BUSINESS OF FASHION: BEYOND BASICS: HOW JOSEPH’S PRIVATE LABEL BECAME ITS SECRET WEAPON

BUSINESS OF FASHION: BEYOND BASICS: HOW JOSEPH’S PRIVATE LABEL BECAME ITS SECRET WEAPON

LONDON, United Kingdom — When smart Londoners of a certain age think of Joseph, the British retailer’s iconic founder Joseph Ettedgui and his inimitable eye come to mind. From humble beginnings — the Moroccan-born Anglophile started his fashion empire in the 1960s, selling sweaters by the then-little-known Japanese designer Kenzo Takada out of the hair salon he ran with his brother on London’s King’s Road — Ettedgui had, by the time of his death in 2010, built an influential network of Joseph stores spanning London, Paris and New York.

His shops, with their slick, monochromatic palettes and chrome and glass architecture (first designed by Norman Foster), are seen as predecessors to the modern concept store, laying the foundations for Colette in Paris and Milan’s 10 Corso Como. He introduced Chelsea to the likes of Azzedine Alaïa and Helmut Lang and was the first British retailer to stock Prada.

But Ettedgui was a designer in his own right, launching Joseph’s own-brand label in 1972 to provide women with beautifully-made basics alongside his imported designer wares. After all, “An entire wardrobe can’t be made up only of designer clothes,” he explained. Today, the accessibly-priced Joseph brand is the beating heart of the business, accounting for 87 percent of the company’s worldwide sales in 2015.

Indeed, many a London-based fashion editor or luxury industry professional swears by Joseph garments.  “I grew up in London and all the girls at school lusted after a Joseph jumper,” says Lara Mingay of luxury PR firm LM Communications. “It always makes you feel well-dressed. It’s easy to move in, easy to travel in. It’s never loud and always looks chic. It’s like an old friend because it’s always been consistently good.”

A private label is not a novel business strategy among multi-brand retailers. From 2010 to 2015, the global market for private label apparel and footwear grew at a steady compound annual growth rate of 1.9 percent, according to data from Euromonitor. Department stores such as Barneys, Saks Fifth Avenue and Harrods have long produced own-brand collections. Typically consisting of basic pieces at more affordable price points than the designer brands they sit alongside, these lines can be a way for stores to fill in the gaps in their designer offering. Because they are designed and manufactured in-house, private labels have a number of financial and logistical advantages. "You're able to get a very strong margin on these items — you can control markdowns, you can control sales periods," explains Robert Burke, chairman and chief executive of consulting firm Robert Burke Associates.

But while some retailers produce private labels as a way to cover the cost of selling designer brands at low margins, Joseph’s private label has been a vehicle for international expansion. “When I joined the company four years ago [in 2012], I felt that everybody believed that Joseph had the potential to grow itself — not only mixed in with the international brands,” says Takehiro Shiraishi, managing director of Joseph.

For Shiraishi, growing the business through its private label makes more sense than trying to grow the network of multi-brand shops that made the retailer famous. Its mono-brand stores make up the vast majority of Joseph’s retail network (today, of the company’s 100-plus stores, only seven are multi-brand) and in Japan — where Onward Kashiyama, the company that bought Joseph in 2005, is based — only Joseph own-brand stores exist.

Expanding into new markets through multi-brand stores is also problematic. Last year, the business opened its first two Chinese mono-brand outposts in Beijing through a franchise partner and plans to roll out a further 13 in the next four years. “The local knowledge our franchise partners have of their markets is essential to growth when we’re establishing Joseph in a new region,” Shiraishi says. However, “We don’t do mixed branded stores with partners because it is so difficult to control what they buy… We would have to check every brand name they proposed to market under Joseph’s name.”

Concentrating on Joseph’s private label also allows the company to expand its wholesale distribution — a channel Shiraishi sees as “crucial” for exploring new markets, such as Asia and the Middle East.

