.

The more mass market Chinese brands which are inspired by bigger brands also make lots of money. For example Ports 1961 makes money. They have many distribution channels; their price point is good; they are positioned well; they show at New York Fashion Week; and they spend a crazy amount of money on advertising. Chinese customers feel that Ports is a Western brand.

BoF: You’re clearly changing the way you merchandise your store here in Paris compared to the way you merchandise your store in Taiwan. Do you think that Western luxury brands are sufficiently adapting their store assortment to Asia?

HW: I don’t know about ‘successfully’, but look at Chanel. They did a Chinese collection which, at least in my opinion, probably doesn’t sell at all. It’s very different from the ‘Chinese’ that we are looking for in Asia. They make it in an old way. It’s old fashioned, it’s not contemporary.

The Chinese customer wants to buy Western things from Western brands. In the 1990s Versace was very popular in Taiwan. Everybody wanted to have one of those really flashy shirts. In China today, it’s very much like market in Taiwan in the 1990s. People want to wear something to show that they have money.

I think in the next 5 to 10 years this will change and they will start to mix and match the design from different brands. But now, you go to Plaza 66 and you see ladies wearing D&G with logos everywhere. You can tell they don’t know how to mix and match it.

BoF: What about Hermès’ Shang Xia brand, which is billed a the first Chinese luxury brand?

HW: We are in the same shopping mall as Shang Xia, so I check their store every time, and I don’t really know what they are trying to sell. The way they are packaging themselves is very mysterious. They have a little section where they have chopsticks, glassware, all these plates, some selection of Hermès ‘comfortable wear’. But they don’t have a special look, there is no identity as yet. To me, Shang Xia doesn’t represent China. People know them as a subsidiary of Hermès and that’s why the press visit.

BoF: As you think about taking Shiatzy Chen as a business forward, what are your plans for the future in terms of growth?

HW: We feel that the main revenue will come from Asia, so our target is to open 100 stores altogether in China by 2020. Right now there are 10 stores in China, and this year we are opening another eight. It’s not very easy to achieve, and we are looking at about 20 to 25 stores in Japan if everything goes smoothly. So I think will have 100 stores in China, 50 in Taiwan, 25 in Japan, and we want to add up another 25 worldwide.

Imran Amed is founder and editor of The Business of Fashion

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com
• Harold Tillman, Chairman, The British Fashion Council
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill
• Pierre Mallevays, Founder and Managing Partner, Savigny Partners
• Robert Duffy, President, Marc Jacobs International
• James Gardner, Founder and Chief Executive Officer, CreateThe Group
• Stephanie Phair, Director, TheOutnet.com
• Jeff Rudes, Founder and Chief Executive Officer, J Brand Jeans
• Lisa Montague, Chief Executive Officer, Loewe
• Marigay McKee, Fashion and Beauty Director, Harrods
• Matteo Marzotto, Chairman, Chairman, Vionnet
• Emmanuele Carminati Molina, President, Valextra

Emmanuele Carminati, President, Valextra | Source: Valextra

MILAN, Italy — In 1937, in Milan’s Piazza San Babila, a new brand called Valextra was born. Eventually Valextra became known for producing the ultimate in Italian luxury leather goods for only the most wealthy and discerning Italian clients. Valextra was amongst the first to create products that matched the changing lifestyle of this elite class, who were just becoming accustomed to the luxury of air travel.

Fast forward 75 years and Valextra remains under-the-radar, having gone through a period of great financial difficulty. In short, the brand had lost its way, while competitors like Goyard, Hermès and Louis Vuitton were not only much better known, but also financially successful.

Still, many industry tastemakers, with knowledge of and access to everything and anything luxurious, are drawn to Valextra. There is something precious about this beautiful Italian brand, its craftsmanship and dedication to quality. On a recent visit to the Valextra showroom in Milan, I was promptly introduced to Tyler Brûlé, founder and editor-in-chief of Monocle, who was carefully examining the leather bags with his now well-known attention to all the fine little details. A few minutes later, Anna dello Russo, editor-at-large of Vogue Nippon, floated into the showroom with her dog Cucciolina, photographer Giampaolo Sgura, and naturally stylish assistant Viviana Volpicella in tow.

