Tara Pearls Jewelry on Gilt Groupe | Source: Gilt Groupe

What’s a Dress Worth? (NY Magazine)
“The online retailer Gilt Groupe offers a great deal: Buy designer clothes at deep discounts. But is it good or bad for fashion?”

Chanel to sell goods online (Marketing)
“Chanel is to begin selling products directly through its website later this year in a landmark decision likely to be followed by rival luxury brands.”

Carolina Herrera Sees Signs of Life in Luxury (WSJ)
“Fashion designer Carolina Herrera says she was “shocked” a few months ago when she noticed her $7,990 gray sequined tulle gowns were “selling like hotcakes,” relatively speaking.”

World’s top fashion prize increased to 220,000 euros (AFP)
“The coveted Andam fashion prize for emerging talent on Monday announced a more than 25-percent increase in its endowment, to 220,000 euros (307,000 dollars).”

London Fashion Week Preview (Fashion156)
Fashion156 launches the London Fashion Week preview issue, including coverage on womenswear, menswear, accessories, beauty and grooming.

Seibu Yurakucho | Source: theworldmodspb

Seven & I to Shut Seibu Department Store on Sales (Bloomberg)
“Seven & I Holdings Co., Japan’s largest retailer, will shut a Seibu outlet on Dec. 25, its third department-store closure in two years as demand slumps for clothes and luxury goods… Department store operators Isetan Mitsukoshi Holdings Ltd. and J. Front Retailing Co. have also shut stores amid falling wages and rising job losses.”

U.S. consumer confidence rises to 16-month high (Market Watch)
“A little more optimism about the current economic climate sent the U.S. consumer confidence index to a 16-month high in January, according to a survey released Tuesday by the Conference Board.”

German fashion trade shows gaining momentum (Independent)
“Berlin-based fashion trade events Premium and Bread & Butter, running concurrently to Berlin Fashion Week January 20 – 23, recorded a rise in visitor figures, leaving organizers in a euphoric mood.”

Royal spin set to get wool back in fashion (Herald)
“Yesterday Prince Charles lent his support to the cause at the launch of The Wool Project, which aims to bring the fashion, carpet and textile industries together to increase demand for wool and raise its worth to upland farmers.”

Chanel and Armani, Under the Silvery Moon (IHT)
“Like a box of macaroons projected into cyberspace, the Chanel show on Tuesday played soft and citrus pastels against streamlined silver to make a strangely beautiful show.”

“Vol de Jour” by Karl Lagerfeld | Source: Chanel.com

NEW YORK, United States — In recent seasons, while a deep economic downturn has threatened the long-term survival of many magazines, a number of major fashion brands have been creating their own editorial content, and perhaps no brand has done more of this than Chanel. Back in November, Olivier Zahm posted an image of several layouts from 31 Rue Cambon, announcing “the first Chanel magazine which I have art directed and designed for Karl Lagerfeld, to be distributed worldwide in all the Chanel stores.”

But whereas 31 rue Cambon will be a print publication, Chanel’s real content focus has been in the digital space, harnessing Karl Lagerfeld himself to create increasing volumes of original content for digital distribution, especially around the brand’s showcase “Métiers d’Art” collections, which underscore Chanel’s unique commitment to the traditional Parisian ateliers the firm acquired in 2002 — costume jewellers Desrues, embroiderers Lesage, milliners Michel, feather-makers Lemarié, cobblers Massaro, floral designers Guillet, and silversmiths Goosens — a strategic point of differentiation.

Having created runway videos, a silent film and short video teasers to accompany their Paris-Moscou Pre-Fall 2009 and Paris-Venice Resort 2009-2010 “Métiers d’Art” collections, Chanel recently launched a longer-format film and a full runway video for their Paris-Shanghai Pre-Fall 2010 collection. To accompany Paris-Shanghai, Mr. Lagerfeld has also been posting a series of behind the scenes video diaries documenting his design process, as well as fittings with models and the making of advertising campaigns, all released via YouTube and the Chanel News section of the brand’s website.

