Louis Vuitton store in Chengdu | Source: Forbes

Chasing Luxury Dreams – A Tale from Chengdu (Forbes)
“It’s one thing that the Chinese government spearheads infrastructure projects such as massive railway development; it’s another thing that it promotes luxury consumption. Yes, that is exactly what the government of Chengdu, a second-tier city in south-west China, has proudly done… According to Chengdu Retail Industry Association, Chengdu is home to 80 percent of international luxury brands and ranked third behind Beijing and Shanghai in luxury sales.”

Tory Burch markets minority stake; could be planning IPO (FT)
“Tory Burch, the New York-based apparel company, is selling a minority stake… Chris Burch, company co-founder and ex-husband of its namesake designer, has been shopping part or all of his stake in the New York-based women’s fashion company… The move by Chris Burch, as well as the company’s reported search for a new COO and CFO, will pave the way for the company to IPO in 12-18 months, the two industry bankers said.”

Why the Wealthy Will Stop Spending (WSJ)
“Luxury (at least in the U.S.) is no longer a stable industry. It is increasingly becoming the most manic segment of our consumer economy, as it follows the hyper swings of the stock market rather broader economic growth. The new normal for luxury means there is no more normal. As financial markets, wealth and luxury spending become more intimately linked, luxury will be prone to more sudden spikes and crashes.”

Nordstrom in New York to Use an Alias (NY Times)
“Called Treasure & Bond, the new store will open Friday in SoHo and will be less than a tenth the size of a typical Nordstrom department store. In fact, it is a big experiment that will not even contribute to Nordstrom’s bottom line, as the profits have been committed to charity… Retail analysts said it was sensible for the Seattle-based chain, which for years has been trying to figure out the New York market before formally opening a full-fledged department store.”

Andrej Pejic, the top model who won’t get out of bed for less than $50 a day (Telegraph)
“Willowy, blonde-haired Pejic, 19, was catapulted into modelling high-end women’s fashion by none other than Carine Roitfeld, the revolutionary former editor of Vogue Paris. ‘Put him in Fendi!’ is what Pejic recalls Roitfeld saying unexpectedly on the shoot she was styling for the magazine.”

The Fred Hayman Place sign, Los Angeles | Source: Fred Hayman Archives

Fred Hayman: The man behind Rodeo Drive (LA Times)
“He’s been called the godfather of Rodeo Drive. And it’s not all hyperbole. Before Beverly Hills was the land of designer logos… Hayman was an architect of luxury in Los Angeles, bringing high fashion, a social shopping atmosphere and white glove service to what was still a sleepy main street when he went into retail in 1967.”

Prada IPO five times subscribed (Reuters)
“Italian fashion house Prada, which is seeking to raise up to $2.6 billion through a Hong Kong IPO, has generated five times demand for its offer… The Milan fashion house, known for its leather handbags, brightly-coloured shoes and long boots, launched the retail portion of the IPO on Sunday.”

Tory Burch Awarded $164 Million in Anti-Counterfeiting Suit (Thread NY)
“The company has been ceded control of the fake-product domain names, and given power to disable future websites set up by the offenders… The victory marks a significant step towards combatting the problem of trademark infringement in the fashion industry.”

Philip Treacy on Ascot (WSJ)
“Treacy has been the last word in hat making since graduating from the Royal College of Art in 1990, thanks to initial ‘sponsors’ like the late, great Isabella Blow, Madonna and, more latterly, Lady Gaga. But since the Royal Wedding he says he has been unable to keep up with demand both here and in the U.S.”

Feting an Ending, and a New Start (IHT)
“Why has ‘Saint Martins’ become a by-word for excellence? It is one of many colleges showing in London last week. All have in common the concept of nurturing creativity and individuality to push fashion forward and to allow the students to make work that is a mirror image of an ever-changing world.”

Tory Burch Boutique in Seoul, Korea | Source: Tory Burch

Tory Burch’s Many Second Homes (WSJ)
“Business or pleasure? Both. As her empire grows globally, Tory Burch designs each shop differently, but all are inspired by her own home.”

Black, White and Plaid All Over (NY Times)
“This season has brought plaid of a more restrained stripe just for them: shadow plaids — that is, subtler patterns rendered in blacks, grays and whites. A kind of mash-up of vanguard and rear guard, of Antwerp and Edinburgh, they offer some of the dandyish charm of tartans while paying homage to the black mood that never goes out of fashion.”