Add to this the news that Valextra is taking over the space in Barneys New York flagship previously occupied by Prada, launching new collaborations with Blackberry, selling Valextra iPad and Mac Airbook covers on Mr Porter, and even (somewhat surprisingly) working on a new bag collaboration with Katie Holmes. The Valextra team is certainly making a concerted effort to broaden the awareness of this legendary Italian brand.

I caught up with President Emanuele Carminati Molina to learn more about his investment in Valextra, the operational challenges he is facing in turning it around, and why technology gadgets like the iPad and Blackberry Playbook may play a key role in the brand’s future, just as air travel once did during the brand’s golden age.

BoF: Despite its enviable heritage and cult following, Valextra is still somewhat under-the-radar. Can you tell us a little about the Valextra story?

Emanuele Carminati Molina: The Fontana brothers, who founded Valextra, worked with exquisite, precious leather right from the beginning. Over time, they began to show very old Milanese families how to mix traditional leather craftsmanship with a new style, for example, due to the rise of air travel.  Many of the most important articles produced by Valextra were dedicated to travel, such as our famous Avieta, the first briefcase named ventiquattro, or ’24 hour’ bag. It was so important in terms of design that it won the prize Compasso D’Oro. We are still producing the same briefcase more than 70 years later. This is our story.

BoF: How did you first get involved with Valextra, and why?

ECM: Long after this golden period of Valextra was over, some time back, I learned that Valextra was up for sale. I was surprised to learn that the company was in a bad situation, and that I could have it for not so much money, but that it would require significant investment to make it work.  And so, in three days, without doing any due diligence I bought the company. It was an act of emotion; an act of love. I couldn’t help thinking about all the memories I had from my first years of school here in Milano when I first came to know Valextra.

BoF: But you’re a business man too. So, what was your goal for Valextra when you bought it?

ECM: My specific target was, in a very short time, to bring Valextra back to the very top of the luxury market in leather goods, because I was sure that this was possible, especially for a brand like Valextra.

BoF: How did you plan to recapture the old Valextra magic?

ECM: First, we had to make a kind of ‘new deal.’ Valextra had lost its ability to operate at the highest levels of quality following the situation that had arrived from the 1980 – 2000, when Valextra started working for external accounts. They were producing for Dunhill, for Cartier, for Armani, and for a lot of other people, slowly losing the Valextra soul and identity. And so, my first commitment was to rebuild the ability to produce beautiful things with the perfect quality. I went back to former Valextra craftsmen and tried to convince them to come back to work.

It was very difficult, but eventually all of these people came back, not for me, but for Valextra.  It was very important to find these people; to have the right compromise with them; and to start working with the same mind. In 2002, we were ready to start and now you can see with your own eyes what we are doing here.

We have to go very deep in our souls to really understand what we are doing. Everything has to give us emotions; good sensations. That’s really important. I appreciate very much what I can find in other stores and I really respect  all the other companies, but only at Valextra do I find real emotion.

BoF: But how will you sustain Valextra’s level of  craftsmanship when all of these highly-skilled craftsmen can no longer work?

ECM: This is a very good question. We have about 6o people working in our factory, and soon more than 15 of these people will retire. It’s impossible to replace them, with their level of skill and experience. Very few young people have the patience for this kind of work.  Of course, we are trying to teach some more people how to work but, probably we will have to seek help from external laboratories where we can send some of our masters to control and oversee the production, to control the quality. We will always produce only in Italy and always very close to our own company factories.

Valextra Playbook Case | Source: Valextra

BoF: But you are also optimistically looking ahead with new projects, including a collaboration with Blackberry.

Yes, it all started when we agreed to study and develop smartphone covers for the Curve. RIM [Research in Motion] was impressed by the creativity and style of Valextra and expressed a desire for a deeper collaboration with us. For us, RIM was the the ideal tech partner and we agreed to study a cover for the Playbook, the new BlackBerry tablet.

Respecting our philosophy of interpreting the époque, we have been closely following the evolution of technology products that have become part of our daily lives. We will continue to study and create accessories that may connect in harmony with these tech gadgets. Our objective is not only to dress, but to modify the impact of the object by transforming it from a piece of technology into a symbol of elegance.

The worldwide success obtained by this concept of intertwining elegance with technology, has resulted in the sell out of our covers, which we believe hold a crucial position in our future strategies.