But pursuing global expansion through the Joseph private label posed two key challenges for the business: competing in the contemporary market, and winning wholesale stockists, which often have large shoe and accessories departments. “We needed to propose a product mix that would complete the Joseph lifestyle,” Shiraishi says. “Other contemporary market designers do 60 percent of their sales from the accessories business. They survive with the accessories line.”

To round out its product offering, this year, the Joseph brand is expanding into two new categories. Shoes, which were launched as part of its Pre-Fall 2016 collection, will arrive in stores in June, while handbags will be introduced for Spring/Summer 2017. Shiraishi hopes to build up accessories to account for 15 to 20 percent of the Joseph brand’s sales.

For businesses looking to make their private labels more relevant, having a greater focus on fashion trends is a way forward, advises Robert Burke. “[Own brands] used to do a big business with v-neck and crew-neck cashmere sweaters. Today, those basics have been filled by the Uniqlos and the J Crews,” explains Burke, who says today’s successful private labels are producing “more of a fashion basic.”

It’s a trajectory that the Joseph label has been following. Under Louise Trotter, its creative director since 2009, the line has become more fashion forward, offering its interpretation of recent trends alongside the classic silhouettes that made Ettedgui successful. Today, while customers might “buy a simple pant from us to wear with a designer piece, they’re also buying Joseph head-to-toe,” she continues. “That’s the advancement.”

But despite its evolving collection, Shiraishi says the brand still lacked awareness amongst international consumers. For retailers trying to transition their private labels into bona fide brands, perception can be their biggest problem, concurs Bernadette Kissane, apparel and footwear analyst at Euromonitor. “Flipping their business models around — going from buying wholesale, to developing a brand, to then being a wholesaler,” poses challenges, she says, but “the biggest catch is to gain the credibility as a brand… It takes a lot to establish and create demand for it.”

“Joseph has always been well known in the UK and the French market,” Shiraishi explains. In February 2014, to put the brand on the map, Joseph made its London Fashion Week debut, holding a catwalk show to celebrate the 25th anniversary of Joseph’s 77 Fulham Road store. The business had already been under pressure from existing wholesale distributors to develop a show collection, says Trotter, who adds that the “incredible” response to the show prompted the company to create a fashion-focused show collection for Joseph every season. The impact of this decision on Joseph’s wholesale business has been tangible. Since 2014, wholesale has grown 10 percent year-on-year, and now accounts (along with franchising) for 37 percent of the Joseph brand’s annual sales.

Other specialist retailers have also benefited from making their in-house labels more fashion-focussed. The Outnet’s Iris & Ink, which launched in 2012 as a 35-piece capsule collection of basics, has since quadrupled in size and added more directional designs that have helped make it one of the site’s top five brands in terms of sales, says Shira Suveyke, executive vice president and chief merchant of The Outnet. Likewise, last year luxury e-tailer MatchesFashion.comlaunched Raey, a trend-driven private label that “now accounts for substantial numbers in revenue and is always on the bestseller list,” says Ruth Chapman, co-founder and co-chairman of Matches. “The brand is successful because of its strong fashion DNA, rather than being basics or essentials,” she says.

When it comes to creating a successful own-brand collection, according to Robert Burke, specialist retailers like Matches and Joseph have an advantage over larger department stores. “They’re smaller operations, usually dealing with fewer total stores… so the ability for them to be in touch with their customer is greater. [When] you know your customer, you’re able to address their needs,” Burke says.

Department stores, however, are following suit. Last year, Nordstrom — which already had a range of private labels across apparel, accessories, homeware and beauty that aim to “compliment and round out existing national and international brands,” says Mark Tritton, executive vice president of Nordstrom and president of Nordstrom Product Group — launched a private label designed by Caroline Issa, chief executive officer of Tank magazine. This February, the department store debuted another collection in collaboration with street-style star Olivia Palermo.

