Luxury Institute News

December 11, 2014

Where Has All the Luxury Gone?

By: Judith Russell
December 8, 2014
The Robin Report

 

We in the industry have been bandying about the term “luxury” pretty freely of late, but there is growing realization that if a product or brand is easily accessible and relatively inexpensive, it’s not really a “luxury” product. And the minute you add the term “affordable,” it becomes an oxymoron.

As the ever-widening income inequality gap illustrates, the rich are still getting richer. According to Pew Research, the top 1% of households in the US, or those making $400K or more annually, earn 23% of the total income in the country, and control 35% of the net worth. Both figures have been steadily growing for more than a decade.

One ever-present behavior in the spending habits of the superrich of any generation is opting for the special over the mundane. Makers of high-end jewelry and electronics, cars, exotic vacation hotels, and other products and services target this group of discerning consumers for a reason: They value, and are willing to pay a steep premium for, that which is appreciated by and accessible to only an elite few.

Milton Pedraza, CEO of The Luxury Institute, a research firm that tracks and advises the global luxury goods market, says that consumers consistently define luxury as the best of design, quality, craftsmanship, and service. Brands that always deliver against these attributes, including Audemars Piguet, Chanel, and Buccellati, also tend to have a compelling brand heritage story.

Dumbing Down the High End

So where is true luxury retailing today? The high end is on a steady course down market. Nordstrom, Neiman’s and Saks are slowly evolving into off-pricers, expanding their Rack, Last Call and Off Fifth concepts much faster than their full-line businesses. This is eroding their credibility as purveyors to the elite, since one of the strongest pillars of luxury is pricing integrity. But Wall Street can be pretty unforgiving. In order to satisfy investors, these businesses must grow. Opportunity for organic growth is limited, due to intensified competition and more demanding consumers.

Look at the auto market. Mercedes, BMW and Audi are all adding cheaper models to the low ends of their product lines. You can’t turn on the radio without hearing an ad for their affordable lease deals, wooing us to experience a taste of luxury at a discounted price.

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Exacerbating the situation is the fact that many luxury brands, including Louis Vuitton, Prada, Hermès, Burberry and Dolce and Gabbana are now bypassing their retail partners and going direct to consumers, launching their own e-commerce sites and brick-and-mortar stores. The fastest way the Nordstroms and Neiman-Marcuses of the world can grow sales and earnings is to trade down. But they can only do this for so long before becoming known primarily for their discounting, the kiss of death in luxury.

Ubiquity Erodes Exclusivity

Then there are the outlet stores. Many of the veteran brand leaders, such as Coach, Tiffany, Michael Kors, and Ralph Lauren, are finding that they’ve tapped out the full-price specialty market opportunity and are now growing exponentially by expanding their outlet store footprints. Overexpansion breeds ubiquity, ultimately the downfall of premium brands whose hallmark is limited distribution.

Ubiquitous availability in outlet stores also compromises perception of pricing integrity. “Wealthy people are smart,” says The Luxury Institute’s Pedraza. “They’re willing to pay a high price for the best, as long as it’s fair, but they don’t want to get taken advantage of.” Also, many of the leading industry bloggers are of the opinion that much of the merchandise in luxury outlets has never seen a full-price store. It is, they believe, a lower level of design, quality and craftsmanship created specifically for the outlet, and carries faux full-price tags that are then reduced to obfuscate their real value. This breaks another rule of luxury, authenticity.

The New Luxury Customer

In what used to be the high-end luxury sector, a big, gaping void is forming, ripe for the filling by a new breed of luxury brands. Several key factors are contributing to this opportunity.

  • Millennials, who will account for 30% of all retail sales by the year 2020, according to Pew Research, are an increasingly important force in the marketplace. They are already wielding tremendous influence in retail, demanding more elevated, contemporary and technology-driven products and experiences. They are forcing retailers to offer better high-tech, high-touch engagement and greater personalization.
  • Many high-end consumers are beginning to show a distinct preference for experiences over things, having become sated with too much “stuff.” This is driving growth in segments like the ultra-luxury travel industry. These experiential customers are also demanding a meaningful brand connection that elevates the products they buy with an emotional investment. We know that a unique personal experience will make it more likely for that consumer to become a loyal customer.
  • A group of consumers has moved away from playing it safe and shopping with the flock to desiring more individualized offerings. Leading fashion-trend forecaster David Wolfe of Doneger says, “Bye-bye mainstream, hello to thousands of tiny consumer tribes.” And these tribal members are demanding fresh, frequent new products and experiences that can be customized, personalized and unique.

