One of our favorite trend reports of the year has been released. Mary Meeker's report covers the internet in its entirety - extending beyond digital commerce. But, as it is where our stores reside, we anticipate and devour the broader market information that Ms Meeker provides. A few takeaways:Read More
Uber's head of Economic Research and former economist at Yale, Keith Chen sat with NPR's Shankar Vedantam to talk about dynamic pricing and behavioral economics. This is a must listen for every merchant, buyer and product / brand manager who touches or thinks about pricing.
Canada's large retailer sales are in, and they are showing a consistently modest overall increase of 1.5 percent.
A few highlights of the report include:
- Womenswear's first increase in months at 2.7 percent (although, much of that may be attributed to markdowns)
- Menswear continues to post steady and impressive growth: 7.8 percent this month, 5.2 percent in May, and 4.9 percent in April
- The decline in books has grown to over 7 percent (from around the 5 percent in previous months)
- Sporting goods, and toys, games, hobby have achieved another double-digit month at 10.9 percent increase
A markdown is almost the most boring topic to talk about in retail. Almost. Busier promotional calendars from some of the globe’s biggest retailers, tough competition, shoppers comparing prices online, and a new wave of e-commerce companies make this one of the most interesting areas in retail right now.
The basic tenants of product markdowns haven’t change at all. Markdowns continue to be expensive lessons for retailers and buyers. Markdowns are a way to free up cash flow for new merchandise. The first markdown is always the best and most effective.
But, the way in which retailers are approaching markdowns is shifting.
A NECESSARY EVIL
Every article ever written on markdowns begins essentially the same way: “it’s a word that brings instant weariness to any retailer”. Most then indicate markdowns are a ‘necessary evil’. Then some try to put a positive spin on the act of reducing the value of your merchandise.
This is obvious and a bit silly. No one in the industry wants to devalue the product they have picked for their customer - a customer who has supported your store(s) year after year.
However, the tips and tricks included are good standbys:
- Place your markdowns at the back of the store, so your customer has had a chance to shop regular price merchandise first.
- Make your first markdown count. It should be deep enough to immediately drive up the rate of sale.
- Storewide promotions are twice a year, limit your promotions otherwise to clearing up duds. The customer is trained to shop at these sales only twice a year.
What these tips and tricks lack is the acknowledgement that the way large, dominant retailers has shifted. This is simultaneously altering the way the consumer is shopping as well.
Most of the world's biggest and best retailers love markdowns. They have found a way to use a large amount of in-season promotions to drive traffic and sales. In fact, each season’s strategy is not so much of a strategy any more, but resembles instead a promotional plan.
Take for example North America's oldest retailer, Hudson’s Bay. This retailer uses Bay Days and One Day Sales to purchase low cost, low quality, high volume product to drive a million dollars in sales per day. Combined with an extensive calendar outlining when each brand will appear in-flyer and in-store at 25-, 30-, 40- percent off, the myriad of direct mail coupons, monthly seniors days, and weekend events, the retailer is always on sale.
Branded retailers, like American Eagle, are also planning their promotions pre-season instead of using markdowns to only clear inventory at season's end. A simpler calendar is used in which merchandise is designed and bought for promotions throughout the year: 2 / $20 graphic tees, $25 denim events, etc.
In many cases, the ‘always on sale’ strategy is driving top line sales, and certainly traffic for these retailers. The margin pressure is also often significant. These companies are sometimes producing lower quality product to account for the reduction in retail price. High volume purchases are also part of the strategy, enabling the manufacturer to achieve economies of scale. And finally, as with Hudson’s Bay, the vendor base is quite literally paying for the margin shortfall that results from the promotional strategy.
This is a difficult strategy to compete with for any retailer with less than 50 stores.
At the other end, there are retailers refusing to participate in markdowns completely. Everlane andDollar Shave Club are both building strong business with this model. They are e-commerce companies, which inherently makes their operating margins lower. Both offer extremely limited assortments – some variation supporting a few core items. Both have a high value product and pricing strategy – offering essentially wholesale pricing to the consumer.