In fact, Chanel News looks a lot like a blog and publishes “exclusive online features” with enough originality, regularity and volume to qualify as an online magazine. As well as the videos for the “Metiers d’Art” collections, there are fittings with Lily Allen for Spring Summer 2010, a ballet filmed in the haute couture salon at 31 rue Cambon, images of Coco Chanel’s private apartments shot by Olivier Zahm, photos of Edita Vilkeviciute’s favourite places in Shanghai, drawings of the Paris-Moscou collection by Russian model Sasha Pivavorova, personal entries from “Karl’s Diary,” and short films such as “Fitting Room Follies” and “Vol de Jour” featuring Lara Stone. With new features added every few days, it’s a remarkable volume of material.

So why is Chanel investing in creating and publishing all this digital content? The answer is rooted in the changing nature of media, marketing and technology and underscores lessons that all major fashion brands would do well to observe.

In the past, marketing fashion collections mostly meant buying pages in magazines or space on strategically positioned billboards. In both cases, brands paid to interrupt consumers, repeating a visual theme or message in order to create recognition, desire and conversion. By exerting their influence as advertisers, brands also forced magazines to feature their products in their editorial. But today, affluent consumers are migrating online, where the balance of power is dramatically different.

It’s hard for consumers to avoid advertising when they’re flipping through a magazine or walking down the street. And it’s hard for publishers to ignore advertisers’ demands when the costs of printing and distribution are high. But on the web, where the tools of communication are largely free — it costs nothing to publish a blog, share on Facebook, or broadcast on Twitter — brands no longer have the leverage to monopolise media or pressure editors. In fact, the sheer volume of media and commentary generated by consumers themselves increasingly drowns out the monologue of traditional marketing.

These days, it’s not about being louder. It’s about being more interesting. To communicate effectively, brands must inspire and harness conversations amongst consumers by giving people something remarkable to talk about — something of value that they will actively seek out, amplify and share with others. In this new reality, forward-thinking fashion brands like Chanel are learning to think like media companies, creating and publishing original editorial content to earn attention and attract fans who will carry their message across the internet.

This approach makes particular sense for luxury fashion brands who are known for their creativity and ability to convey social status. That’s because, online, content is social currency: influencers increasingly earn friends and followers by circulating interesting digital content via their blogs, Facebook and Twitter.

For Chanel, there are signs that this is just the beginning of a broad strategy to give consumers a continuous stream of inspiring content to talk about and spread across the internet, driving recognition, desire and conversion. In an interview with Women’s Wear Daily, Bruno Pavlovsky, president of Chanel fashion, recently announced plans to relaunch the current Chanel News blog, this March, as a full blown destination, chanel-news.com.“The idea is to give all these social networks a location where they can have genuine information about Chanel,” Pavlovsky said.

Watch this space.

Vikram Alexei Kansara is Managing Editor of The Business of Fashion

Boss Black by Peter Lindbergh | Source: Hugo Boss

Permira to keep Hugo Boss, ProSieben for years (Reuters)
“Permira doesn’t plan to exit from media company ProSiebenSat.1 and fashion label Hugo Boss for a couple of years, the German head of the private equity company told Reuters.”

Chanel wins counterfeit case but is forced to pay damages (Telegraph)
“A seamstress who took Chanel to court for stealing her small firm’s crochet pattern has lost her counterfeit case but the famous fashion house was ordered to pay 400,000 euros for breach of contract.”

Do These Vuitton Ads Stretch Too Far? (Business Week)
“Instead of sexy models flaunting handbags and lots of skin, Louis Vuitton’s current ad campaign features Vermeer-inspired images of demure young women hand-finishing purses and wallets at a workshop table… There’s just one tiny detail missing. Hardly any Vuitton bags or wallets are handmade.”

Luxury shoppers still spending, but shelling out less (Los Angeles Times)
“The recession’s end hasn’t reached Rodeo Drive, where salesclerks can at times outnumber customers. But many stores are better prepared than last year, with leaner inventories and lower-priced goods.”

Retailers expect steady Christmas trading (Drapers)
“Every retailer surveyed in the British Retail Consortium’s Christmas Trading Snapshot Survey agreed that this year’s Christmas trading period would be at least as good as 2008.”

