Artist's impression of Westfield London

LONDON, United Kingdom – I didn’t want to like the new $2.7 billion Westfield mall in London. I really didn’t.

For one thing, I’m American. I’ve done my fair share of time in malls. For another, this mall happens to be pretty much in my backyard in London’s Shepherd’s Bush and I had been indoctrinated for months before the opening that it would be a tragedy for local residents. And then there’s the name. The Australian developer has gone around the world gobbling up existing malls, building new ones, and calling them all the same thing: Westfield. Pretty un-inventive.

So, I didn’t go to Westfield for a very long time. But when I finally did make it there recently, I was completely blown away.

… Continue Reading

Top fashion business links for the week of 30 April, 2007:

New York Times – No Store is a Hero to its Valet
Either the New York Times really has it in for Tom Ford (perhaps he spurned and interview request or declined an editors request for a discount?) or there is a real issue with Tom Ford’s new eponymous business. First, Cathy Horyn criticized Ford’s new business for being too niche and too grand (after Ford had provided her with a private tour – you can’t buy this woman’s vote) and today, in its Critical Shopper feature, Horacio Silva pans the store for confusing "exclusionary for exclusive."

Modabot.de – Brave New Internet World – How the Internet is changing the Fashion Universe
Fashion 2.0 is a hot topic. The Business of Fashion recently advocated that big fashion brands should consider the Internet an avenue that they should be cruising down, albeit with necessary caution. Over at Modabot.de, the Berlin-based fashion blog for avantgarde fashionistas, they delve into the topic with vigour, providing a 360 degree view of the fashion blogosphere and some of the new social shopping sites that are bound to change the way consumers shop forever, if not now, then certainly in the years to come.

Style.com – Gathering Moss
Sarah Mower at Style.com provides a witty and always insightful peek into the Kate Moss for Top Shop event this week. This is no small business. Philip Green has managed to make this line a pilot project for expanding Top Shop to other markets, particularly the US. Not only will the line bow at Top Shops around the world, it will also be sold at Colette in Paris, Barney’s in America and 10 Corso Como in Milan. Mr. Green was even on hand to provide some sales assistance himself. Clearly, this is a business he is counting on.

The Daily Telegraph – Farewell to Floaty and Flirty
Is this a harbinger of Chloe’s fast fall, after its fast rise on the fashion scene? At the Daily Telegraph, they have joined the chorus of people questioning the design direction taken by new Chloe’s new Creative Director, Paulo Melim Andersson. One can definitely appreciate a bit of Marni heritage in the collection he showed for A/W 2007, but the question is whether Chloe loyalists are brand faithful or design faithful. As the Telegraph points out, if it is the latter, then there are plenty of other places for girly girls to look for the look that Chloe has become known for over the past 10 years. Clearly, for a large fashion house like Chloe, a change in creative direction like this should be considered carefully as part of a broader strategic exercise. This is no less important to a fashion business than an airline choosing to fly to a new market (did you know Virgin flies to Nairobi?), a cola company changing their age old formulation (New Coke, anyone?), or Colonel Sanders tweaking the KFC recipe (do you like your chicken more crispy?).

Reiss, the London-based fashion retailer, is a on a rollout spree. Not only are they opening their fourth US Store in Los Angles on Robertson Boulevard (the first three are dotted around New York City), they are also opening a new location on Ledbury Rd in London’s Notting Hill, which also happens to be my street.

Reiss’ positioning is unique in the market. They are occupying the less-and-less seen mid-priced space in between Luxury and High-Street fashion. Many companies that have previously occupied this space have either started going upscale (e.g. Diesel, which is now trying to position itself as a luxury brand with a new shop on London’s Bond Street) or they are going closer to high-street (e.g. Benetton, which is moving a bit further down and trying to catch up with the fast fashion business model). This is the result of the fact that many consumers are now opting for branded high fashion at premium prices or ‘disposable’, trend-driven fast-fashion copycats, or even mixing the two up with the now-slightly-overused-but-still-relevant term "high-low", i.e. combinations of a Zara top paired with a Gucci bag and Prada shoes. In between, you have the mid-priced space (which often competes with the diffusion lines of big fashion companies, like "Marc by Marc Jacobs" or "See by Chloe") which is a smaller segment with fewer and fewer players.