Imran Amed is founder and editor of The Business of Fashion

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com
• Harold Tillman, Chairman, The British Fashion Council
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill
• Pierre Mallevays, Founder and Managing Partner, Savigny Partners
• Robert Duffy, President, Marc Jacobs International
• James Gardner, Founder and Chief Executive Officer, CreateThe Group
• Stephanie Phair, Director, TheOutnet.com
• Jeff Rudes, Founder and Chief Executive Officer, J Brand Jeans
• Lisa Montague, Chief Executive Officer, Loewe
• Marigay McKee, Fashion and Beauty Director, Harrods
• Matteo Marzotto, Chairman, Vionnet

Matteo Marzotto in his Milan offices | Source: The Business of Fashion

MILAN, Italy — When Matteo Marzotto, stylish scion of the Italian fashion dynasty announced in February 2009 that he was acquiring the storied House of Vionnet, owned at the time by Arnaud de Lummen who had already had a go at reviving the sleeping beauty himself, the response from the fashion industry was simultaneously one of intrigue and distaste. On the one hand, a swarm of journalists and buyers packed into Marzotto’s Milan apartment for the initial press conference. On the other, many fashion observers could not fathom how a legendary French fashion house could be moved to Milan, run by an Italian, and designed by Rodolfo Paglialunga, an Italian designer who had worked for most of his career in Italy.

Vionnet presents its Autumn/Winter 2011 collection during Paris Fashion Week on Friday

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com
• Harold Tillman, Chairman, The British Fashion Council
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill
• Pierre Mallevays, Founder and Managing Partner, Savigny Partners
• Robert Duffy, President, Marc Jacobs International
• James Gardner, Founder and Chief Executive Officer, CreateThe Group
• Stephanie Phair, Director, TheOutnet.com
• Jeff Rudes, Founder and Chief Executive Officer, J Brand Jeans
• Lisa Montague, Chief Executive Officer, Loewe
• Marigay McKee, Fashion and Beauty Director, Harrods

Marigay McKee, Fashion and Beauty Director, Harrods | Source: Harrods

LONDON, United Kingdom — Later this month, Luxury Briefing will hold its 14th Luxury Briefing Conference, an annual gathering of the industry’s great and good in London. Called Future Luxe, this year’s conference will explore the luxury industry of the future and incorporate a new format designed to foster more networking and interaction amongst the attendees. The speakers — including writer Dana Thomas, Soho House CEO Nick Jones, and WGSN founder Marc Worth — come from all quarters of the luxury sector, and will tackle a wide range of issues to make sense of an industry that is engulfed with change.

Amongst the most significant developments in the luxury sector in recent years has been the rapid evolution of the luxury consumer. We have witnessed shifting attitudes and buying behaviour of luxury consumers in established markets like Europe, America and Japan and the rise of luxury consumers in emerging markets, especially China. We have seen the emergence of the ‘aspirational’ luxury consumer, but also the rise of the ultra-high net worth consumer, each of whom have different expectations when consuming luxury products and services.

One of the undisputed global leaders in luxury customer service is London’s iconic luxury department store, Harrods, which has years of experience in serving different types of consumers, with different levels of spending power, from different parts of the world. In advance of the Luxury Briefing Conference, BoF caught up with Marigay McKee, Fashion and Beauty Director of Harrods and one of the store’s most important ambassadors, to get an exclusive sneak peek of a panel of influential women who will discuss luxury retailing of the future.

BoF: At the FT Business of Luxury conference last June in Los Angeles, you said that 400,000 people come through the doors of Harrods 1 million square foot building every week. A growing number of these shoppers are Chinese tourists. Can you tell us how you specifically serve the Chinese luxury consumer?

MM: The majority of our customers live in Central London, however, we also have a high percentage of international clients from across the country and across the globe.

Chinese visitors constitute a well established proportion of Harrods international customer base and numbers continue to grow significantly every year. At Harrods the trend is for the highly brand conscious Chinese shopper to seek out the very latest, limited edition, and or exclusive products. Fashion, beauty, accessories and fine jewellery from luxury brands including Hermès, Chanel, Louis Vuitton and Dior are amongst the preferences, and Harrods works closely with these brands to provide the exclusive and special edition goods these shoppers desire when they visit.