Temperley Time (Vogue.co.uk)
“Temperley London is coming back to the capital for February’s London Fashion Week. Launched in 2000, the label went on to show in New York between 2005 and 2008 but returned to London to show the spring/summer 2009 collection.”

Todd Lynn – Dressing the Rock n Roll Elite (Clash Music)
“Todd Lynn has been dressing the rock ‘n’ roll elite for years. Legends of the music world seek creations by the masterful tailor. He has dressed the Stones, Marilyn Manson, Bono and Courtney Love.”

Fashion Triumph: Deflecting the Male Gaze (NY Times)
“Since April, Ms. Medine, 21, has been publishing photos of herself wearing these pieces on her blog, the Man Repeller, as well as shots of similarly challenging recent runway looks: fashions that, though promoted by designers and adored by women, most likely confuse — or worse, repulse — the average straight man.”

Givenchy's Autumn/Winter 2010 Campaign | Source: Givenchy

Tisci’s Trans Europe Express (WWD)
“Givenchy designer Riccardo Tisci has taken the whole idea of ‘coed fashion shoot’ to another level: The designer is using a transexual among the cast for the house’s fall-winter ad campaign.”

Jones Apparel to buy Stuart Weitzman (Reuters)
“Jones Apparel Group Inc. said it will buy designer shoe company Stuart Weitzman Holdings for an initial cash payment of $180 million, in a bid to expand its reach into luxury goods.”

Fast Retailing Shares May Fall After Uniqlo Sales Drop (Bloomberg)
“Fast Retailing Co., Japan’s largest clothing chain operator, may fall in Tokyo trading after the company blamed cold weather for a domestic sales drop at its Uniqlo chain.”

Tory Burch interview: America’s new fashion sweetheart (Telegraph)
“You might not recognise the chic, Hitchcock-esque blonde sitting poker-straight in Claridge’s tea room in London, but to millions of Americans she is a veritable style icon.”

Katie The Genius (Dazed Digital)
“The much lauded London-based menswear designer Katie Eary is now participating in the first ever public fashion funding scheme from Catwalk Genius.”

Tory Burch Sells Minority Stake to Tresalia (WWD)
“Tory Burch has found a new partner. After a yearlong search for additional financing, the designer has sold a minority stake in her more than $200 million firm.” To view the video of Tory Burch’s Spring 2009 presentation click here.

Shiny Media: my thoughts on its demise (Telegraph)
Katie Lee, co-founder of Shiny Media, discusses the rise and fall of the UK’s first blog network.

Born by Ted Baker eyes younger market (Drapers)
“Ted Baker is aiming to take a slice of the younger market with a new directional, lower-priced casualwear sub-brand called Born by Ted Baker.”

Hermès to open 1st Brazil store this year (Reuters)
“Paris-based Hermès will open its store in the upscale Cidade Jardim shopping mall in Sao Paulo by mid-September, Valor said, citing Guillaume de Seynes, deputy managing director at Hermès and a member of the company’s founding family.”

Fashion sales suffer as swine flu rocks consumer confidence (Retail Week)
“Retail like-for-like sales were down 4.1 per cent in the week ending July 19 as swine flu shook consumer confidence.”

Recession, Spend They Must: Luxury Shoppers Anonymous (New York Times)

NEW YORK, United States and LONDON, United Kingdom – Some say that during a downturn, there is a flight to the high-end: buy fewer of the more expensive pieces that will stand the test of time and do away with impulse fashion purchases. There is also a rush to discounters: buy the same quantity of goods, but at lower prices which enables consumers to keep the newness factor, albeit at inferior levels of quality. Therefore, it is said, the middle market suffers.

Whatever is the conventional wisdom, if recent moves by some of the industry’s most successful fashion executives are any indication, there is a significant opportunity to be captured in the middle market, which has lagged in recent years. They are putting their money where their mouths are.

In January of this year, Jane Sheperdson finally announced her next big move after transforming Topshop into one of the world’s most innovative retailers. Sheperdson revealed that she had successfully executed a management buy-in at Whistles, the tired mid-market brand, in cooperation with the beleaguered Baugur Group, Whistles’ major investor.

She told The Times of London of her plans to revitalise the offering. “I think I’m quite representative of a certain sort of woman who is darting round but hasn’t found somewhere that fully satisfies her, she said at the time. “And that’s what I would like to change.”

Along with her management team, some of whom worked with Shepherdson at Topshop, the fashion dynamo now owns a reported 20% of the business, and will share in the upside of the value she creates.