The key to their regular-price strategy, however, is scarcity of product. Everlane manufactures smaller quantities until demand requires otherwise.Vancouver’s own Aritzia built their business this way.
Zara, on the other hand, has significant breadth of merchandise, operates using retail pricing, and is a bricks and mortar retailer also has success with the scarcity model. Zara’s markdown rate fluctuates between 15 and 20 percent.
Product scarcity is not actually a markdown strategy as much as a way to avoid markdowns. It doesn’t just mean selling-out of product, and it certainly is not the Target-method of stocking shelves. Product scarcity means diligently measuring demand and having the system, procedures and partners in place to help you execute.
For smaller retailers this may mean simply having your best suppliers hold stock for you in-season.
There is also a customer psychology component. The customer needs to know and understand that the product is
- highly covetable and
- available for a limited time.
Communicating exclusivity, covetable product attributes, or limited timing, are essential components of product scarcity messaging.
Exclusive product is often too limited in quantity, sizing, and pricing. What do you do if your customer is unable to purchase the scarce product? Have alternatives on-hand that are easy purchases for your customer. For any item in limited quantities, platinum pricing, or advanced design elements, the alternatives will allow your customer to purchase/participate. And, of course, it allows you to make a sale.
To see markdowns in a new way, a mastery of the connection between consumer psychology, brand strength, and the commerce of markdowns is key. Deepen your understanding at the item and market level. The tools, content, and best-practice resources will enable a stronger strategy, from the first to the last markdown.
Course access is available for four (4) weeks from time of purchase.
Canadian consumers are right, there is a price gap between the cost of goods in Canada and cost of goods in the United States. This has been an issue that retail buyers, wholesale reps and Canadian distributors have been struggling with for well over a decade.
Most Canadian cities are located within a few hours of the US border. Better sales, better brands, and better pricing have been consistent reasons cited by customers for shopping in the US, instead of Canada. Although there is better brand availability in Canada, pricing is still a concern.
The retail industry has largely attributed higher taxes, shipping, customs and duty for this perception. But a new Statistics Canada Report indicates that the before-[consumer-]tax price of non-regulated goods is almost 25 percent higher.
The CPL, or comparative price level is a ratio of the final selling price in Canada to the final selling price in the US – adjusting for the difference in currency exchange. The CPL in 2011 of 1.25, pre-tax, indicates consumer goods were priced 25 percent higher in Canada than the US.
And there is a relationship with the currency exchange rate. As the value of the Canadian dollar rises, so does the price of goods in Canada compared with the US. In 2002, when the dollar was at US$0.64, CPL was 95 percent. When the exchange reached US$1.01 in 2011, the CPL also rose to be 29 percent higher than the US standard.
With price parity still out of reach for Canadian consumers, relative prices fluctuating with currency rate changes, a delayed adoption of e-commerce, free shipping from the US, and an influx of American retailers into the country – the industry up north certainly has its challenges.
Target Canada launched over 100 stores in the country in the last year, with prices higher than in their US stores. Overall, the retailer lost over $1billion in the first year, for a variety of reasons, but customer’s overall disappointment in pricing is perhaps one of them. They’ve recently replaced the CEO, and it will be interesting to see how they address the parity issue. Perhaps a lower operating margin to achieve comparable US – Canada retailers is on the table to help ensure market-share growth.
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No one would deny the action sports world is undergoing a significant shift. After years of unstoppable growth, acquisitions, and brand extensions, the industry has found they have spread themselves too thin.
Sales in core brands has slowed, while profit margins have declined (if not entered into negative territory). In search of financing, at least two of the major four brands – Billabong and Ripcurl - declined to reach a deal in a ‘hostile’ IPO and buy-out market.
2013 was the year the industry took a good look at itself, and outlined how they would adjust and transform their businesses to remain relevant to a younger audience.
