LVMH Lecture Theatre at Central Saint Martins, Kings Cross | Source: LVMH

LVMH and Central St Martins Partnership (Vogue UK)
“Central St Martins new Kings Cross building will feature a state-of-the-art lecture theatre sponsored by LVMH. The luxury conglomerate has also announced plans for a scholarship programme to recruit promising designers from the university for its stable of brands.”

Tamara Mellon leaves Jimmy Choo (FT)
“Tamara Mellon has stepped down from Jimmy Choo, the footwear and accessories brand she founded 15 years ago, following its takeover and integration with Labelux, the private Italian luxury goods group… In 1996 Ms Mellon transformed a small business set up by Jimmy Choo, a cobbler from east London. The business has also branched out into accessories such as handbags and scarves, as well as fragrances.”

A new frontier for big brands (FT)
“In Paris, at 23 Place Vendôme next year, Louis Vuitton will open the first boutique dedicated to its fine jewellery. It is a significant move for the industry… As is usual with Louis Vuitton, a decision by the world’s most successful luxury brand to make a decisive step into a new market is a signal of shifts in the industry… But expectations are that jewellery’s switch from a predominantly craft market to a new frontier for big brands is under way.”

Big in Japan: Paul Smith’s focus shifts to the East (Telegraph)
“The designer has, however, recently fixed his gaze eastwards, staging a fashion show in Japan for the first time in his career. Entitled I Love Japan, the show marked the launch of Japan’s first major fashion event since the March 11 earthquake, tsunami and nuclear crisis… In the case of Paul Smith, the designer’s affection for Japan has clearly returned – reflected in both the number of boutiques and department stores across the country and sales figures.”

Fashion retailing catalogs turn a page (LA Times)
“Alluring as print catalogs may be, an increasing number of retailers — Bloomingdales, Nordstrom and J. Crew among them — aren’t just mailing them to their customers. They’re going digital, showing off this season’s lace-trimmed dresses and faux-fur vests in free downloadable apps that mimic the traditional catalog experience, minus the print.”

Savigny Luxury Index May 2011 | Source: Savigny Partners

LONDON, United Kingdom — As luxury stock valuations continue to roar ahead, even as the overall market has stalled, and luxury brands go to private and public investors to finance further expansion, we take our monthly check of the Market Pulse to understand the key drivers.

Big news

• The Savigny Luxury Index continues its upward trend led by the bullish outlook for the sector in terms of both organic growth and acquisitions

• Continued good news flow with Hermès announcing outstanding Q1 results despite its exposure to Japan, which remains its largest market (representing almost a fifth of its revenues).  Burberry also posted stellar full year (end March 2011) results but signaled further investment in order to capitalise on the brand’s momentum

• There has been a flurry of M&A activity during the last month despite high valuations.  Puig acquired the fashion house Jean-Paul Gaultier from Hermès.  Labelux went on a shopping spree bagging Jimmy Choo from TowerBrook and Belstaff from the Malenotti family.  Department store group Coin was acquired by BC Partners.  French leather goods brand Le Tanneur was acquired by Qatar Luxury Group, owned by the Emir of Qatar’s spouse.  Chinese conglomerate Fosun bought a minority stake in the Greek jewellery brand Folli-Follie

Going up

• Hermès’s valuation continues to climb higher despite lack of clarity over Japan

• Strong Q1 results and bid speculation have fuelled Coach and Tiffany’s share prices

Going down

• Ralph Lauren’s share price dipped after the company announced disappointing Q4 results due to higher operating costs

What to watch

• Strong growth potential in China is fuelling competition amongst brands who all want a slice of the pie.  This may drive overheads and rental costs up and put pressure on margins

Luxury Sector Valuation, May 2011

Pierre Mallevays is a contributing editor at The Business of Fashion and founder and managing partner of Savigny Partners, a corporate advisory firm focusing on the retail and luxury goods industry

Carine Roitfeld by Terry Richardson | Source: Terry Richardson

Lunch with the FT: Carine Roitfeld (FT)
“Roitfeld, 55, has built a career on being cool. She made her mark as a stylist in the 1990s, when she and the photographer Mario Testino created risqué campaigns for Gucci… [As the editor of French Vogue] she became one of the most powerful women in the fashion industry, famous for edgy, sometimes controversial and frequently erotic photo shoots.”

