Store fronts on Rodeo Drive, photo courtesy of WWD.

L.A. Specialty Boutiques Rocked by Shutdowns (WWD)
In LA, troubled boutiques are closing in droves.

The New Rules Of Luxury Spending (Forbes)
“Today’s high-net-worth consumers are still spending–but they’re putting more thought into their purchases.”

Ideeli.com, Ideal Online Shopping? (JC Report)
Ideeli’s invitation only online retail model is proving to be recession proof.

Retail Sales Tumbled in December (WSJ)
In December, retail sales figures in the US, “fell a sixth consecutive time.”

Priya Kishore, a beacon for Bombay's new creative elite, courtesy of Bombay Electric

NEW DELHI, India – When Priya Kishore and Bombay Electric hit Mumbai a few years ago, Mumbaikars didn’t know what was coming. No sooner had Kishore arrived than she became a beacon for Bombay’s new creative elite – one with a rightful place on the world stage.

A friend while she lived in London, Priya always had this wonderful creative streak, dressed in quirky clothes and popping colours. No wonder Mumbai has taken to her so well – she shares her love for colour with many of the denizens of India’s most populous city.

Of course, all hasn’t been rosy of late. With a terrorist siege that lasted well over three day, Indians have been in the streets, exercising their rights, in this, the largest democracy in the world.

But life goes on. Priya just opened Pocket Electric, India’s first pop-up store in New Delhi. Could she be testing the grounds for a Delhi invasion? We reached her there to find out more in our latest CEO Talk, a BoF Exclusive.

BoF: Why did you set up Bombay Electric in the first place?

When Bombay Electric was conceived, there were only a handful of luxury brands in India, and the domestic fashion market revolved around wedding wear.

Three and a half years ago, the market for ready-to-wear was nascent at best, non-existent at worst, and it was virtually unheard of to base a store’s selection on design alone. It seemed obvious to us that Mumbai needed a veritable design-focused platform to represent the emerging designer talent in this country, as well as offer our discerning clients international brands with a focus on design over label.

Bombay Electric was the first store to offer a curated, tightly merchandised environment in India. I had expected a good reception from Mumbai, but was delighted at the overwhelming response, and fast spreading word-of-mouth. We now have a cult following amongst our clients and Bombay Electric is a brand people are emotionally attached to.

Last week a client wrote in our visitor’s book “I found myself in this store”.

BoF: What is the product and brand mix in your store? How does this differ from what is on offer elsewhere?

Bombay Electric carries established Indian designers such as Manish Arora and Rajesh Pratap Singh, but is also well known as the first to spot rising new talent. Our international brands are cherry picked for their focus on design, and include Comme des Garcons, Pauric Sweeney, Surface 2 Air, and United Nude.

We aim to carry clothes that you can wear anywhere in the world, which means that you will find very little fully traditional or conventional Indian clothing. By amalgamating tradition and modernity, we encourage designers to develop special collections for us. I have developed close relationships with designers and I often encourage them to base a collection for us around a single concept, colour or texture.

BoF: Bombay Electric is right around the corner from the Taj Mahal hotel, site of a long siege during the recent Mumbai attacks. How has been business been since then and what do you think this means for the future of luxury in India?

We opened the Monday after the attacks as a symbolic gesture, but were delighted that many clients, supporters and friends visited and shopped. Thankfully business is back to normal now – it is hard to crush the spirit of Mumbai.

The luxury industry has taken a temporary slowdown, but at the end of the day, you can’t argue with sheer population numbers (1% of 1 Billion) and the growing spending power of its emerging middle and upper middle class.

The demand is still there, and although the speed of growth has been slowed, the growth itself has not. The potential of the luxury industry in India is huge; something that the IHT has recognised by deciding to host their luxury conference in India.

BoF: And, what about the impact of the global economic crisis?

We have not noticed a drop in sales during the economic crisis – what I have noticed, though, is an almost overnight change in Indian consumer tastes.