Much of the media coverage has been focused on changing and uncertain executive posts. Quiksilver replaced 7 of the 10 executive posts in 2012-2013 with leaders from strong global brands (i.e. Nike, Disney, etc.). From 2012 Billabong has seemed uncertain about the permanence of the leadership in the CEO post. What was underestimated in the coverage were the subtle, yet significant shifts in the ways these brands do business. Kelly Slater moving on from a 20+ year relationship with Quiksilver is a perfect example.
Sounding similar to many retilers strategy statements, Quiksilver’s 2013 profit improvement plan outlines a focus on core brands, the reallocation of marketing to social, and a shift from a regionally to globally managed company. Here’s how it breaks down.
FOCUS ON CORE BRANDS
The core brands for the organization are Quiksilver, Roxy and DC – the girls surf line showing the largest growth as of late. Quik has already exited its womens contemporary business, Dane Reynolds’ Summer Teeth, VSTR and Hawk. Muskova, Lib Tech, GNU, surfdome, and the iconic Maui and Sons are left. They’ve all be noted as “not significant”, with Maui and Sons also receiving an ‘x’ instead of a check for sustainability.
In 2013 alone, Quiksilver released 100+ athletes and cancelled numerous event sponsorships. In 2012 the company estimated that they spent only 15 percent of their marketing budget on activities related to product “demand creation”, and 50 percent on athletes and events. By 2013 Quiksilver estimates their demand spend will be closer to 70 percent, with athletes and events making up 10 percent of spend (salaries and T&E make up the rest). Cue the Kelly Slater announcement.
No one in the industry today would fault a shift to social media spend, such a drastic move will have larger industry implications.
Action sports are an industry that has built its growth and popularity through event and athlete sponsorship. If the big three aren’t going to do this, we’re not sure who is. While this may be the right decision for the company, the move won’t do much for strengthening or growing the size of the market.
It’s always better to grow the size of the pie before dividing it up. The big 4 may just be competing for market share at this point.
SUPPLY CHAIN OPTIMIZATION
This is where great work is being done. Previously only 20 percent of Quiksilver styles were globally available, as much of the design and purchase orders were written regionally. The company was developing 51,000 styles annually.
Consistent brand identity is easily achieved with one collective voice and one product offering. Weather requires some variations, but the goal of reaching 70 percent global styles seems both a prudent use of design resources, and a wiser move to develop global brand strength.
Demand and merchandise planning are also being done at a global level will which allow the company to achieve better pricing and delivery as they will now have more significant volume. Reducing their vendor base by over a third – and utilizing them across brands, will also allow for greater simplicity throughout the supply chain, and the pricing efficiencies mentioned above. This aggregated factory model will also allow the organization to push more responsibility to the supplier-level, including pre-packing for larger retail clients.
Of course, it wouldn’t be a sourcing strategy in 2013 without talk of shifting production to lower cost countries. While we have mixed feelings about this, because the skill in each of these low-cost regions (Bangladesh, Indonesia) is still developing. A certain quality of product needs to be maintained.
This year, 2014 first quarterly losses are coming from the wholesale channel, which decreased by 7 percent. This may be a result of true demand for the product, or a shift in wholesale sell strategy. In 2013 the company switched to a single sales team to support all brands.
Direct to consumer channels showed the best growth for the first quarter this year, comp store sales increased by 2 percent, while the total retail channel increased by 4 percent. E-commerce, as expected, is the fastest growing channel at 16 percent.
QUIK IS NOT ALONE
Billabong is going through a similar restructure, although with less certainty. The brand has been plagued with buy-out and share sale talks since 2012, with uncertainty surrounding the CEO post.
Similarly, the company is in the process of shedding excess weight. Billabong has successfully extinguished future purchase obligations with Nixon, sold Canadian Chain West 49 to YM Inc., and shuttered the doors on 158 under performing retail stores.