Escada Store, Berlin | Source: Luxuo

Megha Mittal to buy luxury fashion house Escada (Reuters)
“‘Today the insolvency administrator of ESCADA AG signed a sale and transfer agreement with one of the Mittal Family Trusts,’ the company said in a statement late on Thursday after the preliminary creditors’ committee approved the deal.”

Victoria’s Secret unveils plans for launch in UK and Europe (Retail Week)
“US fashion and beauty giant Limited Brands has outlined plans to open Victoria’s Secret stores in strategic markets including the UK as part of an international expansion drive.”

eBay goes upmarket with fashion site launch (Revolution)
“eBay has launched a website written by fashion followers in an attempt to attract more ‘well-to-do’ shoppers. The Inside Source aims to shift perceptions that eBay only offers second hand goods and last season’s threads.”

Asia boosts Hermès luxury sales (AFP)
“Sales in Asia helped boost French luxury group Hermès in the third quarter, the company said on Friday, reporting an overall 10-percent rise in sales to 452 million euros (672 million dollars).”

Seamstress takes on might of Chanel over crochet pattern (Guardian)
“A 61-year-old woman from a small town in eastern France is taking on the might of one of world’s greatest fashion houses in a case that threatens to shake up the way the industry treats its skilled workers.”

Hermès Kelly Bag, courtesy of Hermès

BRUSSELS, Belgium — Sometimes, a mere glimpse of a product’s silhouette is enough to tell which designer or fashion house created it: the Chanel No 5 perfume bottle, the toe of a Berluti shoe, the unique shape of the Fendi baguette. Today, there is renewed interest in these kinds of classic products as shape and design have made a return in making a product desirable, especially now when consumers don’t want their products to scream with logos and bling.

As they look for unbranded products that are recognisable for their design, this also raises the question of whether there is adequate legal protection for these more subtle indications of provenance. This will almost certainly reignite a debate for strong design right protection, but it might also mean that the shape of a product is worthy of trademark protection in and of itself.

The fashion industry is currently fighting two battles on the intellectual property front. The first is against counterfeiters exploiting trademarks and logos. The second, more complicated battle is against those not-so-imaginative designers from within the industry who are simply aping the designs of their peers. This second fight is the one that is most harmful to creativity, investment and reputation. The main weapon against knockoffs is design right protection, but this is not an option if the design isn’t new. So, timeless products without obvious trademarks but which are instantly recognisable — think the classic Hermès Kelly bag — are in a sort-of legal limbo.

In the EU, it is in principle possible to protect a (three-dimensional) shape as a trademark. In practice, however, it has proven extremely difficult to convince courts that a shape has a sufficiently “distinctive character” to be registered. For many years, European courts have been of the opinion that consumers are not in the habit of making assumptions about the origin of products based on their shape. They argue that consumers need a sign or word element to make that connection.

Last week, an EU court restated this long-standing position in a case concerning the shape of the Bounty chocolate bar. The court’s view is basically that the shape of a product must be more than a variant of a common shape of the type of product in question. Only then can it fulfill the function of a trademark indicating origin. Assessing whether that is the case should be done from the point of view of “the relevant public”, described as the “average consumers of the products or services in question, who are reasonably well informed and reasonably observant and circumspect.”

Still, a closer look at this general reasoning makes one wonder if we haven’t actually arrived at a point where at least some consumer groups make the connection between a shape and a product’s origin. While the shape of the Bounty bar might not be sufficiently distinctive for a trademark, the case of luxury products is fundamentally different. These are sophisticated products whose design is born of an intellectual process, tells a message and (if all goes well) transcends generations. What’s more, the very essence of luxury products arguably creates a consumer group that is well above average when it comes to being informed, observant and circumspect about details, other brands and look-alikes.

If luxury consumers are willing to pay for quality in design and shape, shouldn’t it be possible to protect the required and underlying investment and creativity?

Hanne Melin is a competition and IP lawyer based in Brussels

Chanel Haute Couture show, courtesy of The New York Times

Chanel, Now and Then (New York Times)
Cathy Horyn discusses the future of Chanel with Karl Lagerfeld.

