Savigny Luxury Index December 2011 | Source: Savigny Partners

LONDON, United Kingdom — While the luxury industry entered 2012 with an overall outlook that remain uncertain, the sector remained resilient.

Big news

• The Savigny Luxury Index (SLI) lost 2.6 percent in December, whilst the general market index MSCI gained 3 percent over the period.  The cause for this divergence was a temporary sell-off in luxury stocks in mid-December.  Two factors contributed to this: the Italian sovereign debt crisis prompting an exodus from Italy-based stocks and the finalisation of Hermès’ defensive structure, which sent its share price down 7 percent in the days following the announcement.

• Despite treacherous capital market conditions, Michael Kors’ listing in New York on 15^th December was a resounding success.  Kors sold more shares than expected, achieving a valuation of close to $4 billion, or 3.8x LTM sales.  Shares jumped 25 percent on their debut and have since climbed a further 8 percent.

• In contrast, the listing of Chinese jeweller Chow Tai Fook in Hong Kong on 9^th December was received with lukewarm interest, which may be attributable to high valuation expectations.

• A Swiss court ruled that Swatch Group can cut down deliveries of watch parts to third parties from next year.  This will create supply issues for a number of watch brands and has already prompted luxury groups such as PPR and LVMH to snap up small watch component manufacturers.

Michael Kors | Source: Wall Street Journal

Kors IPO sets US fashion record (FT)
“Michael Kors, an upmarket fashion and accessories brand, has launched the biggest-ever public offering in US fashion, selling more shares than expected in a deal that will value the company at nearly $4bn… The deal was heavily oversubscribed and priced at $20 a share, above the projected range of $17 to $19. Investors in the company sold 47.2m shares, more than the 41m initially offered and raising $944m. The sale valued the company at $3.8bn.”

Hermès family finalises holding to prevent takeover (Reuters)
“The family owners of Hermès said on Wednesday that they had finalised the creation of a holding company with 50.2 percent of the share capital to protect the luxury house from hostile takeover. The creation of the holding, dubbed H51, has been in the works since last autumn when fashion giant LVMH revealed that it had secretly built up a 17 percent stake in Hermès.”

For Fashion Start-Ups, a Bridge to Investors (NY Times)
“Fashion is fickle, making it harder for start-ups to raise capital. But FashInvest, created by David J. Freschman and Karen Griffith Gryga, venture capitalists, is a platform that acts as a kind of matchmaker between seedling fashion companies and investors.”

5 Top Retail Success Stories for 2011 (Forbes)
“Sustainable, savvy, and stylish could best describe the business moves made by certain retailers now winding down the year in stellar fashion.”

Insiders | Susannah Frankel (AnOther)
“Ever since documenting the seminal Fashion-able? shoot by Nick Knight and her close friend, the late Alexander ‘Lee’ McQueen for Dazed’s 1998 issue; Susannah Frankel has forged an ongoing collaboration with Dazed and Confused which led to being appointed as Fashion Features Director of AnOther when it launched in 2000.”

Hermès Store | Source: GQ

Hermès and the secret of luxe appeal (GQ)
“Hermès is a phenomenon: probably the most successful, perhaps the most creative, certainly the most respected and one of the most profitable luxury-goods companies of all time. After a brief blip from 2009-10, the tur­bulent economic times seem to have, if any­thing, accelerated its success.

Putting a Price on Michael Kors (NY Times)
“The fashion designer Michael Kors is seeking a luxury price tag on his stock. His company’s initial public offering, expected this week, would value it at up to $3.6 billion. The metrics are in line with Prada, which listed earlier this year. But Michael Kors Holdings may struggle to sustain the growth needed to stay in style with investors.”

“Tweeting Without Fear (WSJ)
“By now, even the stodgiest companies have found their way onto Twitter. They have discovered it isn’t just another marketing channel with a funny name, it’s more like a conversation they need to join or risk losing influence over how consumers view them or their brands… But there’s a flip side… Ill-considered tweets or hacked Twitter accounts have caused plenty of embarrassment.”

What the Internship Bust Means (Elle UK)
“Her Majesty’s Revenue & Customs has warned London Fashion Week designers that failure to pay interns the national minimum wage could lead to prosecution… Interns are the engines that drive the fashion industry. The framework is so prevalent that most designers, public relations executives, editors and stylists in staff jobs today completed internships at the beginnings of their careers.”

