Luxury Institute News

July 18, 2018

NORDSTROM RATED THE MOST EMOTIONALLY INTELLIGENT BRAND IN THE US

The CEO Magazine
July 18, 2018

The American department store topped the Luxury Institute’s 2018 Emotionally Intelligent Brand Index.

The Luxury Institute released its results for the 2018 Emotionally Intelligent Brand Index (EIBI) this month and, according to the affluent consumers surveyed, Nordstrom is the most emotionally intelligent multi-brand in the US.

The key factors that the Seattle-based company outperformed on included empathy, trustworthiness, and generosity.

Amazon in contrast ranked low among affluent consumers, with some rating it the worst in terms of these attributes, even though the brand is easily one of the most well-known multi-brands across the world.

The other brands included in the survey included Barneys New York, Bergdorf Goodman, Bloomingdale’s, Neiman Marcus, Net-A-Porter, Saks Fifth Avenue, Sephora and Ulta.

According to the Luxury Institute, the EIBI survey is an extension of the “high-performance client relationship system pioneered by Luxury Institute 10 years ago”.

“Delivering great products and quality today are merely a cost of entry, even if you deliver them instantly. Even having great customer service is insufficient to be sustainable today. Many will only see the short-term impact, yet Nordstrom, while having its challenges lately, looks more adaptable and agile for the long-term functional and emotional needs of consumers than Amazon,” explained Milton Pedraza, Luxury Institute CEO.

“This analysis makes it crystal clear that while Amazon is the current product category killer, it has a long way to go to be an admired and beloved brand. Amazon, to many affluents, even those who buy from it frequently for convenience, is a soulless utility. While Amazon is the current product category killer, it has a long way to go to be an admired and beloved brand.”

“Jeff Bezos needs to lead this brand to establish emotional connections with the human beings who work for the brand, and purchase products through the brand. Sooner or later, just as with humans, your brand’s deep lack of emotional intelligence will catch up to you, with negative results,” Milton continued.

The Luxury Institute surveyed a nationally representative sample of over 1,200 responders with a minimum of US$150,000 annual household income across several brand categories most consumed by affluent consumers.

Nordstrom has 373 stores in the US, Canada and Puerto Rico, 239 of which are Nordstrom Rack stores. Los Angeles makes up US$1 billion of Nordstrom’s market and provides for more than four million customers.

According to Retail Leader, “Nordstrom executives said 2018 will be a big year for the company, as it continues to adjust to a changing retail landscape.”

Source: https://news.theceomagazine.com/news/nordstrom-named-most-emotionally-brand-us-brand/

July 16, 2018

VEGAN DESIGNER STELLA MCCARTNEY EDGES OUT CHANEL AND LOUIS VUITTON AS KINDEST LUXURY FASHION BRAND

LiveKindly
By: Jill Ettinger
July 13, 2018

Vegan fashion brand Stella McCartney has been ranked number one in empathy, generosity, and kindness on the New York-based Luxury Institute’s annual “Emotionally Intelligent Brand Index.”

McCartney, daughter of former Beatle Sir Paul McCartney and the late musician and entrepreneur Linda McCartney, edged out leading luxury brands including Chanel and Louis Vuitton in earning the top spot in those categories. The Luxury Institute’s ranking looks at how a brand relates to its customers, employees, and society at large, including its impact on the environment.

MILLENNIAL MARKET

“Today affluent consumers across all generations, but especially Millennials, think of brands as organic, living entities comprised of the purpose, values and behaviors of the people who lead them and who represent them at the front lines, across any channel,” says Milton Pedraza, CEO of the Luxury Institute.

“A brand, today, is known well beyond its products. Just as with individuals, if a brand today cannot deliver more than expertise and deeply lacks emotional intelligence, or simply has an emotional intelligence deficit that is clear to clients, it is at a distinct disadvantage in the probability of long-term success or even survival.”

Pedraza also called out the luxury industry for its often unwillingness to change or adapt its policies. “Unfortunately, some brand leaders, especially in luxury, would rather delude themselves than embrace, or crave, candid customer feedback and take massive positive action.”

STELLA MCCARTNEY AND THE NEW FASHION ETHOS

But a growing number of luxury brands are making pivotal shifts in their approach to the environment and ethics. Earlier this year Versace announced it was removing fur from its designs. Fendi too just removed them from its most recent show, focusing instead on faux furs more aligned with Millennial values. Even airlines like Virgin Atlantic are taking steps toward more sustainable and responsible commitments. Richard Branson’s airline recently announced it was removing beef and palm oil from flight menus because of their connection to deforestation and climate change. Earlier this year luxury car brand Tesla announced it’s moving toward replacing leather from its car interiors.

The London-based Stella McCartney brand is built on an ethos that resonates with the core Millennial consumer; the line doesn’t use any animal-based textiles including leather, fur, skins, and feathers. McCartney’s forward-thinking designs and textiles also earned her the 4th spot for trustworthiness, the 17th spot for quality and 6th for customer service.

Most recently, McCartney made headlines when the now Dutchess of Sussex Meghan Markle wore a McCartney design to her royal wedding reception. The vegan designer also attended the Met Gala in New York earlier this year alongside outspoken vegan celebrity Miley Cyrus and Paris Jackson, daughter of the late pop singer Michael Jackson. All three women wore McCartney designs and Cyrus told the red carpet reporters that not killing animals for fashion was “[expletive] hot.”

