Watch in High Quality at SHOWstudio.com

LONDON, United Kingdom — Digital fashion film has gained real momentum over the last couple of seasons. Using sound and movement to communicate fashion in a way that’s emotionally charged, cost-effective and easily distributed, the format has been adopted for online editorial and fashion week presentations alike. But it’s important to remember that new formats are only as successful as the image-makers and stylists who embrace and sustain them with their creativity.

Over the last year, on the strength of two breakthrough films for Gareth Pugh, London-based Ruth Hogben has emerged as one of the most influential and passionate young filmmakers working in fashion film today. It’s a genre she helped to pioneer while assisting Nick Knight between 2005 and February 2009, both as his first photographic assistant and editor of his fashion film projects for SHOWstudio.

With her third major film — a short for Christopher Kane’s highly anticipated new Topshop collection — due to launch during London Fashion Week, BoF recently caught up with Ruth to talk about her first experiments in film, the power of sound and movement, balancing concept with clothes, the importance of the internet, and her hopes for the future of fashion film.

BoF: Let’s start at the beginning. When did you first start experimenting with fashion film?

At the very beginning of my work with Nick Knight, I spent about two days writing down timecodes for a project on SHOWstudio. It was called Editing Fashion and it was basically about 8 hours of footage sent out to different editors. There was a porn editor, a wildlife editor, a Hollywood director. It just opened my eyes and I thought: “This is such an exciting medium!”

Nick used to film everything for copyright reasons and for his archives. And one day, I picked up a video camera and started filming beside him. The very first film I made was called Beasting. It was with Simon Foxton and John Galliano’s A/W ‘07 menswear collection. I had half a day with an editor, teaching me how to use Final Cut Pro, and I’ve just been working at it and trying to embrace my mistakes ever since. I started out wanting to do photography, but at the end of two years, I realized I’d been spending every single evening and all weekend shooting and editing films.

BoF: How did you move from documenting photo shoots to making your own films?

I guess I was always frustrated shooting on the side of Nick’s shot because you don’t get somebody looking down your lens, they’re always looking at the side of the lens. But we did Hussein Chalayan’s show about four or five seasons ago, and we did something for Bernhard Willhelm. It all felt really exciting at the time and we were learning quite a lot. We did lots of stuff on SHOWstudio like 24 with YSL.

But the first time I felt that I was actually able to understand the medium properly was when I did the films for Gareth Pugh. “Insensate“ was a film that I made with Nick on a Dazed & Confused shoot with Gareth. When I first started thinking seriously about fashion film, the only thing in my head was Gareth’s clothes.

BoF: Your films for Gareth are stunning. “Insensate,” as you mentioned, accompanied the cover shoot for Dazed & Confused’s October 2008 issue, while your second film screened during his Autumn/Winter 2009 presentation in Paris. What’s the difference between creating a film for editorial and a film for a fashion week presentation?

The pressure is very different! I spent about three months on the “Insensate” film, while I spent five days on the presentation. You have to wait until the clothes are ready, so I shot it in a day and edited it in four days. The difference is the adrenaline and the pressure, like “I’ve got to get this finished and there’s going to be Suzy Menkes watching this and hating that it’s a film!”

That’s the thing you’re up against. You’re removing your audience from the clothing. Unless the clothes have dimension like Gareth’s that let you use film to your advantage. You wouldn’t have been able to see that balloon ladybird coat as well on the catwalk. It worked really well on film. But to show a film is not easy. The journalists and the editors and the stylists, they all want to see the movement, the textures, the colours. So I think it was quite brave of Gareth.

BoF: It must be quite difficult capturing detail and texture. What are the challenges of communicating clothing on film?

When I start to do a film, it’s always led by the clothes. As you say, the challenge is textures and making the right movement for the right piece of clothing. If you’ve got something really strong and solid in front of you then it’s got to be a very different movement and direction to what you’d do if you have a see-through dress. Just like a fashion photograph, everything is led by shape, movement, style and the woman inside the dress.

BoF: Some fashion films are more like moving photos that really focus on the clothes, while others are more narrative and focus on communicating a more abstract concept or mood. Where on the spectrum do you think fashion films are most successful?

I think the most successful films, just like the most successful photographs, are the ones that are from someone’s heart and are passionate and understanding. Film is such a vast medium. But for me, I like the idea of a fashion film being like a picture, but moving.