Reducing supplier base by 75 percent while focusing on the “core business” will also help the brand achieve efficiency in pricing and operations. The brand will retain its regional organization – Americas, Europe, and Australasia.
Operationally, both Quiksilver and Billabong are doing the right things to ensure they remain in business for the next decade and beyond. Coming off of a local focus and emphasis on new brands, the businesses are cycling around to their core competencies.
What we look forward to next are the conversations around innovation, which is what will be needed to maintain their relevancy in the market. Technical fabric innovation, design innovation, and lifestyle innovation.
Most of the results above are no surprise, particularly the continued rise of Omega, Patek Philippe, Piaget, Cartier and Hublot. However, Zenith’s falling results may be an eye-opener to followers of collector forums.
Patek Philippe, Jaeger-Le Coultre, and Zenith are the top three brands across all watch forums. Of course, most of the activity occurs on two forums only: Chinese platform iWatch365 and TimeZone.
More on watches:
- According to some industry experts, 80 percent of the worldwide watch and jewelry turnover is generated at Baselworld, which is happening right now.
- Swiss exports are slowing. In 2013 they grew 1.9 percent, down from 11 percent in 2012.
- Watches exported at under 200 francs ($226 US at today’s exchange) made up 65 percent of the market.
- While still making up the highest percentage of unit exports, watches less than 200 francs ($226 US) also had the biggest yearly decline (-8.5 percent).
- Swatch Group posted an 8.3 percent increase in 2013 from last year.
- LVMH’s watch and jewelry category showed a decline of 1.8 percent in 2013.
- Europe and France together make up 34 percent of LVMH’s watch business. Asia contributes 40 percent.
- Asia continues to dominate the market with over 50 percent in value share.
 Henselder, Axel. 2014 March 27. “Looking Good: Swiss watch industry ticking along at record pace”. Baselworld Daily News.
WALMART's FACTORY AUDIT
Walmart, with over 200 Bangladeshi factories producing merchandise for them, has released the results of an initial audit of 75 factories. Of the 75, 10 had outright failed.
Each factory audited was given about 60 days to improve on their safety score. As a result, the retailer discontinued business with 2 factories, and reported that 34 have improved their initial grades from a C or D to A's or B's. This is a powerful indication of what can be accomplished in the country's garment industry when a retailer applies pressure.
The report makes no mention of the number of factories who received an initial C or D rating and did not improve their scores. But it is a good start, 45 percent of the factories showing improvement.
WAGE INCREASES FOR GARMENT WORKERS
Much of the focus in Bangladesh, since the factory collapse and fires earlier this year, has been spit between building safety codes and treatment of workers. Earlier this month a government-appointed panel voted to raise the minimum wage to 5,300 takas a month (or about $66.24 US) from the current $38 US level. However The Ministry of Labour still needs to approve the amount to make it law.
Workers have rejected the proposal indicating that nothing below 8,114 takas ($100) is acceptable. Factory owners are also fighting the wage hike, as it will increase their production costs, effectively eliminating their competitive advantage.
With 100 companies now signed to the Accord on Fire and Building Safety in Bangladesh, 1500 of the 3500 active garment factories are slated to be inspected in the new year. "You can feel there is a momentum quite frankly that is quite different to what I saw six months ago, " Gilbert Hounbo, ILO deputy director-general said earlier in Geneva.
In order for the Bangladesh garment industry to continue to improve its production quality, worker livelihood, and growth (although the latter has been quite strong despite the former two issues), the world's retailers will have to do their part to maintain that momentum and pressure for improvements.
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Urban Outfitters had a strong Q3 contributing to net income figures of +25.1 percent in the first nine months of the year. The company opened nine stores in the quarter, bringing the global store count to 500. The wholesale side saw net sales rise 20.5 percent to $50 million. Here's how the rest breaks down:
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This week, two major retailers took a step out of their comfort zones, across the country, to play in their competition’s playground. Walmart has expanded its west-coast technology lab, and Amazon has opened a photography facility in New York.