Then, in July, Robert Bensoussan of Jimmy Choo fame (and fortune) unveiled the latest investment by his company Sirius Equity, in L.K. Bennett, another dusty mid-priced label with a significant presence in the U.K. In an email memo announcing the transaction, Bensoussan said “that the business is divided equally between shoes and clothes. We plan to develop the company not only in the UK but internationally.”

Not to be outdone, Tory Burch, the US label with an estimated $200m in sales, was featured in a front-page article in Women’s Wear Daily revealing that Burch is looking for an investor with $300m to take a 30% stake in her business, valuing it at over $1 billion. Though the valuation may sound unreasonable, clearly Burch believes that she has hit on something with huge value and growth potential.

Indeed, many major U.S. and International retailers I have spoken to rave about the brand. Burch’s Reva ballerina shoe, which is manufactured in Brazil, is perennially out of stock and still in huge-demand. And, while the Tory Burch collection tends to be found on the younger-skewing Contemporary departments of many US retailers, it has a slightly older following amongst ‘Soccer Moms’ and career women.

The Tory Burch brand is already far more modern and stylish than what is on offer at LK Bennett or Whistles, but all three brands do have two important things in common. First, they are all targeted at women in their 30′s and 40′s who aren’t slavish to trends. Professional women often complain that they can’t find clothing that is age- and role-appropriate. So much of what is available is targeted to twentysomethings with different lifestyles and body-types.

Second, they are each positioned in the middle-market, offering decent quality at prices that are perceived to deliver honest value. After years of fast-fashion purchases, consumers’ closets are full, and the basic constraint of limited storage real estate means that purchases are being made more carefully. Some women, it seems, have tired of dropping $2000 on a handbag that is dated in a season or two. But, they are also finding that the latest season’s copies from Zara are just not good enough, even if the prices are rock-bottom.

So, with the economic downturn putting a squeeze on spending, the smart money is apparently on a better-quality, mid-priced fashion offering. We’ll see if the strategy works. Those career women may not be pressed for choice for long if Bensoussan, Burch and Shepherdson have anything to say about it.

Tory Burch photo courtesy of W Magazine.

A few weeks ago, Neri Karra, a professor at the London College of Fashion wrote to me to say she had included The Business of Fashion as part of the curriculum and recommended reading for both her Masters and Undergraduate students of fashion business strategy. Not only this, she kindly invited me to give a short talk to her some of her Master’s students, and yesterday, my 30 minute chat turned into a 1.5 hour debate with some very passionate students from around the world, all of whom are interested in the fashion business.  I’d like to thank Neri and her students very much for welcoming me into their classroom and inspiring many so many new ideas for posts here on The Business of Fashion.

One of the topics that came up was about how to choose a target market and ensure that the product for that market meets the customers’ needs — functional needs, emotional needs and budgetary needs. This question came to mind instantly when I came across this article, from The Wall Street Journal’s Teri Agins, on the "Yummy Mummy" market, aka "Soccer Moms".   (Incidentally, the WSJ has been particularly good about engaging with bloggers to propagate its content and have even introduced video with embed codes that bring their written content to life. Well done!)

According to the article, in the US alone there is a market of 40m babyboomer women, many of whom feel underserved by the fashion industry, which has been serving up boring clothes that don’t reflect varied attitudes, tastes, lifestyles, and body-types of this group. The NPD Group estimates that clothing purchases by women over 35 accounted for nearly half of the $102.7 billion in women’s clothing purchases in the US. Clearly, this is not chump change and established retailers and upstart brands alike have been scrambling to fill this market gap.

Bloomingdales has developed a new in-store concept called Quotations targeted at women aged 35-55 who are looking for something that is age-appropriate (i.e. doesn’t look like they are wearing their daughter’s clothes), body-appropriate (i.e. you hear the word "bra-friendly" come up a few times in this video), while still being fashionable and on-trend (i.e. declined from runways in NY, London and Paris). The in-store concept has been rolled out across 20 stores and includes a product offering from more than 30 brands.

However, the article missed out on possibly the most successful entrant into the Soccer Mom market thus far: Tory Burch. In only a few years, the former socialite has built a business estimated at more than $100m in revenues, with freestanding retail shops in New York, Los Angeles, Atlanta, Dallas, Greenwich, South Coast Plaza, East Hampton, Bal Harbour, and Chicago, in addition to prestigious wholesale accounts in the US and abroad.  Burch’s Brazil-made Reva ballerina shoe became a serious it-shoe and flew off the shelves. The evidence was on the feet of about one in every 5 women I saw in on the Upper East Side of NY earlier this year.

