Hermès scarf for sale on Ebay

EU To Adjust Rules Governing Online Sales (CNN Money)
“The European Commission Tuesday said it plans to adjust the rules governing the rights of retailers to sell their goods on the Internet in an attempt to boost online sales in Europe.”

Coach Drops On Worries About Slowing Comp-Store Sales (WSJ)
“Shares of Coach Inc. fell as much as 7.1% Tuesday after the upscale leather-goods retailer’s fiscal fourth-quarter profit declined 32%, in part on prior-year gains, while sales fell short of analysts’ expectations and margins declined. Though the company’s per-share earnings met consensus estimates, much of the focus turned to the possible slowing of comparable-store sales at outlet stores and the company’s heightened investment in its Fall 2009 “Poppy” collection.”

Cost cuts help Jones Apparel profit beat estimates (Reuters)
“Jones Apparel Group Inc (JNY.N) reported a higher-than-expected second-quarter profit on Wednesday, bolstered by cost cuts and the strong performance of its wholesale jeans business.”

Unmasked: the blogging model who rocked the world of fashion (Guardian)
“An interview with Jenna Sauers, the fashion model who worked anonymously for the feminist website Jezebel.”

Reliability is good for business for fashion retailer sector – CPM (Fibre2Fashion)
“In the light of the current market situation in Eastern Europe, a platform such as Collection Première Moscow (CPM) is more important than ever. The demand for information, especially from the Russian garment retail trade, and the search for practicable ways out of the crisis, are at the forefront of every retailer’s consciousness in these weeks.”

Iconic floral prints, courtesy of Liberty

Liberty appoints advisers to review the business (Drapers)
“Liberty has confirmed it is set to appoint advisers to lead a review of the business, which could lead to a sale of the iconic London department store.”

LVMH, Chanel Force EU to Modify Draft Law on Internet Sales (Bloomberg)
“Luxury goods makers LVMH Moet Hennessy Louis Vuitton SA and Chanel SA may win more control over how Web-based retailers sell their products after a last- minute lobbying campaign over a draft European Union regulation.”

Why your price is right (FT)
Vanessa Friedman explores the “Dutch Auction,”  leaving pricing to the people.

Winning Designs in China: Standing Out to Fit In (Huffington Post)
“The Chinese consumer is becoming increasingly modern and internationalized. However, while “egos” and ambitions are huge, the “new generation” is not becoming “individualistic” in the Western sense – i.e., the peoples never define themselves independent of society.”

China becomes world’s 2nd largest luxury market (People’s Daily Online)
“If you think China is still a developing country, this piece of news is going to surprise you. China has overtaken the US to become the world’s second largest luxury market.”

Outnet homepage, courtesy of Net-a-Porter

Net-a-Porter gives details of discount venture (Drapers)
As revealed in BoF’s exclusive interview with Natalie Massenet in November, Net-a-Porter will launch a discount e-Commerce venture called Outnet.com.

Milan’s Choice: Appeal to Reason or the Gut? (WSJ)
In order to lure customers, designers in Milan employed polarising design strategies.

Mulberry to beat expectations (Drapers)
According to Mulberry, the holiday sales rush will help it beat market expectations.

Luxury Players Battle Changes in Online Rules (WWD)
Changes in European regulation, could dictate how luxury players operate their e-Commerce businesses. (Subscription required)

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.”

Alex Bolen, CEO, Oscar de la Renta

NEW YORK, United States – It’s a new year, but the news hasn’t changed all that much for the luxury business. In fact, as the numbers roll in from the holiday season and for the fourth quarter of 2008, many executives’ worst fears are playing out. It’s a good thing the industry has leaders like Alex Bolen around to keep us all optimistic.

A few seasons ago, I received an invitation to the Oscar de la Renta show in New York. It was a surprise because I hadn’t requested a ticket and I didn’t know anybody at the company. After the show, I met Alex for the first time and learned that he reads The Business of Fashion daily newsletter every morning on his Blackberry, while walking his dog. Invitation explained.