We continually tailor our service offering by working closely with Chinese tour operators to accommodate pre-booked groups, as well as by providing bespoke concierge services for customers. We are looking to expand on Chinese speakers and also have a Chinese Hospitality Manager to ease their shopping experience in store.

As well as the long-standing international reputation of our brand, our loyalty programme Harrods Rewards, an international Enewsletter, Chinese and Mandarin translations on Harrods.com and advertising in high end Chinese publications all contribute to the Chinese visitor’s attraction to the Knightsbridge store. Multi-lingual staff, later summer opening hours, worldwide shipping and our Global Blue tax free shopping service are also vital to the overall experience we offer all our international visitors and homegrown customers alike.

BoF: It is my understanding that Harrods plays particularly close attention to a small cadre of ultra high net worth clients who account for a very significant percentage of Harrods sales. How do you treat these UHNW customers differently?

MM: We do have a lot of high net worth clients who value an enhanced product offer, a great mix, excellent service and exclusivity on tap. We have special parking services, hospitality services and an excellent department for personal shopping called By Appointment run by a team of service focussed experts. Creating a personal rapport and valued relationship with our customers ensures they return. The CRM programme and team have greatly aided us in this arena as it is outstanding.

BoF: This past year, Harrods expanded its online function to launch new ecommerce categories which are set to grow healthily in the future. What makes the online experience at Harrods.com stand out? How do you integrate your online business with your retail business?

MM: Harrods is the World’s most famous Department Store. And there’s nothing like a trip to the store. However, with one physical location, the web is a vital tool in reaching shoppers on a global level, to match the power of the brand. We are just beginning on a journey to develop a site that matches the experience in store.

There is an intense interest and a significant investment in developing Harrods.com to add revenue and prestige to the site, as well as making it visually and aesthetically a ‘go to’ tool for research and shopping.

This year we introduced the Shoe Boutique on harrods.com, home to the latest collections and trends for women and men from leading International designers. This has been a key sales driver. As Harrods is just a unique destination, a large majority of our clients, especially the fashion regulars like to come in and experience the reality of the fashion bustle in store.

BoF: You will be speaking on a panel of influential women in luxury at the Luxury Briefing conference later this month. As you look to the future of luxury, what are your priorities for Harrods both in the short-term and over the next 5 years?

MM: Luxury is evolving at a very fast pace and real luxury is becoming even more discerning and sought after. We’ve seen huge growth coming from the power brands of the last decade but also renewed growth in heritage and couture classics. To really stand out we have to have a point of difference, a real wow factor in store, a unique exclusive factor and outstanding service levels in an unparalleled environment.

The formula to success varies from brand to brand from business to business but desirable aspirational luxury is here to stay and dream investments are on most people’s wish lists guaranteeing the need for a luxury store to fulfil them.

BoF is pleased to be an official media partner of the Luxury Briefing Conference to be held on 20-21 January, 2010 in London. A few tickets are still available to attend the conference in person. For further details, please visit the registration page and see the full itinerary here.

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CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com
• Harold Tillman, Chairman, The British Fashion Council
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill
• Pierre Mallevays, Founder and Managing Partner, Savigny Partners
• Robert Duffy, President, Marc Jacobs International
• James Gardner, Founder and Chief Executive Officer, CreateThe Group
• Stephanie Phair, Director, TheOutnet.com
• Jeff Rudes, Founder and Chief Executive Officer, J Brand Jeans
• Lisa Montague, Chief Executive Officer, Loewe

Lisa Montague, Chief Executive Officer, Loewe

MADRID, Spain — Many of the world’s most legendary luxury brands strike a delicate balance between a strong heritage and a link to contemporary culture and society. In the lucrative market for leather goods, LVMH-owned Loewe, Spain’s answer to Hermès, has a long history of beautiful craftsmanship and a strong link to the Spanish royal family. But despite this rich heritage, Loewe has for many years remained a sleeping beauty, failing to find a contemporary articulation that would quicken the pulse of the young fashion mainstream.

In 2008, Loewe’s stewards at LVMH initiated a repositioning, appointing Stuart Vevers — whose background as the leather goods genius behind the repositioning of Mulberry made him a very good choice — as the brand’s creative director. Then, last year, Lisa Montague, who worked closely with Mr. Vevers as chief operating officer at Mulberry, took the reins as Loewe’s chief executive, reuniting the team that successfully put the British leather goods brand on the global fashion map.