The New Face of Luxury

The next generation of luxury brands, I predict, will focus on meeting the needs of a relatively small, yet potentially profitable group of consumers. The brands will deliver quality of workmanship, authenticity of design and materials, and customized fit and trims. Whether casual or dressy, products will be limited in availability. There will be no sales, no coupons, no department store gatekeepers, and no need to get big fast. These brands will need to reach critical mass of between $500 million and $1 billion to generate sufficient profit and cash flow, while remaining exclusive, premium, and ultra-special. Needless to say, service—or its newest moniker, customer relationship building—will be out of this world.

Does this sound like the couture world of times past? You bet it does. But there will be differences enabled by 21st century technology. Brands will use digital tools, including big data, to develop and maintain an intimate relationship with their consumers and engage them on a personal level.

Curated offerings of products and services will be created especially for customers who opt into the relationship. Brands will use store-scanned measurements of their customers’ bodies to deliver a perfect fit. With geo-fencing and other technological capabilities, companies will know where their customers are and where they’re going—even going so far as to deliver a fresh wardrobe to their client’s hotel while on vacation. Sound futuristic? The technology exists today.

Who will be included in the next generation of the luxury elite? Brands like Elizabeth and James, Tom Ford, Bottega Veneta come to mind. The extent to which they succeed in creating luxury businesses with staying power depends on how well they can deliver on their product, service, and customer engagement features, and how well they can rise above the relentless discounting fray that is decimating brands today.

The luxury brands of tomorrow will be privately-owned and managed by a team possessing design genius, marketing savvy, financial prowess and technological wizardry. They will view their work as the intersection between art and science. They will control every phase of the value proposition from product conception to delivery, with customer focus front-and-center every step of the way. These innovators will not think of their businesses in terms of the products they sell or distribution channels, but rather in terms of serving their affinity tribe, a community of customers that share similar values and a passion for the brand, bordering on obsession.

So, back to Wall Street, these guys may not pay any attention to these businesses because they will be privately held. But there’s little doubt in my mind that they’ll become personally invested in the luxury brands of the future—by becoming some of their best tribal customers.

Source: http://therobinreport.com/where-has-all-the-luxury-gone/?utm_source=The+Robin+Report&utm_campaign=c3d66eab66-Where_Has_All_the_Luxury_Gone_12_10_2014&utm_medium=email&utm_term=0_e90268c709-c3d66eab66-201755673

December 1, 2014

Marketer of the Year: Stuart Weitzman

By: Irene Park
Women’s Wear Daily
December 1, 2014

Click on the link to read the entire article (subscription required): http://www.wwd.com/footwear-news/markets/marketer-of-the-year-stuart-weitzman-8049600?gnewsid=a161467a3da489b5897b97c969ca7fb8

November 22, 2014

Astronaut Mark Kelly talks watches at South Coast Plaza

By: Lisa Liddane
OC Register
November 23, 2014

The former Space Shuttle and combat pilot lends his credibility to Breitling’s timepieces.

As ambassadors of luxury timepieces go, Mark Kelly is as antithetical to the prevailing celebrity mold as it gets. He travels without an entourage, can walk into South Coast Plaza and blend into the crowd – as he did recently, and does not pose in any advertisements for Breitling.

Perhaps that’s a good thing.

The retired astronaut and decorated Navy pilot brings to the 130-year old Swiss brand two important things that actors Daniel Craig, Hugh Jackman and Leonard DiCaprio, for all their onscreen talent, bankable pulchritude and high-wattage glamour, cannot provide to the watch brands they represent: gravitas, authenticity and credibility.

Kelly’s résumé includes flying 39 combat missions during Operation Desert Storm and traveling more than 22 million miles through space, according to the National Aeronautics and Space Administration.

