Recommended Reading: Week of 12 December 2011

The Business of Luxury never stops despite daily responsibilities. As such, I’m back after a few weeks’ hiatus. There’s been a ton of great articles since my last posting, so let’s dive in, shall we?

First up, we look at one of my favorite topics of discussion: timepieces, as explored by Tina Gaudoin at the Wall Street Journal. I had a lovely discussion with a colleague recently, who wanted to know my background, how I got into PR, and most notably, how I got into luxury PR. I explained to him my love affair with PR came after I realized I had too much of a conscious to become a lawyer. And luxury PR came after spending two years working as a top sales associate at Tourneau. My interaction with luxury buyers gave me a better understanding of how luxury brands create the type of emotional frenzy that causes people to pay an extraordinary price for inanimate objects.

Something happens to you, I explained to my colleague, when you come in contact with a $980,000 watch – nay, timepiece – and you are thoroughly educated as to why such an object should cost $980,000. You never really look at watches the same again. And ultimately, you come to appreciate true luxury as an unquantifiable value.

Some will argue there’s no need to own a $980,000 watch. Exactly! There is no need. Nor is there a need to pay $4,000 a night for a hotel room, spend $900 on a pair of shoes, or drive a car that goes faster than one should outside of a race track.

We do it for the thrill it gives us.

The customer that bought the $980,000 Blancpain knows that he is one of an extremely exclusive club of collectors that own such a masterpiece. And in the case of this particular masterpiece, he knows the one he owns was made exclusively for him, by hand, from a master watchmaker.

We go from watches to better understanding those who will pay a handsome fortune to own finest timepieces; specifically, how to understand the motivators of one affluent buyer from that of another. Kayla Hutzler at Luxury Daily (which I highly recommend a subscription) gives an overview of the findings from Ledbury Research’s Luxury Briefing Wealth Summit 2011.

The article reminds me of a lecture I gave a few years back to the luxury division of the French Trade Commission during their annual conference. To help them better communicate the American consumer to luxury French brands seeking entrance into this market, I spoke to them of three different types of luxury buyers (a future op-ed piece will address this again). Ledbury Research’s findings introduce us again to this same concept, this time, looking at luxury buyers in various countries and how each are segmented. This is an invaluable consideration, as so many companies think one strategy works across the board in all countries. This, of course, the smartest of us know is never the case; as should it never be considered true across luxury buying as well.

Speaking of business strategy across multiple countries, The Corruption Trap by Angela Garvey Hammond for INSEAD gives us a hint of what a country’s trade commission won’t tell you in the first meeting. Corruption can be a necessary evil of doing business in a foreign country, especially as BRIC countries receive a greater amount of attention from luxury companies who are looking for the next great proponent of conspicuous consumption.

And lastly, an article I was surprised to discover, but definitely worthy of consideration, given, again, the popularity of BRIC countries to luxury companies. Apparently, there are some luxury brands skimping on quality in the products they bring to the Chinese market. Tsk. Tsk. Not a good way to begin a long term relationship with Chinese luxury buyers….

On to the articles…

On the Cultural Fight of Hermès and Building a Great Luxury Brand

Enjoy reading October’s Rumination and Perspective.  We’ll return to Recommended Readings next week. As always, feel free to share your perspective.

On the Cultural Fight of Hermès and Building a Great Luxury Brand

I received an invitation to preview the Hermès film “Hearts and Crafts” on their website lesmainsdHermès.com. The film tells the story of the many who work hard to manufacture our beloved Hermès products. I’m not too fond of watching anything on my laptop since an honest effort to pay attention always turns into a multitasking campaign, as I simultaneously listen to (instead of watch), while checking emails and doing my weekly research into the affairs of the grand world of luxury. This film, however, made me stop, look and listen. Perhaps it’s because I’m now learning French and am always looking for opportunities to practice my listening (the film is entirely in French with subtitles), or more likely, because the film’s message resonated dramatically to me as someone who advises companies on how to build great luxury brands. Hermès has now, for me, become the epitome of a luxury company for which all others should be compared.

