WWD: Fine Jewelry’s Casual Turn

WWD: Fine Jewelry’s Casual Turn

WWD | MISTY WHITE SIDELL

At a tony, star-studded event celebrating Tiffany & Co.’s latest high-jewelry collection last month, there was an uncharacteristic sense of nonchalance in the air.

The first high-jewelry concept by the brand’s chief artistic director Reed Krakoff exhibited a new, casual mood. While megawatt diamonds and rubies remained consistent with the house’s history, many designs featured an informal twist. A circular pendant, for example — featuring nearly 40 carats of aquamarines and 14 carats of diamonds — was strung not on a bedazzled platinum chain but rather a simple knotted cord made of leather.

This relaxed mood is being felt throughout the jewelry industry — a sign that haute joaillerie is adapting to a more casual moment in fashion and society. It is the result of a tangled web of social changes — particularly the runoff, jewelers say, of post-recession values and an ongoing change in how jewelry is consumed, as an increasing percentage of the industry’s clientele becomes a woman shopping for herself.

“There is no question that life is becoming more casual and as a result, fine jewelryneeds to keep up with that. I think people find themselves dressing up less frequently; they still go to important events but they think differently about how to dress for those events. This has certainly impacted the way we think about designing our collection — we try to design for today’s aesthetic. It doesn’t mean we don’t design important pieces of high value, but we are thinking if someone can wear it often,” said Kwiat and Fred Leighton chief executive officer Greg Kwiat.

“The challenge in such a rarefied world is crafting pieces that are extraordinary but at the same time also wearable frequently and effortlessly. Often these are contradictory ideas. However, everything we create is connected by the notion of everyday luxury — to create something incredible and rare, but also something that can really be enjoyed as a part of modern life,” Alessandro Bogliolo, Tiffany’s ceo, said of the company’s design ethos. Among the images featured in the jeweler’s Blue Book catalog of high jewelry is a photo of actress Gal Gadot reclining in Tiffany lariats — paired with jeans and a white T-shirt, rather than a ballgown.

Fashion industry consultant Robert Burke summarized the movement: “It wasn’t that long ago, people used to discuss what’s appropriate for day and night. All of that is obviously out the window now.”

The fine jewelry industry flourished in the mid- to late-19th century — a time that saw the founding of maisons including Van Cleef & Arpels, Cartier and Bulgari. The Industrial Revolution heralded a new class of private wealth that intermingled with royalty — the two visually sparring off at cotillions and royal balls, outwardly boasting their wealth with lavish jewelry.

Fast-forward nearly 200 years and these formal occasions are now occurring with dwindling frequency. Nowadays, should one buy a diamond wreath necklace, it is likely to sit in the safe for weeks, if not months at a time. Jewelers say that this has become a primary concern among collectors, who wish to buy things they can wear every day.

“There is definitely a feeling today in the broader world that you have to be careful not to show off wealth. People with wealth are not consuming as conspicuously. This has translated into the jewelry world. They don’t mind spending money on jewelry if it’s an important piece, but they don’t want to walk around saying — ‘look at me, how much I spent.’ It doesn’t feel congruent with today’s general atmosphere,” Kwiat said, noting that Fred Leighton has recently passed on acquiring lavish jewels that are out of line with today’s stylistic attitudes.

This is forcing the industry to adapt — designing and dealing in precious stones that suit a new, toned-down taste level. There has been a rise in unpolished gold and unfaceted cabochon stones and designs that feature important stones in less obvious ways (as seen in designer Ana Khouri’s anatomically leaning work). These pieces are no less valuable than the big sparkly gems worn in the past, but their aesthetic is more wearable. This new tone suits Millennial consumers, an age group that is beginning to take an interest in jewelry collecting and tends to avoid ostentatious displays of wealth.

“The younger clients are looking for staples right now. They are not coming in to get the bright pink sapphire ring, they are getting something they can get a lot of wear out of,” noted Frank Everett, Sotheby’s senior vice president for jewelry. He added that Van Cleef & Arpels jewelry from the Seventies — inlaid with turquoise or coral — is performing strongly at the moment, particularly for its casual appeal.

A gold and coral ‘Alhambra’ necklace by Van Cleef & Arpels, sold by Sotheby’s for $68,750 while estimated at $15,000 to $20,000.  Courtesy

Goldsmith Jean Prounis, age 25, launched her namesake collection in 2017 — handwrought from an ancient alchemy of 22-karat gold. Prounis prefers using cabochon stones over those that are sparkly and faceted and polishes her jewelry with a dull luster rather than high shine. Her designs have found their way onto shelves at Dover Street Market New York and Holly Golightly in Copenhagen.

“For me, wearability is the most important part of design. I think it’s important to my brand that you can wear a lot of valuable objects and still feel safe — even as a social target. You don’t want to come off as someone wearing $20,000 worth of diamonds. You can know you are wearing a well-made piece and not feel like everyone else has to know,” Prounis said.

Also at the core of jewelry’s casualization is the rise of women purchasing jewelry for themselves, which is particularly prevalent among Millennials.

Fine jewelry has long been geared toward women, but aimed at a man’s bank account. With self-purchasing, women are buying pieces as “part of their outfits,” and seek unique designs that speak to their personal aesthetics, rather than waiting for a man to bestow them with the jewelry of his choice.

Self-purchasing has become especially lucrative for female designers, who bring an intuitive perspective to their craft. Irene Neuwirth — who has made her name with thoughtful, colorful designs — says that about 90 percent of her clientele is self-purchasing women.