Source: https://www.livekindly.co/vegan-designer-stella-mccartney-kindest-luxury-fashion-brand/

 

July 2, 2018

Fast fashion, furious controversy: Why retailers like Zara and H&M keep making headlines for offensive clothing

The Washington Post
June 29, 2018
By: Abha Bhattarai


(Kevin Lamarque/Reuters)

Fast-fashion retailer Zara found itself in the headlines last week after first lady Melania Trump wore one of the company’s designs — a two-year-old olive green jacket emblazoned with the words “I really don’t care, do u?” — on her way to visit immigrant children who had been forcibly separated from their parents.

The backlash was immediate. Although the incident may have been more about the first lady’s sartorial message than the actual garment, the world’s largest clothing company was once again in the middle of a firestorm, raising questions about why certain fast-fashion retailers — H&M, Topshop and Urban Outfitters among them — repeatedly end up in the hot seat.

Fashion professors say the constant pressure to churn out new clothing makes it difficult to ensure proper oversight. Zara alone produces 20,000 designs a year, while its parent company, Inditex, manufactures roughly 1 billion items annually.

Sometimes, that leads to controversy. Zara last year faced criticism for selling a miniskirt printed with a cartoon character that resembled Pepe the Frog, a symbol used by white supremacists.

The Spanish chain has also apologized for selling striped pajamas for children with a yellow star on the breast that some said resembled concentration camp uniforms, and an embroidered handbag that included a swastika design. The retailer later pulled all three items from its shelves.

“Everything just has to happen so quickly,” said Abigail Glaum-Lathbury, an assistant professor of fashion design at the School of the Art Institute of Chicago. “It’s like an assembly line — we hear a lot about the strenuous working conditions at factories, but design teams are under similar pressure. It’s not likely that anyone is saying, ‘Hey, guys, let’s stop and consider the context and meaning of each item we put out.’ ”

And, she added, “without context, without history, you are bound to make really epic failures.”

Zara has a three-part process for vetting its products, according to Zara spokeswoman Amaya Guillermo. The company uses an algorithm to scan each design for insensitive or offensive elements or language. Each piece of clothing is then reviewed by a global committee in Spain, where the company is headquartered, and later by local committees in each market where the item will be sold.

Zara declined to say when it initially put the review process in place. It made changes to the process after the skirt that resembled Pepe, according to a person familiar with the situation. Zara said the skirt had been designed by an independent artist, Mario de Santiago, and that there was “absolutely no link” to Pepe or the alt-right.

But even with those processes in place, experts say it can be difficult to tell how certain text or symbols will be construed by local shoppers. Part of the problem, Glaum-Lathbury said, is that retailers tend to use text and simple images as an inexpensive way to set their items apart from those of competitors. Much of fast fashion requires taking ideas from the runway and quickly adapting them for mainstream shoppers, which often means making a few tweaks and sending them to production, she said. (In Zara’s case, much of this process takes place at the company’s headquarters in Arteixo, Spain.) Within weeks, garments are shipped to 2,200 Zara stores in 96 countries.

“These are huge, lumbering, out-of-touch multinational corporations,” said Elizabeth L. Cline, author of “Overdressed: The Shockingly High Cost of Cheap Fashion.”

Earlier this year, H&M faced backlash for an ad that featured a black child wearing a sweatshirt that said “Coolest monkey in the jungle.” The company apologized, pulled the shirt from its shelves and said it has created a new team devoted to diversity and inclusiveness. H&M did not respond to requests for comment.

In recent years, Urban Outfitters has come under fire for selling red-stained Kent State sweatshirts, a reference to the Ohio university where four students were killed for protesting the Vietnam War in 1970. Topman has apologized for selling T-shirts with sexist messages that included “Nice new girlfriend — what breed is she?’ and “I’m so sorry, but . . . You provoked me; I was drunk; I was having a bad day; I hate you; I didn’t mean it; I couldn’t help it.” Neither company responded to requests for comment.

Analysts say retailers are also increasingly relying on algorithms and sales data to determine what shoppers want. The fact that Americans are spending less on clothing than they once did, even as the number of retailers continues to grow, is also leading some to cross the line between edgy and offensive.

“There’s such a need today to stand out — there is so much competition in the marketplace — that companies, designers, advertisers are all desperate to get attention,” said Milton Pedraza, chief executive of the Luxury Institute, a consulting firm in New York. “And one way to do that is to say, ‘Let me see how far I can take this.’ ”

Source: https://www.washingtonpost.com/news/business/wp/2018/06/29/fast-fashion-furious-controversy-why-retailers-like-zara-and-hm-keep-making-headlines-for-offensive-clothing/?noredirect=on&utm_term=.7fc7f91e5667 

June 10, 2018

Kate Spade stepped away from her brand a decade ago. But what happens now?

The Washington Post
June 8, 2018
By: Abha Bhattarai

 


The Kate Spade brand is owned by Tapestry, which also includes Coach and Stuart Weitzman. (Michael Nagle/Bloomberg)

The Kate Spade brand could survive the death this week of its co-founder because Kate Spade the designer handed over the reins to her company years ago.

But Spade’s suicide could compound the difficulties facing her newer label, Frances Valentine.

Spade, who died Tuesday morning, co-founded her namesake company 25 years ago, bringing color and whimsy to a handbag market filled with dark leather goods. But she sold a majority stake to Neiman Marcus in 1999 and stepped away altogether in 2007. The brand has traded hands twice since and now belongs to Tapestry, the parent company of Coach, which bought it last year for $2.4 billion.

“Kate Spade the brand now transcends Kate Spade the person, which is how you know this is a truly successful brand,” said William McComb, the former chief executive of Liz Claiborne (later renamed Fifth & Pacific), which owned the Kate Spade line from 2006 to 2017. “Kate created something that was simple and stylish, modern and fun — and that’s what continues to this day.”