“Mark Kelly has such a great reputation for integrity – he’s an all-American space hero,” said Milton Pedraza, chief executive officer of the Luxury Institute, a boutique research and consulting company. Breitling, which calls its timepieces “instruments for professionals,” has had a long-standing relationship with the aviation industry, Pedraza said. Kelly is the ideal brand representative who appeals to a specific segment of luxury watch customers who prize accuracy, innovative technical features or aviation-related components.

Kelly visited the South Coast Plaza Tourneau boutique, which has a dedicated Breitling wing, to launch the new Cockpit B50, a chronograph specially developed for pilots. He sat down with the Register to discuss his history with Breitling and how watches are practical instruments of measurement for him. Here are highlights from that conversation:

Orange County Register: I understand you were wearing a different watch brand during your first space flight.

Mark Kelly: I wore a different one, which shall remain nameless, a pretty high-end watch that didn’t work.

OCR: What happened?

MK: It had a little issue. The second hand got stuck on the minute hand (chuckles), which is not a good thing when you need the second hand to time something at an important part of the space flight … that was the only time I wore that watch.

OCR: Did you buy a new one?

MK: I got a Breitling from a friend of mine.

OCR: What did you know about Breitling at the time?

MK: I always wanted one. I knew it was a watch for aviation and was very reliable and probably wasn’t very well known as some of the other brands, but it’s a product that’s really made for pilots.

OCR: The accuracy of the watches seems to be a big selling point, and I would guess that for you, it is.

 

MK: Yeah, it is, especially in my career as an aviator … time was incredibly important. In the airplane that I flew, you needed to be able to constantly do the math in your head, but use the watch, your distance and your airspeed to figure out, are you behind or are you ahead of getting the target on time … you would break it down into six second increments. Why six seconds? Do you know why?

OCR: Why?

MK: Because it’s a tenth of a minute, it’s easier to do the math. The accuracy of the minute hand and the second hand is key to being able to do your route. And it’s sort of like that for space flight, too. You need an accurate watch because you’re doing a lot of critical things on time.

OCR: You’ve worn Breitling since about 2006. As a veteran, pilot and an astronaut, did you ever imagine you would be a face of a luxury watch company?

MK: No (laughs). When I had my first Breitling watch I had no relationship with the company. I just wore them. Before my last flight (into space), the Association of Naval Aviation contacted me to ask me to fly a Breitling watch that was going to be given to President Bush “41″. It was the centennial year of naval aviation, so I took that watch into space, took a bunch of pictures in space.

The plan wasn’t set on who to give it to. There was a thought about giving it to President Obama, the current president. People went, well, President Bush is a naval aviator. At the end of the day, they decided to auction it off and they gave the money to a school in Pensacola that uses Naval aviation to teach kids math and science. It went to a much better cause. The watch went for like, $60,000.

OCR: As for the new Cockpit B50, are there any features in it that you find interesting?

MK: If I was flying in combat again, that’s the watch I would buy. It’s a SuperQuartz movement, thermocompensated … it’s incredibly accurate. If you turn your wrist, the light will come on. So imagine you’re flying an airplane at night, you don’t have to take your hand off the throttle … it has a regular alarm that’s a tone, but also has one that vibrates like your phone so you can feel it. It’s nice to use in space where it’s so loud – all the fans, pumps and everything.

OCR: How many Breitling watches do you have now?

MK: Oh, I don’t know. I have several … most are locked up in a safe.

OCR: Which one is your favorite?

MK: The one I’m wearing – right now. … This is a Navitimer 1461. It’s got dates, days of the week, the month and it’s got the moon phase. It’s really kind of cool. It has to be reset only once every leap year (or every 1,461 days). So you really have to adjust it only every four years.

Source: http://www.ocregister.com/articles/watch-643086-space-breitling.html

 

November 14, 2014

Nordstrom Always Outperform the Competition

In The Loop
Bloomberg TV
November 14, 2014

 

http://www.bloomberg.com/video/nordstrom-always-outperform-the-competition-VAqcMyQMQCGBrEqrAnNYrA.html

Luxury Institute’s Founder and CEO Milton Pedraza discusses luxury retail on “In The Loop.”