For Joseph, developing its own brand has contributed to a 20 percent growth in retail sales in the last two years. But while the fashion collections “send our message to the market,” says Shiraishi, it is still the brand’s pre-collection — more in keeping with Joseph’s luxury essentials origin — that makes up the bulk of the private label business. The breakdown between the pre- and show collections “is probably 80/20 or 85/15,” he says.

“Joseph has grown into something much bigger than a private label,” says Trotter. The fashion week stalwarts in London this weekend would agree.

QUARTZ: Coach is now a full-fledged American fashion house

QUARTZ: Coach is now a full-fledged American fashion house

“It has the potential to drive sales and really make [Coach] a total brand, as opposed to just a handbag brand,” says Robert Burke, CEO of retail consultancy Robert Burke Associates, of Coach 1941. “They’ve made a real push with specialty store retailers to be represented there and be sold there.”

QUARTZ | MARC BAIN

Since at least 2013, Coach has been in a sales slump, suffering from its reputation as a peddler of nice but unremarkable handbags, and the fact that Coach bags could often be had at a discount—the kiss of death for any “premium” brand. But now, a look around fashion’s best storefronts suggests that’s about to change.

As of this month, you’ll find clothes by Coach amid the racks of cool, forward-thinking labels at New York’s Opening Ceremony. At Colette in Paris, which buys some of the best European labels, Coach will be there, as it will be at luxury retailers Jeffrey and Saks Fifth Avenue in New York, Luisaviaroma in Florence, and Lane Crawford in Hong Kong, among others. And while some of these shops already carried Coach’s bags, it’s just as much the apparel—patchworked leather jackets and vests, as well as tops, dresses, and skirts printed with bustling, colorful prairie florals, with the label Coach 1941—that are finally steering the “affordable luxury” brand back toward the high-end.

Coach 1941 showed its latest collection at New York Fashion Week yesterday (Feb. 16), after an enthusiastic response to Coach’s first major runway presentation last September. That this line is simultaneously debuting at some of the top fashion retailers around the world could offer Coach’s image a much-needed boost.

There are indications that a turnaround is already taking hold. While the brand’s recent earnings report was far from stellar, it did show improvement. The company has been cutting way back on its promotions while introducing new designs, and CEO Victor Luis remarked in a call with analysts that Coach’s handbag sales in the above-$400 bracket grew to 35% of bag sales, up from around 30% last year. “The increases showed continued progress of our elevation strategy, with higher price points and more fashion-forward products,” he said.

Coach even expects to return to positive same-store sales growth by the fourth fiscal quarter this year.

The designer behind Coach 1941 is Stuart Vevers, a well-respected fashion veteran who previously reinvigorated accessories-driven brands Mulberry and Loewe. The English designer’s clothes and bags for Coach 1941 are cool, easy, and fun, and they have a broad appeal, in keeping with Coach’s accessible “affordable luxury” position in the market. They’ve already added some much needed energy to a brand that had become stagnant.

“There’s a nice, youthful spirit to the ready-to-wear,” says Jeffrey Kalinsky, founder of Jeffrey, which also bought Vevers’s work for Mulberry and Loewe. “It’s not just about a floral dress. It’s about a biker jacket. But the biker jacket is not in black leather. It’s in a shot of color.”

 Kalinsky is also an executive vice president at Nordstrom, which will carry Coach 1941, too. He says even though Coach’s main business is bags, clothing is critical in turning Coach into a complete fashion house. “In an accessory business, ready-to-wear gets to spin the fantasy about who the woman is,” he says.

Some of the clothes are selling well, Vevers has said, but Burke believes they’re more about image than sales. “It’s really meant to help in repositioning the brand and elevating it,” he says.
It’s hard to restore the luster of a brand that been overexposed in the mass-market, but there are noteworthy precedents, including Gucci and Burberry. As Burke points out, Gucci was mostly known as a mass-market handbag and accessories brand before Tom Ford took over as creative director, and made it supremely sexy, in the 1990s. And Burberry was a coat resource until Rose Marie Bravo helped it develop into a complete luxury house.