You can have a film that has a story and words. But I like the idea of it being more about the clothes and more about the motion. But it’s quite hard to know. One day I might want to do scripts!

BoF: How does shooting movement and sound impact your approach to casting? Have you ever considered using dancers or other types of performers instead of models?

If it was right for the clothes and the film. But if you get to work with someone like Lily Donaldson or one of the other great models, their hands and feet and legs and arms: it’s elegance from start to finish.

When you’re watching Lily on the side of a Vogue shoot, when she’s not in front of the camera for stills, she’s just absolutely incredible. It’s complete performance. If you’ve got a great model, the movement in between positions is what you use for the film and it’s going to be exquisite.

I think fashion films are really exciting for the new young models, because they’re the generation that are on the internet and are looking at clothes online and it’s not just stills anymore. They’re the ones sharing stuff on Twitter and YouTube. So it’s exciting for them to know that their shoot is part of a whole new fresh medium.

BoF: Of course, moving images have been around since the late 19^th century. What do you think makes “fashion film” a new medium? What role has the internet played in its development?

There’s been a lot of experimentation over the years. There are loads of experimental films by fashion photographers like Guy Bourdin. But he didn’t really have a platform. Basically in the past, companies haven’t been able to afford to put these types of films on cinema screens or they haven’t always been able to afford TV advertising.

But now, because of the internet and because of places like SHOWstudio and Style.com, there’s a platform. Net-a-Porter are playing films now! Everybody’s just sort of realizing that it doesn’t have to be still and I think people are realizing how incredibly powerful that is.

BoF: People sometimes draw parallels between fashion films and music videos. Do you think there is potential for crossover between the two?

The difference is, what should lead a music video is the lyrics and the music and the beat, while the lead for a fashion film is the clothes. I’m not sure I’d like it if the genres ever crossed. I’d like to think that fashion film is strong enough not to look like music video, and not to look like anything else but it’s own genre.

I also think it’s really important that whoever is filming or editing a fashion film actually understands what a pencil skirt means to a woman, or what ankle socks communicate. All those little things.

BoF: What is the future of fashion film, for your work and as a medium?

I think everybody is still learning how to make a good fashion film and what it means to make a fashion film. I’m spending all my time and energy making fashion films. So I hope as a medium it blossoms into its own niche in the market.

If you’re making an 8 minute film, then somebody’s actually got to be quite interested. It’s not as immediate as a photograph you can digest in 2.4 seconds. But if it’s made the right way, the communication can be really powerful.

I’d like to make my films about equality and women being powerful and intelligent and not always just being sexual. You put movement and music to something and it’s got so many different facets and layers to it, that what you’re saying almost has to be deeper. It’s got more depth to it. You can say so much more with 30 seconds than you can in a single frame.

Vikram Alexei Kansara is a digital strategist and writer based in New York.

Sophie Theallet

NEW YORK, United States — New York fashion is said to strike a balance between commerce and creativity. With few exceptions, New York designers tend to prioritise practical concerns like wearability over more frivolous concerns like the so-called wow factor. On the surface, this seems like a sound business strategy. But when designers focus too much on the practical and are obsessed with being on-trend or with what their peers are doing, everything ends up looking, well, kind of the same.

Sophie Theallet, the French-born American designer based in New York, does not have this problem. Theallet creates clothes with a distinctive mix of sophisticated wearability and refreshingly untrendy luxury. Unlike other designers who look for aesthetic inspiration from visual archetypes or vintage clothes, Theallet, who claims to not have a specific muse, designs with a more soulful, introspective process.

“My aesthetic approach is simple: I design what I feel in my heart and mind,” she explains. Inspired by the enduring styles of designers such as Jeanne Lanvin, Yves Saint Laurent and Gabriel Chanel, she insists: “A beautifully executed garment, both in design and in workmanship, does not need to be bounded by trend. It is profoundly my style and my way of seeing things and it naturally became our business model.”

Masha K

Combining this deeply personal approach with a quintessential French sensibility gleaned from her days working with two of world’s foremost couturiers, Jean Paul Gaultier and Azzedine Alaia, Theallet’s fledging label has concocted a recipe that is showing the early signs of success.