“Back in the day, men would buy their wife or girlfriend jewelry so it would look as expensive as possible. I think now people are much more drawn to something a little less in-your-face. My client is a woman really expressing herself through jewelry. It’s such a personal thing, I think men need a little reprogramming when they are buying fine jewelry, not just looking for things covered in diamonds and emeralds,” she said.

Neuwirth is among a contingency of female jewelers to design pieces that express a more relaxed attitude — the result, they say, of creating items that they would like to wear themselves.

Temple St. Clair founded her namesake line in 1986, and has found a following of “women looking for a very high quality of jewelry made in the old-world tradition, yet modern, wearable and versatile for evening.”

She noted that “self-purchasing women are buying and investing in high jewelry pieces but want to wear it more casually, They don’t have debutante balls, they want to wear and enjoy these pieces — that is the next frontier for me.”

Designs by Sophie Bille Brahe.  Courtesy

In Copenhagen, jewelry Sophie Bille Brahe creates pieces that are “designed for what I want to wear living in Copenhagen — you won’t see a lot of girls in high heels. We are all on bikes. So in that sense, designing jewelry to just be part of your outfit that you can wear from morning to the evening. It becomes a part of you, not just something you dress up with.”

Bille Brahe’s rings are purposefully sculpted “so that they wouldn’t annoy me during my day, and so I can still use my hands when I’m working.” She says that 99 percent of her clients are self-purchasing women, who visit stores like Dover Street Market, Twist and Isetan for her designs.

“I think women have a lot more to say today rather than 20 years ago when men would just buy a classic engagement ring,” she said. “The whole jewelry scene has changed — it’s not just one thing anymore — there is a lot of space for different directions.”

WWD: Chanel to Transform U.S. Wholesale Business to Concession Model

WWD: Chanel to Transform U.S. Wholesale Business to Concession Model

WWD | LISA LOCKWOOD

In a dramatic shift for the company, Chanel Inc., the U.S. subsidiary of Chanel Ltd., is transforming its wholesale business into a concession model.

The company plans to operate concession departments in its major accounts, which include Neiman MarcusBergdorf GoodmanSaks Fifth AvenueNordstrom and Bloomingdale’s. The process began last year with Bloomingdale’s 59th Street location, and this year several others were converted, namely Saks in Greenwich, Conn., and Atlanta and Neiman Marcus in Atlanta. The rest will be phased in over the next year.

“You might be wondering why, after 12 years of relative silence, am I doing a real interview,” said John Galantic, president and chief operating officer of Chanel Inc. “It’s a time of pretty major change here. The old saying is ‘don’t waste a crisis.’ But I look at it the other way more, which is when the business is very strong and the demand very desirable, there’s much more leverage and leeway to make change.”

Luxury players such as Louis Vuitton, Dior, Gucci and Prada frequently operate concession models in department and specialty stores’ handbag departments in the U.S. American department stores are among the few worldwide that continue to operate primarily on a wholesale model; most department stores in Europe and Asia rely primarily on concessions, particularly for luxury brands.

According to Galantic, Chanel’s chief reasons for wanting to have a more direct-to-client relationship with its key partners are:

*Visibility of the client and her purchasing path, allowing Chanel to service her and communicate directly.

*Owned inventory and real-time visibility of inventory across all points of sale.

*Chanel employees in the multibrand retail boutiques will be closely connected to the house and will have access to training and development opportunities.

*Multibrand retail clients become part of the Chanel omni-touch point world and have access to the same e-services that exist in Chanel boutiques.

In addition, Chanel will bolster staffing levels in its freestanding boutiques in North America and shift to a blended model of compensation that focuses on rewarding fashion advisers whose teams work in a collaborative manner in serving the clients’ overall experience, said Galantic. In North America, Chanel has 23 freestanding boutiques for fashion, as well as watch and fine jewelry. There are also four fragrance and beauty stand-alone stores.

Among multibrand retailers, there are 55 doors/locations that carry all Chanel product lines, including ready-to-wear, shoes and accessories.

In discussing the rationale behind the move, Galantic said the brand came at it from a position of strength. The company has been showing very strong results across the board. “The first thing is the desirability of the brand and that always drives the business. The brand is more desirable than ever. On the business side, we are enjoying strong growth. We’re actually gaining share from fragrance to makeup in the doors we’re in, to ready-to-wear, across the board accessories, jewelry, watches,” he said.

He noted that there’s a lot of growth happening at the highest part of the pyramid. That means, high jewelry and pieces above $50,000, as well as the number of clients for couture and its Métiers d’Art collection. “Leading the way is the higher part of luxury, which is the way we want to grow the house,” said Galantic.

Another important metric for Chanel is the total purchasing power of its clients. He said that if the brand looks at certain retail partners, Chanel accounts for roughly 7 percent of their sales, which is significant. But if the company takes the total purchases of that Chanel customer throughout the chain into account, it’s over 30 percent. “When we open new distribution, we’re bringing brand image, and we’re bringing a very powerful shopper,” he said.

So if things are going so well, why change direction?

“There are some fundamentals at Chanel we have no intention of changing,” he said. “We always want to be creation-led, following the impulse of our creator across all our categories, rather than following a trend. We either make the trend, or observe a trend, but we don’t follow a trend.”