The brands that have endured the deaths of their namesake designers typically had already moved on years earlier. Hubert de Givenchy, whose little black dresses were closely associated with Audrey Hepburn, died this year, but in 1995 stepped down from his fashion house, which had recently been sold to French luxury giant LVMH. Yves Saint Laurent also handed over the reins of his label and sold it to another French luxury group, Kering.

When Alexander McQueen died in 2010 at age 40, his fashion house was quick to name a successor: Sarah Burton, who had worked with McQueen for many years. The Metropolitan Museum of Art unveiled an exhibit celebrating McQueen, and the brand’s loyal customers kept coming back.

“Let’s be honest: All founders die,” said Milton Pedraza, chief executive of the Luxury Institute, a market research firm in New York. “But if your brand has great DNA — Apple, Alexander McQueen — then there’s already a great foundation to build upon.”

But other brands whose founders died while they were still in charge haven’t fared so well. L’Wren Scott’s clothing line, for example, was dissolved 18 months after her 2014 death. Coco Chanel’s death in 1971 left her label in a 12-year slump until Karl Lagerfeld took over in 1983.

The stock price of Kate Spade’s parent company, Tapestry, faltered on Tuesday before recovering later in the week.

Spade’s laid-back sensibility and penchant for bright, bold colors have continued to drive much of the brand’s aesthetic over the years.

There was a possibility, some said, that the price of original Kate Spade products — her signature Sam bag, say — could climb on resale sites like eBay in the coming days, or that there could be a temporary spike in web traffic to the company’s site.

“Does this create a huge media buzz that drives more people to the Kate Spade website? Who knows,” said Brian Yarbrough, an analyst at investment firm Edward Jones. “But I don’t think this really changes anything for Tapestry. If a product looks good, people are going to buy it.”

Since taking over Kate Spade last year, Tapestry has tried to cut back on online flash sales and sweeping promotions that some say have tarnished the brand’s cachet. But it’s been off to a rocky start: Last month, Kate Spade posted a 9 percent drop in same-store sales, sending shares of Tapestry falling more than 12 percent.

“Although Kate has not been affiliated with the brand for more than a decade, she and her husband and creative partner, Andy, were the founders of our beloved brand,” Anna Bakst, chief executive of Kate Spade New York, said in a statement. “Kate will be dearly missed.”

Nicola Glass, who previously worked for Michael Kors, took over as creative director earlier this year. Her predecessor, Deborah Lloyd, had overseen design for more than 10 years, and helped turn the handbag line into a lifestyle brand that included ready-to-wear clothing, dinnerware and bedding.

But branding experts say Spade’s death raises a number of questions for Frances Valentine. The line of handbags and shoes she co-founded in 2016, which is carried by Nordstrom, Neiman Marcus and DSW, had yet to find the mainstream success of her namesake brand and it was unclear who would take over.

Source: https://www.washingtonpost.com/news/business/wp/2018/06/08/kate-spade-stepped-away-from-her-brand-a-decade-ago-but-what-happens-now/?noredirect=on&utm_term=.b729ce36fcd4

 

May 9, 2018

Harry Rosen presses for success with joint ventures, acquisitions

The Globe and Mail

 

“Everybody has been hurt” by big shifts in retail, said Milton Pedraza, CEO of New York consultancy Luxury Institute, adding apparel has been the category most affected. Men are dressing down and not buying as many suits and ties, while consumers generally are spending less on apparel and more on …”

 

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SOURCE:  https://www.google.com/url?rct=j&sa=t&url=https://www.theglobeandmail.com/business/article-harry-rosen-inc-charts-growth-strategy-for-a-changing-marketplace/&ct=ga&cd=CAEYACoTNjUzODM3MTE3MzA4ODAyOTg1NjIaZTUxNjVmMTI4ZWQxNjUwODpjb206ZW46VVM&usg=AFQjCNH-fjRTM-NdSbuN27EHOZxFilrsRg

April 16, 2018

Upscale, downscale: Target draws customers with collaborations with high-end brands

The Washington Post
By: Abha Bhattarai
Friday, April 13, 2018

 

Not long ago, Gracie Howard got a pair of bright red Hunter rain boots. She felt good about the purchase — at least until she heard Target would soon be selling almost identical Hunter boots for a fraction of the price.

“I just wanna know why I’ve been buying $150 Hunter boots but the Hunter collection at target is $40. . . . ,” the 18-year-old from Cuero, Tex., tweeted. “I feel scammed.”

The boots aren’t so special anymore, she said — “I feel like everybody’s going to be walking around wearing Hunter now” — but that wasn’t going to stop her from heading to Target this weekend to see if she can pick up a pair or two.

“They’re so discounted that I’ll go see what they have,” she said.

And that, shoppers and analysts say, sums up Target’s high-low collaborations: There are obvious downsides, but many shoppers find them irresistible.

The retailer’s newest designer partnership, with iconic British brand Hunter, is set to roll out this weekend (though store credit card holders got access to a few items a week earlier). It is the latest in a series of collaborations that over the past two decades have turned around the retailer’s image and helped establish it as a higher-end alternative to competitors such as Walmart. Target has rolled out limited-time collaborations with established luxury brands such as Missoni, Alexander McQueen and Jean Paul Gaultier, as well as up-and-coming designers including Jason Wu and Prabal Gurung.