While it remains to be seen whether Vevers and Montague will be able to replicate their success at Mulberry, there are signs that the Loewe’s profile is on the rise: flip through the pages of influential magazines like French Vogue and Loewe is featured in editorial spreads alongside better-known fashion darlings like Givenchy and Gucci. Meanwhile Angelina Jolie, Madonna and Sienna Miller have been photographed toting around the label’s best selling Amazona bag, a sure sign that less famous women will soon follow suit.

The numbers look promising as well. In 2009, as a result of global expansion, especially in China, the company’s earnings rose 7.5 percent to reach an estimated €115m, a good performance in what was otherwise a very tough year for luxury brands, especially those without mega-brand status like Loewe. (Loewe declined to confirm or comment on these figures.)

With a Loewe flagship store designed by Peter Marino, due to launch in London’s Mount Street this Spring, BoF spoke with Ms. Montague at the brand’s Madrid headquarters to discuss the on-going repositioning, her working relationship with Mr. Vevers, and the legendary Spanish brand’s plans for international expansion.

BoF: Your Gran Via store is so steeped in Loewe’s rich past. It seems like the much over-used word “heritage” really applies here.

Lisa Montague: Yes, especially at Gran Via, which is the original store and is 70 years old. Loewe indeed has a glorious past, especially the time around the beginning of the last century, when it was granted status of purveyor of leather goods to the Royal Court. So in a way, that branch is like a historical showcase while the future of the brand can be seen here on Serrano Street, where we have our main commercial stores.

BoF: How do you see the opportunity that exists in the Loewe brand?

LM: As I see it, the opportunity at Loewe, is to take that legacy of the past and create a legacy for the future. As the head of the brand’s management, that’s my primary purpose: to deliver the potential of this brand. And while I think we have a long way to go accomplish that goal, we certainly have the ability to get there thanks to the unmatched skill-set in the company. At our factory in Madrid and the workshops in Barcelona, we have master craftsmen who have been in the business for 50 years, and they are passing on their skills to a younger generation, which is important because, of course, the danger is that as they start retiring the skill is lost. So because we have all that know-how, I think we owe it to the brand, to the industry, and to our customers to focus on that and capitalise on it. That’s where our strength is as a brand. And I think it’s second to none.

It’s very rare to find a house with that ability and know-how in house, that hasn’t been somehow diluted over the years. At Loewe, it has been very strongly protected. So that’s an amazing set of assets to work with.

Stuart [Vevers] told me before I joined, “You won’t believe the wealth of knowledge and know-how in the brand!” And indeed, until you get here and you see it, you don’t really understand, quite simply because it doesn’t really exist in many other places. For instance, we only buy the top 3 to 5 percent of available leather at the top end of the market. And because we only work with the best skins and we have the know-how to work with those skins, we can produce this incredible product. So we really have decided to focus on the leather craftsmanship at the core of the company to differentiate the brand. We can’t pretend to be something we’re not. We probably don’t compete very well in textiles, so were not focusing on that. But we can really compete in leather.

BoF: You mentioned Stuart Vevers. How does he fit into this vision? You have a brand with a great tradition, but presumably you need to give it contemporary resonance.

LM: That’s totally Stuart’s bag if you’ll forgive the pun. That’s exactly why he joined at the beginning of 2008, a year and a half before I came on board. He was attracted by the beauty of the brand and the opportunity to take something with the weight and power of Loewe’s heritage and make it relevant again to a new customer base. It’s already a much-loved brand here in Spain and actually in all of our markets, especially Japan. But particularly in this country, there’s a great passion and pride for the brand, people have grown up with it, it’s a very aspirational household name. So the challenge is to reawaken that passion and to ignite it in new markets, because the brand had become a bit dusty.

BoF: What exactly is Stuart’s creative vision? The Wall Street Journal christened Loewe’s Amazona “the anti-bling bag.”

LM: Well, that’s because with Loewe it’s all about quality, which is hard to replicate. The luxury is in the product and it’s not until you touch it that you understand. So it’s not about hanging things off the bag. Obviously, we do decorate the bags, but in the end it’s not about embellishment. It’s more about the inherent quality that’s built in and the way the bag is constructed. Stuart has always said that the Amazona is so beautiful you could turn it inside out, which in fact he did in the Fall/Winter 2010 show to prove his point slightly tongue-in-cheek.

