The Private Traveller - Luxury in a Minute

Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic management firm specialising in luxury brands and services. With a firm foundation of over 20 years of experience with some of the world’s most luxurious brands, Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces, and specialised services. Her advice is firmly based in objectivity and ultimately, accountability. Prior to founding MO Luxury, Melinda enjoyed a varied corporate career, most recently as Country Manager of Prada Australia and New Zealand and General Manager, Chanel Australia and New Zealand for the Fashion, Fine Jewellery & Watch Division. She has also worked for Yves Saint Laurent across the fashion and beauty businesses.

eBay Counterfeiting Conviction... Too Soft? 06/09

We have been very vocal about our objection to counterfeiting lately, here at the MO Down. This week, a Paris court has drastically reduced damages demanded from eBay, following a suit from LVMH for selling fake goods. The original conviction of ?38m ($53.4m AUD) was reduced to ?5.7m (approx $8m AUD), and we aren't really sure what to make of this. Both sides have claimed victory. Excuse us?
The real issue here cannot be expressed in dollars or euro. eBay have had its wrist slapped, and LVMH is pleased to have a precedent. But will this stop counterfeit products being sold online in the future? Is it enough? We worry that the crime of counterfeiting is not being taken seriously. Sure, fashion knock-offs might not be a crime priority in the realm of drug trafficking and credit card fraud, but they are a breach of intellectual property in the same league as plagiarism and film piracy. The future of the innovation and investment in quality that these brands represent is contingent on their ability to uphold their high standards. These standards falter in the hands of counterfeiters who peddle mediocre products under their names.
LVMH contended that it was hurt by the sale of fake products on its site. Lost revenue is only the half of it. The real damage is to brand identity. No matter what, there is always someone who argues for fakes, claiming they raise brand awareness. We beg to differ? see Fake Goods Are Fine? Not from last week! Luxury companies spend millions of dollars each year to provide an exclusive service to a specific market. Anything less is directly opposed to the interests of their brand awareness. Fakes are not fine!

Jimmy Choo To Make An Initial Public Offering 3/9

And its looking at being valued at around ?500m (approx. $847m AUD). Not that we really needed any proof that women are obsessed with shoes. Goldman Sachs and Morgan Stanley are to become advisers for Jimmy Choo, which was bought for ?180m ($305m AUD) in 2007 by Towerbrook Capital. Sold by Choo for ?18m ($30.5m AUD) in 2001, and later to Lion Capital for ?101m ($171m AUD), sales have grown 30 per cent per annum on average since. Not too shabby in just 6 years! If the demand for sky-high stilettos was ever in doubt, let the figures speak for themselves.
Originally shoes, though certainly not just any shoes, the company has since diversified into leather goods, frangrances, handbags and sunglasses. Last November, it forged a partnership with H&M to reach a wider audience- see Lanvin. With more than 110 stores in 32 countries, including recent openings in Singapore, Dubai, Sydney and Macao, CEO Tamara Mellon has certainly brought the brand a long way from its humble origins. She currently maintains an 18 per cent share in the company.
With Towerbrook evidently looking at options for an IPO, one can only assume they have been encouraged by recent successful flotations, including a sale for over ?458m ($776m AUD) by French cosmetics brand L?Occitane in Hong Kong. In reality, the IPO or Sale would not occur until next year. Other options include keeping the company, and investing in more stores- particularly in the fast-growing Asian market.

Lanvin Confirms Holiday Collection With H&M 3/9

Will the real collaborator please stand up. Yesterday, we were certain that Bottega Veneta was going to partner with H&M? we were wrong! It seems this was just a rumor, and Lanvin is in fact the actual H&M collaborator. Joining the likes of Karl Lagerfeld, Stella McCartney and Comme des Garcons, we can?t wait to see how Lanvin infuses H&M with its unique style.
Designed by Lanvin?s artistic director Alber Elbaz and menswear designer Lucas Ossendrijver, the collections (both men?s and women?s) will become available in over 200 retail stores worldwide on November 23- though eager shoppers will be able to view the collections online from November 2. If there haven?t been enough surprises already, the online revelation will take the form of a film, produced especially for the occasion. H&M have been very secretive about the whole affair, and have teased followers with cryptic clips for the past few days? we impatiently await the feature!