Jimmy Choo sold to Labelux for £500m (Guardian)
“Its killer heels are de rigueur for Hollywood actresses on the red carpet – and this weekend luxury shoe brand Jimmy Choo was sold for an A-list price tag of £500m…. Labelux’s other investments include Swiss luxury brand Bally and the Derek Lam fashion label. Its chief executive Reinhard Mieck said it saw “substantial potential” for the brand, particularly in Asia.”

Inditex breaks new ground for seasons in the south (FT)
“Inditex… has become the first global retailer to sell fashion lines designed especially for the seasons of the southern hemisphere… for clothes retailers based in the northern hemisphere, the seasons of the south have traditionally presented a barrier to full globalisation because of the complexity of producing specially-tailored winter lines at the same time as summer wear.”

China’s luxury consumers get their information online (Relax News)
“70 percent of the country’s consumers of luxury brands search the internet each month before making their purchases. What’s more, 30 percent claimed they searched online for information on luxury items each week. But, surprisingly, just five percent of those polled said they were actually interested in making a purchase over the internet.”

Jeans for deep pockets (FT)
“Major fashion labels such as Chanel, Ralph Lauren, Balmain and Roberto Cavalli have created luxury jeans, some costing well over £1,000… ‘The market for designer denim continues to grow and has no limits. For so many of the fashion collections, their most sought-after pieces are in the fabric.’”

The Post-Advertising Age (Luxury Society)
“Today, the only way brands can connect with customers and prospects is by genuinely adding value to their lives, either by providing a useful service or by telling rewarding stories. Brands have no choice. Messages that aren’t valued will be ignored.”

A Revolution Sallies Forth on the Tunisian Runway (IHT)
“The textile and garment industry, though battered by economic recession and Asian competition, is still the country’s largest employer and leading export sector; it is also the European Union’s fifth-largest textile supplier, producing in particular for Italian and French houses.”

Jimmy Choo eyes £650m HK float (FT)
“Jimmy Choo and its private equity owner TowerBrook Capital are considering a £650m ($1.07bn) initial public offering of the luxury shoe group, in a move that could inject more competition into the auction for the company.”

PPR Shares Rise After Sales Beat Analyst Estimates (Bloomberg)
“PPR’s luxury division is ‘the key highlight’… the results ‘back up our thesis that the Gucci brand will catch up with best-in-class in 2011 and that Bottega Veneta and Balenciaga would confirm their rising star status.’”

The Ageless Supermodels: What sets them apart? (Jessica Michault)
“What makes these particular models timeless? What do Kate Moss, Naomi Cambell, Claudia Schiffer, Christy Turlington, and Amber Valletta or Kristen McMenamy and Stella Tennant, for that matter, have that thousands of other super model hopefuls don’t?”

Allen Edmonds' Redan shoe | Source: Allen Edmonds

At Their Feet, Crafted by Hand (NY Times)
“It has not been lost on workers at Allen Edmonds, or those at about a half-dozen shoe companies that still produce in the United States, that the craft of shoemaking is experiencing something of a renaissance. Over the last few years, as heritage brands have been rediscovered by a new generation of customers, especially young men.”

Jones Group one of bidders for Jimmy Choo (Reuters)
“Clothing maker Jones Group is one of three potential buyers for upscale shoe and handbag maker Jimmy Choo… Jones Chief Executive Wesley Card told Reuters in February that his company was looking to buy brands that would help extend Jones’ reach, particularly into overseas markets.”

How Far Off Are Local Chinese Luxury Brands? (Jing Daily)
“Luxury brands are born out of two main factors, one being history and the other a mature consumer base. However, there are virtually no domestic Chinese luxury brands that have these two characteristics… The establishment of a brand requires a lot of time and money, two things that are in short supply when a brand is first starting out.”

Museums Are Finding Room for Couturiers (NY Times)
“The big-city shows have helped legitimize fashion for smaller museums and provide a template for how to raise funds. And pop culture highlights fashion’s allure. ‘A hit show like ‘Project Runway,’ whose viewers are young females, underscores the passion for fashion among a key demographic that is also crucial for museums.’”