Whether this year will prove a similar turning point for Coach remains to be seen, but 2016 is important regardless. It’s the 75th anniversary of the company, which started as a family-run workshop in New York—in 1941, of course—making leather goods.

In 1996, Coach hired Reed Krakoff as creative director. He was instrumental in reworking the brand’s image and expanding the business into what it is today. Coach became ubiquitous in American malls and grew internationally, pioneering the affordable-luxury space now filled with American brands such as Michael Kors and Kate Spade. But the shine faded, and Vevers replaced Krakoff in 2014, the same year Luis took over as CEO.

It makes sense in that context that Kalinsky calls Coach 1941 a “natural evolution” of the brand rather than a change of course. It’s more than just a pivot away from recent history—it’s laying groundwork for the future, and it’s making Coach a brand to watch.

WWD: HANDBAG BRANDS BRACE FOR MORE MARKET CHALLENGES

WWD: HANDBAG BRANDS BRACE FOR MORE MARKET CHALLENGES

“Handbags have been a hot, call-to-action-type purchase, but now customers are looking for versatility and it’s resulted in very subtle trend and branding, which makes it less urgent to update your bag,” said Robert Burke, chief executive officer of fashion industry consulting firm Robert Burke Associates. “What happens when retail is shaky is that customers go back and shop their closet and see what they have.”

WWD | MISTY WHITE SIDELL AND DEBRA BORCHARDT

The handbag market’s been, well, a mixed bag.

Retailers are seeing a swelling inventory of sameness that lacks a “call-to-action” for the consumer to buy, yet investors have turned bullish on a few key players, such as Coach and Kate Spade, viewing these brands as relative bright spots. Stalling the market is the more cautious consumer-spending environment — and shoppers’ seeming unwillingness to buy fashion products — which could trigger even more promotions this spring and further pinch the bottom line of major brands.

Handbag stocks got a much-welcomed lift last week when Coach’s fiscal second-quarter earnings beat analysts’ expectations and gave investors hope that the other accessories brands would have similarly good results. In the two days following Coach’s earnings last Tuesday, Michael Kors Holdings’ stock leaped 6 percent while Kate Spade added 3.5 percent in value and Vera Bradley jumped more than 4 percent.

While Coach’s earnings per share of 68 cents were 2 cents better than consensus estimates, North American comparable-store sales dropped 4 percent, the eleventh quarter of decline, although the best performance in 24 months. So in traditional Wall Street fashion, not terribly bad results was cause for celebration. Most analysts were pleased that Coach’s turnaround efforts seemed to be taking hold and that the company was moving in the right direction under chief executive officer Victor Luis and executive creative director Stuart Vevers.

This week will provide a further temperature reading of the accessories market when Kors weighs in with its results on Tuesday. Kate Spade’s numbers will be out next month.

Regardless of whether those companies show stronger performances, the overall sense of the market is that accessories aren’t the surefire revenue generator they used to be. Gone are the days when shoppers would rush to stores to buy the latest “It” bag or shoe and accessories, like apparel, have suffered from the overall consumer ennui toward fashion.

At least one industry observer says the Internet has thwarted the shelf life of the segment.

For the high-end sector, there seems to be a somewhat confused and “oversaturated” market of designs that evoke the minimalism of Céline and the more-is-more aesthetic now signature to designs by Gucci under creative director Alessandro Michele and Fendi — giving the consumer no clear trend-driven incentive to buy.

“Handbags have been a hot, call-to-action-type purchase, but now customers are looking for versatility and it’s resulted in very subtle trend and branding, which makes it less urgent to update your bag,” said Robert Burke, chief executive officer of fashion industry consulting firm Robert Burke Associates. “What happens when retail is shaky is that customers go back and shop their closet and see what they have.”