Second is human touch. He said that when it comes to human touch, the client expectations for luxury are evolving and are increasingly demanding. “The product makes her dream, and she’s looking for an experience that’s in line with a product at the same level. When we do our research and when we talk to our clients and when we learn, we find 50 percent of the brand image is determined by the experience. When you add brand to experience, you get image. A negative experience can detract from the image,” he said.

While there’s mythology that says that mass is convenience and luxury is experience, Galantic takes a different point of view. “In reality, it’s true for mass, but luxury with the new demands and expectations really has to be both — experience and convenience,” he said. Basically, he said, Chanel wants to make a shift in the way it controls its destiny. “That means to greatly enhance the client experience to become a more direct-to-client brand, with more of a one-on-one relationship,” he said.

Galantic stressed that the move does not mean the company wants to phase out its retail partners. In fact, just the opposite. He said it realizes that its retailers are often initiating the first-time experience a customer has with the Chanel brand. They also provide a multibrand experience, which in some cases the client favors. In addition, there are areas around the country where Chanel doesn’t have a freestanding boutique. “The only option to shop Chanel could be in a multibrand retailer, which is a big chunk of the business and an important part,” he said.

Further, he noted, “For the newer clients, we know the first visit can be intimidating and we know we have a lot of work to do there. In order to be able to handle all the traffic and exceed expectations for everyone, it takes a different model and takes more people. It takes a different kind of training and takes different kinds of rewards,” he said.

One of the biggest advantages is control of data. “It means owning the client experience and being able to connect the touch points for the shopper. So the visit to a Neiman’s or Saks or a Chanel boutique, whether it’s fashion, watch or fine jewelry, is part of the same brand and not happening in different silos,” said Galantic.

As a result of operating a concession model, Chanel plans to hire 700 people. Galantic said he expects this model to be in place by the end of 2019, and by early 2020, it should be finished. The plan is to do most of fashion next year, and then move on to watches and fine jewelry.

Bloomingdale’s 59th Street flagship was the first store to turn its Chanel accessories and ready-to-wear departments into a concession model in October 2017. “It’s doing extremely well,” said Frank Doroff, vice chairman of Bloomingdale’s. “The growth rates are very impressive. We’re very pleased. When they came to us, we always support our partners,” he said. He noted that the growth rates have “increased substantially” from the prior arrangement.

“From a client standpoint, from an employee standpoint, from a business standpoint, from a mix of sales, having the right assortment, we’re very pleased,” said Galantic, about Bloomingdale’s.

“We found that our retail partners have been very supportive of what we’re trying to do. There are advantages to them, in Chanel being able to create a connected business model,” said Galantic. Another advantage is that the customer will have access to an item which might not be in stock in a multibrand retailer. Further, a multibrand retailer might have clients who are significant for them, “but are very significant for us, but not big enough to be VIP level. When we add the purchases together, all of a sudden, they’re very high on our radar and may be invited to a Chanel show, which they wouldn’t have in the past. There are many advantages in the long run,” he said.

“Our partners have been cooperative in helping us engineer these changes and making sure the experience in the stores will continue to be seamless and that people who are helping a Chanel shopper outside the hard shop will continue to be part of the conversation, even though we now own the client data,” he added.

Galantic believes that these moves will elevate and enrich the client experience. “It’s now possible once we have all the touch points connected, it’s possible to really start to raise the bar in our boutiques and everywhere. We’re calling it ’boutique evolution,’ and what we’re doing is enhancing the client experience, reimagining the whole service model in terms of whom we recruit, how we reward our people.”

As a result, commissions will end.

“We are phasing out commission. We’re also rewarding much more collaborative work,” said Galantic. “It’s less of a solo effort and more of a team effort. That, in turn, creates some new career possibilities.”

He believes that collaborative work translates better into management than solo work, and that it’s a skillset that lends itself more to career advancement. A senior fashion adviser in a Chanel boutique in a multibrand retailer can become a boutique director and move onward from there. Galantic said that some people who are working in the Chanel boutiques at specialty or department stores and are on their payroll, will shift to Chanel’s payroll.

Connecting all the touch points is a critical element.

“What the client is really interested in is omni-touch points, the more connected experience. When she engages with Chanel, and it could be chanel.com, or an app, or a wish list or a virtual closet, or making an appointment, or a live chat or a call center, that once she enters any touch point, she’s entered all. Through her ‘My Account,’ she’s now part of a Chanel connection. We’re working very much on this, and we plan to be ready for an omni-touch point connected world in 2019,” he said.

In fashion, watch and fine jewelry, Chanel is adding people in the freestanding boutiques, as well as in multibrand retail, and in fragrance and beauty, it’s building out a combined channel of stand-alone doors and chanel.com, which is its fastest-growing channel in fragrance and beauty. “We’re also working on new retailer models where we’ll also have access to data. We’ll have access to our client data, they’re not strictly lease agreements, and some of them will have connections to our web site, some of them will have shared people. We’re experimenting with different models, but all on the same principal of being able to be more direct, one on one to our customer,” he said.

Ready-to-wear and handbags are not sold on chanel.com, and there are no plans to do that. Fragrance and beauty have been sold online since 2006. Sunglasses have been sold on the web site since 2015. Galantic noted that most of its fashion clients prepare their boutique visits by visiting chanel.com, or the app or call center.

This past summer, Chanel upgraded its web site and introduced a host of new features, including virtual try-ons for sunglasses, and soon, makeup. There are multiple features such as ‘make an appointment,’ wish list and live chat, and it plans to deploy the web site globally in 2019.