Rise: Gabriella Marina González (Dazed Digital)
“More powerfully dark than ever, the latest collection by Miami-born London-based designer, Gabriella Marina González, represents a new display of the most sinister poetry, a fresh twist to the most hard-core drama…. Leather masks and harnesses with metallic rivets, sky-high wedges and loose knits give shape to The Cyclops Apprentice, her proposal for next summer.”

Dior Homme: The Time I Had Some Time Alone (Dazed Digital)
“A world away from Slimane’s razor sharp aesthetic, the sense of ease and movement balanced with extreme rigor in the S/S11 collection betrays Van Assche’s growing confidence in his place at Dior Homme. Dazed spoke to Van Assche about the collection and his first foray into the digital realm – a film with photographer Willy Vanderperre.”

Fashion Rethinkers: Norma Kamali (JC Report)
“She uses Skype as a medium for customer service, the pieces from her most recent collection, which was shown in February, will hit her store in just a few weeks (compared to the normal delivery of a few months)… In other words, Kamali has never played by the rules, and for that we consider her a revolutionary thinker.”

Jimmy Choo the Man Back to Jimmy Choo the Label (The Cut)
“Choo has hired London-based investment bank and corporate advisory firm Daniel Stewart to look into his options, though sources are skeptical of his ability to get back in bed with the label that bears his name. WWD calls his breakup with Mellon ‘acrimonious,’ while an anonymous source ponders, ‘Would Mellon ever accept a Jimmy Choo owned by Mr. Jimmy Choo?’”

Mumbai has designs on the UAE (The National)
“As fashion week drew to a close in Mumbai, with ruffles, feathers and wings transforming the catwalk into a fairytale scene, business was brisk behind the smoke screens… among those making the biggest deals were buyers from the UAE and throughout the Middle East, participants said, with the Lakme Fashion Week (LFW) summer and resort collections the main attraction.”

Shulman on the Middleton Effect (Telegraph)
“People are always on the lookout for new fashion icons, says Vogue editor Alexandra Shulman. At the moment there are few individuals who are in the news as much as Kate Middleton has been… the British fashion industry is benefiting from Kate’s public profile and associating herself with the home industury can only help it prosper.”

Givenchy Couture A/W 2011 | Source: stylefrizz

All about the Atelier (FT)
“It’s possible we’re thinking about this all wrong – this being the now-shrunk-to-three-days-with-only-six-full-fledged-couture-brands couture shows. It’s possible we’re asking the wrong questions. It’s possible that, instead of perennially rending our garments and plunging into the long tunnel of debate over whether couture is relevant in a not-entirely-post-recession 21st century, we should reconsider our assumptions.”

The battle at the heart of French fashion house Hermès (Independent)
“It’s not without reason that Arnault, the man at the head of it all, is dubbed ‘the wolf in the cashmere coat’ and his far-from-demure entrepreneurial style is well-known, not to mention entirely at odds with the more discreet and traditional values this proudly independent name represents.”

Boosting America, in Her Own Fashion (NY Times)
“Michelle Obama’s impact on fashion extends far beyond the ‘made in America’ label stitched into her dress. The optimism, glamour and accessibility that she communicates through her style of dressing transcends cultural borders and economic boundaries.

Jimmy Choo sees profits treble despite sales fall (This is Money)
“Jimmy Choo’s profits have more than trebled despite a slump in sales abroad… estimated to be worth £500m, [the company shows] turnover six per cent lower at £82m in 2009 but pretax profit up from £4.8m to £15.3m – thanks to big cuts in sales and administration costs.”

Rankin’s beautiful model army (Telegraph)
“Daphne Self is an 80-year-old model, Vivienne Westwood a fashion designer, Elizabeth I the most renowned queen of England. A more unlikely group of superheroines you would be hard pressed to come up with… This at least is the hope behind Snapped! , a new exhibition of fashion portraiture at the National Portrait Gallery in London.”