The Indian consumer remains very discerning, even our wealthiest clients consider their choices greatly. They do not think as western consumers, nor do they have similar tastes – recognizing this is the key to success for luxury brands in India.

BoF: New luxury malls are popping up in India, including DLF Emporio in Delhi, attempting to bring Luxury brands together in one place as is found in other markets. Do you think these malls have a real future in India, or could street shopping districts actually emerge?

Whilst the mid-market malls are perennially packed full of middle class shoppers, luxury malls such as Emporio are virtually empty every time I visit.

During the 5 days of Delhi fashion week that I spent at Emporio I only saw two people with shopping bags. I have had similar experiences at UB City in Bangalore. It is too soon to say whether the luxury malls will be a success or not, but it is clear that shopping is a core leisure activity. What the Indian malls need to do is realize this, and perhaps look to the experience-focused marketing strategies of Dubai Malls for inspiration. Luxury malls must be a destination in themselves – I have not seen this happen in India yet.

The high street is a more intuitively Indian concept, integrating preferences for local services, but the true dilemma lies in availability of good real estate which is virtually nonexistent in Indian metros, especially Mumbai. We were very lucky to find our standalone heritage building on what is now known as ‘the Bond Street of Bombay’, but spaces like ours are now virtually impossible to come by.

BoF: Now that you have established a bonafide business, what can we expect from Bombay Electric in the months and years to come?

Our latest news is the opening of Pocket Electric– India’s first guerrilla store. We’ve taken occupation of a space at the Garden of Five Senses in New Delhi, and I’m quite excited about the result. We see Pocket Electric as Bombay Electric’s rebellious kid sister – an espresso shot of the best of the flagship’s collections, but with a distinctly new edge from our new collaborations, most notably with Bharat Sikka, one of India’s most progressive photographers.

A temporal space allows you more creative freedom, and permits you to suspend your client’s belief as they walk in through the door – or rather window, as is the case for Pocket Electric. The store soundtrack features unreleased tracks from Talvin Singh, who is also set to perform at our official launch party, and the walls are adorned with Bharat Sikka’s otherworldly visions of Delhi.

CEO Talk is an ongoing series of discussions with fashion entrepreneurs and business leaders as they combat the economic downturn. 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

Buenos Aires is a city better known as the home of the Tango, but one day it may become known as the land of the killer retail concept.

Across this metropolis of 11 million people, from the uber-cool urban jungle in Palermo Viejo to the elegant boulevards of Recolota, a retail explosion has taken place, proving that Argentina has truly bounced back from the economic crisis that virtually paralysed the country at the beginning of the millennium.

Our favourite barrio (and everyone else’s) is Palermo Soho, named for one of its urban brethren in New York. The intersection of El Salvador and Armenia is analagous to Spring and Mercer, the heart from which all the action emanates. But that’s where the similarities end.

Compared to the relative homogeneity and formulaic feel of retail stores in New York (and London, and Paris), many stores in BA have a feeling that is all too rare in our world of  ‘retail formats’. It’s not just the overall design of the stores, but little details like floors entirely laid out in Persian rugs, beautifully reconditioned vintage cars and motorbikes, and product displayed on antique pool tables that all lend to the feeling of authenticity.

Perhaps budgetary restrictions and a weak peso have prevented store owners from buying everything new, but with these little touches, the designers have had to be a little creative, and the result is a completely different feel from what we are used to. Rather than copying each other blindly or rolling-out cookie-cutter formats, each store has a unique feel. This is something that stores in Europe and North America should aspire to if they want to engage their customers with a special shopping experience.

However, it must be said that while the enticing retail concepts easily drew us in, the product inside often left us cold. Run-of-the-mill quality, poor design, or blatant brand rip-offs (and sometimes all three combined) meant that we often left the stores empty-handed. Of course there were some notable exceptions, which we recommend highly on your next trip to BA, whether it is for holiday or some well-justified market research on how to create a retail concept that will delight your customers.