But retail analysts say that while the big-box chain has­­ boosted its own cachet, the tie-ups are less fruitful for premium brands looking to attract aspirational shoppers. Sure, partnering with Target may boost brand recognition and awareness in some circles, but to what end? Once the items sell out, often in days or weeks, it’s unlikely, industry insiders say, that Target shoppers will suddenly begin buying Victoria Beckham trousers at Saks Fifth Avenue for 25 times the price. (A version of the designer’s flared trousers sold for $40 at Target last year. A similar item at Saks Fifth Avenue is marked $1,010.)

“I’ve never seen a collaboration between a truly luxury brand and a mass retailer have much of an impact,” said Milton Pedraza, chief executive of the Luxury Institute, a New York-based research firm and consultant to luxury brands. “The only benefit here long term is to the mass retailer, which gets a halo effect from having a top brand on its shelves. But long term, the democratization of a luxury brand rarely works.”

Target, which has rolled out more than 175 such partnerships since the debut of its Michael Graves Design Collection in 1999, has been successful in creating buzz around many of its collaborations. And once shoppers are in the retailer’s stores, or on its website, analysts say they’re likely to make additional purchases.

“These types of lines actually drive little in sales, but the real win is to drive people to stores and have them buy everything else they need,” said Sucharita Kodali, an analyst for the market research firm Forrester. “It’s perfect for Target.”

The partnerships have made high-end pieces more affordable to a mass market — if customers can snag them in time — and helped kick off a frenzy of high-low partnerships. Karl Lagerfeld and Stella McCartney have designed collections for H&M, as have Versace and Balmain. Vera Wang now sells clothing at Kohl’s. And “Project Runway” winner Christian Siriano, whose dresses typically sell for thousands, has a line at Payless ShoeSource, the discount retailer that filed for bankruptcy this month.

Target’s annual sales have more than doubled since 1999, from $33.7 billion to $71.9 billion.

“These collaborations give our guests the opportunity to get their hands on incredible design at an affordable price,” said Mark Tritton, Target’s chief merchandising officer. “With each partnership, whether it be with a designer or brand, we want it to feel unique and special.”

Not always easy to buy

By the time Catherine Donovan logged on to Target.com at 7:30 a.m. Saturday, the $35 Hunter backpack she’d been eyeing had sold out. The Target credit card-holder found it on eBay — for three times the price.

“That may be part of the plan — to create hysteria — but it’s become a complete bloodbath,” said the 34-year-old from Des Plaines, Ill. “I’m not going to turn my back on Target, but you have to wonder who they’re selling to.”

Longtime shoppers say scoring designer merchandise at Target can be a frustrating experience. Collections usually sell out on Target.com within days, if not hours, and the retailer offers few details on exactly when online sales will begin.

The Minneapolis-based company has also faced criticism for sloppy displays and an unstable website. And some shoppers say the marked-down designer wares are sometimes badly made.

“I feel like the quality really takes a hit in collaborations like these,” said Kate Concannon, 31, who runs the fashion blog Life Sucks in a Strapless Bra. “I mean, Hunter boots are an investment piece — I’ve had mine for 10 years — but the Target collaboration is making me scratch my head a little bit: Why are these boots $40 when they normally cost four times as much?”

Hunter boots are typically made of natural rubber and are handcrafted from 28 parts. But the Hunter for Target line is mass-produced in a factory, using a preformed mold. There are also a few obvious differences in design: Hunter for Target boots, for example, come with calf extenders, and the top of the tall rain boots are cut diagonally instead of straight across. But other than that, shoppers noted few visible differences between the $40 boots at Target and the $150 models sold elsewhere.

Hunter did not respond to requests for comment.

It is unusual, analysts said, for a designer to offer a lower-priced alternative that is virtually identical to their legacy product. But some said Hunter, a 162-year-old brand, was likely to reach a fresh audience at Target.

“The demand for the product is limited, and they could go lower end, but that could diminish the higher-end products,” said Kodali of Forrester. “This is a way for them to dip their toes into the lower end in a brand-appropriate way.”

Pedraza, though, was not persuaded. Sure, these luxury brands attract throngs of people, “but is it profitable? Is it sustainable?” he asked. “Very often, these partnerships are a sign of desperation, and we’re starting to see brands recognize that going mass-market isn’t the best idea.”

A number of department-store brands, such as Michael Kors, Kate Spade and Coach, are struggling to turn around their businesses after flooding outlet stores and off-price retailers with low-priced wares, Pedraza said. “Once you’ve gone mass-market, it’s almost impossible to go back up.”

‘Too much hype’

Amy Arbide has been scouring the Hunter for Target lookbook for weeks. On Friday, she stayed up late waiting for Target to update its website with Hunter backpacks, tote bags and fanny packs that it had promised its credit card holders.

“A couple of friends and I stayed up until midnight,” the 32-year-old said. “Nothing happened. I stayed up until 2:30 the next morning refreshing the site. Nothing.”

She finally decided to go to sleep. When she woke up at 7:30 a.m., three hours after the collection had gone live, everything was sold out.

“It made me so mad, and then my best friend calls me with the same story: ‘Oh my God, everything’s gone,’ ” said Arbide, a paralegal in Miami. “Was I supposed to pull an all-nighter for this so-called exclusive presale? It was just poorly executed — and with too much hype.” (A spokeswoman for Target said the sales typically roll out online “in the wee hours” because the company’s site is refreshed overnight.)

Back in 2012, Arbide bought a couple of items — a zip-up clutch and a water bottle — by Tory Burch as part of Target’s holiday partnership with Neiman Marcus. She’d never heard of the brand before, but all of her friends seemed impressed.

“At the moment, I hadn’t realized what I was getting,” she said. “I was fresh out of college. But then I got those products, and I thought, you know, this is a nice brand.”

Since then, she’s bought Tory Burch items at department stores, including four purses, five pairs of shoes and multiplepieces of jewelry.