Q&A With Rupert Sanderson (WWD)
“Rupert Sanderson never planned to be a footwear designer. It was only after an ill-fated career in advertising that he decided to pursue the career. But 10 years after launching his eponymous line, he is now firmly planted in the shoe industry. Not only has he established a high-end label, but Sanderson has built a vertical business as well.”

Michael Kors | Source: Life

Michael Kors Seeks to Raise $792.3 Million in U.S. IPO (Bloomberg)
“Michael Kors Holdings Ltd., the luxury-clothing company, is seeking to raise as much as $792.3 million in a U.S. initial public offering as the company’s founder and the biggest investor trim their stakes… Michael Kors, the designer who founded the company in 1981, is planning to cut his stake as retailers of luxury goods outperform mid-priced department stores and discounters this year.”

Gucci sales not slowing yet, has plan B ready (Reuters)
“Luxury brand Gucci has not seen any impact on its business from global economic woes but it would be prepared to react quickly and cut costs if sales slowed, its chief executive said in a newspaper interview. Patrizio di Marco told Le Figaro that Gucci, part of French luxury and retail group PPR, had a ‘Plan B’ that could see it delaying store improvement work while sticking to its store opening programme.”

U.S. retailers tailor fashions to Asian tastes (LA Times)
“As the U.S. market continues to sputter and China’s continues to boom, U.S. retailers are updating business plans to include the world’s second-largest economy as well as the rest of growing Asia. Just as Louis Vuitton, Gucci and Apple have erected temples of capitalism in cities such as Shanghai and Beijing, Western apparel makers are infusing their clothing lines with Asian sensibilities in look, feel and size.”

Future Classic (WSJ)
“At the house of Roger Vivier, the buckle reigns supreme… The buckle, which has adorned Vivier shoes and handbags for more than four decades, is a signature that you recognize without realizing that you have… But Bruno Frisoni, the dashing, bespectacled and asparagus-slim Frenchman who is artistic director of the label, has quietly been masterminding another house signature: the Prismick.”

A glint in his tie (FT)
“‘Clothes maketh the man,’ goes the cliché: but what exactly do they maketh of him? What, for example, to make of the landslide of lads in spangly sweaters at the autumn/winter Prada show?… For many men the latter might seem the most likely answer, except for the fact that those metallic sweaters are currently hitting shop floors and selling out.”

Michael Kors by Mikael Jansson | Source: Interview

Michael Kors By Lauren Hutton (Interview)
“It’s hard to pinpoint when Michael Kors first became a fashion designer. It might have been the moment when Dawn Mello, then-fashion director at Bergdorf Goodman, stopped by Lothar’s, the boutique on 57th Street where Kors was working as salesman/window dresser/in-house designer after dropping out of the FIT, and told him that if he ever went out on his own, she’d love to take a look at his collection.”

Valentino Boost (Vogue UK)
“Valentino has reported a revenue boost of 24 per cent in the past six months, helping it to return to the black. The Italian label posted first half net profits of €2.6 million euros (£2.28 million), compared with a loss of €7.4 million (£6.50 million) during the same period the year before.”

J.Crew settles investor lawsuits for $16 million (Reuters)
“Investors agreed to a $16 million settlement of lawsuits stemming from the buyout of clothing retailer J.Crew Group Inc by two private equity groups, according to an investor attorney. The settlement is based on an earlier $10 million agreement that collapsed in January, according to Stuart Grant of Grant & Eisenhofer PA, which represents shareholders.

Fashion’s Great Confusion (WSJ)
“If looking fashionable is your goal, you can’t go far wrong this season, even if you don’t give a fig for sartorialism. Why? Well, fashion—the designers, manufacturers, marketers and retailers of clothes, and the stylists, editors, commentators and photographers who bring it all to you—don’t seem to have a clue as to what’s going on. There’s a schizophrenic element to this season’s looks and collections.”

Helmut Lang to Put on Its First Fashion Show Since 2005 (The Cut)
“Nicole and Michael Colovos started as creative directors of Helmut Lang in 2006 after Theory bought the label from Prada, but they never put on a fashion show. This spring they’ll do their first one for the label at New York Fashion Week.”