China’s retail up, Li & Fung buys Amies, Boutiques squeezed, Fashion & Social networks

China Retail Sales Rise 22%, Help to Counter Slowdown (Bloomberg) Despite the global economic slowdown, China's retail sales are up 22% in October. Hardy Amies bought by Li & Fung (Drapers) Fung Capital Europe, the investment arm of Li & Fung, has bought Hardy Amies. Boutiques Get Squeezed (WSJ) Independent boutiques "are among the retail industry's hardest hit" in this economic crisis. Fashion’s New Circuit: Social Networks (WWD) European luxury goods firms are using online marketing to "entice a new breed of customer, better leverage their ad budgets and ultimately sell more products." A couple shopping in Shanghai, photo courtesy of Bloomberg.

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Luxury Outlook | Finding meaning in design

Back in September, The Business of Fashion caught up with noted futurist Faith Popcorn to talk to her about "recession culture," and how this changes the way consumers scrutinise spending decisions. It seems like a quaint discussion now (because of my questions, not Ms. Popcorn's answers) because our interview took place back when consumers in the U.S. were still spending. Boy have things changed since then. By the middle of October, Eric Wilson of the New York Times reported of worried U.S. consumers walking into department stores and retailers, shopping bags in hand, returning entire bags of merchandise which had been previously purchased. What's more, he went on to report of dramatic drops in sales at major luxury departments stores…

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Luxury Outlook | “You’ve been shopping, we won’t tell”

LONDON, United Kingdom - In the latest sign of just how quickly consumer psychology is changing, Net-a-Porter yesterday sent an email blast to its huge customer database, offering a "discreet packaging service" to offset the conspicuousness and potential guilt associated with shopping in this, the most severe economic crisis in at least a generation. Whereas previously the direct marketing email from the world's pre-eminent online luxury fashion retailer would have been accompanied by a strong, aspirational fashion image, the latest email features whispering women in a 1950's era photograph. The ad, while cleverly recalling the current fashion revival of the one-piece dress, focuses its message instead on the opportunity to continue to shop "and receive items in an unbranded recycled brown…

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Luxury Outlook | Grim and grimmer

LONDON, United Kingdom - In recent conversations with global luxury business leaders and American fashion entrepreneurs, young designer brands and fashion executives in the UK's high-street behemoths, the mood has been decidedly downbeat, with rapidly decreasing sales leading to increasingly desperate sale signs. Hiring freezes and spending cutbacks are in place almost across the board.  Emerging fashion businesses I have spoken to are reporting significant decreases in orders for Spring/Summer 2009. Orders are being cut back or canceled altogether and there are reports of fabric mills in Italy and manufacturers in China facing dire straits as the brakes are put on consumer spending around the world.  The sudden freeze in spending is a reaction to dramatic drops in the value…

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Luxury Outlook 2008 | How much padding does that luxury cushion have?

LONDON, United Kingdom - Conventional wisdom is that the luxury sector is cushioned from the ups and downs of the overall economy because its customers are amongst the "happy few" who aren't affected by such trivial matters as making mortgage payments and paying off credit card bills in the midst of a darkening macro-economic environment. But exactly how much padding does that luxury cushion have? According to Luca Solca of BernsteinResearch, not a lot. In his report "PPR: Worsening Macroeconomic Outlook points to slower Luxury Market Growth in 2008," published today, Solca asserts that there is a strong correlation  between the general economy and the luxury sector (R-squared = 66%). Therefore, any problems in the general economy are certain to spill…

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