The Future of Luxury in a Recession (Atelier)
As companies like Coach, Gucci Group and LVMH report their results this week, this video from Atelier, a division of Leo Burnett, highlights some of the cataclysmic changes in consumer behaviour that will drive the luxury of the future. What do you think of their assertions?

PPR Says Luxury Sales Remain ‘Sluggish’ (WSJ)
“Mass retail and fashion group PPR SA posted a 2.6 percent drop in first-quarter sales and said revenue in its luxury unit remained “sluggish” in March, signaling that demand for high-end products is still suffering amid the downturn.”

Business focus on eco-fashion: Greener clothing sized up (Telegraph)
“Allanna McAspurn, UK general manager of Made-By, is attempting to kick start an initiative funded by the European Union and the Dutch government to promote sustainable practices in the retail clothing industry.”

Mizrahi’s star back on the rise (Variety)
“While many of his fellow fashionistas are struggling to survive in an economy where aspirational shopping is as out of date as last season’s handbag, Mizrahi’s stock is clearly on the rise.”

Coach Profits Fall (WWD)
“Coach Inc. on Tuesday posted a 29.3 percent decline in third-quarter profits, hurt by the pullback in consumer discretionary spending, but said that it was confident in its business outlook.” (Subscription required)

Gucci S/S 09 advertising campaign

Gucci CEO sees satisfactory Q1-report (Reuters)
“Fashion house Gucci has had a satisfactory trend in the first quarter.”

‘Project Runway’ Will Move to Lifetime (WSJ)
“Nearly a year of litigation between General Electric Co.’s NBC Universal and Weinstein Co. over “Project Runway” ended Wednesday with an agreement that allows Weinstein to move its popular reality-TV show to Lifetime Networks.”

Macy’s CEO got 2008 compensation of $14.82 million (AP)
“Macy’s Inc.’s Chief Executive and Chairman Terry Lundgren received compensation valued at $14.82 million in 2008, much of it in stock compensation, according to an Associated Press calculation of figures disclosed in a regulatory filing.”

Hermès to Open in the Hamptons (WWD)
The French luxury brand will take up temporary residence in a 2,000-square-foot space specialising in beach attire. (Subscription required)

Gucci Spring/Summer '09 ad campaign

Murjani to divest Gucci stores in India (Economic Times)
In an effort to recoup investments he’s made in the luxury sector, Mohan Murjani plans to divest the operations of Gucci in India.

Luxury goods succumb to the cycle (FT)
Despite some views to the contrary, the luxury industry is proving to be prone to cyclical ups and downs.

Malaysian shoe guru Jimmy Choo plans teaching academies (Yahoo)
“Malaysian-born luxury shoemaker Jimmy Choo is planning a network of “Couture Shoe Academies” worldwide, with the first to open in his home country.”

A New Home for New York Fashion Week (New York Times)
After this month’s New York Fashion Week at Bryant Park, the event will move to the Lincoln Center for Spring/Summer 2010.

Macy’s to Centralize and Cut 7,000 Jobs (WWD)
As another sign that the retail landscape in New York is abysmal, Macy’s cuts 4% of their workforce or 7,000 jobs. (Subscription required)

MILAN, Italy – Take a walk into a Gucci store these days and one cannot help but notice the preponderance of logos and icons on almost every Gucci product in sight, especially the brand’s leather goods, shoes and accessories. Horsebits, double G’s, and Gucci crests abound. But, it seems the conspicuous logos are failing to resonate with consumers in these recessionary times.

Rumours are circulating in Italy that Gucci has dramatically cut production orders to make up for waning demand for the Italian luxury brand’s core leather goods offering. If the reports are accurate, it speaks volumes about the worsening climate for luxury goods players in general, but particularly for brands like Gucci which have chosen to follow an explicit “accessible luxury” strategy.

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News flashes have been coming in today from investment analysts covering PPR, which reported its 1Q08 results earlier today. The news is not good for the Gucci brand, but Bottega Veneta has managed to beat market expectations, even in this downbeat economic environment.

Gucci sales only increased by 2.4% to €513m, versus market expectations in the neighbourhood of 7% growth. As a result, some analysts are considering posting downgrades to their ratings on the PPR stock. Given it’s self-stated positioning as an ‘Aspirational luxury’ brand, it may not seem surprising that Gucci would be one of the first brands to show signs of the economic slowdown.

But that’s not the whole story.

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