Luxe Ad sales down, Barney’s mailer, Paris shopping, Perfumers, Macy’s consolidation

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…

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Luxury Outlook | Innovation engine

  As the big three U.S. automakers await to hear their fate on a requested bailout from the U.S. government and Citigroup teeters on the verge of bankruptcy, it now seems that the fall of Lehman Brothers, Bear Stearns and other corporate casualities was just the beginning of what is likely to be a global economic meltdown of epic proportions. With this as the backdrop, a reader recently wrote in to ask about the prospects for aspiring job seekers in the fashion industry more generally. Others have been wondering how some of the emerging businesses that have come to the fore in recent years are faring. The short answer to both questions is that things are extremely tough out there,…

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Recession dressing, High-low retail unions, Upmarket retail takes over, Luxury prices go down

Recession Dressing (Newsweek) In these troubled economic times, people may dress according to who they really are rather than who they want to be. Analysis: What's in a name? (Drapers) Collaborations between designer brands and celebrities with high-street labels are still generating profits. Middle market loses out to niche players (Drapers) Upmarket retailers are taking up more share of the overall womenswear market from the middle market stores. In Rare Move, Luxury-Goods Makers Trim Their Prices in U.S. (WSJ) In this tough economic environment, "luxury companies from Chanel S.A. to Versace SpA, Christian Louboutin and Chloé are reversing the industry's maxim that luxury prices only move up." Diane Pernet, photo by Miguel Villalobos, courtesy of Diane Pernet.

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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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