Vintage Biba | Source: Couture Allure

Vintage labels find a new life (FT)
“‘The original Biba [is] very iconic… It changed the face of fashion and people loved it – it was affordable, easy and sexy. The new Biba has been the most successful launch in the House of Fraser’s history – it’s done way, way better than we’d expected.’”

Jimmy Choo to launch men’s shoe collection (Telegraph)
“Launching for the autumn/winter 2011 season, a sneak preview of the collection reveals something for every modern man: from chunky, black leather biker boots (a sell-out success over in the women’s department) to classic, leather loafers and on-trend Chelsea boots.”

ASOS sales growth accelerates (Reuters)
“ASOS, which targets internet-savvy 16 to 34 year old women looking to emulate the designer looks of celebrities like Kate Moss, Sienna Miller and Alexa Chung but at a fraction of the price, said on Wednesday its retail sales rose 59 percent to 100.0 million pounds ($160 million).”

Japanese Department store sales fall 3.1% in 2010 (Japan Times)
“Japan’s department store sales in 2010 declined 3.1% from the previous year on a same-store basis, down for the 14th consecutive year due to weak consumer confidence amid the economic downturn… Sales totaled 6.29 trillion yen, the lowest level since 1982.”

The sartorial geniuses – aged 60-plus (Telegraph)
“From the photographic evidence coming out of Florence and Milan this week, an Italian man only approaches his full power and confidence in dressing in his fifties. At 60-plus, he may qualify as a sartorial genius… completely [outclassing] younger men’s gaucher attempts at fashion.”

Fast Retailing's Tadashi Yanai | Source: Guardian

‘Superficial’ Fashion Leads Uniqlo Billionaire Astray (Bloomberg)
“Tadashi Yanai, Japan’s richest man, used advice from management guru Peter Drucker to build his Uniqlo clothing empire. To pull out of a slump that’s hammered profits and shares, the billionaire is revisiting the lessons.”

J. Crew Board Didn’t Have Many Details Ahead of Bid (WSJ)
“J. Crew’s chief executive Millard “Mickey” Drexler was negotiating a potential sale of the clothing company for nearly seven weeks before he informed the company’s board of his talks, according to the latest company securities filings.”

Jimmy Choo steps back into men’s footwear (LA Times)
“Nine years after exiting the men’s shoe business, Jimmy Choo will be stepping back into the arena, launching a collection of dress shoes, moccasins, casual biker boots, sneakers and evening slippers for fall-winter 2011, the company announced.”

Louis Vuitton Challenges Copycat Bag Imports (Bloomberg)
“[LVMH] filed a U.S. trade complaint seeking to block U.S. imports from China of handbags, luggage and other accessories that copy the Louis Vuitton look. Some Chinese companies are infringing trademarks ‘through a systematic copying of Louis Vuitton product lines’.

Pierre Hardy’s New York (Style.com)
“The New York skyline reconfigured as a glittering pump—that’s what you can expect to find at Pierre Hardy’s new West Village shop, his first in the U.S. and third worldwide.”

Jimmy Choo takes steps to possible IPO (FT)
“The private equity owner of Jimmy Choo plans to appoint investment banks to advise on strategic options for the maker of stilettos for the stars, including a possible initial public offering valuing the company at about £500m.”

Affluent, Generous Young Women Lead Recovery (Marketing Daily)
“When it comes to power-shopping our way toward economic recovery, a new report from American Express says well-heeled young women are leading the charge.”

Should luxury brands use twitter? (Luxury Society)
“Luxury is an intricate web of emotions… can it be captured in 140 characters (and that too with a shortened link of some sort if the company is trying to drive some traffic to a specific webpage or website)?”

Taking a page from Wal-Mart, Holt Renfrew hires greeters (Vancouver Sun)
“The luxury retailer’s new president, Mark Derbyshire, is chagrined at the mention of the company’s reputation for having sales clerks with a chilly attitude that may intimidate potential customers.”

Fashion Week Preview: The Faces (NY Times)
“Now that we’re practically on a first-name basis with Doutzen, Lakshmi and Anja, it’s time we meet Bambi, Fei Fei and Kat. They are some of the new and almost-like-new faces we’ll be seeing next week at the New York fashion shows.”