(Source: Bloomberg)

 

November 11, 2014

Luxury Institute’s Seven Trends Shaping Luxury in 2015

NEW YORK, NY–(Marketwired – Nov 11, 2014) – The following is a White paper by Milton Pedraza, CEO of Luxury Institute, LLC:

All around the globe, the luxury industry has navigated against strong headwinds in 2014. Growth in China has slowed due to government crackdowns and macroeconomic forces, Russian clients are buying far less for obvious reasons, and key European countries dependent on streams of wealthy tourists and aspirational buyers have also stalled. The situation is comparatively better in the United States and in Japan but both nations are growing far below their long-term economic potential. To these cyclical challenges, add in the secular change of online buying cannibalizing store and it has been a tough year for most luxury goods and services providers.

There are exceptions to the rule of sluggish sales. Despite the challenges, pure-play luxury brands like Saint Laurent, Bottega Veneta, and Hermès continue to innovate and make necessary investments to retain their status as luxury brands. No one is immune to market forces. Luxury will always be cyclical, but the real danger for brands that we see comes from self-inflicted wounds caused by the inability to accept new realities and failure to execute. Doing either of these far too slowly is also dangerous.

Looking ahead, the future has the potential to be very bright for luxury. Providing high-end goods and services to wealthy customers will remain a growth industry in volume, and value, for decades to come. What’s crucial now is rapid adaptation to evolving market realities. Powerful forces are affecting the luxury industry right now and remind us that we have to get comfortable being uncomfortable. The time to implement change is now.

We work with dozens of top-tier global luxury brands each year and live in the headquarters and stores of our clients. Based on recent experiences and dialogues, here are seven trends and issues that enlightened luxury brands need to address in 2015:

1. There Are Too Many Luxury Brands For A Slow-Growth Environment

There are too many luxury and premium brands in the world. Our industry has too many hotel chains, too many handbags and apparel producers, too many automotive providers, too many wealth managers, too many watch and jewelry makers and too many private jet charter companies. Name an industry and you’ll likely find a staggering number of brands purporting to be premium. Many have global ambitions.

There are too many “luxury” brands, but not enough great ones. Most are pure copycats. This does not even take into account all the fearless start-ups trying to disrupt the industry.

In 2015, look for many more large, medium and start-up brands to stall, or fail, at a faster rate than over the last few years. Affluent consumers, chased to exhaustion, are swamped by too many me-too options in every category. It will be time for true luxury brands to stop benchmarking the mundane players, understand their own brand identity, values, and standards, and get back to delivering differentiated, fully-priced value in 2015.

2. Comparable Store And E-commerce Sales Are The Critical Metrics

One recurring theme we hear in luxury boardrooms is that any run-of-the mill luxury brand can open stores, including outlets, globally to increase sales. In the current environment, it takes true leadership competence to drive significant comparable store sales. Foot traffic into stores is down 20% to 30% year-over-year for many luxury brands. E-commerce has scarcely made up the difference.

Look for luxury brands in 2015 to stop opening stores completely, even close some, and focus surgically on pinpointing true opportunities to open profitable new stores. The three mantras of luxury economics in 2015 will be: driving new valuable clients to online and offline channels, dramatic increases in conversion, and profitable retention of all high potential clients, not just the VIPs.

3. Not Only Best Practices, Best Execution

Dr. Atul Gawande, a Harvard surgeon and author who has studied how the highest performers in many fields achieve results, has written that the biggest differentiator in medicine and business today is not learning new best practices but executing on a core set of known best practices. For example, hospital infections proliferate today in most hospitals even though medical personnel are fully aware how they can be prevented. Failure to execute best practices consistently is the single biggest impediment of increasing sales and profits in the luxury industry.

Luxury today is full of highly experienced marketing, sales, e-commerce, operations and human resources executives who know exactly how to execute best practices. Unfortunately, many of these leaders show up at the office daily and fail to inspire, empower, measure and reinforce these best practices. In 2015, look for boards of directors to require measurable results from their teams as the hyper-competitive environment requires going from experienced to expert, from delusion to execution.

