Savigny Luxury Index January 2012 | Source: Savigny Partners

LONDON, United Kingdom — It’s been a strong start to 2012 for the luxury good sector, as equity markets made significant gains in January.

Big news

• The Savigny Luxury Index (‘SLI’) outperformed the benchmark MSCI World Index (‘MSCI’) by 6 percentage points, gaining 11 percent over the month of January, relative to an increase of close to 5 percent for the MSCI.

• Investors have been exposed to continued good news.  Indeed almost all luxury groups have announced outstanding Christmas trading and 2011 year-end results driven mainly by growth in Asia excluding Japan.

• However, uncertainties have not dissipated.  Although the US market seems much better, Europe remains a concern, with sector sales highly dependent on tourist spending.

… Continue Reading

Joe Fresh Autumn/Winter 2011 | Source: Mens Models Talk

New wave of Canadian fashion brands is looking to build a worldwide presence (FT)
“Canada has many assets – commodities, natural resources, space, poutines – but most people would not count fashion among them… Yes, the Canadians are coming. And no, it’s not all lumberjack shirts and ice hockey jerseys. Their arrival marks a sense of maturity for retailers on both sides of the border.”

France and Italy: ‘Ready-to-War’? (NY Times)
“Against all the odds of the flailing euro, mountains of sovereign and personal debt and a general economic uneasiness, men’s wear is booming. As Ermenegildo Zegna opens the Milan winter 2012 men’s season on Saturday, the company has recorded a 14 percent increase in sales in 2011, pushing total revenues to €1.1 billion, or $1.4 billion.”

Italian Luxury Clothiers Say Euro Crisis Won’t Stop 2012 Growth (Bloomberg)
“Ermenegildo Zegna and Raffaele Caruso are among Italian luxury goods makers that say they are optimistic for 2012 even as Europe’s sovereign-debt crisis weighs on demand in the region and growth slows in Asia.”

Richemont Third-Quarter Sales Rise on Increased Asian Demand (Bloomberg)
“Richemont, the world’s second-largest luxury-goods maker, reported 24 percent growth in third-quarter revenue, boosted by sales of Vacheron Constantin timepieces and Cartier jewelry in Asia. Revenue rose to 2.62 billion euros ($3.31 billion) in the three months through December from 2.12 billion euros a year earlier, the Geneva-based company said today in a statement.”

Prada Displays Its Star Power (IHT)
“It was a red carpet, and it had to be, given the stellar lineup on Prada’s runway Sunday: From Adrien Brody in a rich red coat to Gary Oldman in a spiffy black morning coat, and the rest of a star-studded cast… What the designer seemed to be saying, after her dynamic but simplistic racing car theme for her last women’s collection, was that if men like cars, they like power, with all the trappings of formal tailoring and linear coats even more.”

Savigny Luxury Index November 2011 | Source: Savigny Partners

LONDON, United Kingdom — As the luxury and fashion sector enters the critical holiday shopping period on the back of strong results for the first half of the year, there are growing signs that executives are worried about what the future holds for the luxury market in 2012.

Big news

• This has been another month of record results for the luxury sector, with Hermès, Richemont, Ferragamo, Burberry, Tiffany, Prada and Ports all posting outstanding numbers for their first half or third quarter period.  Buoyant growth in Asia continued to lift sales; Richemont in particular shone with revenues in the region soaring by 60 percent in its first half report.  Growth was also present in mature markets, notably in the USA where Burberry’s first half sales and Tiffany’s third quarter revenues rose by 25 percent and 17 percent respectively.  This was confirmed by recent news of a very strong Thanksgiving weekend, with US retail sales estimated at a record $52.4 billion.

• Yet worries are growing over 2012.  The global markets rebound which took place towards the end of November following news of concerted action to solve the eurozone debt crisis did not happen for the luxury sector, with our Savigny Luxury Index resuming its downward slide.  Some market participants have issued thinly veiled warnings over next year, notably Richemont and Tiffany (see below).  Retailers are keeping inventories low into the end-of-year season; we have heard reports of some of them asking leading fashion brands not to deliver too early, a shocking role-reversal mode.  Industry CEOs are hoping for the best but quietly making contingency plans.  Overall, the SLI has lost 4.9 percent over the month of November, compared to an increase of 1.8 percent in the MSCI general index.