Encouraged to start her own line by the late retailer Janet Brown, whose eponymous store many considered to be as influential as the larger department stores, Theallet launched her label in 2007, when it was quickly picked up by Barneys New York. Now, Forty Five Ten in Dallas, Blake in Chicago, and Jeffrey carry Theallet’s collection in the US, and it also has international distribution in choice retail doors in Kuwait and London.

One reason for Theallet’s breakaway success has been that she has struck a chord amongst discerning fashion tastemakers, whose support can help a young fashion brand rise above the thousands of emerging labels around the world.

First, there was the American Vogue profile last June, which was no doubt precipitated by regular attendance at Theallet’s shows by the magazine’s powerful editors Sally Singer, Hamish Bowles, and Grace Coddington. They were joined by the industry’s two most important fashion critics, Suzy Menkes and Cathy Horyn, who were clearly paying attention to the French expat’s uniquely untrendy designs. And, earlier this year, Michelle Obama single-handedly put Theallet on the global fashion map when she wore the designer’s black berriboned dress to an April unveiling of a Sojourner Truth sculpture in Washington D.C.

Despite the considerable editorial attention and early success with retailers, Theallet’s husband and business partner, Steven Francoeur, knows that there is a long road ahead before they have a sustainable business. “Unfortunately, the big fashion groups have so much financing, and it is difficult to compete being independent,” he says. But rather than accepting defeat, the husband and wife duo, who got their lifeline from a “small family investment,” remain both proactive and patient.

Though the company would benefit from a business partner, they are looking for someone “who understands our business model,” says Francoeur. Ultimately, he wants to help grow Sophie Theallet’s unique vision — on her own terms.

Robert Cordero is a Contributing Editor of The Business of Fashion.

By now, everyone has seen the striking Annie Leibovitz portrait of Keith Richards, his electric guitar, and his monogrammed Louis Vuitton guitar case. It is the fourth in a series of ads that have featured Mikhail Gorbachev, Catherine Deneuve, and tennis powercouple, Steffi Graf and Andre Agassi.

The ads have been in almost every respected magazine and newspaper imaginable, the Richards image is the current homepage image for the Louis Vuitton website, and the former Rolling Stone is blown up to two story proportions as the hoarding in front of the soon-to-be-expanded Louis Vuitton store on London’s Bond Street.

But somehow, I did miss this YouTube video which goes behind-the-scenes to show how Leibovitz worked her photographic magic with a rock star legend.

Over the weekend, a friend was saying that the Keith Richards image really didn’t work for her. In her words, it wasn’t a “good fit”.

Though I understand where she was coming from, I don’t think image is really the point here. This is not a traditional fashion campaign (Louis Vuitton stuck to Mert & Marcus and a few supermodels for that). It’s about creating reverberations amongst the press and consumers, and most-of-all, reinforcing Vuitton’s long-standing heritage in luxury travel luggage.

And in that respect, the campaign can only be considered a raging success. According to France’s L’Express Magazine, which published an article entitled La Folie Vuitton (roughly translated Vuitton madness), more than 8000 press articles have been written about the campaign, the blogs are buzzing with discussion, thousands of people have tuned in to YouTube and Dailymotion to check out the behind-the-scenes video and innumerable conversations like the one I had with my friend have probably also happened. This is what one might call viral marketing magic.

Not surprisingly, a 6th face for the Art of Travel will be announced shortly, following in the line of respected faces from politics, entertainment and sport. Who will be next?

Nokia 7900 Crystal Prism Phone

LONDON, United Kingdom – Something is in the air. Earlier this week, we received a mysterious package in the post from Nokia. Inside, we found a 7900 Crystal Prism phone, complete with a Sapphire crystal and engraved design by French graphic designer Frederique Daubal, who has previously collaborated with Paul Smith and Colette, the iconic Paris fashion concept boutique.

Not only this, the fashion and technology blogosphere has been abuzz about Tag Heuer’s branded mobile phone, priced to compete with the Vertu phones, at 3900 euros (or about $6000). Previously, other fashion brands including Prada, Armani, and Levis have launched mobile phones with much hype and fanfare.

To top it all off, I was recently invited to give a Keynote Speech at the ArcChart Handset Fashion and Style Congress in London later this month on, what else, The Business of Fashion.

So, is all this fashion phone buzz just PR hype, or is it something that fashion brands and mobile phone players should be seriously thinking about?