“It’s a matter of brand recognition,” Arbide said. “Because of Target, you’re going to have a broader range of people wearing items with the name ‘Hunter’ on it. That’ll get people to notice and say, ‘Where did you get that? What is Hunter?’ ”

Case in point: herself. Even though she’d heard of Hunter’s rain boots before, she had never given them much thought or been to the company’s website.

“But once Target announced the collaboration,” she said, “I began going to HunterBoots.com.”

And Arbide is not giving up on the $40 boots yet — even if it stresses her out. On Saturday, when Target makes its Hunter products widely available, she says she’ll set her alarm for 3 a.m.

“I really do want to snag those boots,” she said. “You’re talking about items that normally cost $200 selling for $40. Any time you have something like that available, why not?”

SOURCE: https://www.washingtonpost.com/business/economy/upscale-downscale-target-draws-customers-with-collaborations-with-high-end-brands/2018/04/13/5dd25888-3cd2-11e8-a7d1-e4efec6389f0_story.html?utm_term=.152794c1669a

Most of Trump’s merchandising empire has faded

The Washington Post
By: Zane Anthony, Kathryn Sanders and David A. Fahrenthold
Friday, April 13, 2018

 

Before he ran for office, Donald Trump made millions by selling his name to adorn other people’s products. There was Trump deodorant. Trump ties. Trump steaks. Trump underwear. Trump furniture. At one time, there was even a Trump-branded urine test.

Now, almost all of them are gone.

In 2015, Trump listed 19 companies that were paying him to produce or distribute Trump-branded consumer goods.

In recent weeks, only two said they are still selling Trump-branded goods. One is a Panamanian company selling Trump bed linens and home goods. The other is a Turkish company selling Trump furniture.

Of the rest, some Trump partners quit in reaction to campaign-trail rhetoric on immigrants and Muslims. Others said their licensing agreements had expired. Others said nothing beyond confirming that they’d stopped working with Trump. Their last Trump goods are now being sold off, often at a discount: One cologne is marked down from $42 to $9.99 for an ounce.

“Success by Trump,” the website says. And below that: “Clearance.”

The decline of the Trump merchandise empire is another sign of how politics has changed the president’s business. On one hand, it has allowed his Mar-a-Lago Club and his D.C. hotel to monetize his political alliances, raking in money from evangelical Christian groups and GOP campaigns.

But it has also driven away customers and partners who’d been drawn to the old Trump – a hustling icon of ostentatious wealth, who sold golf memberships to the truly rich and $42 cologne to those who merely wanted to be.

“Once the political campaign started, the wall went up,” said Marshal Cohen, who measures retail business trends for the NPD Group. “The wall that he [built] was more around his merchandise than it was around Mexico.”

The Trump Organization did not respond to questions about its licensed-merchandise business. Trump has said he has given up day-to-day management of his company while he’s in the White House. But he still owns it.

The Trump Organization sells its own name-branded merchandise. Last year, it opened an e-commerce site, www.TrumpStore.com, with an inventory of Trump T-shirts, teddy bears and key chains.

But the licensed-merchandise business was something different. It allowed Trump to make money off other people’s work, other people’s products, other people’s marketing.

All Trump had to do was sell something that he could never run out of.

His name.

Trump first pursued the idea in 2004. His emissaries contacted an executive at Phillips-Van Heusen, the menswear giant, with a proposition.

How would his company like to pay Trump for the right to put his name on their clothes?

The menswear executive wasn’t interested.

“He laughed,” Jeff Danzer, who was a marketer working for Trump, recalled later.

At that point, Trump was still emerging from the long, low years of the 1990s: huge debts, corporate bankruptcies, tabloid divorces. What customer wanted that on their shirt collar?

But then, “The Apprentice” took off – and rebranded Trump as a sharp-dressed boardroom titan.

After that, the idea of Trump shirts wasn’t laughable.

In fact, it wasn’t enough.

“Suits, dress shirts, ties, even down to shoes,” Danzer recalled. “Any- and everything that you would wear in the board room is what we were going out to license.”

By the end of 2004, Trump had a deal with Phillips-Van Heusen and a Donald J. Trump Signature Collection of clothes at Macy’s.

But that wasn’t enough, either.

Eventually, Trump was a smell – A “masculine combination of rich vetiver, tonka bean, birchwood and musk.” Trump was a chandelier. Trump was a mattress. Trump was a steak. “The meat category represents Mr. Trump’s power,” anunderling told the media when Trump Steaks launched.

Trump was a urine test.

“Take a snapshot of the most critical metabolic markers in your body’s natural waste fluids,” said the website for the Trump Network, a vitamin company that sent its customers urine-sample kits with the Trump logo on them. The tests would be used to determine what vitamins the customer needed, according to archived versions of the Trump Network website.

The rest of the marketing business shook its head. But, for a time, it worked.

“A caricature of what wealth is – as opposed to what real wealth is,” said Milton Pedraza, chief executive of the Luxury Institute, a consultant to luxury brands. Trump sold to those, he said, “who didn’t know the difference,” he said.

However, Pedraza said, Trump began to undermine his own success by “label-slapping” – sticking his name on anything he could, even the farfetched and ridiculous. Emeril Lagasse sold pots. Greg Norman sold golf shirts. Trump sold. . . everything.

“There was no strategy,” Pedraza said.

In 2009, Trump reported that his licensing partners had sold $215 million worth of Trump-licensed goods worldwide. That ranked him 80th on License Global magazine’s list of the top 125 merchandisers. In some years, Phillips-Van Heusen alone paid him more than $1 million.