Does Galantic feel that the company is missing out on sales by not selling the handbags or ready-to-wear online?

“I think it’s quite the contrary. One of the things that’s special about Chanel and keeps us at the top of luxury is we favor and cultivate human contact so that there’s a human relationship with someone who knows you, with someone you make an appointment with, who takes care of you, who curates the collection for you, who styles you. For high luxury, that needs to happen in a boutique and not on a screen,” he said.

“True luxury is telling a seductive and irresistible story which has to happen in a human way,” said Galantic. He said e-commerce is “an algorithmic-based, anonymous transaction and therefore it’s antithetical with high luxury. That’s what open access e-commerce is,” he said.

Robert Burke, chairman and chief executive officer of consultanty Robert Burke Associates, sees the benefit to the concession model to a brand like Chanel. “Over the past several years, we’ve seen more of the brands go to concession models. Chanel is probably one of the most coveted brands by the consumers as well as the retailers and department stores. As a result, Chanel knows the value they add to the overall brand lineup in a department store, and I’m sure that they’ll negotiate accordingly.”

Two big moments for Chanel will occur in New York this fall when the company opens its renovated flagship on East 57th Street on Nov. 15 and will present the Metiers d’Art collection at the Metropolitan Museum of Art on Dec. 4.

The 57th Street store, designed by Peter Marino, will be increased from 7,100 to 14,000 square feet and will be expanded from three to five floors. “This will be a true global Chanel flagship. It’s reconfigured in a way which makes, in particular, the ground floor more spacious,” he said.

Furthermore, Galantic noted that despite published reports elsewhere, the New York office is not closing. He stressed that the majority of corporate functions moved to London, but that accounted for 47 jobs out of 20,000 global employees. There are 1,350 Chanel Inc. employees in the U.S. He noted that Alain Wertheimer, chairman and ceo of Chanel, is based in New York and is not relocating. Jobs that moved to London, where the Chanel Ltd. holding structure is based, were global functions in human resources, legal, CSR and finance. France remains the creative hub for Chanel, which had revenues last year of $9.62 billion.

Several functions, including innovation and corporate partnerships, are based in New York. “If we’re hiring 700 people, we’ll need someone to lead them along,” he said. In addition to hiring people in the boutiques, Galantic said they’ll be hiring staff in technology, analytics and data. “We now have a lot more data to understand, react to and figure out how to leverage in a human way,” he said.

Looking ahead, Galantic sees the biggest opportunities for the brand as watches, ready-to-wear and beauty.

In high jewelry, he said the company is doubling the business this year and expects to continue these growth rates. In fact, he noted that the brand recently had a $3 million transaction in Las Vegas. “It’s never going to be a big business in units, but it gives a halo of timelessness to the entire house that’s very important, so we tend to communicate about it quite a bit and will continue to do so,” he said.

Chanel is expanding the independent dealers where it sells watches and is adding fine jewelry. In 2018, 30 percent of its existing Chanel retail distribution received an expanded collection/ assortment of Chanel fine jewelry. The company expanded its fine jewelry distribution to five additional Neiman Marcus Chanel shops in Beverly Hills; Chicago; San Francisco; Palo Alto, Calif., and Houston this year. It also opened two independent jewelers with fine jewelry, in addition to Dover Street Market in Los Angeles, with a curated assortment. At present, Chanel has three stand-alone boutiques for high jewelry on Madison Avenue in New York, Beverly Hills, and South Coast Plaza in Costa Mesa, Calif.

In the next year, Chanel plans to open several new fragrance and beauty stand-alone boutiques in key markets.

In addition, a freestanding Chanel boutique is being built and will open at 65 East Oak Street in Chicago in January, replacing one that closed last year in the Drake Hotel.

Discussing what the presentation of the Métiers d’Art collection in New York will do for the Chanel brand, Galantic said, “It’s the ultimate experience for our clients and the echo and resonance around the show spreads around the country. For clients, and for our own employees, it’s incredibly energizing to have Karl [Lagerfeld] and the collection here.”

BoF: End Clothing: Menswear’s Silent E-Commerce Contender

BoF: End Clothing: Menswear’s Silent E-Commerce Contender

BUSINESS OF FASHION | CHRISTOPHER MORENCY

LONDON, United Kingdom — Just a stone’s throw away from Supreme, Palace and Stüssy’s London boutiques, a new men’s fashion mecca has emerged.

Situated within a newly developed apartment complex in the city’s Soho neighbourhood is the recently opened, first London flagship belonging to End Clothing (better known as End) — the Newcastle-based men’s retailer founded by John Parker and Christiaan Ashworth.

Inside, artichoke green plants and neon signs cut through the abundance of sleek marble countertops and concrete floors that form the backdrop to numerous silver railings and stone walls displaying exclusive sneakers, street-luxe apparel and homeware.

Like many of its streetwear peers, the store often sees long queues of young fashion devotees, fully dressed in the latest Off-White, Balenciaga and Nike gear, waiting for the newest, limited sneaker launch to drop. Lines often stretch far beyond the corner of the monolithic 9,500 square-foot building.

While the fashion industry has only recently embraced drops, for End, this has been a weekly occurrence since its inception in 2005. On “drop days,” lines can reach up to 500 shoppers. “We’ve had queues outside of our stores for as long as I can remember,” says Parker, who, along with Ashworth, at the age of 22 founded the menswear destination in Newcastle with £20,000 (about $26,000) of their own money.