BoF: Tell me a little about your working relationship with Stuart. You seem to make a great team.

LM: I believe in giving creatives their space. The way it works is I deliver a very strong, clear, direct business vision and he delivers a very strong, clear creative vision and we make sure that the two go in the same direction and are aligned, which is a lot of fun actually. And if we are ever not aligned then we make sure that we sort it out very quickly and then go forward together in the same spirit. I think it’s a very positive collaborative relationship that we have and I think we feel we are on even footing. We’re a true team, which is rare and one of the reasons I think we’ve come together again. We’re both very receptive to new ways of doing things.

BoF: Loewe seems to have a low profile in the Anglo-Saxon markets like the US and the UK. Do you have a plan of attack for the US?

LM: Indeed, we are not strong in the Anglo-Saxon markets, which makes it a great opportunity. Still, we are actually very happy with our results so far in the US. We have built a lovely business, small but beautiful, with Bergdorf Goodman and we are at some other top stores, a total of 10 in the entire US. But no, we do not have an aggressive expansion plan there. Our priority is to focus on the network we have at the moment. We have 140 stores that need to be renovated to fit the new Loewe — that’s quite a challenge. We want to update the existing stores before we add new ones. We have so much to do, we need to be careful not to do it in a scatter-gun approach, and that what we do, we do well.

BoF: How do you present the brand in a new market like China? How do you distinguish it from the Western luxury brands Chinese consumers already know?

LM: Actually, that’s a timely question. We recently went to Beijing to do a major brand presentation. So for the first time ever we took the October runway show from Paris for a second showing in Beijing, balancing it with a concurrent heritage exhibition, so it’s the old and the new. We also presented our leather icons series, which is our ready-to-wear face to the world. And lastly, we showcased our made-to-order business. It’s the ultimate Loewe experience, a once-a-year, by-invitation-only, leather and fur dominated collection of exquisite pieces handcrafted in Barcelona, delivered to order in the colour and material of the customer’s choice. Combined, these elements aimed to demonstrate to the Chinese customer the uniqueness of the brand.

BoF: How has the situation in Spain, one of the countries hit hardest by the economic downturn, affected Loewe?

LM: Yes, times are very difficult particularly in Spain, but also in Japan which has also been deeply affected. So two thirds of our business is in some of the toughest markets of the world right now. So it’s a challenge. I think it pushes us to be more creative, more innovative, more energetic.

In Japan, for instance, we have been hyperactive and throwing new ideas and events at the consumer constantly which has elicited a great response. So it’s not impossible to overcome the difficulties, but you can’t just sit back and complain, you have to do the exact opposite: show the brand.

BoF: Can you share with BoF some lessons you learned from your time at Mulberry?

LM: What I learned most of all from my previous experience is that we all worry about change, it’s human nature. People are afraid of change, generally. It’s hard to embrace change for the majority of people. And yet, if you are brave enough to push forward and do the right thing — which in this case means going to the heart of the brand — in the end, people are pleased with the results. It’s a fear-based misconception that you will alienate people by pushing things forward and changing things and refreshing them. Change can be very positive as long as it’s true to the brand and true to the spirit, to the culture and to the company.

So that’s the greatest lesson I learned: to be brave and bold. Because when you are trying to take a brand forward, inevitably you have to leave some things behind, which is not an easy thing to do.

Suleman Anaya is a contributing editor at The Business of Fashion.

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com
• Harold Tillman, Chairman, The British Fashion Council
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill
• Pierre Mallevays, Founder and Managing Partner, Savigny Partners
• Robert Duffy, President, Marc Jacobs International
• James Gardner, Founder and Chief Executive Officer, CreateThe Group
• Stephanie Phair, Director, TheOutnet.com
• Jeff Rudes, Founder and Chief Executive Officer, J Brand Jeans

Jeff Rudes | Chief Executive Officer, J Brand Jeans

LOS ANGELES, United States — While preparing for our FASHION PIONEERS interview with Natalie Massenet over the summer, I had the chance to spend quite a bit of time at the stylish new Net-a-Porter offices. Apart from the funky furniture, bright airy atmosphere and technology, the other highlight of camping out at Net-a-Porter is to see what employees at the most powerful fashion e-tailer are wearing.