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Etiqueta Negra – The highest quality menswear in town where the retail concept, image and product are all in perfect sync. Vintage motorbikes and a seriously cool Jaguar gave a tough masculine edge to the soft silhouettes. (Gorriti 5131, Palermo SoHo and Defensa 1008, San Telmo)

Balthazar - Classic menswear for the Argentinian dandy. Our favourites were the Alpaca wool scarves, made under Balthazar’s design direction.  (Gorriti 5131, Palermo SoHo and Defensa 1008, San Telmo)

Mercer - A skylit denim emporium with Persian carpets, overhead fans and red geometric wallpaper with antique furnishings. Some of the jean cuts need some work, but the store is breathtaking. (El Salvador 4677, Palermo SoHo)

Sabater Hermanos – Forget about your local Lush store, Sabater Hermanos is a place where the authenticity is more noticeable than the sweet smelling soap.  It’s no wonder given that these guys have been making soap for three generations. (Gurruchaga 1821, Palermo Soho) 

Satori – We loved the sneakers as well as the sleek, simple interior at Satori shoes. The staff is as cool as the shoes are, without any of the attitude.

Bolivia – Menswear with a twist that doesn’t feel as predictable as Paul Smith. Lift up the collar of your classic white shirt, and you’ll find a colourful paisley or stripe. (Gurruchaga 1581, Palermo Soho)

Photographs copyright of the Business of Fashion 2007.

There was quite a bit of interest our recent post  Discreet Luxury – A Segment to watch. Stealth wealth consumers want something special and discreet and therefore reject obvious logos, product ubiquity and sameness. Though the category is dominated by thousands of small, independent brands, Bottega Veneta is the one global brand that has been emblematic of how well this can work from a business standpoint.

This video supplements a Wall Street Journal article entitled Inside a Salon that Serves the Logo-Phobic and takes you inside Yuta Powell’s discrete luxury boutique in New York’s Plaza Athénée Hotel (I didn’t know New York had its own Plaza Athenee either!). The store stocks niche luxury brands like Boudicca, Azzaro and Kiton and each product must pass through Ms. Powell’s exacting standards for quality and craftsmanship, honed during a long career at Givenchy.

Ms. Powell says "This is slow fashion; fewer but better clothes."

After having checked out some of the more up-and-coming areas of L.A, it was time to visit the king and queen of luxury and fashion here: Rodeo Drive and Robertson Boulevard.

The most remarkable thing about both these streets is that the stores really are an extension of the brands themselves. In Paris, London and even New York, most brands are constrained by existing building facades and building codes which they must work around as they design their stores. In Los Angeles, it appears that the brands have complete freedom in design, and therefore, if done well, every aspect from the sparkling exteriors, the natural lighting, the size of logos outside the building, and even the dramatic entrances off the street are messages about the brand. It was truly impressive.

If Abbot Kinney and West 3rd are streets filled with independent boutiques where young contemporary brands get their start, then Robertson is where they go to open their first flagship stores. Tory Burch, American Apparel, Anya Hindmarch, and Nanette Lepore have all opened shop on the street. These stores are mixed in with some of LA’s most famous boutiques (Curve, Kitson, Lisa Kline). Yesterday, in line with the celebrity focus of contemporary brands, a Paris Hilton appearance  at the Kitson store shut down a stretch of Robertson yesterday due to the "lookiloos" who descended to catch a glimpse of the starlet

Nearby on Rodeo, it’s a more distinguished affair (except for the double decker buses using loudspeakers to give highlights to the  throngs of tourists from places as diverse as Italy, Japan, and Kentucky). Many stores go all out in trying to draw in the shoppers.

The Chanel store is a glimmering white beacon of sophistication, complete with huge black Chanel logos and digital screens visible from the outside.

Prada takes a more subtle approach. No branding from the outside, but a dramatic entrance and clear Prada signature attracts those in the know using runway highlights from their most recent collection.