For Trump, the benefit wasn’t just the money. The items brought his name into closets and kitchens around the country.

“It’s ties, shirts, cufflinks, everything sold at Macy’s. And they’re doing great,” Trump told David Letterman in 2012, during an interview in which he’d also complained that China was overtaking the United States as an economic power. “Number-one-selling tie anywhere in the world.”

“The ties are made in China,” Letterman said.

By 2015, when Trump entered the presidential race, some of his more far-out ideas – steaks, urine tests and vitamins – were already kaput. But, according to his financial disclosures, the 19 remaining licensees were still paying him a combined $2.4 million-plus per year, just to put the Trump name on their goods.

Then Trump ran for president.

Within a few weeks, the number was down to 14.

“We are disappointed and distressed by recent remarks about immigrants from Mexico,” said a corporate statement from Macy’s, after Trump called Mexican immigrants criminals and “rapists” at his first campaign event. “. . . We have decided to discontinue our business relationship with Mr. Trump.”

Losing Macy’s meant losing all the Trump merchandise that Macy’s had sold. Phillips-Van Heusen, his first big deal. Peerless, which made Trump suits. Parlux, which made his colognes. Another company made Trump belts. All gone.

Serta, which made Trump Home mattresses, had been one of Trump’s most lucrative partners. Trump lost it, too.

“They’ll all be back,” Trump told Forbes magazine.

A few months later, Trump called for a “total and complete shutdown” of Muslims entering the United States.

He lost another partner, a Dubai-based company that had a license to sell Trump furniture in the Middle East, Africa and India.

That left 13.

What happened to the rest?

To find out, The Washington Post and the Investigative Reporting Workshop at American University tried to contact all of the remaining companies that Trump had listed as licensing partners on his 2015 financial disclosure forms.

In one case, the company was mystified to have been listed at all.

“We haven’t done business [with him] for a long time,” said Jim Ehren, an executive at a sign-making company in the Los Angeles suburbs. His facility had once made inspirational posters, which paired Trump quotes with scenes of Wall Street or a golf course. But not recently.

Two other partnerships – one to sell Trump-branded shoes in Mexico, the other to sell Trump home organizational products – had apparently ended before any Trump-branded merchandise was sold.

That left 10.

Trump vodka also seems dead. It had survived in Israel, after the product had fizzled elsewhere. But Trump’s own financial disclosures don’t list it after 2015.

Trump coffee, also, is no more.

“It was a lack of sales,” said Sam Blaney at Two Rivers Coffee, which stopped making its Select by Trump coffee pods last year. “Not every idea was a good idea.”

At Downlite, which had sold Trump-branded pillows, the company said it had let the license expire in 2015.

“Purely a business decision,” said Josh Werthaiser, the company’s chief executive. “It had nothing to do with the election.”

That left seven.

Of them, five companies said that they weren’t making Trump products anymore – but gave little detail beyond that.

Wonu, which made Trump-branded bedding in Korea, said simply that its license had expired. Ditto for the makers of Donald J. Trump eyeglasses. A French company that once made Trump mattresses has been sold. Its new owner said it didn’t make them anymore.

At the company that once made Trump-branded throw blankets, executives did not call back. When The Post visited its office, a receptionist said she didn’t know of any Trump products being made there now.

At Elk Lighting, a staffer said the company has stopped making Trump-branded chandeliers and sconces. On its website, the company’s Trump Home Regency chandeliers are now sold as just “Regency.”

Since Trump began his campaign, the Trump Organization’s website has not added any listings of new manufacturers, to replace those it has lost. In Trump’s 2017 financial disclosure, he reported that his royalties from licensed merchandise had fallen from more than $2.4 million to just over $370,000. The forms do not give exact numbers, only a range of values that the figures fall between.

Only two companies are still paying to put Trump’s name on their products.

One is HomeStudio, which produces Trump-branded bed linens and housewares for the Latin American market. It declined to comment for this story, beyond confirming that it still makes Trump goods.

The other is Dorya, a Turkey-based manufacturer of Trump Home Collection furniture.

When a reporter visited the company’s Chicago showroom recently, there was a room full of sleek, modern, expensive chairs and tables. But the Trump name itself was hard to find, unless you knew where to look

On one $4,000 end table, for instance, the silver nameplate reading “Trump” – the name Dorya was paying to use – wasn’t on the outside of the piece at all.

To find it, customers had to look inside the drawer.

SOURCE: https://www.sfgate.com/news/article/Most-of-Trump-s-merchandising-empire-has-faded-12831555.php

April 5, 2018

7 Complaints of Successful Luxury Salespeople

CEPro
By: Jason Knight
Wednesday, April 4, 2018

 

Change these seven problems, from spending too much energy on social media to altering product lines, and boost sales by 30%, according to the Luxury Institute.

 

7 Complaints of Successful Luxury Salespeople
New York’s Luxury Institute finds sales training to be a waste, and product discounts are ineffective on high-end clientele. 

 

Has any integrator playing in the high-end luxury market ever wondered why one of his or her previously top-performing salespeople suddenly seems to be demotivated and in a sales slump? According to information from the independent New York-based Luxury Institute, it could be something you are doing, not necessarily a problem with the salesperson.

The Luxury Institute recently held “intimate and confidential individual interviews” with top performing in-store sales associates across the spectrum of top-tier luxury and premium brands. The Institute also cross-checked the findings with store managers and retail heads to confirm the results. These top performing associates average more than 12 years of experience, and most perform supervisory roles. They are among the 20 percent of associates who deliver 80 percent of the dollars to top brands, comprising all genders and ethnicities.

