BrandWatch by Michel Gutsatz

Hong Kong: what brands are they queuing up for?

I was in Hong Kong three weeks ago. Canton Road in Kowloon is the main artery where you find all the luxury brands, and to where "mainland" Chinese rush on weekends to take advantage of the price differences between boutiques in Hong Kong and the mainland (30% to 50% depending on products and categories).  I was able to take some photographs that make it clear that all brands do not sail in the same boat. Three brands stand out:
Pay honour to whom honour is due: Chanel. With just 7 boutiques (end of 2011) in China, Chanel’s presence on the continent is the most discreet, but among the Chinese it tops the wish-list in terms of intention to purchase in fashion and beauty (according to Bain, 2011). The boutique was full – with a long waiting line outside.

Hermès - which has 19 stores in China since the end of 2011 - enjoys the same affluence:

And lastly, Louis Vuitton (38 boutiques at the end of 2011) has fewer people queuing up at its door - but the shop is full ... of Chinese who seem less sophisticated than those standing in line at Chanel or Hermès...

On the other side of the street my eye is attracted by the Cartier boutique (37 shops in China) where a security officer supervises a line of ... 4 people, although the store is almost empty!

There are no waiting lines at any of the other boutiques:  Those of Italian brands are empty. Armani has 107 boutiques in China, Ferragamo has 57, Zegna 56. Dunhill (104 boutiques) and Boss (114 boutiques) are not worth citing – they are all equally empty.

What can we deduce from this quick survey? Simply that luxury brands are now clearly divided into two groups: those that - according to the tenets of luxury – know how to manage their rarity (and believe they should not have more than 40 boutiques in China) and the others... that have become merely masstige brands.

Once I loved Serge Lutens

I offer you a new "Real Life Story" by Virginie Michelet.  After taking us to the Guerlain Spa of the Trianon Palace and the thermal baths of Saint Malo, she now tells us of her disappointment at Serge Lutens at the Palais Royal in Paris. Luxury brands have a long way to go in terms of customer relations!

by Virginie Michelet

There was a time I used to love Serge Lutens perfumes, the aesthetic advocacy of its brand and boutique at the Palais Royal in Paris. 
It was a musky and dusty summer day.  We strolled along the gallery of the Palais Royal that was, fortunately, in the shade. As usual, I was drawn to the Serge Lutens show window with its perfumes.  It has this 'je ne sais quoi' that is both historical and mysterious, an attractive display midway between the literary and revolutionary fantasy of the eighteenth century and a vision of an olfactory and visionary beyond.  My friend and I entered this kingdom of the senses. The languor of summer gave way to curiosity. Discovering perfumes, smelling them, almost tasting them, we are caught up in a game of bemused seduction, the outcome of which - admittedly - was to buy a perfume. Led by my nose, encouraged by my friend, helped by the assistant accomplice, I walk through forests of Cedars, groves of Myrrh, alleys of Tuberose, lingering to smell the fragrance of Musks and notes of Ginger, losing myself in mazes sprinkled with Vetyver, Violet, Sandalwood, Honey, Rose and Leather. 

Smelling so many fragrances eventually made me feel a bit dizzy, but the time caught up with us and it was time to choose. 

However, I found it hard to decide.  What exactly was I looking for?  What smell buried deep in my childhood? 'Santal Blanc' wins by a nose over 'Encens et Lavande'.  The ritual of purchase completed, pleasure dissipated and we shook ourselves out of this enchantment.  Listless!  After taking just a few steps, back in the harsh light of summer, I was seized by a horrible doubt.  On my right wrist … I was hit by a sudden realization: I should have chosen 'Encens et Lavande'!  That was it, the fragrance, magical and full of meaning, the perfume talisman, the one that would protect me from the aggressions of the day helping me to refocus on my intimacy.  "Go and exchange it", said my friend. 

I spun around gaily and walked back into the shadows of the Palais Royal and found myself at the door. I turned the handle. In vain. I rang.  There was no answer.  Suddenly, a figure emerged from the bowels of the earth. "Here she is", I said to myself.  Error.  Someone else, a stranger, stood in the door that was ajar.  She barks, "It is closed".  I try to remonstrate, gurgle a few words, profess my desire to exchange my purchase for the coveted one. "It's the special collection, we don't exchange!", in a surly voice. "But ..." "I'm telling you we're closed!".  The slamming of the door plunged me into the hell of non-existence.  But wait, did I imagine it - the slightly triumphant smile of the shrew? Frustration and anger get the better of me. Quick! A Tweet to signal my cruel disappointment to the world.  A rather ridiculous gesture, considering the overwhelming betrayal of which I was a victim.  Since then, the worm has worked its way into the apple.  I regard even the perfumes that I loved such as Féminité des Bois with suspicion. I have not even opened the package purchased that day. 

What was that little phrase from Serge Lutens about luxury? Ah, yes! "Wanting to make luxury is like wanting to be sexy, it's wasted ... or vulgar!"

Vuitton - present on all fronts

Last month, Louis Vuitton opened a boutique of 150 sq. mts. exclusively for jewellery at the Place Vendôme – also installing its jewellery atelier on the first floor. This initiative has been hailed as proof of the upmarket progression of the LVMH brand which - with a location in the emblematic site of luxury French jewellery and its own workshop - acquires a stamp of legitimacy in a category where Cartier and Van Cleef & Arpels (the direct competitors of the brands of the Richemont group) shine.