4. Transforming Store Managers Into Entrepreneurs

Everyone who understands luxury retail agrees unequivocally that the store manager is the backbone of any operation. Despite this wide recognition, many store managers are disempowered into becoming little more than glorified administrators and bureaucrats. They stay in small offices all day counting inventory and pounding out reports that can be automated in a flash.

There is a crisis of management in luxury, but it is not primarily in the executive suite. It is among the store manager ranks. Luxury brands need to attract, retain, educate and empower store managers to become a new breed of entrepreneur within the luxury brand. In 2015, look for top-tier luxury brands to focus resources to dramatically increase the formal education, empowerment and incentives of store managers to generate business by using public relations, digital assets, events, social media, and other tools to drive traffic and sales to stores daily. These local entrepreneurs will unleash a new era of “freedom with boundaries” in the luxury world.

5. Brands Are Finally Getting Serious About Human Relationships

We believe that the concept of a luxury brand having a relationship with its customers without continuous human to human engagement is highly overrated, if not an outright mirage. Last year we told you the online personal shopper was a critical and urgent evolving concept in the luxury world. One of the few brands that executed this concept was mainstream retailer Zappos. Others like Net-A-Porter reserve this concept for VIP clients.

In the coming year, look for more brands to finally begin building deeper relationships with large percentages of online and multi-channel customers. Although resources are scarce, brands should build intimate relationships with, at a minimum, their top 20% to 40% of clients.

Also, and very importantly, look for luxury brands to empower store sales associates who have multi-channel clients to reach out and build human relationships after the client purchases in any channel. For this to happen, digital assets and insights must empower sales associates in real time, and compensation structures will need to reflect the nature of a multi-channel relationship. In 2015 we are extremely optimistic that the economic conditions will force brands to get moving on building better client relationships rooted in personal interaction rather than impersonal algorithms.

6. CEO Change Will Accelerate Again In The Luxury Industry

During the recessionary years of 2008 and 2009 CEO changes were widespread as desperate times called for desperate measures. This time the change lacks desperation, but it will be just as profound. Demographics will drive change in the executive suite as baby boomer CEOs gracefully step down at a rapid clip. We experienced several CEO changes toward the end of 2014, and we expect to see many more in 2015.

In times of change, luxury brands look for more skilled and effective leaders. Enlightened boards of directors at major conglomerates and private equity firms are looking for a new breed of highly collaborative and effective team builders. Inspiration is needed more than perspiration to lead associates to execute brilliantly across segments and channels. Companies expect measurable execution in 2015, and they will get it, one way or another. Given the demographics of luxury, expect more women and diversity candidate CEOs to thrive in 2015, all to the benefit of our industry.

7. Think Less Facebook, More Pinterest

Let’s face it, in its current format, Facebook is of marginal value for luxury brands. Gathering millions of likes and online fans has not been a formula for rapid sales growth in luxury. Success stories have been few and far between despite the lemming-like response from unenlightened digital executives and their agency partners. True luxury buyers are far more discerning. Engagement in luxury requires a one-to-one conversation, not a megaphone.

Social media can certainly serve a useful purpose. Sites and apps like Pinterest and Instagram that engage visually have a far better chance of success for the eye-candy offerings of many luxury brands. Look for localized and personalized efforts to thrive within these highly engaging media and look for the leading edge brands to empower all front-line associates to post their favorites in a brand-sanctioned way. In this way, a brand can engage clients and prospects in rich, honest dialogue that builds relationships and boosts sales.

The luxury industry is healthy, but those who anticipate change will have a decided advantage. Many luxury goods and services brands enter 2015 with false confidence and may only realize too late that the world has changed. Enlightened brands are jumping off of the cresting wave, and onto an emerging wave to drive sales and profits in 2015.

We welcome your opinions and comments. Please see below for our contact information.