The proof is in the pudding. In the last year, we have seen Apple, arguably the most powerful consumer brand of the day, create a virtual frenzy around the world with its launch of its iPhone, much to the delight of Apple enthusiasts who have bought into the streamlined design, aesthetic simplicity, and street cred of the Apple brand. So, who’s to say fashion brands can’t seize this new fashion moment as well?

When purchasing decisions about a product move from being a largely functional decision to one that is more emotional, at least in part, then design, branding and aesthetic can play a role — and that’s where fashion comes in.

For years now, people have been personalising their generic phones with screensavers, ringtones and decorations, to make the phones their own. As ArcChart says in its in-depth report on fashion phones, Fashion and Style in the Mobile Handset Industry, the mobile phone is now

the most ubiquitous item of personal consumer electronics worldwide. This has made it an obvious tableau for the expression of an individual’s fashion tastes and style…it travels every with its owner and is visible to others.

The opportunity here seems real. What remains to be seen is which models for entering this market end up working the best. Prada and Armani have chosen to go the licensing route, working with external design and technology partners to bring their phones to market at more affordable prices. But this means that their phones  risk feeling like the brand has just been stamped on the phone, with little effort to focus on design with the same degree of precision that Miuccia Prada and Giorgio Armani have when they are designing clothes. In fact, don’t these two phones kind of look the same?

On the other hand, a more bespoke proprietary model like Tag Heuer’s could be appealing in order to build a more defensible and differentiated position in the market. However, this will require sourcing the technology and expertise from somewhere and at sky-high prices, technophiles will be even more likely to judge the phone on its technical merit, as well as its aesthetic, as Tag Heuer has been learning.

One thing is for sure…this is only the beginning of the fashion phone. We’ll be back with a report from the conference later this month.

David Beckham billboard in Milan, courtesy of Emporio Armani

MILAN, Italy - Every once in a while, we notice the media — all kinds of media from blogs to arty fashion mags to the mainstream press — talking about the same topic in a contemporaneous burst of discussion. In the past few days, the talk has been about men’s underwear. Or rather, the advertising campaigns behind this burgeoning business segment. Not since the 1980’s and Bruce Weber’s campaigns for Calvin Klein have we seen so much media interest in men’s underpants. 

Tim Blanks explores the subject at length in VMAN’s Fall/Winter 2007 issue in The History of the Male Supermodel. And, according to an article in today’s International Herald Tribune, men’s underwear is big business.

Two Italian fashion brands are trying to get in on Calvin Klein’s underwear action using sexually-charged photos to heighten awareness of their presence in the market.

Last week, the Giorgio Armani press office in Milan sent us photos of David Beckham’s new advertisement for Emporio Armani Underwear towering over the intersection of  via Cusani and via Broletto in Milan for Men’s Fashion Week (this might explain why everyone is talking about it). But Robin Givhan of the Washington Post debates whether the sexually charged images are objectifying men while  still other sites choose to debate the use of visual enhancements in the ads.

All the attention is good news. Mr Armani is expecting  a 30% surge in the underwear business as a result of the Beckham campaign, which is reported to run for 3 years and be worth £20 million. 

In an interesting reversal of roles, it’s almost like the underwear ads are defining the overall visual image of the Emporio Armani brand, including it’s face. Is Mr Armani saying that David Beckham is the ideal brand ambassador for Emporio Armani, or is it just a way to get increased attention on a small business by exploiting international celebrity?

Not to be outdone, Dolce & Gabbana are also getting in on the underwear action with a David of their own. Their underwear business has grown 12% over the past year and is bound to take another leap after the high-profile release of a D&G style sexed-up calendar featuring David Gandy, whom VMan is referring to as the new male supermodel.

The calendar has been distributed to Editors at Milan Fashion Week and Horacio Silva of The New York Times says everybody in Milan is talking about it while The Times of London’s Carol Midgley gushed unabashedly about it in her article, calling Gandy the Modern Renaissance Man. While some of the images are even a bit too saucy for the BoF, you can find them all here on the internet site the D&G have set up for your viewing pleasure. These guys know how to make a campaign work and work and work.

Given all this hoopla, perhaps its not a surprise that, according to Reuters, Burberry is also considering moving into underwear. Seems like Christopher Bailey, Burberry’s Creative Director, has been taking notes on the Italians’ latest PR coup.

Photos courtesy of Giorgio Armani and Dolce & Gabbana.