AMAZON IN NEW YORK
Amazon announced the opening of a 40,000 square-foot photography facility in New York, which plans to run 24/7 when it’s fully operational in a few weeks. Fashion, lead by Cathy Beaudoin, is estimated to be a significant blend of the company’s expected $95 billion business in 2013, which includes women’s contemporary Shopbop.com, men’s Eastdane.com, and MyHabit.com which is the flash sale component.
Amazon is west-coast based, with headquarters in Seattle and a significant presence in Silicon Valley, but the company was eager to make a home in New York. The studio is expected to serve it’s own businesses, in addition to those sellers who use the Amazon site as a third party sales outlet and platform.
“New York is a magnet for talent — models, photographers, digitech people, hair and makeup stylists,” Beaudoin said. It’s as much about cost-cutting and convenience as it is about image excellence. “This is allowing us to scale and obsess over the customer experience”.
WALMART IN CALIFORNIA
While Amazon is focused on improving its soft-lines and ‘customer-browsing’ capabilities, Wal-Mart is looking to compete and play catch-up with the etailer in e-commerce technology. The discount retailer is pouring money into mobile and talent, expanding it’s offices in San Bruno, California to include foosball tables and salmon entrees.
Talented engineers are what the company is after, as Walmart continues to grow its $10 billion ecommerce channel. Same-day delivery, online pricing, and free delivery (without membership) are the areas Walmart continues to make head-way.
Walmart’s online revenue may only be a fraction of Amazon’s, there is significant opportunity with the volume of unique visitors to the site. Walmart counted just shy of 63 million unique visitors in August – which is about half of Amazon’s 133 million. That is a much smaller delta than the revenue measurement. It shows that Walmart has the customer’s interest – it just needs a larger share of their dollar.
Earlier in the month Walmart also opened two new online fulfillment centres so it could increase its product selection and ship packages to customers quickly and cheaply – the two strategies which enabled Amazon to become dominant in the channel.
Both retailers have significant strength: Walmart has scale and profitability, Amazon dominates the e-commerce world. Both have the vision and awareness to know they need to expand into new areas. That is good news for the future of both.
- Flash sale sites are shifting models
- Increasing purchase frequency and basket: Amazon Fresh
- Amazon dominating the loyalty sphere with speed and membership
- Amazon Unpacked
- EBay vs Amazon - Fashion Edition
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For the first half of 2013, sales were up 14 percent.
Consistent with the luxury retail sphere, Hermes' own stores were driving growth at a faster rate, 15 percent versus wholesale sales at 11 percent.
PRODUCT & METIERS
Forty-six percent of the company’s sales are in leather. Production capacity is limited growth at about 10 percent. Availability of quality raw materials and artisans who can achieve the caliber of craftsmanship is limited globally.
Textiles, home, and jewelry are seen as Hermes’ product growth engines. Jewellery and the Art of Living show the greatest potential for expansion achieving 40 percent increase in the first half of 2013. For the same period, perfume was up 20 percent, adn silk + 13 percent. Watches were a bit slower, as with the rest of the industry, down 1 percent.
Hermes silk scarf takes 750 to 2000 hours to engrave. Two thousand hours is equivalent to one year of work. There are 25 to 40 colours per scarf.
Fastest growing market – Canada 20 percent + annually for the last two to three years. This is largely attributed to the stability of the economic environment in the country.
Asia is a close second, and encompasses a much greater percentage of the companies overall business. Asia, excluding Japan, grew in the first half of 2013 at 17 percent, and makes up one third of the company's sales.
Hermes is opening a space which is dedicated to Petit h in the rue de Sevres Paris store.
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As Louis Vuitton's sales performance growth slows from West to East, LVMH continues to grow it's portfolio of companies which appeal to a wider audience.