Louis Vuitton - in this year of transition, which will see the departure of its iconic Managing Director, Yves Carcelle - is present on all fronts. I will focus on four major initiatives:

1. The opening of the first shop-in-shop for shoes (September 2012) at Saks Fifth Avenue: as usual, the brand will self-manage this space. For the occasion, a limited-edition shoe design will be created and sold exclusively in this shop-in-shop. Louis Vuitton again reinforces its legitimacy in a category where it has been present only for the last few years.
   
   
2. The launch of the first LV perfume: In January this year, the brand recruited a perfumer, Jacques Cavalier - creator of Eau d'Issey (Issey Miyake), Midnight Poison (Dior), Acqua di Gio (Armani), Opium pour Homme (Yves Saint Laurent) and Poème (Lancôme). Like its glasses and watches, the perfumes will be sold exclusively in the LV boutiques – and not through specialized distributors. The brand launched perfumes previously (Heures d'Absence/ Je Tu Il / Eau de Voyage) in the 1920's/1930's. For Louis Vuitton, it is here again a question of investing in a category that is essential today in order to build up the legitimacy of a luxury brand AND to boost its operating margins.
   
   
   
   
3. The artistic and commercial collaboration with the Japanese artist, Yayoi Kusuma - in the form of 7 pop-up stores (the first opened on 10th July in the Soho boutique in New York - the eve of the opening of the retrospective Whitney Museum dedicated to the artist - others will follow at Printemps Paris, at Selfridges in London in late August, at Pacific Place, Hong Kong, Ngee Ann City in Singapore and Isetan in Tokyo). These temporary boutiques, designed by the artist, will sell a collection of ready-to-wear created by Yayoi Kusuma for Louis Vuitton. These products will later be available in all the brand's boutiques. Vuitton thus follows its logic of collaboration with contemporary artists (Takashi Murakami, Stephen Sprouse, Richard Prince, among others) to the end: this is the first time it opens several pop-up stores exclusively dedicated to collaboration of this type.
   
   
4. The "Voyage" theme returns: the "Louis Vuitton Express" is the common theme of the new advertising campaign of the brand and displayed at the newly-renovated Plaza 66 boutique in Shanghai. A film and a mini site allows Louis Vuitton to dramatize the imagery linked to the brand - the voyages by train during the 19th century ...
   
   

 

Louis Vuitton - with these numerous initiatives - confirms that it is one of the most innovative, modern and active luxury brands. It strengthens its business model (an exclusive distributor with its own network), its legitimacy as a global luxury brand (by entering new categories), its status as an active and creative brand (its collaboration with contemporary artists), ... and its presence in China, currently the largest luxury market. Yves Carcelle's "reign" will therefore end in a blaze of glory - but LVMH has announced so many successors over the last 10 years that some still doubt whether he will really be leaving!

Luxury brands and the Olympics: more or less successful co-branding

 The Olympic Games were the occasion for a number of luxury brands to associate with national teams (you will find a summary here). These co-branding operations were more or less successful. I would like to mention four of them in particular, those to which I would award medals, in the spirit of the occasion:

Gold Medal: Armani and the Italian team

Here is an excellent example of consistency: an Italian brand uses its "sports" collection, EA7, to outfit the Italian team. An extremely elegant presentation - conserving the Black & White codes of Emporio Armani, projecting Italy and its qualities, and sports where it traditionally shines - characterized this campaign labelled "The Sense of Being." This limited collection was backed up by a comprehensive communications campaign: a website, an app, visuals created by Richard Phibbs, TV commercials...

Silver Medal: Hermès and the French show jumping team

The French brand, Hermes, entirely consistent with its history, created the blazers of the French show jumping team. A really nice video, and designs by Philippe Dumas accompanied a collection that will probably hit the stores in 2013 as part of the spring-summer collection.

The team, unfortunately, did not bring back a medal from London (this will have no impact on the brand) - but why didn't Hermes have enough drive to outfit the entire French contingent?

Bronze Medal: Stella McCartney and the British team

It was, in fact, a venture spearheaded by Adidas - which asked Stella McCartney, the English designer, to design the swimsuits of the British athletes. This raised an outcry in the media about the reinterpretation of the national flag by the designer (see the article in the Huffington Post): too much blue, and where did the red go?
From the point of view of consistency, it is minimal in this case: Adidas will certainly benefit from the success of the British team.

Chocolate medal: Ralph Lauren and the U.S. team

The USA / Ralph Lauren co-branding - where consistency is, in appearance, very strong - was marked by two major controversies:

• All the outfits of the American team created by Ralph Lauren, were manufactured in China: this (in the middle of an election year) evoked a flood of criticism of the brand and the American team (asking them to "burn 'Made in China' USA uniforms"). I know, from reliable sources, that initially Ralph Lauren approached an Italian manufacturer and considered that the price offered did not suit their budget.  You can be certain that no such controversy would have arisen if this solution had been chosen: "Made in China" remains synonymous with poor quality and outsourcing in the eyes of commentators of every hue.
• On the jackets worn by the athletes at the opening ceremony, the Ralph Lauren logo is larger than the American flag: the critics (justifiably) point out that the sponsor-brand occupied too much space.
  

The "privilege" highlighted by Ralph Lauren therefore spills over into an unrepentant mercantilism. But then, only too happy to find a sponsor, did the officials of the U.S. team consider the questions of quality, manufacturing location or size of the logo?