While this was a huge compliment, I am not telling you this to boast. Rather, it demonstrates that Alex is one of those rare executives in fashion who is literally switched on to new technology and new media. Alex recently answered a few questions to give us the latest news from Oscar de la Renta and explain his bullishness about the Internet in our first CEO Talk for 2009.

BoF: How are things going for Oscar de la Renta in this tough economic environment? What is your overall mood about the prospects of fashion and luxury?

Obviously this is a difficult environment for many industries, especially luxury goods and retail. That said, we feel quietly confident that we are well-positioned, and with the right product, to still be successful in this environment. We are still performing well in our own retail stores, and at wholesale, especially relative to many of our peers. There is a general sense that people will buy fewer items of better quality for the foreseeable future. Customers will demand uniqueness and good value, which is not to say inexpensive. We must deliver luxury – great design, the best fabrications and finest make, all at the appropriate price. We think this all suits our business well.

BoF: Your business is predominantly an American one — with significant Wholesale volume — not the easiest place to be right now. When last we spoke, you were contemplating a European retail push to build the Oscar de la Renta business internationally. Where do you stand on this now? What about establishing a presence in emerging markets like China and India which are still growing, or Japan, where Oscar de la Renta has no presence?

It’s no secret that some of our US wholesale partners are currently challenged, but our brand has been one of the few that are actually performing on their floors. Our international wholesale growth has been explosive – we have expanded our international doors from five to seventy five in the last six years. We opened our first international freestanding stores in Athens and Madrid this October, and they are both proving successful, considering the climate. We are also scheduled to open in Moscow in 2009, and we feel confident that we have a strong customer base in all of these markets, based on our demand at wholesale. We are still actively considering real estate opportunities in other European capitals, especially London. That said, we are being cautious about signing long-term lease commitments in this climate. My feeling is that there will be closings in key locations; rents should be dropping. The Middle East, China, India, Turkey and Japan are all still high priorities, and we are actively developing our relationships with the right partners in these markets.

BoF: Retailers are reporting the it is ready-to-wear and apparel that has been hardest hit. Are you doing anything to offset this in other categories?

Ready-to-wear is our core business, but we have not had the same experience as many other brands for precisely this reason. The Oscar de la Renta brand has always been more about quality than seasonal fashion. Nonetheless, we are still growing our accessories business, and developing a strong statement in shoes and hangbags, and that remains a priority for us.

BoF: You recently launched a new website. What roles will ecommerce and web 2.0 play for Oscar de la Renta?

I am a huge believer in the Internet, both in terms of branding and as a commercial vehicle. We have a lot of original content, with Oscar discussing different aspects of the house, and we will continue to add more. We launched the e-commerce site in September and we are now seeing sales, especially since the holiday season started. We have already had one sale over one hundred thousand dollars through our site. As for the interactivity…I think that this is where the real power of the Internet lies. We are looking at ways to incorporate these elements into the current site.

BoF: Finally, how would you describe the relationship you have with Oscar himself? As he is also your father-in-law, does this help or hinder the relationship at work?

This is Oscar’s company, and his name on the door, and he has been very successful for much longer than I have been around. As he is arguably the best designer in the world, I feel that the best thing that I can do for this company is to keep him very excited and interested in coming into the office. As for the personal relationship, I think that Oscar knows that he can really trust me, and that I would never consider anything not in the best interests of the company or himself.

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

Vera Wang for Kohls, courtesy of Kohls

Vera Wang Bows Out of February’s Fashion Week Tent (WSJ)
Vera Wang is the latest designer who has decided to not have a priceyrunway show this upcoming New York fashion week.

Online sales surge 16% in November (Drapers)
Unlike brick and mortar stores, sales activity on e-commerce sites jumped 16% compared to last year in November.