Louis Vuitton, the flagship brand, is beginning to appear oversold, particularly in China. David Sadigh, CEO of Digital Luxury Group told Forbes in June that many luxury brands are still growing in the Chinese market. This is in contrast with Louis Vuitton which has pulled back its expansion plans for the near future, while the brand continues to see modest sales growth.
Sephora, as part of the Selective Retailing business group, achieved organic revenue growth of 19 percent. This out-indexes the total for LVMH's 2 percent. The Fashion & Leather Goods group achieved only 5 percent revenue growth, and a decline of 1 percent in profit for the same period last year. In North America Sephora continues to strengthen its position and innovate in the digital sphere. A flagship has been recently opened in Shanghai, and the retailer has begun its expansion in India.
Catering to beauty buyers through fragrance and cosmetics is a smart move, as these products give mass-market consumers and entry-point into the luxury sphere. Sephora's combination of exclusive product offerings, exclusive size options for products with wider availability, and a strong private label are the aspects in which the company is able to maintain control of pricing (with less pressure to discount to keep up with direct competitors. Many analysts agree, Sephora will continue to be LVMH's cash cow in the short-term.
Amazon Fresh has been slow to roll-out beyond the Seattle market, where it launched in 2007. The usual Amazon MO of undercutting prices (up until this year, largely through tax-free purchases for consumers), to gain market share is not as easy in a business like grocery with thin margins and high delivery costs associated with daily delivery service.
As Amazon looks to offer same-day delivery in all product categories, and begins to build a fulfillment network to facilitate this service, Amazon Fresh is set for it's rollout. And it's not because Amazon necessarily wants to become your full-service grocer, but because of how often people buy food.
SAME DAY DELIVERY LOGISTICS
Same day delivery is considered to be the next level of service expected by consumers - soon to be a standard option without the high delivery costs it is associated with today. However for an e-retailer, creating a same-day service poses significant logistical and economic hurdles. McCorvey writes, "It's the so-called last-mile problem--you can ship trucks' worth of packages from a warehouse easily enough, but getting an individual package to wind its way through a single neighbourhood and arrive at a single consumer's door isn't easy" .
How frequently trucks need to leave the distribution centres, sometimes with minimal volume (trucks that are half-full) poses and economic efficiency problem. If a truck is travelling across town and is only making a few stops along the way, the cost associated with delivery (fuel and time) may be very expensive.
The business key is to balance the immediacy with which the customer wants their goods delivered (the frequency of deliveries) with a volume of merchandise worth delivering.
INCRESED PURCHASE FREQUENCY - & basket
Same day delivery service is something that is expected from Amazon's general merchandise business - and this is where Amazon Fresh comes in. Grocery customers shop at least weekly, and of course, expect same-day delivery. By turning monthly Amazon customers into weekly Amazon and Amazon Fresh customers, the company is generating order volume that makes same day delivery economically viable.
Fresh PRIME LOYALTY
And the final piece of the puzzle - how do you ensure customers are consistently purchasing their weekly groceries from you? Through a membership program which will drive customers to it. We did a quick review of the company's Prime program which is built upon free or discounted delivery. Fresh prime offers $299 membership, which means about 30 orders with free delivery are needed to reap the benefit. With 10 million users of Prime, Amazon has already proven that their membership program works.
The end result of all the above combined? Leading the industry through customer satisfaction with cheap (or free) same-day delivery, increasing customer purchase frequency, added categories and spend with each order (basket), and a potentially significant new membership program with Prime Fresh. "Think of the synergy between Prime, same-day delivery, and Fresh," says Tom Furphy, former Amazon Fresh executive. "When all of those things start working in concert, it can be a very beautiful thing."
ADDITIONAL NETWORK BENEFIT FOR AMAZON
There is an additional business advantage to building a powerful network of transportation and fulfillment centres, and its build upon Amazon's exiting Third Party Fulfillment by Amazon (FBA) business. Amazon provides the framework for third party sellers - currently 40% of Amazon's product sales - and when they use FBA, Amazon handles (and takes money from) the picking, packing and shipping. Increasing their transportation and distribution facilities to accommodate Amazon Fresh and same-day delivery will also have the added benefit of increasing FBA business as well. Not bad for Bezos.