What Reiss has done right is that they don’t skimp on quality. For consumers who don’t care about brands, but still want designer fashion of high quality (and for whom, therefore Zara and H&M just won’t cut it), Reiss is a good alternative. Some of my friends swear by Reiss’ off-the-peg suits for daily wear to the office, because the prices and styles are good, and they can save their bespoke stuff for special occasions.

The Gap announced today that Paul Pressler has been pushed out of the organisation as it struggles to find ways to turn the business around. Part of the problems the company is facing is addressed in my previous post: "Mind the Gap?"

I am not surprised by this move as public companies often try to make high-profile leadership changes to signal to the market that they have recognised a problem and are trying to fix it. Whether they actually manage to turn things around, remains to be seen. You can read more about it in today’s WWD – their prognosis for the company’s future is not terribly optimistic.

Big fashion business news Stateside last week were the dismal sales results of Gap Inc, the venerable American high street retailer that also owns Old Navy and Banana Republic. December 2006 like-for-like sales were down 8% versus 2005, which in turn were down 9% versus 2004. In the same period, many other retailers saw an increase in sales versus last year. Of late, the Gap has been struggling to recapture the heady days of growth and market dominance it enjoyed in the late 1990’s.

So, what gives? How did the Gap lose its way? The arrival of European retailers like Zara, H&M and Mango has surely played a big part. These retailers, who quickly copy catwalk trends and produce them in the store with amazingly short lead times, mean that competing on the high street now requires that fashion be fast – very fast. Make regular visits to the Gap and you will see that the fashion is neither fast nor fashionable.

The first issue at the Gap is the product, which is not as fashionable as what you can find elsewhere. The importance of good design has begun to trickle down from luxury fashion to the high street, meaning that the old business models of basic items at a good price is no longer sufficient . The Gap has been completely behind the eight-ball on this, while Zara and H&M have led the way with consistently fashionable, on-trend collections. The Gap was also late in catching the wave of bringing in big name designers to create high-profile capsule collections as Stella McCartney, Viktor & Rolf, and Karl Lagerfeld have all recently done for H&M. Last summer, finally, the Gap attempted a similar tactic by introducing a small collection dresses by London-based designer Roland Mouret. As far as I can tell, these simply did not seem to create the same level of excitement amongst fashionistas. To its credit, the Gap has reportedly created a European design team to better suit the tastes of international customers and I have noticed some improvement in the product on the men’s side, but there is still seems to be a long way to go if these sales numbers are any indication.

Second, and this is anecdotal only, the merchandise at the Gap doesn’t seem to change as often, and sometimes seems as though it is sitting there for months at a time. Zara makes regular, frequent drops of brand new merchandise to keep inventory fresh and to encourage shoppers to keep coming back to see what’s new. Not only did the capsule collections create massive brand awareness and street cred for H&M, it also brought new customers into the store, including fashionista types who may not have shopped at H&M before. More visits, more often, from more customers drives sales growth. As a McKinsey partner once exclaimed to me in Boston, the biggest drivers of retail success are footfall and basket size. The more visits you have to your stores, the higher your sales will be as each new visit means a potential purchase.

Which brings us to the third issue: heavy discounting. The more your consumer spends on each visit (basket size), the higher your sales will be. I have been to the Gap three times in the last 4-5 months, and each time, I have been offered large discounts on the merchandise that was being bought. I’m not complaining about this as a consumer, but as a manager of the business, I might think about discounting a little bit differently. During the first visit, upon leaving the fitting room, I was offered a friends and family card by one of the employees which saved me 30% on everything that I had in my hand. The second time, a month or so later, when I mentioned that I had been invited to a special American Express discount evening (which was not until the next day), the kind cashier offered my friend a 30% discount anyway, even though we were a day early. And now, if you walk into the Gap post-Christmas, it is covered with 75% off signs, with cashmere sweaters for only £35. Heavy discounting like this creates an expectation and precedent in the consumer’s mind about value and pricing. Many consumers will simply wait for items to go on sale, especially if it seems like the merchandise will still be there in a month. I can’t remember the last time I bought something on sale at Zara. If I find something there, I buy it right away, knowing that someone else will snap it up if I don’t act quickly.