Fashion Guidance for Aging Japanese Lads (Washington Post)
In Japan, there’s OilyBoy, “a slick new magazine designed to excite consumption among “elder boys.”

Santa On Sale: A Holiday Recession (JC Report)
According to the JC Report, most retailers “confirmed that, compared to last year, this holiday season has been predictably slow.”

Holiday Shopping Off to Strong Start (WSJ)
Due to door-buster deals, retail sales on Black Friday were strong, but crowds petered out over the course of the weekend.

As Online Shopping Scales Back, Big Names Will Dominate (Seeking Alpha)
According to a J.P. Morgan survey, “nearly 30 percent of online shoppers say they plan on spending less this year during the holidays than last year.”

Luxury Shame (Newsweek)
In these difficult economic times, conspicuous consumption isn’t en vogue—even for the richest of the rich.

Celebrating Luxury in the Time of Melancholia (New York Times)
Many luxury magazines are trying to figure out how to promote expensive items without seeming “out of touch.”

Black Friday shopping, photo courtesy of the Boston Globe.

For Luxury Brands, Less Money to Spend on Ads (New York Times)
The rapidly plummeting market for luxury goods in the United States (down 20.1% in October according to MasterCard) is having a knock-on effect on advertising spending.

Barney’s Designer Mailer Online Catalogue (Dualité)
Following in the steps of Net-a-Porter, Barney’s “Designer Mailer” signals a continuing trend in “shoppable editorials” online.

Paris’s newest and hippest shopping destination (IHT)
In Paris on Rue Mont Thabor, “a quiet [shopping] revolution has been taking place since the Maria Luisa store, with its raft of artfully selected designers, moved there after 20 years on Cambon.”

Perfumers Make Their Big Holiday Push (WSJ)
Despite fragrances’ slumping sales this year, companies are still launching new scents just in time for the holidays.

Macy’s Said Considering Consolidation (WWD)
Macy’s will consolidate its company from four into two divisions.

Marc Jacobs Holiday Party 2007, photo courtesy of The New York Times and PatrickMcMullan.com

Alexander McQueen to collaborate with Target (Drapers)
Alexander McQueen creates a range for Target geared towards a “slightly older customer.”

Online Retailers: Slower Growth Expected This Holiday Season (WSJ)
Online retailers are resilient when it comes to the economy, but they’re not immune,” according to Scott Silverman, Shop.org’s executive director.

What Moves During An Economic Downturn (JC Report)
“One might assume that demand for timeless basics would be on the rise in such uncertain times, many retailers report that it’s the exact opposite.”

Jean Paul Gaultier Said to Tap New President (WWD)
Veronique Gautier is said to be the new president of Jean Paul Gaultier.

Alexander McQueen, photo courtesy of Alexander McQueen.

One look at the current advertising campaign for Hermès, and it’s clear that India is on the radar screen of Western luxury brands. But this is not a new phenomenon. At the recent Walpole Seminar on China & India, Dr. Amin Jaffer, International Director of Asian Art at Christie’s, described the long relationship that India has had with European luxury brands, dating back to the late 1800’s.

Today, however, things aren’t as straightforward. Other Walpole seminar participants like Mohan Murjani (of the Murjani Group – partners to Jimmy Choo, Gucci and Bottega Veneta in India) also revealed that new luxury entrants in India are up against strong domestic players, labyrinthine bureaucracy, and inconsistent infrastructure. Break-even will take longer than some might have hoped.

On the Internet side, despite the naturally chatty and curious Indian nature, things have also been very slow to develop.  I explored this topic in an article in Luxeletter, an online publication from the Murjani Group, covering the luxury industry in India.

The entire article is republished below.

‘Net’ting gains online

Fashion Industry expert and writer Imran Amed thinks it’s only a matter of time before the Web 2.0 revolution hits luxury in India

After consecutive years of explosive revenue and profit growth, many luxury brands and retailers are beginning to grapple with the consequences of what could prove to be a challenging 2008.