Corporate Social Responsibility 02/09

As the MO Down has already touched on in the past few weeks, China is set to become the world?s largest consumer of luxury goods by the year 2015. As far as the Chinese market is concerned, brands may be forced to, quite literally, help people eat, or be eaten.
Luxury brands will need to compete to assert themselves in this increasingly lucrative market, and it will be interesting to see how they realise the image potential that lies in their CSR. Personal philanthropy is all the rage for the Chinese elite at the moment, and consumers are becoming increasingly aware of corporate generosity- or lack thereof.
A survey of 1100 shoppers in China, Hong Kong and Taiwan, conducted by Albatross Global Solutions and Ruder Finn Asia, found that CSR would influence brand loyalty in 2/3 cases. This seems a golden opportunity for brands to capitalise on doing good. The ?nouveau riche? of China are indulging in luxury brands and flaunting their status to distinguish themselves, but are likewise under enormous social pressure to be charitable. As luxury, status and charity become inextricably linked in China, luxury brands will be scrutinised, and perhaps crazy, for not following suit.
Several luxury brands have already showed initiative- Bulgari released a ?save the children? charity ring, and Gucci have switched to environmentally friendly packaging. See It seems that the title of most charitable luxury brand may become a coveted one- May the best man win!

Bottega Veneta Collaboration With H&M? 02/09

It?s always exciting to see a collaboration between luxury and mainstream fashion, and the latest relationship to form in the industry is between Bottega Veneta and retail giant H&M.
Whilst the duo forming together is still being kept secretive, H&M released a video a few days ago that caused a stir and alluded to the collaboration with Bottega Veneta. The blog world has been in overdrive as readers picked at the clues from the short video clip. The main clue being that a shadow cast figure in the video seems to be Tomas Maier, Bottega Veneta?s creative director.
The video ends with a date that we all wait for- September 9th. The day when the luxury face behind this new duo is revealed.

Hermes Net Income Increases 55 Percent 02/09

It?s been a positive week for luxury brand Hermes, as net income increased 55 percent for their first half, with net income rising to $246 million.
Earlier this week HSBC rose their global growth forecast for the sector to 11 percent from 10 percent. Analyst Antoine Belge commented on the roaring nature of Asia in the luxury sector, ?luxury companies are still spending cautiously, the China theme is positive for margins and the euro weakness is a poster.? The strongest growth for Hermes currently is in Asia and the US (with the US up 26% at the end of June.)
For Hermes the sky is the limit as shares have risen in the company roughly 52 percent, with sales estimated to increase by as much as 12% this year. With the rapid improved demand coming from the luxury Chinese shopper, Hermes look set to soar even further.

Bulgari SpA Is Expected To Shine 01/09

Bulgari SpA CEO Francesco Trapani has stated this week to the Wall Street Journal, of his confidence that the company can see an ?aggressive rise? for this year. Last month, Bulgari?s second quarter net profit was reported at 600,000 euros ($763,300), and the company are expecting this to improve, alongside an increase in dividend.
Trapani expressed his confidence in the company?s future, yet also reminded us that Bulgari is not for sale- as companies like Switzerland Swatch have been interested in the purchase. While we wait, the result is sure to speak for itself!