“There is definitely a glut of merchandise without a point of view,” agreed Sarah Blair, Barneys New York’s senior vice president, divisional merchandise manager for shoes and bags. “Consumers are looking for newness and something with a good price value. This is not the days when they would buy the same bag in a new color. It used to be that brands were driven by an iconic bag in a plethora of colors, but that trend has plateaued.”

Neiman Marcus’ fashion director for women’s accessories, Ana Maria Pimentel, said: “I think sometimes when the economy fluctuates, designers think it’s easier to be safe, but it’s always best to step it up.”

Pimentel said there is still a “hunger” for accessories, though. “I think where we have seen success is when there is newness; she is not holding back if the product is new and emotional — I don’t think she is even being price-conscious if we are giving her a reason to buy.

“We have seen her slow in things that are stagnant and haven’t changed,” Pimentel added.

In an effort to stir emotion and design persona, labels like Fendi have stepped away from more classic, pared-down styles in favor of novelty bags fabricated in bright colors, with interchangeable straps and charms. “It’s so emotional and cute — people are really responding to that cheerfulness,” said Blair.

She also pointed to Altuzarra’s new collection of saddle bags, Loewe’s small elephant-shaped pouches, and Chloé as strong performers. Heritage labels including Delvaux and Mark Cross continue to entice consumers, she said.

But Burke said the novelty, accessory-for-your-accessory model that Fendi and others is promoting has done the larger market a disservice.
“What worries me about these novelty styles and the ability to accessorize your bag with a strap or ornament, is it means that customers are using an existing purchase…so it may be a reality from a retail perspective that these accessories mean that they don’t have to buy another bag,” he said.
Burke, like many others in the industry, said designs’ overexposure on social media often smothers a design’s success before it hits retail shelves. “Customers are looking at bags prior to delivery and are tired of it [by the time it gets to the store]. It tarnishes in some ways the impulse of a bag purchase,” he said.
“Bags had a lot more longevity before the Internet,” Burke continued. “If you think of the Fendi Baguette bag, it had a very long run. The shelf life for bags today is extremely short because of their exposure online.” He said a cocktail of “design, trendiness and exclusivity” is what now drives a bag’s success.

According to Blair: “It’s a volume business with high margins. I think a lot of people and designers are trying to get involved in this type of business.”

Just a few years ago, the launch of an accessories collection seemed like the surest way to bolster a designer’s bottom line — resulting in an explosion of merchandise. Now analysts are taking more of a wait-and-see approach — even for blockbuster brands like Kors.

Oliver Chen at Cowan & Co. wrote, “We note a cautious read-through for [Michael Kors] and Kate Spade, given Coach’s estimates that the North American premium women’s handbag and accessories market was essentially flat in the December quarter, with unit growth remaining positive, offset by lower [average unit retail]s due to heightened discounting activity.”

Chen said he has “concerns that [Michael Kors] could be under promotional risk, given management’s commentary on competition intensifying and driving higher levels of promotions than anticipated, notably in the outlet and wholesale channels.”

The consensus from FactSet for Kors’ third-quarter results is for $1.46 in earnings and sales of $1.35 billion. That would be lower than the earnings for the third quarter of 2015 of $1.48, but sales would be higher than last year’s third quarter, which came in at $1.31 billion. The average price target amongst analysts is $49.26. Unlike Coach, Kors is very promotional on its Web site, with many handbags marked down 50 percent.

David Schick of Stifel expects a challenging quarter from Kors, and is below Street estimates for earnings. “Our comp estimate reflects our concern that [Michael Kors] is reaching a saturation point in North America handbags,” wrote Schick. His survey told him that more shoppers intended to purchase from Coach than at Kors. It could be because Kors’ handbag line is mostly on the large size, whereas women’s preference is trending to smaller sizes.