Without a doubt, the most ubiquitous piece of clothing at Net-a-Porter over the summer was the Houlihan trouser by J Brand Jeans, known for its low-rise and skinny cut. Everyone from Ms. Massenet herself to scores of others in her team wore the Houlihan like a defacto office uniform. Word on the street was that the Houlihan was the hottest thing running, selling out offline and online, all over the planet, racking up a staggering 200,000 pairs sold.

But of course, this is the era of fast fashion and the days of the hot Houlihan are waning. That’s okay, CEO Jeff Rudes was already thinking of his next signature silhouette ages ago. With thirty years of denim experience he’s the guy to talk to for insights on how the denim industry has exploded into one of the most important fashion categories, recession or no recession.

I caught up with Jeff on a recent trip to New York to get some lessons on the premium denim business and to get his take on where the denim market will go in seasons to come.

BoF: You have a long and distinguished career in the denim industry, in particular in the capital of American denim in Los Angeles. How has the denim market changed over the past 30 years?

Jeff Rudes: In the 30 years since I have been in this business, denim has transformed from simply a moderate price point product into what was called “designer jeans,” and now, “premium denim.”  It’s a premium product that has become a fashion staple sold at upscale retailers such as Barneys New York, Bergdorf Goodman and Saks Fifth Avenue. And this is down to quality, fabric and wash. We are now also using high performance new stretch yarn innovation that allows more comfort which every woman loves. We really focus on how the fit shapes the body.

BoF: How do women buy jeans today? What are the key purchase decision factors? How does this differ from the way men buy jeans?

JR: What we hear all the time is number one decision making factor for a women is fit. Second is the style and then the wash. Women shop for a new pair of jeans as much as men watch sports. All sports have a season and all jeans have a season. For women, there is almost a ritual in the treasure hunt for the perfect jeans. She tends to shop brands she trusts and retailers where the sales associates are knowledgeable about the product.

Men also shop for fit, but comfort and quality matter most to them. Men also tend to be loyal to a brand once they find one they like.

BoF: When setting up J Brand, what was your strategy?

JR: Our strategy from the beginning was to create the perfect fitting jean which was classic, sophisticated and timeless. Our intention was to make a women look and feel beautiful in her jeans. It’s about her outfit and not about the jean. We are known for our dark, clean and minimalist look which is now part of our DNA.

Our strategy also involves product evolution. In January 2006, while driving in a cab in NY and having so much success with our 912/12-inch pencil leg, and knowing that 10-inch skinny jeans had performed years earlier, I looked at the person who was next to me in the cab and said that we’re going to go narrower in the leg opening, as skinny as we can, and to the ankle. We knew that we needed to create the next best fit in that style, which became our famous 910 style.

When we started J Brand, we also knew that there was a space in the market for a clean, dark jean that she could dress up and dress down. We created our signature “Ink” blue and “Jett” black washes. Now you see women wearing a Chloe top with her dark Ink J Brand jeans and Christian Louboutin pumps. Or you see her wearing a simple white t-shirt with a black Balenciaga leather jacket, and her Jett black J Brand jeans tucked into her Manolo boots. That is how we envisioned her wearing our jeans.

BoF: And what did you think J Brand could become?

JR:  Each move we make in building the brand is calculated to meet the expectation and results for which we are looking. Each step is carefully thought out to ensure the same level of integrity our customer experienced when she bought her first pair of J Brands.

We make sure we stay true to our mission across the board, in every product expansion from non-denim to new fabrications and fits. Every decision and choice we make speaks to the integrity of that branding vision.

So what does that mean? It’s about how we are presented in each store; who we are choosing to launch product expansion with; and how we will do it. Because of our careful approach to global expansion and as we are sold in the fashion capitals throughout the world, our customer will recognise our brand whereever she goes in the world, whether on the streets or in the stores.

BoF: Last season you worked with Proenza Schouler to produce a limited edition set of paint- splattered jeans developed with Jack McCullough and Lazaro Hernandez. This season you worked with 5 London designers to do something similar. How do these kinds of young designer collaborations fit into your business strategy?