The store quickly became known for its unique, curated mix of sportswear brands such as Nike and Adidas and fashion-forward, emerging labels like Henrik Vibskov and Umbro by Kim Jones.

In 2006, End launched its e-commerce website and online sales quickly eclipsed those of its brick-and-mortar shop.

Still, many high-end brands weren't convinced. “Back then, consumers weren’t mixing luxury with emerging fashion, so it was very hard to attract the brands that we were interested in working with,” explains Parker. “Very quickly we understood that we needed to become the best partners to the brands, representing them in right way, paying the suppliers on time and always act respectful.”

It wasn’t until 2009, when End opened a second Newcastle outpost and started to introduce contemporary fashion brands such as A.P.C., Acne Studios and Comme des Garçons, that the business started cultivating a community of loyal, young shoppers. The move paid off and that year revenues grew by 50 percent.

For Parker, dipping a toe into the luxury market was naturally next on End's agenda. “Mixing [streetwear and luxury] is so accepted now with Virgil Abloh at Louis Vuitton and with LV’s Supreme collaboration, but when we started speaking to luxury brands it wasn’t an easy conversation,” he said.

At the time, upscale houses were predominately working with more established department stores and high-end boutiques, which mixed its merchandise based on price points and design aesthetic. Associating themselves with End would have been a risky move.

“We were the new kids on the block [and] one of the first stores to have the vision of how the younger generation would dress, mixing up the styles and brands,” says Ashworth, who started working with luxury brands in 2010. “I spoke to them about our millennial and gen-z consumers and about how we were reaching a different consumer. Some of the more forward-thinking ones got it and came onboard and I don’t think any of them have regretted it.”

By 2014, End passed one million registered users on its website and luxury brands including Saint LaurentMaison Margiela and Valentino started to see the opportunities of working with the retailer and signed on. Around that time streetwear had entered the arena of high-fashion with a new wave of emerging brands. Labels like Off-White, Vetements and Gosha Rubchinskiy started blending fashion-forward design and a luxury-like positioning with community-driven authenticity often found in street culture. The global fashion industry was about to be disrupted by streetwear, and End had seen it coming for years.

For Index Ventures, which has also invested in Farfetch, Net-a-Porter and Grailed, it was enough proof to take a minority stake in the retailer, for an undisclosed sum, in 2014.

“End is a combination of a great secret when it comes to the investment community and a cult following when it comes to its customers,” says Danny Rimer, a partner at Index Ventures. “It’s this community and the close relationship the team has with its suppliers that sets it apart from other retailers.”

The backing — End’s first ever investment — enabled the company to expand its Newcastle store, open a new three-storey flagship in Glasgow and bring its tech team in-house (instead of working with a third-party) where they worked on new developments, including the 2015 introduction of End Launches, a first-of-its-kind online raffle system that lets consumers enter draws with the chance to win and purchase exclusive and highly coveted sneakers.

The changes led the company to grow its team to more than 450 staffers and its revenues from $35 million in 2015 to a projected $180 million by the end of 2018. According to Parker, End has been profitable since day one.

And while End’s annual revenues still track behind those of its competitors — MatchesFashion reported about $393 million in revenue for the year ending January 2018, while Ssense is on track to hit about $800 million in sales in 2020 — it has cultivated a strong community on which it is betting strong future business growth.

According to data from SimilarWeb, a digital market intelligence service whose data is imperfect but directionally accurate, monthly web traffic to End’s website reached 7 million in September 2018, compared to 3 million for MatchesFashion, 5 million for Ssense and 3.6 million for Mr Porter. End also had the highest average page views and average article visit duration per session out of the group. It also has a higher Instagram following than that of its competitors.

“End isn’t eclectic just to be eclectic. Its credibility as a first-mover allows for strong relationships with e-commerce eschewing streetwear brands, which provides it with a competitive advantage against other retailers when it comes to product,” explains Robert Burke, founder and chief executive of retail consultancy firm Robert Burke Associates. “[Meanwhile] luxury brands look to End as a platform to elevate their own brand through sharing a stocklist with cult streetwear brands.”

Now with a solid foundation in place, End is ready to become a sizeable player vying for a share of the fast-growing online luxury goods market, which has tripled in size over the last five years, to about $23.5 billion in 2017, according to global consultancy Bain & Company.

While e-commerce sales make up around 90 percent of End's total sales, the founders see physical stores as key to the company's future growth as it offers additional exposure while providing its target demographic with physical touchpoints to the brand. “Over the next few years we’re looking into opening more stores. Next year we’ll be opening our first international store,” says Ashworth, who declined to disclose the exact location. “Our data shows that the UK, Europe, US, Asia and Australia are all very important markets, so with our physical retail expansion it would be a dream to go all over the world.”

In addition, End plans on increasing its brand collaborations and special projects, which will drive novelty for the consumer and additional marketing for the company. Past product collaborations include those with Champion, Neighborhood, Adidas and Ami.

What’s more, End recently purchased a new UK distribution centre, which the company will move into in early 2019 and will be able to hold five times more stock than its current warehouse. Additional distribution centres in Europe, US and Asia are said to follow.

If all goes to plan, the retailer projects that revenues will double to $350 million by the end of 2020.

“[In the end] it’s about removing friction, so the customer can seamlessly shop across channels, and I don’t think many companies have managed to crack that yet,” says Ashworth. “We’ll make it as convenient and as good of an experience as possible for that consumer. We’ve got some good stuff coming.”