Kate Spade is set to report its fourth-quarter results on March 1 before the market opens and analysts are expecting earnings of 32 cents a share on sales of $441 million. Both of those estimates are higher than the numbers delivered for the fourth quarter of 2014. The average price target on the stock is $28.06. Chen wrote, “We continue to view [Coach] as our favorite handbag name, but we still like Kate Spade, as we feel the brand is best prepared to weather a tough sector backdrop on elastic category expansion, prudent promos and controlled distribution.”

Wedbush Securities was also bullish on Kate Spade. At the end of December, the analysts wrote, “Our checks have consistently noted [Kate Spade] as the least promotional and best merchandised handbag brand compared to peers.” Kate Spade’s shareholders need for the company’s fortunes to change — the stock has fallen 46 percent over the past year, although in the last five days it has gained 6 percent. Most of that increase has come after Coach’s earnings.

Vera Bradley doesn’t report earnings until March 9, but that isn’t keeping investors from hoping for the best. The company has had very good success with its leather bags and the company guided the Street higher with its fiscal-year estimates. Gross margins were guided higher as well. Chen wrote, “We’re encouraged by solid third-quarter performance given better-than-planned revenues on reduced promo activity and disciplined expense management.”

HUFFINGTON POST: Robert Burke: Fashion’s Secret Power Link

HUFFINGTON POST: Robert Burke: Fashion’s Secret Power Link

HUFFINGTON POST | RENATA M. BLACK 

Paradigm Shifters is a series of interviews with a select group of women and men from eclectic walks of life. It will highlight unspoken, real-life insights on how they have been able to turn weakness into strength. A naked soul point of view of how their breakdowns were really a preparation for breakthroughs. They are your quintessential paradigm shifters; internal shifts converted into genuine change.

Everything I have ever done has been focused on this underlying theme of shifting the paradigm because, "What we think determines what we feel and what we feel determines what we do." Hence, why Empowered by You takes lingerie, which has traditionally been seen merely as a tool of seduction and redirected that energy as a tool of empowerment.

I hope from these stories you will look at your own situations, struggles and accomplishments through a different lens. At the very least you will be more equipped with real life tools to change your own paradigm. At the end of the day, we are our own Alchemist turning the silver we were born with into the gold we are destined to become.

How did you get into the fashion industry?

After college I went to LA and was deciding whether to go to graduate school, but I needed to get a job until I figured out what I wanted to do. Some of my friends worked at the Ralph Lauren Polo store in Beverly Hills, so I thought it would be a fun job to do for a little while. I ended up working for the company for 11 years. Eventually I moved to New York and I worked in various positions. The company went public and franchise retail was brought in-house and I worked in the newly created retail division. I spent a short time in design (which Ralph encouraged me to do) before returning to retail. In my time there I had the opportunity to work very closely with Ralph, who has really been a fantastic mentor and supporter. 

In 1999 I was hired to be the V.P. Fashion Director at Bergdorf Goodman. At that particular time there were a lot of changes at BG. There's no store like Bergdorf in the world, but it had gotten very dusty. This was an amazing experience in my career. It was a fantastic team of people. I hired Michael Bastian (who has his own label now) as the Men's Fashion Director and Roopal Patel (now the Fashion Director at Saks Fifth Avenue) as the Women's Fashion Director. We had an incredible time and felt and realized that anything could happen. The CEO Ron Frasch and President Peter Rizzo at the time pushed us all to create the best store possible.

So how did Robert Burke Associates come about?