The economies of North America and Western Europe are experiencing varying degrees of softness, and the much-vaunted luxury explosion in Asia, while still promising, will take years to deliver a return on the large investments that have been made, even with astronomical growth rates. Empty luxury shopping malls in China and ongoing structural challenges in a nascent Indian market are proof of this.

Thankfully, there is a bright spot on the horizon that is still undeniably promising for the luxury sector in the West. Just consider these striking facts: The Saks 5th Avenue website is now the second largest contributor to revenues after its iconic New York flagship. Its closest competitor, Neiman Marcus, reported that its online site generated revenues in excess of US $500 million in 2007. European luxury brands from Gucci to Louis Vuitton are also reaping the bonanza of the online luxury frenzy, recognising the luxury consumer’s increasing comfort with and desire to buy goods online.

But in India, luxury e-commerce has yet to take off. For now, Indians seem to value the experience of walking into a bricks-and-mortar store more than the convenience of shopping online. Even if customers wanted to shop online, broadband internet penetration in India remains stubbornly low and unreliable, meaning that it is harder to use bandwidth-intensive shopping experiences that have become standard fare on pioneering luxury e-commerce sites like Net-a-Porter.

The good news for India is that the potential for luxury on the internet is not limited to e-commerce. Today, a luxury brand’s homepage is arguably the single most important point-of-call for consumers looking to learn about a brand’s heritage, products and DNA.

Unfortunately, when consumers turn to many luxury brand websites, they often don’t find anything new and different. Sure, they can find recent ad campaigns (which are already in every magazine), images from the most recent runway shows (which are ubiquitous on the internet anyway), and a video or two (these are few and far between). What consumers really seem to be looking for is an opportunity to engage with the brands and each other.

Let’s talk!

In recent years, a wave of emerging interactive technologies has transformed how people spend their time online. Referred to generally under the umbrella-term Web 2.0, online tools such as blogs, social networks and wikis have marked a shift from an era of one-way ‘read-only’ communication on the internet to one which is characterised by a collaborative dialogue among groups of individuals.

In the luxury space, passionate groups of consumers, in their millions, are talking about luxury brands on blogs and social networks. In France, Café Mode’s independent perspective on the latest runway shows and fashion trends has become so influential that L’Express, a leading daily newspaper, now houses the blog on its own website and pays its blogger a salary. Manolo, an American who writes a popular blog on shoes and celebrity, earns a six-figure salary from his blog and has a column in the Washington Post. Every month, hundreds of thousands of Japanese visit @Cosme, a Japanese consumer review website dedicated to the cosmetic industry. The recommendations are so influential that they can make or break a cosmetics brand in Japan.

Some of the most prolific participants in these communities, said to be about 1 per cent of internet users, may know more about the brands than the brands even know about themselves. As trusted authorities, these experts have the potential to become a brand’s most fervent evangelists — or detractors. What’s more, through the active engagement of these passionate communities, luxury brands can also gain valuable feedback to understand what consumers want and what they expect.

But where is the ‘Blogger’atti?

It’s a mystery to me that India (a country that loves nothing more than to debate and discuss everything) does not yet have an indigenous fashion blogosphere. Indians are notoriously chatty — the Indian blogosphere is already buzzing with technology and Bollywood news. Indians are smart shoppers who like to research before they shop. They actively seek recommendations from friends and family, making word-of-mouth recommendations extremely powerful. Finally, blogs and social networks are not bandwidth-intensive, so are still easy to access even in India’s low bandwidth environment.

Given all of this, it’s only a matter of time before Indians, particularly those of the younger generation, like their luxury compatriots elsewhere in the world, begin to actively turn to the internet to learn more about luxury brands.

The only question is: Who will be the first to answer their questions? The luxury brands, or the bloggers?

Imran Amed is an advisor to the fashion industry and is Editor of The Business of Fashion at www.businessoffashion.net.  Image courtesy of Hermès.