BoF: The Secrets to Selfridges’ Success

BoF: The Secrets to Selfridges’ Success

BUSINESS OF FASHION | VIKRAM ALEXEI KANSARA

LONDON, United Kingdom — When Selfridges staged a large-scale Fendi pop-up last summer, ice cream, postcards and balloons helped to conjure up the energy of a traditional Roman piazza inside the upscale British department store’s Corner Shop, a concept space that’s part of the retailer’s £300 million bet on the power of brick-and-mortar shopping.

The investment is focused on a major, four-year renovation of the accessories hall in Selfridges' London flagship, which was reimagined by English architect David Chipperfield and now spans 60,000 square feet, or about one-third of the Oxford Street store’s ground level. The project includes a new triple-height, art-infused  entrance on Duke Street, a 4,000-square-foot eyewear destination and the Corner Shop, which has also hosted pop-ups with The Rolling Stones, Gentle Monster, Balenciaga and Chanel.

So far, the move appears to be working. Earlier this month, Selfridges posted another set of robust results. For the year ending 3 February 2018, sales hit £1.75 billion ($2.27 billion), up 11.5 percent.

The UK’s looming Brexit has yet to dent luxury consumption in the country, buoyed by international visitors benefitting from a weak pound, and British rival Harrods also saw sales climb in the last year, reaching £862.5 million, up 4.6 percent. But Selfridges stands apart for its strong performance amidst fierce competition from online players and a slump in local consumer confidence.

Tellingly, the retailer cited accessories as a key driver of growth. The opening of major boutiques, including Louis Vuitton and Tiffany & Co. in its Birmingham store, provided an additional boost. And though Selfridges was late to the e-commerce game, digital sales also grew swiftly, bolstered by investment in a Chinese-language site, an Android app and a new unlimited delivery service.

But behind these moves is the underlying secret to Selfridges’ strength: a multi-pronged strategy rooted in a highly focused store network, a unique approach to the concession model and American entrepreneur Harry Gordon Selfridge’s founding insight that a modern department store must be a true destination; welcoming, entertaining and a social landmark.

Selfridges has physical advantages over rivals: it only has four brick-and-mortar locations, all situated in prime, densely populated areas across three UK cities: London, Birmingham and Manchester. This keeps focus and productivity high, which is one of the reasons why Selfridges was able to pour £300 million into the revamp of its Oxford Street store.

Selfridges has embraced a concession model, allowing brands to run their own shop-in-shops. Because brands typically manage their own stock and personnel with greater focus, the approach often outperforms the traditional wholesale model, according to retail analysts. The downside can be a disjointed and undifferentiated shopping experience, exacerbated by store operators who can sometimes act as little more than landlords. But Selfridges avoids this in a few ways.

For one, the retailer has forged strong relationships with its brand partners, encouraging them to be creative with their concessions and ensuring Selfridges gets the very best product, which labels typically reserve for their own flagships. Selfridges also blends concessions with its own product selections, often featuring young and unexpected brands, then knits everything together with entertaining pop-ups to create a seamless and curated customer journey that unites the economic benefits of concessions with a genuine sense of discovery.

“The starting point has to be that nobody should know what’s concession and what isn't,” said Selfridges managing director Anne Pitcher. “I defy you to tell me what is operated by a brand and what we operate directly.”

“One of the challenges with a large format store like Selfridges is keeping it intimate, keeping it highly curated and not just a series of shops-in-shop for major brands — they’ve done both,” added retail consultant Robert Burke. “They’ve really nailed the importance of having a variety of brands: new brands and young brands, and fantastic pop-ups,” he continued. “They have not created a luxury ghetto, meaning that it is not just one big luxury brand after another.”

Alongside its dizzying array of goods, Selfridges also has an uncanny ability to sell the experience of shopping itself, which explains why the new marble-floored accessories hall in its London store comes with a 14-seat circular bar and a Japanese flower market.

“At Selfridges, you can buy flowers, have a glass of champagne, meet a girlfriend and walk around the space, which is architecturally enjoyable,” said Pitcher. “It makes you feel very different if you walk out with a beautiful bag, because you enjoyed everything around it.”

Enjoyment is hard to measure but according to Joseph Pine, business guru and author of “The Experience Economy,” time is the basic currency of experience and the more time your customers spend with you, the more money they will spend now and in the future.

Selfridges offers plenty of novel services like FaceGym, which delivers 30-minute “non-invasive facial workouts” that lift and sculpt the face. (In a sign that department store competitors are closely watching and trying at least some of what Selfridges is doing, Saks Fifth Avenue also opened a FaceGym on the new second floor of its New York flagship in June).

But one of the most important elements of Selfridges’ focus on experience is its food and beverage strategy. Sitting down for a drink or meal at any one of the retailer’s bars and restaurants certainly lengthens the time customers spend in its stores.

It’s also a social activity. “People love people,” explained Pitcher. “People like going shopping together; going to museums together; going to cinemas together. It’s about enabling people to play together. You’ve got to have fun, right? If you don’t have fun, what is the point really?”

Food also plays to the heightened value of sensory experiences you can’t get online. “The role of a physical store must be to engage the senses. We've always had food at Selfridges and we are going to have even more and better food for eating, tasting, smelling,” said Pitcher. Then, of course, there’s the added benefit of a customer that has just had a glass of wine.