Last night I witnessed the intricate ballet of savvy PR and event-planning that has helped build Marc Jacobs into one of the only truly successful, global luxury brands that has been launched in the past 20 years.

It was evidence of the basic human psychological desire to be part of the cool crowd. You know those nightclubs that intentionally keep people waiting outside to give off the impression of being the hot spot of the moment? This was not all that different, except Marc Jacobs has been doing this for almost 20 years, and he has it down to a fine art. Plus, this is not just hype. He has a reputation for delivering collections that will inspire designers and consumers the world over as they adopt his take on of-the-moment coolness. Nobody wants to miss it. It is the hottest ticket in town

Here’s how the night unfolded.

9:00pm – Crowds of guests and press have formed outside the Armory, but nobody is getting in. People are pretty calm, given the show was supposed to  start at this time, except for a French woman who insists she must urgently get in now. She is promptly rebuffed.

9:10pm – The rapidly growing crowd is told by burly security guards to come back at 10:00 when the doors would open. The show would not start before 11:00, they said. KCD publicists assure important buyers and press that they will not lose their seats and that they should go grab a drink. Almost nobody leaves. An old school ice-cream stand outside (with a Kate Spade logo?) serves up helpings to keep the crowd cool. Dodgy freelance papparazi types scour the crowd and big black SUVs like ambulance chasers, desperately looking for recognisable faces. The anticipation builds.

9:19- The doors open 41 minutes earlier than expected. Miraculously. All those people who didn’t leave were right to have stayed. A flood of people pushes inside. A wall of paparazzi await the entrance of major celebrities. Nearby, journalists from fashion channels from around the world are held back by steel barriers, sticking their microphones out to stop the bold and the beautiful to ask them what they think of Marc. I stop to answer questions from Fashion Television. Obviously, everyone thinks Marc is just fabulous. Especially since they are now officially part of the cool crowd. I race to find my colleagues somewhere in the melee.

10:00 – The first of the major celebrities begin to arrive, in what appears to be a carefully choreographed pecking-order. One by one they come, welcomed by an explosion of flash bulbs and then escorted into the Armory by their bodyguards and PRs. Carmen Electra. Courtney Love. Sheryl Crowe. Mischa Barton. Victoria Beckham. Too many to list. They are followed closely by hangers-on and a stream of cameras and young women trying to sell charity t-shirts.

10:05 Everyone else is waiting, watching and gawking at the spectacle unfolding in front of them.  Nobody seems bored or the slightest bit bothered by the wait. Part of the entertainment is what happens beforehand.

10:25 – I am perched (precariously) near a friend in the front row, who explains that since Robert Duffy has started making the rounds to say hello to the high profile guests, the show will begin shortly. I look a couple of people down the row and see Heath Ledger sitting next to Michael Stipe from REM.

10:35 Stipe and Ledger are repeatedly requested to do interviews. Stipe puts on dark glasses when he does the TV spots. I spot Tyson Beckford in the third row.

11:00 . The lights dim and to everyone’s surprise, Marc Jacobs runs out and gives his end of show bow at the beginning of the show. Backwards. Upside down. Inside out. I have seen this concept somewhere else, but can’t quite remember where. Was it India Fashion Week, of all places?

11:01 Even Anna Wintour and the Vogue crowd look amused.

11:02 The models begin to come out, with the most intricate couture-like looks first. Again, this is against the norm. The clothes look interesting. Lots of colour. I am trying to decipher the message. There is always a message with Marc. There are a lot of layers of different clothes being shown in various states of dress and undress. Video screens display the models coming out in their underwear.

11:07 I begin to note that the strength of the show is in accessories, which are on-trend and will be instantly recognisable to Marc Jacobs fans. This is consistent with seasons past. Even if not everyone will "get" the clothes, they will still understand the accessories.

11:19 Look 2 comes out. Only 1 look to go. I see Anna Wintour put her jacket on.

11:20. Show’s over. People race out to beat the crowds while a long queue of journalists wait for an interview with the designer. Once again, it is all choreographed perfectly and Marc only comes out once the journalists have been lined up according to priority. Everyone else races off to the afterparty

12:30 Marc finally shows up to his own party, after having done 1 hour of interviews, only to be greeted by more flashbulbs and more press. Everyone wants a piece of him.