• The long-rumoured acquisition of Italian tailor Brioni by PPR finally crystallised, evidencing the importance of the menswear segment for the sector’s growth expectations, especially in China.

… Continue Reading

Albert Kriemler of Akris | Source: Estilo Moda

The Discreet Charm of Akris (WSJ)
“Perhaps it is Kriemler’s understated, reluctant approach to anything overt or loud—fashionable or otherwise—that attracts women as powerful and talented as Condoleezza Rice, Angelina Jolie, Susan Sarandon and Nicole Kidman to his clothes… Kriemler works extensively with artisans from Akris’s hometown of St. Gallen. The town is renown in the business for its skilled craftsmanship in linen, cotton and embroidered fabrics, and has long been a focus for fashion houses including Chanel, Marc Jacobs and Giorgio Armani. Akris has proper form and heritage, too.”

World’s Biggest Fashion Brands Invest in The Fancy (BetaBeat)
“The Fancy, one of the consumer facing projects under the thingd umbrella, has secured a $10 million round of financing at a valuation north of $100 million. Interestingly, the big bucks don’t come from a typical venture investor, but from a new lead investor PPR, the $16 billion French multi-national run by Francois Henri-Pinault, which owns the globe’s biggest fashion brands… The Fancy is about visual discovery and has become a natural home for fashion brands, which see a high level of engagement from tastemakers around their goods.”

Richemont cautious after H1 beats expectations (Reuters)
“Richemont, the maker of Cartier jewelry and Jaeger-LeCoultre watches, struck a cautious note for the luxury goods industry outlook as growth rates are starting to ease from the strong performance seen in its first half. Between April and September, sales at the world’s second biggest luxury goods group jumped 36 percent at constant exchange rates and October sales were up 26 percent, in a sign consumers could be turning more hesitant about treating themselves to pricey timepieces.”

Nordstrom full year profit outlook below St view (Reuters)
“Upscale department store operator Nordstrom Inc did not raise the upper end of its full year profit forecast even as it reported a jump in sales and profit in the third quarter, and its shares fell more than 3 percent… The department store chain said it now expects fiscal 2011 sales at stores open at least one year to rise about 6 percent, up from an earlier range of 4 to 6 percent.”

Versace: What’s the bright idea? (Independent)
“‘Iconic pieces for young people – the essence of Versace’ is how Donatella Versace describes her collection for H&M… H&M’s link-ups with some of fashion’s biggest names began in a blaze of publicity in 2004 with Karl Lagerfeld – and that sold out in a matter of hours. Its creator – who starred in the accompanying advertising campaign – has since said the experience was responsible for making him a household name.”

World Trade Centre Memorial | Source: The Harrow Group

Fashion Week, 10 Years Later: A Bond Forged in Tragedy (NY Times)
“It is but a small footnote to history that the 9/11 terrorist attacks happened on what was to have been the fourth day of New York Fashion Week for the spring 2002 season… In the days that followed, many designers, as they struggled to make sense of their world and resume the daily business of fashion, arranged simple presentations… But for the younger designers… There was no viable way to show their collections to the buyers or press.”

Richemont Five-Month Sales Rise on Increased Demand in Asia (Bloomberg)
“Richemont, the second-biggest luxury-goods company, reported sales that beat analysts’ estimates as Asian consumers bought more Vacheron Constantin timepieces and Cartier jewelry. Revenue rose 29 percent in the five months through August from the year-earlier period, the Geneva-based company said… Sales rose 46 percent in the Asia Pacific region, where growing numbers of millionaires are fueling demand for high-end goods.”

Fashion Week’s Impact, by the Numbers (On The Runway)
“Since Fashion Week moved from Bryant Park to Lincoln Center a year ago, a lot of people (designers, journalists, locals) have debated the impact of relocating such an enormous media event. While the move has drawn significant complaints from area residents about the noise and pollution caused by the portable generators that power the tents, a new study released… Noted that the shows have had a positive impact in at least one regard, the local economy.”