Fake Goods Are Fine...Not 31/08

According to a new European Union-funded report "buying designer goods can benefit consumers and the companies whose brands are being ripped off." This has definitely got us on our hand tooled soap box. "Professor David Wall, who co-authored the report and advises the government on crime, said the real cost to the industry from counterfeiting could be one-fifth of previously calculated figures." "It's probably even less," he said. "There is also evidence that it actually helps the brands, by quickening the fashion cycle and raising brand awareness." Right, we?d like to know which brands he is talking about here. What kind of brand awareness are we raising from products that are in colours the designers never developed, with pure finishes and not in the same raw materials. This ?awareness? is simply impure and incorrect.
Although we agree law enforcement has its hands full, we also believe time should be spent on counterfeiting and 'fake' anything should not be encouraged. In our book, to not take seriously a very large part of the counterfeit trade which is clothing and accessories manufacturing is sending a huge nod of encouragement to all of those operators manufacturing counterfeit goods to say it is OK. In essence the general take out of this appears to be irresponsible and will serve to only further damage the luxury industry and encourage the counterfeiters.
It is a truism that the majority of people who purchase 'fakes' would not be able to purchase the real thing anyway, and the old adage "to be copied is the highest form of flattery", the cost to luxury brands more than anything is the erosion of their brand value. What this report seems to forget is that luxury products are rare, exclusive and unique due to their raw materials and often bespoke manufacturing methods, whereby the process is expensive and therefore only available to a specific target market. Luxury companies spend millions of dollars each year, out of their own respective monogrammed billfolds, to tackle these issues head on.
As reported in The MO Down earlier, Fakes Goods Can Equal Fake People do we really want to encourage a growing rate of fake folk? We really don't think so. Whilst in the UK there is a crack down on people who trade fake goods, the government have turned against criminalizing those who buy into the trade- when and where can we expect a steady level of action?
Here is some food for thought: Did you know that annual sales of counterfeit goods total an estimate US$600billion worldwide, almost 7% of global trade? Whilst these figures include industries other than luxury goods, one can see the 'fake' business is incredibly lucrative. As we've said before and we would like our readers assistance with in this quest, to educate, friends, family and foes that Fakes really are for Frauds!

Gucci Launches Online Shopping Experience 31/08

Luxury brands are paving the way of the future, with the launch this week of Gucci?s new digital online space. The site was under 18 months of direction before launch and it was well worth the wait. The site integrates rich content, social media platforms and a unique shopping experience, (not to mention the experience of travelling through a real life Gucci store and exclusive online accessories collection.)
Luxury fashion brands are constantly updating their methods of sale and performance, as we saw earlier this year with Burberry (and also Armani) live streaming their runway shows for loyal followers. Burberry also launched their unique online interactive collection under the creative direction of Christopher Bailey.

Tiffany & Co Second Quarter Results 30/08

Last week we brought you Tiffany & Co?s debut handbag collection launch, but the news this week focuses on the brands second quarter results. Although economic analysts forecast the results high, the company fell just shy of expectations. However, Tiffany & Co brought positive news that revenue rose to $668.8 million in the quarter which ended on July 31st (analyst forecasts were set at $690.8 million on average.)
In addition, net income ?rose 19 percent to $67.7 million, or 53 cents a share?, as Tiffany fell $1.33 or 3.2 percent to $40.71 at close of business on 28th August, in the New York Stock Exchange. It?s clear that the Americas are dragging down the net for the company overall with as they make up ?more than half of the total at Tiffany?s, which operates more than 220 stores worldwide. In Asia however, there was a 21% increase which resulted in a staggering 19% profit gain.
However, we have faith that the new debut handbag collection should strengthen the next quarter, given it's a new product injection and curiosity amid the publicity should certainly account for some strong sales.

L'Oreal Sky High Results 30/08

For leading cosmetic company L?Oreal, share results are looking largely positive as first half operating profit have beaten the estimations of analysts. Stock ?climbed 2.92 euros, or 3.9 percent, to close at 78.69 euros, after earlier surging as much as 10 percent?, with a 21 percent to 1.67 billion euros ($2.12 billion) rise in profit.
The great results stem from L?Oreal focusing on higher gross margin luxury beauty and fragrance items, such as the Giorgio Armani, Ralph Lauren and Viktor and Rolf products.