In celebration of Canada Day, we're reminiscing about the trade which built the nation's economy - and is experiencing a resurgence today: FUR. At the Fur Harvesters Auction earlier this summer, a polar bear pelt sold for a record $22,000. To give you some perspective, according to the National Post, five years ago $1,000 would have given you a nice hide.
Fur and skins have been an increasingly important material in both fashion and home decor (and reinforcing the Canadiana image, ELLE is also calling for plaid to be important in high-fashion, moving out from its casual contemporary roots). Hotel, restaurant and lounge decor has exploded with taxidermy of various forms, and we happen to know at least 2 members of the extended Retail Assembly family who have their trappers license.
Canada's retail history is embedded in the fur trade. North America's longest operating company, the Hudson's Bay Company, began in trading pelts. And recently celebrating 175 years, Holt Renfrew - the country's largest luxury retailer - experienced initial success and growth with fur hats and coats, and maintains a very successful fur shop.
Harvesting fur and skins can be a beautiful craft. The artisans maintain centuries-old skills and knowledge of people who truly lived off the land. Feeding demand in a humane, artful way is always a challenge in retail - as many innovations in the industry are focused on mass production. For a distinctly Canadian perspective on the hunting and preparing the animals which live in the wild, we recommend David Adams Richards "Facing the hunter". Happy Canada Day!
Tod's Made-to-Order Milano mens club
The Sartorial Touch is a new luxury space housed on the fourth floor in Tod's Milano flagship at 22, Via Spiga. With private tailoring desks, a wet bar and lounge, Tod's customers will be able to order custom shoes, bags, luggage and small leather accessories - delivered in two months. Reviving old world mens clubs has been happening with greater frequency in the last decade or so, but the ability to create made-to-order shoes in this environment has us particularly eager to visit the Tod's Milano store again.
Gucci's first mens flagship and made-to-measure collection with Lapo Elkann
Also in Milan, Gucci unveiled it's first mens flagship in Brera. Three floors, covering 5,400 square feet, and a dedicated made-to-measure program, and an application for LEED certification are some of the highlights. The made-to-measure collaboration between Gucci creative director Frida Giannini and Lapo Elkann, Italian style icon and businessman, (pictured above) will make its premiere at the store this month. And yes, made-to-order shoes are also available.
This past Friday, three young American design teams presented their collections at the Ming Dynasty City Wall. The event was sponsored by a Silas Chou, an industry businessman from Hong Kong, through the CFDA/Vogue's fashion fund. Part exploratory mission, and part formal introduction to the market, the selected designers attended events hosted by Gary Locke US ambassador to China, and Vogue editor in chief Angelica Cheung.
The event was initiated and inspired by a lunch Anna Wintour had with Jack McCollough and Lazaro Hernandez, where they were attempting to articulate their entrance into the growing market - a challenge for many brands and designers. "They [the Chinese consumer] are not as familiar with the American labels. They're much more familiar with European high-end labels", Mrs. Locke indicated. The challenge of navigating a high-growth economy of significant size, when European luxury labels are quickly expanding is a daunting task for smaller luxury labels. Designers can connect with global markets through e-commerce, digital content and social media - but giving the Chinese customer the opportunity to interact, touch, feel the clothing directly is a challenge.
It was the designer(s) behind Rag & Bone, Marchesa, and Proenza Schouler who headed to Bejing as part of the initiative. Although each of the brands have exposure to the Chinese customer in China through Lane Crawford and a small handful of other retailers, it was an excellent opportunity for additional business contacts and partnerships on both sides. "We're exploring and talking. To open something in China, you need a local partner, so we're sort of testing the waters, " Hernandez told WWD. From that perspective, the event seemed to be worthwhile.