With a good product at accessible price points, strong brand buzz (not in the least hurt by her association to cycling heartthrob Lance Armstrong), and a brand ambassador who is a strong, aspirational face for the company, Tory Burch is the one to watch as the fashion market for babyboomer women continues to develop.

After having checked out some of the more up-and-coming areas of L.A, it was time to visit the king and queen of luxury and fashion here: Rodeo Drive and Robertson Boulevard.

The most remarkable thing about both these streets is that the stores really are an extension of the brands themselves. In Paris, London and even New York, most brands are constrained by existing building facades and building codes which they must work around as they design their stores. In Los Angeles, it appears that the brands have complete freedom in design, and therefore, if done well, every aspect from the sparkling exteriors, the natural lighting, the size of logos outside the building, and even the dramatic entrances off the street are messages about the brand. It was truly impressive.

If Abbot Kinney and West 3rd are streets filled with independent boutiques where young contemporary brands get their start, then Robertson is where they go to open their first flagship stores. Tory Burch, American Apparel, Anya Hindmarch, and Nanette Lepore have all opened shop on the street. These stores are mixed in with some of LA’s most famous boutiques (Curve, Kitson, Lisa Kline). Yesterday, in line with the celebrity focus of contemporary brands, a Paris Hilton appearance  at the Kitson store shut down a stretch of Robertson yesterday due to the "lookiloos" who descended to catch a glimpse of the starlet

Nearby on Rodeo, it’s a more distinguished affair (except for the double decker buses using loudspeakers to give highlights to the  throngs of tourists from places as diverse as Italy, Japan, and Kentucky). Many stores go all out in trying to draw in the shoppers.

The Chanel store is a glimmering white beacon of sophistication, complete with huge black Chanel logos and digital screens visible from the outside.

Prada takes a more subtle approach. No branding from the outside, but a dramatic entrance and clear Prada signature attracts those in the know using runway highlights from their most recent collection.

Dior Homme uses a 2 story sized image, screaming the last few strains of Hedi Slimane’s swan song.

And even Club Monaco offers Valet Parking, elevating its service level to compete with the luxury big boys. 

There is also no denying that New Yorkers are stylish, they just tend to be stylish in easily identifiable groups often associated with the areas in which they live and work, ie. Williamsburg hipsters in skinny jeans and hoodies, Wall Street bankers in Brooks Brothers and 5th Avenue ladies who lunch in Chanel. Sure, you could say the same is true for Londoners as there are trends that seem to capture the imagination of Notting Hillbillies, Sloane Rangers and Hoxtonites alike, but somehow these are executed with individual panache that makes the trend their own.

In New York this past week I was staying near 5th Avenue and everywhere I looked – Starbucks, Abercrombie, crossing the street – I saw women wearing the same things:  Goyard bags and Tory Burch ballet shoes. It’s no accident that both of these items are available nearby at 5th Avenue establishment Bergdorf Goodman and trendsetting Barney’s New York, but still the sheer volume of women toting those bags and sporting those shoes was mindboggling.

Goyard is a 150+ year old French luggage company that has captured the interest of 5th Avenue status seekers with its coated canvas bags which, according to people I spoke to, last forever. Tory Burch, a New York socialite whose very successful label does not have the same history as Goyard, has still managed to do the same with her Reva ballet shoe, emblazened with the Tory Burch logo.

The question I have is how smart it is from a business standpoint to allow consumers to buy into a core item like Goyard’s tote as an "it bag". It’s one thing for a Fendi fashion bag to become the season’s "it bag", because those bags are usually only around for a season or two and Fendi has a whole foundation of core bag designs and silhouettes that are available season after season. These bags speak to the history of the brand and are not marketed as being ‘of the moment’. These never go out of style. Once the moment has passed for the Goyard tote, Goyard will have to reinvent its basic bag to compel more people to buy their bags in the future.  It’s much smarter to market a fashion bag as an "it bag", and allow the core items of your collection to act as the solid base from which other more seasonal bags can be developed. Goyard has done this, consciously or unconsciously, the other way around. 

Turns out I wasn’t the first to notice the Goyard trend as Bill Cunningham (aka the original Sartorialist) captured Goyard totes on countless women in his regular On The Street feature for the New York Times entitled "The Trophy" (see above). He also did an article onthe more seasonal Fendi double buckle bags and Chanel carry-alls, underlining how these experts in the fashion game have got the it bag business sorted out.

Goyard street photo courtesy of the New York Times, 10 December 2006.