12:40 Marc tries to watch his show video, but people keep interrupting him. I watch as his bodyguard and his PR politely (but firmly) tell people who come up to Marc for too long to move along.

12:45 He is unfailingly polite to people, even to the ones he doesn’t seem to know. He looks tired. This is not an easy life.

All photos and content are copyright of The Business of Fashion. See our legal disclaimer for further details.

The Business of Fashion is on the road. Our first stop is in Nassau, the capital city of The Bahamas, an archipelago of islands which has long been a stopping off point for people cruising around the Caribbean. San Salvador Island is where Christopher Columbus first set foot in the New World in 1492 to trade with the Lucayan people. When British loyalists came over in 1717, the islands fell under British control and did not gain full independence until more than 250 years later.

Today, the Bahamas is a rich country, with the 3rd highest GDP per capita in the Western Hemisphere and an economy driven primarily by tourism and offshore banking. A recent mega real-estate development called The Atlantis, financed by Sol Kerzner, the titan known for his over-the-top casinos and hotels in South Africa’s Sun City, has further boosted the Bahamas as a tourist destination, primarily for sun-seeking Americans with money to spend and gamble away in the cavernous casinos.

With more than 5 million tourists visiting the islands every year, it’s not surprising that many of the luxury brands have set up shop to entice these visitors to do a little shopping. What is surprising is that some of them have allowed their brands to be diluted by haphazard merchandising, market-style bargaining, and poorly-outfitted stores under the control of local franchisees. That said, there are still signs that the luxury industry in Nassau is alive and well.

The centre of the action is on Bay Street, where stores like Gucci, Fendi, Coach, Breitling and Rolex are nestled in between discount duty free stores in creaking old buildings. Nearby, cruise ships unload thousands of passengers who flood the streets looking for places to spend their cash.

Walking into the Gucci store was like walking into a time warp. Newer bags and accessories were mixed in with relics which appeared to be from the Tom Ford era. There was a discount table in the back with shoes scattered haphazardly on a table covered with fabric which aimed (unsuccessfully) to hide the sorry state of the table underneath. Some of the merchandise appeared to be damaged or worn out because it was so old. In the background, employees were bickering with each other about something. A friend who lives in Nassau has been able to bargain with the employees, making the store more like a market-stall than a luxury goods emporium. Since the store opened 20 years ago, my guess is that this is the result of an old franchise agreement that may not yet have expired. Either way, this store is doing no favours for Gucci’s brand image or sales.

But all is not lost. A sparkling new Breitling store was fitted with modern, clean fixtures and staffed with knowledgeable employees who have managed to sell 4 watches retailing at more than $150,000 since the store opened in October, including 2 models from the diamond-encrusted, blingy Breitling for Bentley collection. A saleswoman told us that 80% of their customers are tourists, but there is also a significant local population that comes into the store. This was the first time I had been in a Breitling store and I was impressed. If a customer doesn’t leave with a product in hand, they should at least walk away with a positive impression of the brand.

The lessons for luxe companies are clear. Working with partners who understand the local market is often a natural strategy for global expansion. However, hasty decisions and poor oversight of franchised stores may do more harm than good. These stores won’t end up selling much merchandise due to poor management and may also damage the brand’s goodwill with globe-trotting customers who will take poor impressions back home to New York, Milan or Tokyo. On the other hand, a well-chosen partner and clearly defined processes  for ensuring consistency of the retail experience can make all the difference in drawing a good hand in the gamble of working with franchisees.

For years now, the Yves Saint-Laurent brand has been a drag on the otherwise strong results posted by many other fashion brands in the Gucci Group, owned by parent-company PPR. Most recently, Bottega Veneta has been on a tear with strong financial results (eclipsing YSL’s top line revenue in 2006) and a leading position in the luxury consumer league tables, making it the number two luxury brand in PPR’s stable.

The story for YSL is a lot less fairytale, and a lot more Nightmare on Elm Street. The brand has not been profitable since Gucci Group purchased it in 1999 and is still reportedly losing around €50m a year. The brand turned over €194m in sales in 2006. PPR doesn’t break out operating loss of YSL its website and has not provided a timeframe to investors for expected profitability.