Dior Homme uses a 2 story sized image, screaming the last few strains of Hedi Slimane’s swan song.

And even Club Monaco offers Valet Parking, elevating its service level to compete with the luxury big boys. 

To many die-hard fashionistas, Los Angeles has always been considered the less sophisticated, dressed-down, in your face, suburban, over-celebrity conscious little sister to New York, which has consistently retained its place amongst the world’s fashion capitals.  However, our visit to L.A. has revealed an interesting mix of local designers and boutiques combined with the glossy global brands along Rodeo Drive. Driven by its native contemporary brands, L.A. is experiencing a fashion renaissance.

Yesterday, I cruised around some upcoming fashion districts here with Jamil Juma, of Juma, which he designs with his sister Alia. Juma’s collections (one fashion forward RTW, one activewear) are carried at more than 30 boutiques around North America, including Fred Segal  in L.A. and Caravan in NY. Both Jamil and I were keen to get a feel for what is going on here, especially in the hot contemporary segment where his brand is positioned.

In the past few years, contemporary brands based out of L.A. (which themselves grew out of the designer denim explosion that also started here) have taken America by storm. While Juicy Couture is the best known of these brands outside the USA, others including Vince, Joie, Corpus and James Perse have built sizeable businesses using an operationally efficient model that combines fast fashion (multiple deliveries, great ease of reordering) with with celebrity-based promotion.

Not surprisingly, all of the major high-end department stores have turned to these contemporary businesses to drive sales growth, particularly with the surge of Zara and H&M in the mass segment. Barney’s Co-op, Bergdorf Goodman’s 5F and Neiman Marcus Cusp are all sub-brands and businesses built for the contemporary market and Bloomingdales revamped its second floor in New York to get in on the action. And, there are entire shopping districts, like Abbot Kinney in Venice Beach and West 3rd in L.A., which seem to be dedicated to these fashionable yet affordable brands, priced in-between designer and mass.

The Abbot Kinney district boasts more than a dozen boutiques, tightly clustered along the edgy boulevard, mixed in with cafes teeming with laptop-toting students and hipsters. There is a strong movement to keep the independent vibe of the street, and a petition to keep chain stores out of the area was highly visible in many of the stores we walked into. The shopping experience therefore feels a lot more authentic than your friendly neighbourhood H&M.

The standout boutique in Abbot Kinney is Heist, an elegant store with an emphasis on French contemporary labels like Vanessa Bruno and Isabelle Marrant. Like most of the best boutiques, the owner is passionate about fashion and does all of the buying herself.

Jamil and I also spent some time scoping out the cluster of stores around the intersection of 3rd and Fairfax in West L.A. and spoke at length with Eveline Morel, the fashion aficionado behind EM & Co, a women’s boutique on the West 3rd strip. The store had an interesting mix of local labels, international names and Contemporary brands from Vivienne Westwood to Brian Reyes. Seeing Jamil in action reminded me how powerful it can be for young designer to go out and meet with boutique owners and buyers directly, as it is the best way to build confidence in their creative vision, product sense and reliability. It also puts a face to the name on the label.

Eveline told us she works with local emerging designers on product development and collection planning to help grow their businesses. And while she hasn’t bought into the whole celebrity angle for her own store, she said the power of name recognition associated with a Hollywood starlet is undeniable.  She cited the example of Mblem, a business built around the celebrity of Mandy Moore, who while not involved in design, provides input and takes 30% of sales revenue in return.

The Business of Fashion is here in L.A for the next few days and will continue to explore the nooks and crannies and highs and lows of the city of angels. Stay tuned.

Every week there are reports of new online fashion retailers, but some of the biggest names in the UK are noticeably absent from the space. Selfridges and Harvey Nichols have essentially no online fashion businesses to speak of, while the venerable Harrods is selling a heavily edited mix of its lower-priced collections, with an emphasis on accessories, knitwear and outerwear only.