Our collaborations are not about revenue, they are about creating unique one off exclusive collectors jean with designers which is rewarding and creates an amazing global conversation. It’s about the impact of the collaboration.

We measure our collaborations in five extensions of “giving”:

• We are giving the stores something special for their floor that drives traffic.
• We are giving our “fashionista” customers a special limited jean that’s only found at these top retailers.
• We are giving the press, editors and fashion insiders something interesting to talk about
• We give the designers global awareness by creating a unique collaboration and
• We are giving our creative team a fun and exciting project.

BoF: Possibly one of the hottest fashion items over the last 12 months has been the J Brand Houlihan trouser which has sold more than 200,000 pairs. How and where did the product get developed and why do you think it was so successful?

JR: We started talking about a skinny cargo concept in April/May of 2009. We have a great luxe twill fabric that had been very successful, and we wanted to play around with different dye and wash methods to achieve a faded vintage look. Mary Pierson, the Design Director, took a trip to Japan in August 2009 and came back with a vintage pair of army pants with the perfect proportions of pockets and details. The design team quickly put protos into work in our skinny fit and within a couple of weeks had the Houlihan developed in 4 different vintage twill washes. It was the perfect paring of fit, fabric, wash, timing and press. The perfect fashion storm. When you are right, you are right.

BoF: You recently took on a majority investment from a consortium of private investors led by CAA. Why did you choose them as partners and how will the investment help you to achieve your business objectives for J Brand?

JR: Our partners are made up of a strategic group that understands our vision in growing J Brand, and they all bring resources and added value in growing our brand. CAA adds another level of resources and value in entertainment, music and sports that will generate exponential results. We have a strategic line-up in areas and advisors that companies of our size do not have available to them.

BoF: What are your top tips for entrepreneurs and designers looking to set up a denim business? How is the denim business different from the rest of the fashion industry.

JR: Don’t oversell, make what you can manage. Most jean companies were established with one style that grew their business. My tip is that it can be done with a great single product. For most companies, they are driven by a core jean, in other words — each brand has that signature jean that helped build their label — get one jean in the market and stay true to your vision. Denim is based on replenishment so stores are relying on their top denim resources to constantly supply speed to market their core selling styles — it is an item driven business.

BoF: Where are premium jeans trends going from here?

JR: Trends have a shorter life in America because when an item is a best seller or top seller in America, everyone chases to make it. That said, skinny and straight legs are not going anywhere and will remain fashion staples as they can be worn with many different accessorised looks. But, wider leg silhouettes such as bootcuts, flares and bell bottoms are coming back into the product mix. If I were to give you more than that, I’d be revealing our secrets and of course, I can’t do that!

Imran Amed is Founder and Editor of The Business of Fashion

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders. Previous interviews are listed below:

• Natalie Massenet, Chairman and Founder, Net-a-Porter
• Camilla Skovgaard, Shoe designer and Entrepreneur
• Susan Lyne, Chief Executive Officer, Gilt Groupe
• Priya Kishore, Founder and Creative Director, Bombay Electric
• Alex Bolen, Chief Executive Officer, Oscar de la Renta
• Jeffrey Kapelman, Chief Executive Officer, Hilldun Corporation
• Bonnie Takhar, Chief Executive Officer and President, Halston
• Sara Ferrero, Chief Executive Officer, Joseph Group
• Paolo Fontanelli, Chief Executive Officer, Furla
• Stella Iishi, President and Founder, The News Inc.
• Greg Furman, Founder and Chairman, Luxury Marketing Council
• Sarah Curran, Founder and Chief Executive Officer, my-wardrobe.com
• Brian Hill, Chief Executive Officer, Aritzia
• José Neves, Founder and Chief Executive Officer, farfetch.com
• Federico Marchetti, Founder and Chief Executive Officer, YOOX Group
• Sojin Lee, Co-Founder, Fashionair.com
• Harold Tillman, Chairman, The British Fashion Council
• Christopher Colfer, Chief Executive Officer, Alfred Dunhill
• Pierre Mallevays, Founder and Managing Partner, Savigny Partners
• Robert Duffy, President, Marc Jacobs International
• James Gardner, Founder and Chief Executive Officer, CreateThe Group
• Stephanie Phair, Director, TheOutnet.com