I can already hear a million declarations around the world of “mais bien sûr!” upon reading that last sentence…. continued

Recommended Reading from the Week of 10 October 2011

I fell in love with jewelry when my agency stuctured and managed the strategic partnership between the American Heart Association and Solomon Brothers Fine Jewelry. In coordinating the official cocktail party, my office was filled with catalog after catalog of divine jewelry creations from a dozen different jewelry brands; each presenting necklaces and bracelets and rings (oh my!) in diverse incarnations of colored stones. I soon became immaculately passionate about color.

Give me rubies, sapphires and emeralds any day! I can just imagine the look on my future fiancée’s face when he presents me with an otherwise stunning white diamond engagement ring, and I think to myself “White diamond. Hmm…”

Joking. That won’t happen. All of my girlfriends have been instructed to inform this future fiancée that a colored diamond ring is the way to my heart.

All commentary aside, this week’s recommendations introduces us to Theo Fennell, a jewelry designer with an eye for detail and an equal love for color.  The ring to the left is one of my favorites from his collection.  Those who know me well may not be the least bit surprised in this choice for me….

The Luxury Industry is being forewarned yet again of a potential slow down. Sometimes I’m not sure how to regard these industry warnings as it’s one we’ve heard before, and one that manifests quite differently and usually more favorably than expected. I’m advising our clients to be optimistically cautious – hope for the best, plan for the worst and continue focusing on building those relationships with your customers. We’ll see what our Influencer Consortium tells us over the next few months as we move into the holidays.

Another phenomena I’ve been observing – the growth of Flash Sales Site and their implication to luxury regaining its luster. I posited in a LinkedIn post how these sites are affecting the perception of luxury goods, as why pay full price for an item at Saks when Gilt Group will offer a nice discount.  Reuters now suggests emerging problems with the original business models.  As in – luxury brands are no longer as generous with providing these sites with goods as they were when the flash sale site concept first emerged. Hmmm. Are we about to see a bubble burst?

And lastly, the world has now been introduced to the $34,700 chocolate cake. As a devoted mistress of La Maison du Chocolat, if this cake tastes anything like their Fine Champagne Truffles, I can assure you it’s worth every penny.

On to this week’s recommendations….

Recommended Reading from the Week of 4 October

Everyone wants to be in China, very few truly understand the barriers to entry that go beyond just the government bureaucracy. Great introductory article from Luxury Daily to get minds moving in the right direction when a brand decides to approach the Awoken Dragon. Unfortunately, though, as so many companies seek to do business in China, fears are starting to set in that China may not be able to carry luxury through what people are starting to suspect will be a global recession. Claer Barrett at FT reports.

Moving from China to the exquisite world of Ready to Wear High Fashion, Sarah Burton at Alexander McQueen deliciously impresses me. Very rarely do I view an entire collection that can handle all of my personal curves. The Spring RTW from Alexander McQueen handles eloquently that which is most feminine. Sarah Burton is doing a fantastic job as the encore to the label’s namesake.

Enjoy this week’s suggestions…

Recommended Reading from Week of 25 September

I got lost in the world of watches this past week.  Those who know me know that I am passionate about timepieces.  So this week, I invite you to learn about tourbillons from Jeremy Kirkland at Esquire; the Japanese art of maki e-lacquer  and the obsession with exclusivity, both from Sophie Furley at Europa Time; and the top three truly mesmerizing one of a kind timepieces available only to the true connoisseur, as told by Michael Clerizo at the Wall Street Journal.

Louis Vuitton Island Maison at Marina Bay Sand

Louis Vuitton Island Maison at Marina Bay Sand

Also, take a look at how Louis Vuitton is redefining the retail luxury experience, by Lucienne Green at Financial Times and what happens when a former designer for Valentino and Gucci reconsiders high fashion for mass fashion, by Rachel Sanderson, also at Financial Times.