The data reveals a “performance-numbing lack of communication” between top-tier luxury brand headquarters and their front-line associates. “The consequences continue to be a significant loss of sales, high employee turnover, poor morale, and most importantly, severed or damaged client relationships,” says the Institute. While the focus of the study was on retail luxury brands, many integrators may be able to relate to these same issues for their own sales teams.

According to the Luxury Institute, luxury employers who adopt these principles will boost their sales by 20 percent to 30 percent.  Here are the seven critical issues that top-performing salespeople say negatively affect their sales performance.

1. Sales Training Is a Waste

Top performers are unanimous on this point, according to the Institute. Successful salespeople learned how to build client relationships from parents and exemplary mentors who inspired in them a passion for living their life purposefully on a daily basis and helping others at work beyond the training tools provided by the brand. They see product and operational training as table stakes. According to these top performers, current sales training is coercive and dehumanizing.

The best associates tell Luxury Institute that they have honed their skills mostly through trial and error, learning to listen without judgment, asking relevant questions, earning trust, and finding creative ways to make individual clients feel cared for and special.

They acknowledge that it took far too long for them to achieve top performance. They want accelerated relationship-building skills for everyone on the sales team, especially for young associates. These young team members have grown up on social media, and the veterans observe that many can’t make eye contact, they lack empathy, and that they are unable to apologize without stating, “I am so sorry you feel that way,” when they make a mistake.

Some top sellers have hired personal coaches at their own expense.

2. Client Feedback Is Often Ignored: Inventory Is Mismanaged

Clients provide constant feedback to the sales associates about products, policies and trends. According to top sales associates, this critical intelligence is rarely collected systematically, or acted upon. One frequently cited example is the constant tweaking, or discontinuance, of timeless staple brands.

Another impediment is inventory mismanagement. VIP clients are often left wanting due to mismanagement of inventory. These destroy customer lifetime value and relationships. Many clients feel betrayed and don’t return.

Top associates say customer attitudes, desires, and behaviors change often. They recommend that these changes be monitored through periodic market research, or by aggregating customer feedback through the voice of the associate. Also, meet with the sales team prior to rolling out any new product offering.

3. Stop Spamming Clients With Emails

Top sales associates earn trust with top clients by committing to them that they will not be spammed by emails or contacted excessively. But salespeople complain their clients are sent waves of “irrelevant, impersonal emails and other communications,” even though the campaigns are often well-intentioned and well-executed.

Associates say they prefer to keep their frayed, outdated black books, and protect their relationships, rather than enter the information into the database and lose a great client. The result is a massive loss of a critical asset in the era of Big Data. Even more damaging, when a client loses trust, the impact on sales is negative and too often permanent.

The best sales associates suggest using a CRM specialist who understands that personal, measured, humanistic communication is required to build a long-lasting client relationship.

4. Stop Discounting Products/Services

One of the greatest annoyances for both clients and sales associates are inconsistencies regarding product pricing. When clients see products or services for which they paid full price available later for a lower price, they revolt and demand make-goods. The wealthiest clients are particularly vocal, based on principle.

Pricing inconsistencies makes clients hesitant to buy at full price. It also allows sales associates, who want to stay in the client’s good graces, to encourage clients to wait until the products go on sale. Those, according to the top performers, are the games they are forced to play, which adversely affect their credibility and their earnings.

They suggest offering more exclusive products for their own channels, and offering classic, heritage, and signature products that never go on sale. Providing early access to very limited-edition exclusives is not only a more profitable way to engage VIP clients than early access to promotions, it is also a more meaningful way to connect with them. Top associates are happy to let marketing communicate sales and promotions. They would prefer to have the inside scoop topics to talk about.

5. Keep Technology Up to Date

Top performers say it’s a big positive to have “wow factor” in a showroom, but it needs to be kept up to date. That same message goes for the back-end systems, such as inventory management. Even things like making sure the Wi-Fi in the showroom is fast and accessible are a plus. If your showroom Wi-Fi is slow, what do you think a customer will think about the system you can install in their home?

6. Social Media Hurts Local Marketing Initiatives

Top sales associates are active personally and professionally on social media. Many of them post to Instagram almost daily and appreciate that some of their clients stay in touch, albeit lightly, on Facebook and Twitter. However, they report, and the research bears out, that the wealthiest and highest potential clients are less active on social media than aspirational consumers, and are becoming even less so as they become more fearful of the potential damage to their identity, reputation, and privacy.

Wealthy clients have far more to lose in a social media environment where the evidence now shows that their data lacks any protection.

According to top associates, marketing has failed to get the message. They want more funds for customized gifting, rewarding special clients, and creating personalized and exclusive client events. They are happy to be held accountable for the return on investment required to fund those programs and invite marketing to be a part of the brainstorming, execution, and measurement.

7. Offer Flexible Schedules

Calling working schedules “dehumanizing” and “stuck in the Industrial Age,” the study says employers need to be flexible in both scheduling and compensation. Top sales associates who pay for themselves in multiples want flexible schedules and compensation to maximize productivity. For example, part-timers can be some of the most productive sales associates.

 

Source: https://www.cepro.com/article/7_complaints_of_successful_luxury_salespeople

March 30, 2018

A Huge H&M Sale Might Be Coming Thanks to $4.3 Billion in Unsold Clothes

Harper’s Bazaar
By: Lyndsey Matthews
March 28, 2018

Despite high-profile collaborations with both Erdem and Nicki Minaj last fall, H&M admitted that it is sitting on a stockpile of $4.3 billion worth of unsold dresses, accessories, and other clothing and has seen a 62 percent drop in profits in the three months through February of this year, The New York Times reports.