A savvy cultural radar is also crucial to the success of Selfridges, which has managed to be relevant to millennial and Gen-Z consumers, who are expected to account for 45 percent of the luxury market by 2025, according to Bain & Company.

At the end of October, Selfridges is set to unveil a 20,000-square-foot space for men's streetwear that’s been three years in the making and will feature Yeezy, Gucci, A Bathing Ape and Off-White, along with a bowl for skateboarding (much like Paris department store Le Bon Marché, which recently launched a skate-able structure). “We would like to say we are in touch with what is coming down the tracks,” said Pitcher. In addition to streetwear, the retailer was also early to the clean and conscious living trends, partnering with the likes of Detox Kitchen and Canada Goose, which created exclusive fur-free jackets for the chain back in 2016.

Selfridges’ Body Studio is another good example of its ability keep up with the cultural conversation. The concept wraps together lingerie, activewear, swimwear, beachwear in a way that’s more in sync with the way modern women think about their bodies than a typical lingerie department. “When we set out to build a great destination for lingerie, we thought: let’s create a studio with a health cafe and a hairdresser and yoga and a whole conversation about your body, rather than just a place to buy underwear,” explained Pitcher.

It doesn't hurt that Selfridges is also one of the world’s most democratic and high-traffic luxury department stores, drawing 160 million visitors a year to its physical and digital channels. “It is not intimidating and exclusive,” said Burke, who noted its wide spectrum of products and prices.

“The world is welcome at Selfridges,” explained Pitcher. The company has been particularly successful at addressing international customers with translations, multilingual staff, foreign payment options, tax-free shopping services and digital tools that help visitors from abroad navigate its stores.

Then, there’s the power of what Pitcher calls “placemaking.” For all that’s percolating inside its stores, Selfridges is trying to think beyond its own walls, contemplating the neighbourhoods around its outlets and creating connections with local communities. “A physical store sitting in a neighbourhood with which it has no relationship is alien,” said Pitcher.

Selfridges is working closely with Crossrail, a large-scale public transport project in London that will shuttle millions of people to the Oxford Street area, many of whom will surely make their way to Selfridges. The retailer has also planted trees and built a marble bench and drinking fountain outside the new Duke Street entrance to its London store in a bid to create a plaza-like feel that is designed to both prettify the area and attract people to the store.

Last week, the retailer kicked off its rock n’ roll-themed holiday event — Selfridges Rocks Christmas — with a bang involving 85,000 baubles, 200 Christmas trees, a holiday cabaret and a series of elaborate window displays. “Selfridges is providing an experience even if you never walk into the store and you can see that specifically with these windows,” observed Burke. “There are people that won’t walk into the store, but Selfridges has already won them over. And in a year or two years, they might buy something from the food hall or meet a friend for a drink. That’s the win.”

And yet despite the strength of the strategy and the latest round of positive results, there may be limits to how much Selfridges can scale. Growth in its last fiscal year was slower than the 16 percent rise the retailer posted in the previous period. And while operating profit hit a record £181 million, that’s only slightly above the £180 million the company reported last year, meaning that margins fell and big jumps in sales may not be sustainable into the future.

There are clear advantages to the chain’s highly focused retail network, as well as longstanding questions as to whether its approach would translate to smaller cities in the UK should the company attempt to expand. But with only four physical stores, it’s clear that Selfridges must do more to boost its digital strategy.

According to Bain & Company, online luxury sales hit $27 billion in 2017, up 24 percent from the year prior, buoying the likes of Yoox Net-a-Porter, Farfetch and Matches Fashion. Selfridges cited strong digital sales in its recent results, but the company declined to disclose specific figures and its global e-commerce business still lags its Oxford Street flagship in revenue terms.

That said, the retailer has invested heavily in wooing international customers and a single visit to the Oxford Street store could drive multiple additional purchases online, if Selfridges was able to better integrate its physical and digital channels.

“The big challenge right now is whether we have the ability to fully integrate digital with physical and the answer is no, not yet,” admitted Pitcher. “However, when we've done that it will be a huge strength. This is the biggest challenge for any department store,” she added.

“Our roadmap to become an omnichannel player is well underway. The plan is securely in place.”

NYT: Getting Shoppers Into Stores Takes More Than Inventory

NYT: Getting Shoppers Into Stores Takes More Than Inventory

NEW YORK TIMES | ARIEL FOXMAN

In 2018, as many as 12,000 stores are expected to close in the United States, according to Cushman & Wakefield, a commercial real estate firm. Nine thousand storefronts shut down last year.

Yet despite this very real reckoning, countless retailers are not only surviving, but also thriving.

The secret to their adaptive success? Almost anything, it seems, that keeps shoppers on their toes is viable. That includes exclusive merchandise (will this location carry that handbag?), pop-up shops (will this store be here next week?) and experiences (can I eat or drink or post as well as shop?).

Innovations that offer intrigue, if not necessarily inspiration, seem to be winning.

Samantha David, chief operating officer of WS Development, one of the largest retail development firms in the country, has spent the last two years directing the Lazarus-esque revitalization of Palm Beach’s Royal Poinciana Plaza. The area was once a destination as prestigious as Palm Beach’s Worth Avenue, but it had lost much of its retail glory by the 1990s.

The project — which reopened in 2016 — is now one of four properties in WS Development’s Up Markets division that focuses on premier retail opportunities. It features 50 boutiques, including new Hermès and Saint Laurent outposts.