Tiffany & Co Handbag Collection Launches 27/08

It?s the moment Tiffany & Co lovers have all been waiting for- the launch of their debut handbag line. We previously brought you pre-launch info on the exclusive line, and now the designs are out on the market for all to see. Although ?roughly 90% of the luxury chain's sales remain in jewellery?, the new handbag collection features a range of stylish designs starting at $395 and leading up to a luxury large crocodile skin handbag (priced at $17,500)
Whilst Tiffany & Co?s signature jewellery designs range from entry price point of $200 for sterling silver to an average bridal piece of $3,300, the handbags seem well priced and in line with the pricing strategy of the brand for existing products.
With the market showing grand signs of renewed retail life after the recession, we think the Tiffany & Co handbag line will prove popular, and we have to say they look pretty fabulous! We have our eye on the Manhattan satchel in violet glazed crocodile (with Tiffany blue accents on the hardware of course) but aahh that would be one of the more expensive!
We look forward to seeing the new designs in Australia and we are happy to offer assistance in removing some of that table ware in order to display this cleverly put together and 'in and on themed Tiffany range' by designers, Richard Lambertson and John Truex.

Former Prada Manager Battles The Brand 27/08

The tennis match between Prada and former employee Rina Bovrisse in Japan goes for another round this week. Prada Japan will be launching ?a countersuit claiming defamation against a former employee who is suing the company for alleged sexual harassment and unfair dismissal.? We covered the allegations from Bovrisse earlier this year and Prada Japan are now demanding that the former store manager pay 33 million yen ($390,000 dollars) for their troubles. It's a David and Goliath situation really and we look forward to hearing how the law decides to judge this case.

Fashion's Night Out Branches Over The World 26/08

Fashion?s Night Out is always a grand affair, with some of the world?s leading luxury brands bringing their latest X factor to the world. This year FNO will expand over a number of the world?s fashion capitals including New York, Milan, London, Paris and Sydney. Kicking off in Paris on Sept 7, labels including Louis Vuitton and Chanel will provide entertainment for guests, with Louis Vuitton providing a unique photo studio where guests can be featured on mock covers of French Vogue.
The following day will see FNO venture to London, where cocktails may be sipped at the Emporio Armani store on New Bond Street alongside fashion royalty like British Vogue editor, Alexandra Shulman. Over at Burberry, live entertainment will be shown via an acoustic set (with the artist yet to be confirmed.)
In Milan on September 9th, the new Bulgari fragrance will be launched and Bally will host a cocktail party. Yet the highlight for us occurs on the same day in Sydney, where Kirstie Clements, Vogue?s editor in Chief and Lord Mayor Clover Moore will launch Sydney?s own Fashion?s Night Out, including a large array of luxury labels. Covering a huge 448 retailers, FNO will highlight unique activities including Vogue editor tips and limited edition products with brands including Louis Vuitton, Prada, Chanel and Burberry.
The MO Down's insider knowledge has it on very good authority that some of the participating luxury brands will really be putting on a very fine treat for customers. It's a great initiative and the first for Sydney, so this is the time for consumers that may feel a tad shy about working into a luxury brand, to take up the challenge and drop in to see what's on offer on the 9th September. Remember, luxury is about the product as much as it is about the experience!

Barney's Welcomes New CEO Mark Lee 25/08

Luxury department store Barney?s, are welcoming a new and treasured member to their team this week, with Mark Lee stepping up to CEO. The company have been on the hunt for the perfect candidate for two years, and Lee?s prestigious and accomplished background at Gucci makes him ideal for the job at hand.
After leaving Gucci, Lee kept a low profile, which had us questioning just where he was. But the new fit between Barney?s and Lee seems like the perfect match, with Lee stating of the new move ?I am confident that together with the strong Barneys team we can take the company to even greater prominence.?
Whilst his confidence levels are high, Lee has a difficult task ahead of him, with Standard & Poor?s stating of the current environment of Barneys ?although performance has improved recently, we remain concerned that New York-based Barneys New York Inc.'s capital structure is unsustainable?. S&P analyst David Kuntz, also reaffirmed that having Lee in this powerful position is without doubt better than having no one, but also added that for the company to rectify its current economic position ?it doesn't move the needle very much.? We will wait and see?