I was at Bergdorf's for 7 and a half years. I dealt with many established brands and new designers when they were just starting out: Tom Browne, Tory Burch, Proenza Schouler, and Derek Lam, plus the executives. I had this incredible vantage point into the business on what worked, what didn't work. I found that many of the brands had questions when they were looking for strategic growth and how they were going to position themselves. The only consultants out there were generally retired executives from department stores and I was about 42, and thinking about what else I wanted to do in my life. I wanted to open my own consultancy company. I went and I spoke to a handful of people: Anna Wintour, Rose Marie Bravo, who was still at Burberry, and Ralph. And Rose Marie and Anna said yes, do it, but Ralph said 'this is a terrible idea, you should come back and work for me', of course we talked it out. In the end, I started Robert Burke Associates, almost ten years ago. 
When I started out, Tory and Chris Burch were still married at the time, and Chris had just started an investment firm officed on 57th and Madison, so they offered me some office space. Our first client was Marchesa, Anna Wintour called me and said Harvey Weinstein's girlfriend (at the time), Georgina Chapman, wanted to start a new dress line, and asked if I would meet with them. So of course I said yes.

It was a fantastic start and I found that the industry did need someone who could advise brands. Brands often times need to have the perspective of the retailers, so we're unique in the way we approach things. We're not a Bain or McKinsey in that market research driven way, we are more competition and positioning driven. We work with international brands, who might be looking to come to the US and maybe don't understand nuances of the US market, like Alexandre Birman, a shoe designer from Brazil, as well his Schutz brand, which is looking at expansion in the US. So we do that type of work, and we do quite a bit of international and domestic retail, which is generally working with developers and local partners in a region.

What project would you say you are most excited about right now?

I would say the re-design and re-conceptualizing of the Beverly Center because it is such an iconic mall. It's exciting to make it into a strong retail destination for luxury and contemporary retail. Working with the Tommy Hilfiger brand globally has been a very interesting and exciting experience as well. It's a brand that is really poised for great growth.

What do you envision the future of fashion will be like? Do you have any advice for young designers or brands?

I think there is generally a lack of original ideas. This athletic apparel movement is a good example of everyone jumping on the same bandwagon. So I think new designers need to be very clear and focused and not try to be everything to everyone. We went through a period in the early 2000's where a young designer wanted to have a sunglass line, a jewelry line, a shoe line, a handbag line, a ready-to-wear line, and a secondary line, and what we've come out learning is that the customer appreciates when someone is the very best in their field at doing one thing. The advice I would give younger brands is to be very clear on who their customer is and what their product is. 

The company has evolved to work with bigger clients, because it's more advantageous, but I think it's very important to work with young designers and to see their design and help them in navigating. We've had many people who have worked with Robert Burke Associates and gone on to become quite successful. There is a young woman named Alison Chemla who interned here, who now has a jewelry line, Alison Lou, which is sold at Net-a-Porter and Matches, and she just opened a store in SoHo. George Sotelo launched a men's swimwear brand called Thorsun. That is really rewarding to see the people who worked here launch their brands at a relatively young age and find success.

What has been your biggest breakdown to breakthrough moment?

There were a few. Those experiences take you out of your depth. I had always been more interested in the business side. But I think I witnessed the bridging of design, retail and commerce while at Ralph Lauren, which set me up for my work at Bergdorf's. If I hadn't had that experience in intimate design meetings and Ralph asking me which color red I like and then in a store design meeting for a new Ralph Lauren store in London I wouldn't have become confident in what I went on to do advising brands. Unlike some very traditional houses, Ralph will put you in many different positions: you can be in a design meeting, then be in the retail store. That experience doesn't exist as much anymore, but it's important to gain as much experience as possible and hopefully have really good mentors along the way. And Ralph was really incredible in that way, he still is. 

That's the thing about fashion, it's never all business and it's never all creative. Like Andrew Rosen is highly unique because he's a product person and he's a business person. And at the end of the day, Ralph is a designer and a business and product person. You look at someone like Jason Wu, he's very left-brain and right-brain, he's very focused. He called me when he was first starting and asked to have lunch, and I could just tell he was very focused. Then six months later, Michelle Obama wore his dress.

What kind of legacy do you wish to leave behind?