Visit us at www.LuxuryInstitute.com and contact us at luxinfo@luxuryinstitute.com

October 31, 2014

Men are buying up these $1,200 sneakers

By: Kathryn Vasel
CNN Money
October 30, 2014

Click the link to read the entire article, which includes quotes from Milton Pedraza, CEO of Luxury Institute: http://www.channel3000.com/money/men-are-buying-up-these-1200-sneakers/29428624

October 30, 2014

October 18, 2014

The Neiman Marcus catalogue

Hold the myrrh
Gold and frankincense are so two millennia ago

The Economist
October 18, 2014

NOT everyone finds Christmas easy. Some people have so much money that they cannot think what to spend it on. Every year Neiman Marcus, a posh department store, takes pity on these unfortunate souls by offering them its Christmas catalogue, stuffed with ideas to empty even the fattest wallet.

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For example, sporty couples can buy “His and Hers” Quadskis for $50,000 each. These are jet skis that convert into quad bikes in about five seconds (pictured). And they come in a turtle print. Shoppers who wish to relax can buy an elaborate cocktail shaker for $35,000. It comes with a year’s supply of gin and a class for 20 guests with a “mixology” expert.

Many luxury brands are now ubiquitous, which robs them of their snob value. What the truly rich want is “unique experiences”, says Milton Pedraza of the Luxury Institute, a consultancy. Neiman Marcus offers plenty of those. For $125,000 you can ride a Mardi Gras float in New Orleans. For $425,000 you can attend the Vanity Fair Oscar party, having first been glammed up by a style expert so that the other revellers won’t think you are a gatecrasher.

The costliest item in this year’s book is the “House of Creed Bespoke Fragrance Journey”. For $475,000 you can fly to Paris and have a master perfumier create a scent that perfectly suits you. You also get “white-glove car service, private tours and other experiences befitting the royally amazing you”. Your correspondent tried to expense such a trip, for research purposes, but her Scrooge-like editor said no.

Ginger Reeder, who handpicks all the “fantasy items” for the catalogue, does not expect to sell everything. Selling is not the point. “They are chosen for their uniqueness and their publicity value,” she says. In 1997, for instance, Neiman Marcus was unable to offload first editions of 90 of America’s greatest novels, from “The Great Gatsby” to “Catch-22”, but Ms Reeder found some comfort when she received 600 requests for the book-list.

The shop’s most expensive gift ever was a Boeing jet for $35m in 1999. The most memorable have included a submarine ($20m), a mean-spirited camel who spat a lot (Neiman Marcus no longer includes animals in the catalogue) and “His and Hers” mummy cases for $6,000 in 1971 ($35,000 in modern money). A mummy was unexpectedly discovered in one sarcophagus, which caused a spot of bother. A death certificate had to be issued before it could be delivered. Gift wrapping was optional.

Source: http://www.economist.com/news/united-states/21625817-gold-and-frankincense-are-so-two-millennia-ago-hold-myrrh

October 1, 2014

Statement Sweats Have Proved Their Staying Power

October 1, 2014
By Ruth La Ferla

Rita Ora was traveling quasi-incognito when she was snapped this year at Los Angeles International Airport wearing outsize shades, a blush-tone carryall, Air Jordans and a cushy sweatshirt, its hood pulled seductively over her brow.

Olivia Wilde recently strode the same passageways, the picture of ease in a biker coat … and sweatshirt, as did Rosie Huntington-Whiteley, who sallied toward the airport lounge wearing a dark fedora and … hey now, you know the refrain.

At the airport, a hub for the paparazzi, who tend to treat its fluid corridors as a makeshift red carpet, off-duty models and Hollywood A-listers have been flaunting their sweatshirts with careless élan, wearing versions embellished with eye-catching slogans, cartoons and jewels and pretty florettes or, alternately, opting for standard issue, raglan-sleeve varieties meant to signal, one suspects, that the wearer is just like you and me.

Clearly civilians relate, which may be why this cozy insignia of slacker chic, once reserved for furtive cigarette jaunts to the 7-Eleven or late nights on the sofa, binge-watching “Revenge,” has become the would-be style-setter’s trophy of choice, an item for all seasons — and occasions.

Its transition from nondescript wardrobe standby, the fashion equivalent of mac and cheese, to luxurious fashion mainstay now seems to have been all but inevitable. “The world of luxury has gone somewhat casual,” said Milton Pedraza, chief executive of the Luxury Institute, a consulting firm. “A lot of people don’t see sweatshirts as basic items anymore.”