All of this is even more surprising when you consider that many of the major American department stores, with similarly large profiles, have made heavy (and successful) pushes into the online space. Neiman Marcus, Bergdorf Goodman, Nordstrom, Bloomingdales, and Barney’s all have online sites with a large fashion assortment for sale. What’s more, many of the world’s best known luxury brands say that their rapidly growing online boutiques are their number one or two retail sales generators, even more than their flagship stores in the world’s fashion capitals.

Then of course there are online pioneers like Net-a-Porter, Yoox, e-Luxury and vivre.com. Just today, Net-a-Porter  shared the early results of its Roland Mouret virtual trunk show in WWD. In the first 4 days alone, more than $500,000 of pre-orders were placed and 250,000 videos were viewed in 22 countries around the world. (I’ve said it before, but this is a brilliant model for all involved. The customer gets to order in advance and participate in the action like a fashion insider, Mouret gets a global platform for his new collection, and Net-a-Porter knows exactly what quantities to order for its customers, but also gets a view on which items will be the best sellers, and can order more of these. And, think of all that working capital for Net-a-Porter to sit on for the next 6 months — they don’t even need to stump up their own money to fund the orders).

If you add to this the upstart retailers like brittique.com, fashionpublic.com, oli.co.uk, and letrainbleu.com (and toss in the online boutiques for Matches and Browns), you could say there is a virtual fashion fiesta going on.

SO, why have some of the coolest kids not joined the online party? The likely answer is probably some combination of conservatism, risk aversion, failure to grasp the size of the opportunity, and a legacy of snobbiness about selling luxury online.

Rumour has it that Selfridge’s has an online initiative in the works – so they won’t stay away for long. But, they will have certainly sacrificed a great deal of value in not having seen the opportunity earlier, even though they had such a huge head start in terms of skill and brand recognition.

Photoclip courtesy of Net-a-Porter

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.

Collaborations like this are good for emerging designers like Giles because they provide much needed cash to fund the business through working capital crunches, lend credibilty to designer’s stature, and raise the profile of the designer on the back of PR events like this. Who doesn’t like to have a party thrown in their honour? In return, the brands get cool products and street cred.

Who ever thought Mulberry could look like this?

The place was heaving.

The colour-blocking was raging.

This is Joan camping out in front of some SoHo graffiti, wearing her first ever eBay fashion purchase, a shaggy shearling jacket that helps keep her warm in the frigid temperatures that New Yorkers have been struggling with over the past few days.

We visited a couple of Joan’s favourite designer womenswear boutiques. The first one was Kirna Zabete

(96 Greene St., SoHo, New York 10012, near Spring St. +1 212-941-9656), which is a store selling the wares of young designers including Peter Som, Proenza Schouler, Tuleh and Derek Lam. The store is run by two very glamourous women who I have spotted at the shows in New York and Paris. You can’t miss them. They are some of the best-dressed women around, and they run a good business to boot, having been flogging designer clothes for over 6 years. Many boutiques don’t last even 6 months. I attribute their success to focusing carefully on their target customer and buying a tightly-edited collection that suits that customer perfectly. The store staff were helpful and smart (if not somewhat aloof), even though the security guard wouldn’t let me take a photo of the store-front from the outside. We took one anyway because it seemed ridiculous to prevent people from taking photos on the street. I can understand why they want to keep people from taking photos inside, but outside too? Sheeesh.

The next stop was Curve (83 Mercer Street, SoHo, New York), a new transplant from L.A. where Curve has been pleasing West coast fashionistas for several years now. The sales staff in Curve were extremely friendly and truly excited about the brands they are carrying, including their own house label "Curve" and Fenton jewelry, mixed in with Vivienne Westwood, and some serious vintage couture pieces from Dior and the like.

What’s great about New York is that it is always reflecting the zeitgeist of America, which right now is of course about the war in Iraq. Joan and I spotted an unforgettable scene of simple graffiti in a basketball court which speaks for itself. The chain-link of the fence seemed to be perfectly appropriate symbol for this.