Louis Vuitton, Cartier Are Preferred by Chinese, Survey Shows (Bloomberg)
“Louis Vuitton and Cartier are the top choices of Chinese consumers for purchases as their thirst for luxury goods remains unabated in the global economic crisis, a survey commissioned by Ruder Finn Asia showed.”

Sir Philip Green cautious on autumn trading (Drapers)
“Arcadia owner Sir Philip Green is cautious about trading in the final quarter of 2009 and is concerned about how shoppers will react to price increases this autumn.”

Givenchy by Riccardo Tisci a/w 09/10 collection (Telegraph)
“A light breeze whipped away the billowing black and white chiffon robes and Arabic headgear, revealing gilded, jewelled armour and crowns, at the Givenchy haute couture collection for autumn/winter 2009/10 in Paris this afternoon.”

E-retailers find big brands hard to touch (FT)
“Anyone with a computer and something to sell, they said, had a good shot at taking market share away from the big brands. But progress has been slow and the reality is proving a little different.”

Karl who?

PARIS, France – We don’t actively engage in the rumour mill here on BoF, but when the whispers involve Karl Lagerfeld, Olivier Theyskens and Alber Elbaz in a Lanvin and Chanel merry-go-round, it seems worthwhile to engage in a bit of Friday afternoon fashion speculation.

Today, Diane Pernet has published a bombshell post outlining this scenario:

“This is not a fact until you officially read it somewhere else but rumour has it that Karl Lagerfeld will not renew his contract at Chanel and that Alber Elbaz will take his place and Olivier Theyskens will take Alber’s place at Lanvin…Nothing is engraved in cement, these are still just rumours you will have to wait and see.”

Of course, fashion observers have long wondered what will happen at Chanel (and Fendi, for that matter) when Lagerfeld’s seemingly endless energy finally runs out. For Elbaz, or any top fashion designer for that matter, the Chanel post would be a dream job as it is one of the most coveted design roles in the fashion world.

That said, this all seems a bit suspect to me. And as Diane says, these are only rumours.

Word has it that Elbaz has a significant ownership stake in Lanvin, making it hard to believe that he would walk away from all that upside, especially now that sales at Lanvin are up 29 percent and the brand is on the ascendant, even in the current economic environment. What’s more, private equity and strategic investors have been circling the buoyant French brand for months now, and there is potentially a big payout to be had for Mr. Elbaz–but only if he sticks it out and, I suspect, only if he stays on as Creative Director.

In other revolving designer news, WWD is reporting today that Esteban Cortazar is the latest designer to clash with Mounir Moufarrige at Ungaro, prompting the young designer to walk out of his role. This will not come as a surprise to long-time readers of The Business of Fashion. When Cortazar was first appointed, a raging debate took place about his suitability for the role and about Moufarrige’s apparent inability to effectively work with top creative talent. If the news of Cortazar’s departure are true, this will be the third designer to walk out on Moufarrige: Giambattista Valli, Peter Dundas and now, Esteban Cortazar.

UPDATE: As expected, both Chanel and Lanvin have denied these rumours and so, alas, Karl Lagerfeld and Alber Elbaz are both staying put. For now.

Imran Amed is Editor of The Business of Fashion

Hermès Q1 sales get lift from bags, currencies (Reuters)
“Hermès proved again it was resisting the crisis better than many of its rivals with a 3.2 percent rise in first-quarter sales, helped by exchange rates and resilient demand for its handbags.” Have a look at this video from the CBC’s Fashion File to see the underlying craftsmanship that has served the brand well during the downturn.

Financial Analysts Predict 2010 Recovery (WWD)
“Financial analysts and private bankers expect the global economy, with the help of a more dynamic Asian region, to bounce back sometime in 2010.”

Most Powerful Luxury Brands (The Age)
According to the annual Millward Brown BrandZ ranking of the Top 100 Most Powerful Brands, global luxury brands are retaining their brand value. “In the luxury category, Louis Vuitton came out on top, with a brand value of $US19.4 billion, followed by Hermès at $7.86 billion, Gucci at $7.47 billion, Chanel at $6.22 billion and Rolex at $5.53 billion.”