Conversely, Mr. Pedraza noted, “a lot of basic items have gone premium.” He may have had in mind the sumptuous interpretations of this humble item that appeared on fall runways and are sold at Neiman Marcus, Nordstrom and Barneys New York and on upscale websites. Prices veer from $30 for an orchid-printed top by Altuzarra for Target to more than $4,400 for a Fendi version ornamented with fake fur, felt, swaths of mesh and crystal, but then, who’s counting?

Such gussied-up sweats can still play down one’s wealth while conferring enough raffishness to suggest that the wearer is too young, too prodigiously gifted or simply too chic to go in for a conventional 9-to-5 uniform. Indeed, these days the only thing inelegant about this once unexceptional garment is its name. And even that has had an upgrade.

Statement sweats, as they’re known in fashion-speak, emerged on the runways over two years ago, making their debut on the runway at Givenchy in the form of a photo-collage sweatshirt, followed last fall with a Bambi-print variation that became an instant fashion hit. The look gained traction in the spring with the parade of high-end sweatshirts at Theory, Kenzo and Alexander Wang, whose white shirt, cheekily inscribed with a “Parental Advisory” legend, was a fashion editor’s favorite.

Photo

Rita Ora moved through Los Angeles International Airport in fashionable sweats and accessories.

Sweats were reprised for fall at Rag & Bone, where a satin shirt was paired with paint-splatter jeans; at 3.1 Phillip Lim, with burnt-orange leather hoodies; and at Isabel Marant, where a lustrous camouflage shirt was shown with baggy fatigues. Surviving yet another season, they emerged for spring 2015 in a boxy version with cutoff sleeves at Jil Sander, covered in multihued sequins at Dsquared2, in a sunburst design at Fausto Puglisi, in silver at Norma Kamali and as a sleeveless top with an extravagant bow and as an evening dress at Bottega Veneta.

Like biker jackets, sneakers and skinny jeans before them, statement sweats have proved their staying power.

“Today it would be a misnomer to use the word ‘trend’ in reference to the sweatshirt,” said Tomoko Ogura, the senior fashion director at Barneys. Ever-evolving, it is now cut in sophisticated fabrics, including but by no means confined to cashmere, chiffon, organza, leather and lace, and offered in varying textures and shapes. So lavishly garnished are some that they are hard to place as sweatshirts at all. Yet consumers are responding, Ms. Ogura said, “because, while the designer’s hand is apparent, their utility is not compromised.”

Their utilitarian provenance is a talking point, indeed a boasting point, among luxury consumers who like to wear their shirts subversively with tuxedo pants or furs or, conversely, to throw on a sequin-encrusted versions to lend dazzle to their leggings or jeans. It’s like wearing a Casio watch with your Brunello Cucinelli cashmere pullover, suggesting a kind of inverse snobbery. “Like you’re playing the game without quite really playing the game,” Mr. Pedraza said.

In some quarters, sweatshirts, like sneakers, remain the great fashion leveler. Paraded this summer in men’s shows as diverse as Bottega Veneta, Neil Barrett and Lacoste, they seemed intended to mask distinctions of class and income or to render them obsolete. “Turns out,” as Guy Trebay noted in a New York Times fashion review, “Mark Zuckerberg didn’t need to outgrow his hoodie and shower shoes.” (Which is not to neglect those 99-percenters repurposing their gym togs as everyday wear in apparent deference to Gap’s recent injunction, in a series of fashion ads, to “dress normal.”)

“Sweatshirts flourish because they work for every demographic and every retail category — men’s, kids, junior contemporary and designer,” said Sheila Aimette, a vice president at the trend forecasting company WGSN. “They are cross-generational and cross-gender.”

Madeline Alford, a digital editorial assistant at Luckymag.com, has incorporated sweats into her workday regalia. Taking her style cues from the Lucky fashion staff, she may, on any given day, combine her black tubular jeans or leather midi-skirt with an oversize sweatshirt. “Instead of a chunky sweater, you could definitely wear a fleece,” she said, “something still warm and efficient.”