Follow this link to see this weeks recommendations.  Feel free to leave your feedback on my choices for this week and any suggestions of articles I may have missed.

Recommended Reading

New York Times:  Royalty Have for Centuries Been the Watch Industry’s Most Eager Clients
By VICTORIA GOMELSKY

NEWPORT BEACH, CALIFORNIA — In May of 2002, Michael Sheehan, an exotic car dealer from Newport Beach, California, flew to Brunei, the tiny oil-rich sultanate on the north coast of Borneo, to purchase two McLarens and two Ferraris from a collection of some 2,500 luxury cars owned by Prince Jefri Bolkiah, the sultan of Brunei’s wildly extravagant younger brother.

http://www.nytimes.com/2011/09/24/fashion/royalty-have-for-centuries-been-the-watch-industrys-most-eager-clients.html?pagewanted=1

Financial Times:  Online innovation: Expert sets out to capture and keep neglected consumers
By ELISA ANNISS

Until recently, the search for emerging jewellery brands was a highly conventional affair requiring good old fashioned values such as patience, dedication and a lot of legwork. The market for young designers of handmade fashion and fine jewellery was so disparate, disjointed and localised that it provided Elizabeth Galton, a British jewellery veteran, who left her post as creative director at Links of London last year, with the perfect eureka moment.

http://www.ft.com/cms/s/0/351fed1a-d307-11e0-9aae-00144feab49a.html#ixzz1Xg5fjwFF

Financial Times:  Luxury jewels: A game that even the grand names will play
By AVRIL GROOM

Over the past decade or so, while luxury brands from Dior to Louis Vuitton have been busy adding high-profile, high jewellery to their product portfolios, Hermès, perhaps the grandest and certainly the most independent of them all, has remained aloof.

http://www.ft.com/cms/s/0/6108359c-d33c-11e0-9ba8-00144feab49a.html#ixzz1Xg9VgkyF

New York Times:  Magazines Begin to Sell the Fashion They Review
By ERIC WILSON

On Park & Bond, a new e-commerce site for designer men’s wear, Jim Moore, the creative director for GQ, can be found describing a red Calvin Klein turtleneck as “something that can take that gray flannel suit and give it a little bon vivant.” The sweater, which costs $225, is tagged as a GQ Pick, inside the GQ Store.

http://www.nytimes.com/2011/09/26/business/media/magazines-begin-to-sell-the-fashion-they-review.html?pagewanted=1&_r=1&nl=business&emc=ata3

When Is Luxury Worth It?

I recently read the New York Times restaurant review for Masa, arguably one of the best Japanese restaurants in New York City.  The article caught my eye as Masa made our short list when my company was tasked with putting together a press dinner for S.T. Dupont.  As the CEO of the 112 year old French company was flying in from Paris to attend this affair, we were determined to have the dinner at one of New York’s finest.  But Masa’s $40,000 demand for a dinner that would serve just 15 people put it out of the running as other 2 and 3 Michelin-rated restaurants Per Se, Jean George, Le Bernadin and Gordon Ramsey at The London Hotel came closer to our budget. Anyway, this was my first experience with Masa, and I haven’t since forgotten it.  So when I ran across this review where Masa lost one of its four prized stars, I paid close attention.  Continue…

Welcome to The Business of Luxury

We once hailed the vast amount of wealth the U.S. had seen over the past few years and the countless opportunities luxury brands had to fill their coffers.  Times have changed, and with it, the means in which luxury brands can exist in this new era.   We’ve been asked our thoughts on how luxury companies can survive.  Our counsel has not changed – build relationships with your customers.

The challenges luxury brands are currently facing were created by the very opportunities that originally fueled their growth.  From the influx of overnight millionaires with demands for more, luxury companies increased their production and created brand extensions to meet every scale of luxury buyer – from the $300 Coach handbag buyer to the $1.5 million Vacheron Constantin Tour de l’Ile consumer.  The gilded age is over, and new values created by hard-earned economic lessons are now redefining what motivates a U.S. customer to buy luxury. Continue….