The Blue Book of Fashion (New York Times)
“In the resale business, which is enjoying a bit of a renaissance at the moment, the pecking order of designers is different from those of most department stores.”

PARIS, France — Yesterday, Chanel launched its long awaited Chanel No.5 short film Train de Nuit, featuring Audrey Tautou, who is no stranger to the storied French couture brand. Often compared to Mademoiselle Chanel herself, Tautou has now twice taken on the role of the famous coutourière, most recently in Coco Avant Chanel, a film exploring her early life and times.

Within seconds of seeing the opening shot of the 2 minute short film, directed by Jean-Pierre Jeunet, who previously worked with Tautou on the award-winning film Amélie, the viewer is struck by Tautou’s alluring presence, as she rushes to catch the Orient Express which takes her from 1955 Paris to modern-day Istanbul in mere seconds. This is the Internet after all, so things have to happen quickly before patience wears thin and viewers click away.

On board this luxurious mahogany express train, Tautou’s fragrance catches the attention of a fellow passenger, played by American actor Travis Davenport, who becomes hopelessly addicted to our heroine, laying the foundation for a tale of intertwining destinies, woven by the threads of chance and fate.

There is no dialogue at all throughout the film and the story is conveyed entirely through the actors’ powerful body language and the soulful voice of Billie Holiday. In doing so, the film successfully captures the beauty and sophistication of Coco Chanel’s essence while delicately conveying the power of scent in seduction, almost as if it were wafting straight off the screen. This film is the strongest proof yet that luxury brands can achieve a whole new level of storytelling on the Internet, leaving two-dimensional magazine advertisements in the dust.

The production quality is remarkably good and perhaps more importantly, the film is watchable, over and over again, because new details can be picked up with each viewing. There is also a 60 second version of the film available and a full behind-the-scenes look at the making of the film and the story of the legendary perfume itself.

But this is where things start to go awry. It pains us to say that this beautiful film, and all the supplementary materials, are available only on the Chanel site and any initiative to virally propagate the film is thwarted by the lack of an embed function. Indeed, a legal disclaimer warns that

“No part of this website may be copied, reproduced, republished, uploaded, posted, transmitted or distributed in any way for commercial purposes. This prohibition also includes framing any content from this site on another site, as well as unauthorized linking…use of material from this site without CHANEL’s prior written consent is strictly prohibited.”

Unauthorized linking? You’ve got to be kidding. In the digital age, such restrictions not only seem antiquated and old-school, but they also reflect a lack of understanding of the open world of the Facebook-addicted, always-Twittering, YouTube-loving internet faithful who want to share and discuss and celebrate things they love.

While the quality of such sites would not replicate what is available on the Chanel homepage, when weighed against the potential loss of millions of views (see Susan Boyle), this seems like the wrong trade-off to make. Chanel will only reach a fraction of its potential audience with this film due to the restrictions. Why bother creating such a great brand development tool if you aren’t willing to share it?

Viewers clearly want to share the film, and thanks to the advances in video-ripping technology, certain seeders have already started propagating bootlegged versions of the film drastically varying in quality, which is even worse for the brand and completely ruins the experience of watching the film, which could have been released in HD on YouTube by Chanel itself. We managed to find an excellent version of the film anyway. It seems that some luxury brands think they can control content on the Internet.

Not only this, Chanel still refuses to sell Chanel No.5 (or any other Chanel product) on its website, meaning that millions of dollars of potential sales are being sent elsewhere—and this, at a time when the internet is the only channel for sales growth in the luxury sector.

We give full marks to Chanel on the concept and creation of this stunning film, but can’t help but feel frustrated with the fact that this is an unsharable masterpiece. In the end, fashion film is not just about the story, it’s also about an execution strategy that enables the story to be told far and wide.

Title: Train de Nuit by Chanel, 2009
Directed by: Jean-Pierre Jeunet
Starring: Audrey Tautou and Travis Davenport
J&A Rating: 3.5 Stars out of 5