Seeing the people I have worked with and mentored go out on their own. It's not about being successful, it's about having the courage to go out and follow your passion, and many times that inevitably leads toward success. Seeing those young people achieve and strive and become confident, that's probably what I am most proud of. And having some positive influence on them. I think that the creative and business processes in fashion sometimes have a rap of being difficult or pretentious, but I actually find it to be the opposite. I find there is a lot of nurturing and support. You definitely get what you put out, but my experience has been extremely positive. 

I was definitely influenced by the big names that I've been behind, and starting my own business was a very different experience from working for them. I wondered if I'd get the phone call back, or get the meeting, but I found that when you form those kind of deep relationships, you do. It's a very positive and loyal industry.

Listening to Robert's story and how all the circumstances of events in his life have led up to the point of creating a unique position in the market is quite extraordinary. By having a credible name in the industry, he has been able to create his own space where he uses his reputation and spotlight to launch others. He is not only a source of admiration but one of inspiration.

BUSINESS OF FASHION OP-ED: Global Luxury: How to win when you’re everywhere

BUSINESS OF FASHION OP-ED: Global Luxury: How to win when you’re everywhere

BUSINESS OF FASHION | ROBERT BURKE - LONDON, United Kingdom — As the luxury market continues to grow globally and digitally, brands are facing new challenges in terms of how to capture and maintain customers’ interest at a local and international level.

The digital world, whether it be through a brand’s own website, its third-party partners, or social media, has drastically increased the amount of exposure that brands and their products can receive. While seemingly positive, this can be a double edged sword in the luxury world: digital exposure can go a long way towards increasing brand awareness, but it can also lead to consumer fatigue.

In a world where the term ‘omnichannel’ has become omnipresent, there is a fine line that brands must walk, in order to ensure they are providing customers with the products that they want, when and where they want them — and that they are simultaneously creating exclusivity and desire through the right amount of product scarcity.

This isn’t always achieved solely by a high price. Instead, desire is created when a brand strikes the right balance between availability and scarcity through its distribution.

Take the runaway success of Mansur Gavriel’s bucket handbag. It is not an expensive line — the handbags are an attainable price — but it’s very desirable as a result of the label’s distribution strategy. Before Mansur Gavriel releases its bags online at certain points in the year, it builds up a huge demand via Instagram and other online presences. When the products finally do drop, the site is usually overwhelmed with traffic and the products sell out within hours.

While this is an example in which there are surely missed opportunities for higher sales volumes, the sustained brand equity that this strategy creates is of higher value in the long run.

This idea of exclusivity through scarcity is not a new strategy, but it has become even more important, due to the accelerated turnover of information in the digital age. Hermès and Chanel are no strangers to this strategy: both have become infamous for their strategic release of their most iconic products, so much so that their loyal customers will travel the world in search of that one handbag that can only be found in a specific location.

Given that brands are investing heavily in their international flagships, this helps drive traffic to these far-flung locations. On top of that, the discerning luxury customer knows that, when they reach that destination, they will be greeted with a retail experience that matches the exclusivity of the product they seek.

Going forward, success really boils down to two things — brands have to look very closely at their overall communications strategies and also at controlling supply and demand. By possessing a product that few other consumers can have, the luxury consumer feels like an insider, like they’re been told a secret that nobody else knows. The minute that product starts being overexposed, its appeal starts to wane.

This isn’t just applicable to luxury brands. It was always thought that supply and demand was only relevant for luxury. But today, it’s becoming more evident that it’s significant for all brands. Think of Nike and its collaborations with Dover Street Market. Each of the Dover Street Market stores only has 300 or 400 pairs of shoes. During the last release, I passed Dover Street Market in New York and fans were camping out in front of the store overnight to — not because the shoes were $150, but because those loyal fans knew that once they were gone, you wouldn’t be able to get them anywhere else. That’s the crux of creating desire — availability vs. scarcity.

As told to Helena Pike

Robert Burke is chairman and chief executive of retail consultancy firm Robert Burke Associates.