While this is bad news for the Swedish retailer, which also owns Cos and & Other Stories, it’s great news for everyone else since H&M plans to slash prices in the upcoming months to get rid of the unsold stock to fix the problem. But some of that inventory includes months-old Halloween costumes and Christmas sweaters, according to the Washington Post.


Getty Images

The massive pile of unsold clothing—a 7 percent increase in the past year—is just one example of how the fashion giant has been unable to keep up in a world where more shoppers are skipping stores and heading online to buy clothes instead.

In addition to cutting prices, H&M also plans to cut back on opening new stores and focus their efforts on expanding their online business by 25 percent this year.

However, that might not be enough to fix the problem and financial analysts aren’t optimistic about the company. In fact, one even called H&M “a slow-motion wreck” after seeing the company’s first quarter results, according to The New York Times.

Part of the problem is that the millennial consumer base is starting to opt for well-made clothes rather than cheap “throwaway products,” Milton Pedraza, CEO of New York-based market research firm Luxury Institute, told the Washington Post. They’re more interested in “classic and quality, neither of which H&M has been able to deliver.”

But for those who are still loyal to H&M, keep an eye out for massive sales in the upcoming months.

 

Source:  https://www.harpersbazaar.com/fashion/a19623623/hm-has-billions-in-unsold-clothing/

March 28, 2018

Despite deep discounts, H&M can’t get people to buy its clothes

The Wall Street Journal
Abha Bhattarai
March 27, 2018


(Charles Mostoller/Bloomberg News)

Despite a series of widespread markdowns, clothing chain H&M is struggling to sell off $4 billion in extra merchandise — including months-old Halloween costumes and Christmas sweaters — as changing consumer tastes and increasing competition take their toll on the Swedish retailer.

The company, for years a fast-fashion darling, says it’s having trouble persuading customers to buy its clothes. Sales are slipping, profits are down to their lowest level in 16 years, and inventory is way up, H&M parent company Hennes & Mauritz said Tuesday. Shares of the retailer’s stock fell about 6.8 percent Tuesday, to their lowest level since 2005.

“The rapid transformation of the fashion retail sector continues,” H&M chief executive Karl-Johan Persson said in a statement. “The start of the year has been tough. Weak sales combined with substantial markdowns had a significant negative impact on results in the first quarter.”

A confluence of factors have led to H&M’s troubles, analysts say. Chief among them: Millennials are growing up and are more interested in buying well-made clothes than in buying cheap items. There is also more competition from companies like Zara, Topshop, Uniqlo and Asos — all of which customers tend to associate with higher-quality clothing and better websites, according to Milton Pedraza, chief executive of the Luxury Institute, a New York-based market research firm.

“Millennials are looking for quality over quantity, which means they no longer want throwaway products,” Pedraza said. “They care less about fashion and more about classic and quality, neither of which H&M has been able to deliver.”

The recent backlash over an H&M ad showing a black child wearing a “coolest monkey in the jungle” sweatshirt could also have hurt sales, analysts said. There were widespread calls for customer boycotts after the January incident, and musicians The Weeknd and G-Eazy, both of whom had partnerships with the retailer, announced they would cut ties with the company.

“Whether an oblivious oversight or not, it’s truly sad and disturbing that in 2018, something so racially and culturally insensitive could pass by the eyes of so many (stylist, photographer, creative and marketing teams) and be deemed acceptable,” G-Eazy wrote on Instagram. “I can’t allow for my name and brand to be associated with a company that could let this happen.”

H&M has since apologized for the ad, but some in the industry say the company could feel far-reaching effects.

“There was a huge backlash, particularly in places like South Africa, that could’ve left some customers saying: ‘You know what? I wasn’t that loyal to H&M anyway. Maybe I’ll shop somewhere else,’ ” said Tasha Lewis, a professor of fashion design management at Cornell University.

In the most recent quarter, H&M said inventory rose 7 percent to a record $4 billion. On Tuesday, the company’s website was promoting “further markdowns up to 70 percent off.” Many items were clearly months old: Halloween-themed T-shirts were selling for $3.99, while infants’ Santa outfits were discounted to $4.99.

Excess inventory has plagued a number of traditional retailers in recent years, as customers increasingly shop online and look to start-ups for more unique clothing. Several chains, including Macy’s, Kohl’s and Nordstrom, pared back on holiday inventory last year, hoping to avoid having to offer deep discounts on leftover merchandise. The plan seemed to work: Retailers posted their most successful holiday performance in years, and many said they did not have to resort to huge markdowns.

“We maintained a healthy inventory position, which meant we did not need additional discounting to clear inventory,” Jeffrey Gennette, chief executive of Macy’s, said in a recent call with analysts. “We were disciplined with our promotions.”

That, however, wasn’t the case at H&M. As the world’s second-largest clothing retailer (behind Inditex, which owns Zara), analysts say, the company is particularly susceptible to the whims of consumers. H&M’s quarterly sales began falling late last year.

“There is a massive clash between customers’ expectations and what companies are delivering,” said Andreas Inderst, an analyst for the Macquarie Group in London. “This is an industry-wide issue, but for H&M it has become a particularly pronounced problem.”

Company executives, meanwhile, say they’re planning further discounts in the second quarter, as they look to turn around H&M’s business. The company is also preparing to introduce an “off-price marketplace,” called Afound, that will sell discounted items by H&M, as well as other brands.

Source: https://www.washingtonpost.com/news/business/wp/2018/03/27/despite-deep-discounts-hm-cant-get-people-to-buy-its-clothes/?utm_term=.2e8294e6a60d

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