It’s not surprising then that Stefano Pilati, YSL’s Creative Director, has been trying to inject new energy into this legendary brand. The latest initiative is an innovative project with Nick Knight’s Showstudio. According to WWD, Showstudio has received over 200 submissions of script ideas for a photoshoot to be held this Sunday, featuring the new "seasonless" Edition 24 collection of YSL basics. The creative output of the photoshoot will appear on a newly-revamped YSL website this fall, promoting the new collection in an interactive way, with some user-generated content to boot.

It’s good to see more luxury houses experimenting to see how the web can work for them. While a project like this won’t solve YSL’s systemic profitability problems (Valerie Hermann, YSL’s CEO, clearly still has her work cut out for her), it does bring some freshness to the way the brand is perceived and promotes the new capsule collection in a way that is bound to draw attention (and eyeballs). With a certain "Creative Technologist" on staff, we are looking forward to seeing more interactive experimentation from Gucci Group brands.

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

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

That said, the future of  private equity in fashion is largely unproven. The process- and growth-focused strategies favoured by private equity may not always work for fashion brands. These strategies can conflict with the notions of careful growth, exclusivity and creative freedom that are part of a luxury fashion brand’s success. Certainly, there have been some remarkable investment success stories, like the meteoric rises of Jimmy Choo and Gucci. However, there are also stories of failed investments, including the $500m debacle at Asprey and TPG’s ongoing struggle with Bally.

Valentino has now exchanged hands 3 times in as many years, most recently when Permira took a controlling stake in the business after winning a behind-the-scenes battle with The Carlyle Group. This  serves as a relevant current day example of why some of these investments may not work out in the long run.

1. Limited fashion and luxury experience: As far as I can tell from Permira’s website, they have absolutely no experience in the high-fashion and luxury sector. Most of their consumer sector investments are in companies focusing on things like frozen food, ceramic tiles and opthalmic lenses. There are investments in New Look, the UK high street retailer and Cortefiel of Spain, but these a far cry from the haute-couture frocks and fashion dreams that Mr. Valentino put on show in Rome over the weekend. This apparent lack of experience seems to contradict the management strategy that Permira itself has touted on its website:

“Permira has a reputation for establishing close relationships between the Permira Funds as investors and the management teams of the companies in which the Permira Funds invest. Underlying these relationships is a deep understanding of the business fundamentals and competitive dynamics of vertical industries. This understanding has been built up over many years of investing in companies in these industries.”

2. Short-term investment horizon and high acquisition prices can lead to misaligned incentives – Second, private equity funds like Permira usually expect to exit their investments within 3-5 years. Having paid a 20%+ premium over Valentino’s share price, Permira will need to be able to return several times what they paid back to its own investors within this period. This means that they may make decisions that are optimal for value creation in the short term (rapid top-line growth, aggressive store rollout, rapidly increasing licensing revenue, etc) but which can erode brand value over the long term (over-distribution, proliferation of diffusion lines, over-licensing, etc.) The brand is the most valuable long-term asset of a luxury fashion brand and should be carefully managed and protected.

3. Limited engagement with Mr. Valentino on succession planning - A key reason for the success of the Gucci investment were the open relations between Tom Ford, Domenico de Sole and Investcorp. It’s therefore surprising that, according to reports, Valentino and his business partner Giancarlo Giametti were not even consulted by Permira during their discussions to buy Valentino.   Sure, neither of these two gentlemen have any remaining financial interest in the business, but as co-founders they are at the heart of the Valentino brand and Valentino is still the house’s Creative Director. There would have been much to be gained by bringing these two key figures on side and agreeing a strategy and succession plan with them.  When the 75 year-old Valentino retires (as many speculate he will do very soon), he should play a key role in identifying, attracting and apprenticing his successor in all that is Valentino.

And yet, the acquisition spree of fashion brands is far from over, with several of the highest-profile funds (including The Carlyle Group, which lost out to Permira in the fight for Valentino) said to be actively looking in the space and the details behind Prada’s reported discussions (or lack of discussions) still to be revealed. While private equity could actually be a very good at dealing with some of the  industry’s inefficiencies (the excesses of some designers like Valentino do, after all, need to be reined in), it will also need to be delivered with deep industry expertise, a sensible investment horizon, and respect for the creative aspects of the business in order for it to have any chance of succeeding.

Photos courtesy of the New York Times/Jason Schmidt/Alissandro di Meo

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

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

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

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

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

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

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

© 2007 Copyright Imran Amed – The Business of Fashion.