Function trumps showiness among Ms. Alford’s priorities. Fashion, she noted, has been gradually turning its back on the flamboyant extremes of street style in favor of a more accessible look. “Much as we love all that crazy, out-there style, it’s not for everybody,” she said.

Sweatshirts, on the other hand, merit her unstinting approval. “They’re what real women wear all the time,” she said.

Source: http://www.nytimes.com/2014/10/02/fashion/statement-sweats-have-proved-their-staying-power.html?_r=0 

September 17, 2014

Can Apple Watch Win Over Swiss Luxury Giants?

By Sarah Mahoney
Marketing Daily
September 17, 2014

Talk about the clash of the titaniums: For centuries, nothing has said “Master of the Universe” as elegantly as a five- (or maybe even six-) figure watch. Yet for status-seekers who pride themselves on being early adopters, sporting the neighborhood’s first Apple Watch will be a big deal. (Especially since the tech insiders over at CNET are speculating that while Apple’s entry-level watch will be priced at $349, gold ones might sell for as much as $5,000.)

While Tag Heuer has said it’s working on its own smartwatch (and has already developed a smartphone), most luxury watch brands seem confident that the old-world chic of the Swiss will outlast any Silicon Valley buzz. And why shouldn’t they be? Sales of luxury timepieces are strong, and online interest for luxury watches is up 7% in the second quarter of this year, compared to the same period a year ago, according to the World Watch Report. In the U.S., that growth is relatively faint. But in the developing world, curiosity is rising fast: Online interest in these watches soared 23% in China, 22% in India, and 20% in Saudi Arabia. (Rolex is by far the most search-for brand, it says, followed by Omega, Cartier, Tag Heuer and Patek Phillippe.)

“The Apple Watch is a product that is not useful if you don’t own an iPhone,” says David Sadigh, CEO of the Geneva-based Digital Luxury Group, which publishes the report. “It’s a product that has been launched to bolster iPhones sales and put a first foot in the door into the smartwatch market. It won’t have a dramatic impact on the Swiss watch market at this stage, as the majority of the market is composed of brands at a luxury level,” he tells Marketing Daily in an email.

For now, watch brands seem to agree, and are ignoring the onslaught that so many techies are predicting. Piaget, for example, is unveiling a new “Perfection in Life” global advertising campaign, which positions its sexy timepieces in some of the planet’s prettiest places, including Geneva, Paris, “La Côte d’Azur,” and Los Angeles, and could have been taken straight out of a1960s jet-set travelogue. Shot by photographer Maud Rémy-Lonvis, they make each piece a hero: The world thinnest automatic watch, the Piaget Altiplano, for example, towers above the Manhattan skyline, while the Piaget Limelight Gala, with white gold set with diamonds, sparkles over the Hollywood Hills.

And just to prove it’s not completely unaware of the digital age, the company describes the effort as a “360° brand concept,” supported by social media. Consumers can post pictures of their own favorite cities to Instagram, hashtagged #Piaget and #PerfectionInLife, the submitted photos will be entered into a contest. A special Piaget jury will select 5 winning photos from the 50 that receive the most likes, and says they will be displayed in Piaget boutiques worldwide.

What the designers of smartwatches and wearables are missing, says Milton Pedraza, CEO of the Luxury Institute, “is that smartwatches like the Apple Watch are accessories. They’re functional, but they’re not emotional. Luxury watch buyers see their timepieces as art, an adornment, made with true artisanship. So they’re missing half the equation. Smartwatches don’t have the personality that luxury watches do.”

And while there will doubtless be luxury consumers who already own classic timepieces and who buy smartwatches too, “there’s only so much real estate on the wrist.” That means there a tremendous opportunity for tech companies to partner with luxury watch marketers, “to move beyond the generic, dramatically improve the aesthetic, and increase the appeal.”

For now, though, says Sadigh, “folks at Vacheron Constantin, Rolex and Patek Philippe can still sleep well at night.”

http://www.mediapost.com/publications/article/234357/can-apple-watch-win-over-swiss-luxury-giants.html

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