Earn Your Stripes In Luxury 25/08

So, you want to know all there is to know about luxury but don?t know where to learn? Well, here is your chance?Monaco anyone? The International University of Monaco is now offering an MLUX ? a Master?s Degree in Luxury, and this isn?t just any other course. Students will have the opportunity to learn from the best including Gucci, Ralph Lauren and Salvatore Ferragamo.
Given the growth of the luxury sector in traditional markets and the incredibly voracious appetite from the emerging market, a Masters Degree in Luxury comes after the success of the MBA in International Luxury Brand Manager from ESSEC in France. There are nuances indeed in the luxury business and a greater depth of knowledge in the specifics will ensure greater custodians of these brands in the future.

Dolce & Gabbana And Selfridges Split 24/08

It?s the age old rule of location, location, location this week, as Dolce & Gabbana have moved shop, and removed their diffusion line D&G from UK department store Selfridges. Location applies to any retailer, but most importantly for luxury and premium brands, who will scour cities and department stores for the ?right? location and the ?right? neighbours. The move for Dolce & Gabbana comes after reports that the company was unhappy with the move of location for two of their collections.
It just goes to show that in department stores whether you are a luxury beauty brand (where you would ideally be located on the central ground floor) or a premium brand, you still need to work the location to ensure maximum line of sight for consumers. Although it?s quite obvious Selfridges and D&G didn?t see eye to eye, this move could also be due to the recent sell-throughs from the recession, which has seen many consumers avoiding vibrant and obvious branding. Could consumers be taking the route of Jil Sander and Giorgio Armani and not the vibrancy of the flamboyant Italian duo?

Is Bulgari's Stock of Timepieces The Issue? 23/8

Why is it that Bulgari Spa's stock prices (the owner of Bulgari the Roman jewellery company established in 1884) not in line with most of the other luxury goods conglomerates such as LVMH Group, PPR SA, Richemont and Prada and Hermes? Bulgari, the world?s third-largest jeweller, fell 2.6 percent to 5.72 euros, the stock?s lowest price in almost three months. According to a Bloomberg.com article Standard & Poor?s Equity Research reiterated a ?sell? recommendation on the stock, saying in a note that ?we fear that a relatively slower-than-peers business recovery could disappoint investors betting on Bulgari?s late- cyclicality and leveraged operating profile.? Bulgari's peers have been tracking ahead of forecasts mostly consecutively over the past four quarters ensuring positive news stories and commensurate positive stock prices for those listed brands.
As reported in The MO Down earlier this month Snr Trapani, the brand's CEO is certainly not sitting back, he is being pro-active and has already introduced some lower priced jewellery items in addition to increasing the prices of 'some' timepieces. The issue that seems to be handicapping Bulgari's return to stronger growth is in fact its timepieces. As reported on the Bulgari Group 29 July Press Release, "during the half year in question, all product categories, with the sole exception of watches, contributed positively to growth. Jewellery rose by 10.5% at comparable exchange rates (+14.8% at current exchange rates)." However, watch (timepiece) sales decreased by 4.6% (-1.2% at current exchange rates).
The company goes on to say if sales of Roth and Genta brand watches were eliminated and sales of the watches exhibited at Basel which at that time were delivered in the second quarter - the watch category actually grew by 14%. The next quarter and half year results will ensure this comment is justified and cleansing some other branded inventory timepieces within their portfolio should ensure Bulgari Spa has a cleaner slate and will commence to operate in line with its luxury stable mates. With timepieces representing 24% of the revenue it is the second and most significant product category.

David Jones Q4 Sales Are Positive 20/08

David Jones have posted their fourth quarter sales results ahead of forecasts, and the results speak for themselves. The company announced their like-for-like sales rose 1.7 percent. In the quarter up to 31st July, total sales rose to 7.3 % to $497 million. Although David Jones have just experienced the now famous $37 million law suit concerning their former Chief Executive Mark McInnes, Australia?s premium end department store is looking positive, but not so much for Myer.

Versace Launch New Multi Media Phone 20/08

Versace has just launched their latest multi media phone, the Versace Unique. But the collaboration with LG comes years after Prada and LG worked together on a fashion forward phone, so we beg to question, are Versace really being unique in this new move?
The phone features touch screen and is made from high tech ceramic, framed with a luxury 18k yellow gold finish. This is definitely a phone for those who love to draw attention!