Despite her company’s sizable Palm Beach investment, she says she is aware of the crucial retail challenge ahead of her: getting people offline and into her Plaza’s boutiques.

An embroidered tulle dress available only at Mr. Gurung’s West Village boutique.CreditDaniel Dorsa for The New York Times

“Gone are the days of shopping by necessity, as much of that can be satisfied online,” said Ms. David, the daughter of the fashion designer Lisa Perry and the former hedge-fund manager Richard Perry, who also has a majority stake in Barneys. “Today, shopping has to be a part of how I want to spend my day, spend my time, in all aspects.”

To get consumers spending their days at Royal Poinciana Plaza, Up Markets is pairing carefully curated retail with a robust schedule of on-site lifestyle programming like the “Backgammon and Bubbles” series (rosé bubbly for adults, a bubbles bar for the children) and the “Wee Royals” arts and culture activities for children.

Indeed, it would appear that the “hangout” is now as important as what is hanging on the racks.

Prabal Gurung, a Nepalese-American fashion designer, a favorite of celebrities like Priyanka Chopra and Kerry Washington, would agree. As he prepares for his label’s 10th anniversary next year, Mr. Gurung has decided that this is the year to debut his first stand-alone store.

He said his just-opened boutique on Bleecker Street in Manhattan’s West Village is “not the typical retail space where you just sell clothes.” Rather, the store is focused primarily on telling (and experiencing) stories — of the designer’s American dream come true, or the story behind the craftsmanship of handmade merchandise. Mr. Gurung intends to host a rotation of live events.

“We are opening our doors to the next generation to come in and experience that luxury doesn’t have to be cold and distant,” he said.

At the same time, Mr. Gurung has been chosen to be the creative director of “Love, Bleecker,” a joint project from Skylight, a fashion event venue development firm, and Brookfield Properties to reimagine beloved but bruised Bleecker Street, a totem of the past decade’s retail boom and bust.

“My dream for Bleecker Street is that every store should have a back story that can excite,” Mr. Gurung said. Under his recommendation, the “Love, Bleecker” collective showcases small-batch retail shops such as the floral atelier Fleurotica and Bonberi, a vegan and wellness bodega.

While eyes are always on the bottom line, brands like those from the designer Tory Burch are extending the definition of their stores beyond merely pushing new arrivals. Ms. Burch, who has over 100 namesake stores from Azerbaijan to Qatar, said that she wanted her customers to go into one of her stores “and feel like they are going into a home. Where they could hang out, have a drink, have their husband sit on a couch and it would be kid-friendly.”

And this season is now inviting those lounging in her Meatpacking District outpost to get hands-on with her other passion, the Tory Burch Foundation, which has given more than $40 million to causes supporting women entrepreneurs since 2009, including an education fellowship program partnership with Goldman Sachs. “Now that we have had real impact and scale, I am excited to bring it into the store,” she said.

Efforts like Ms. Burch’s reflect the changing nature — and increasing sophistication — of shoppers.

“Gone are the days when stores told the customers what they were going to buy,” said Robert Burke, chairman and chief executive of Robert Burke Associates, a fashion consulting firm with clients like Chloé and Vera Wang. “The customer is now highly educated about the brands. The customer drives the experience and that experience is not entirely transactional.”

That sort of hands-on trial activation can be as literal as Canada Goose’s Cold Room at the brand’s new flagship at the Mall at Short Hills in New Jersey, where customers can try on coats at temperatures as low as minus 13 degrees Fahrenheit. Additional Cold Rooms are set to open in Vancouver and Montreal, where customers could presumably just head outside to check on the efficiency of their purchase.

Other activations are a bit more grand. This September, Matchesfashion.com, an English on- and offline fashion multi-brand store, introduced its retail residence: 5 Carlos Place. The five-story by-appointment “home” in London’s Mayfair allows not only for private on-demand shopping and weekly product curation, but also for entire floors of entertainment. A schedule of panels, podcasts, master classes, dinner parties and performances is available on the Matches site.

One of the pioneers of the “retail residence” is Ralph Lauren, whose first flagship opened in the 1980s on the corner of 72nd Street and Madison Avenue, in a former French Renaissance revival mansion. Rather than gutting the space, Mr. Lauren embraced, renovated and decorated it — turning it into a destination whose value transcended the clothes inside. The store is still referred to by the company and fashion experts as “the Mansion.”

“Ever since Ralph Lauren opened his first store, or shop in shop, he never really thought of retail as just his opportunity to sell clothes,” said David Lauren, the designer’s middle child and the company’s chief innovation officer. “What he did on Madison Avenue was create a home. You would move through it, sit down and enjoy a coffee or a glass of Champagne.”

During its 50 years, the brand has earned a reputation as an early adopter when it comes to technology: embracing everything from online customization to virtual reality and artificial intelligence. That is why it is rather quaint to learn that one of its most successful retail initiatives is Ralph Lauren coffee.

This fall, the brand reintroduced its coffee pop-ups around New York City and it counts the stand-alone Ralph’s Coffee in Hong Kong’s Harbour Cityand Ralph’s Coffee & Bar in London as bona fide hits. “It’s another way to experience the brand,” Mr. Lauren said.

Joel Isaacs, whose New York-based Isaacs and Company is a go-to real estate firm for luxury retail clients including Prada, Marc Jacobs and Jil Sander, said that all of the retailers he was talking to now were considering ways to incorporate events and some sort of food and beverage component.

Mr. Isaacs recently worked with the Texas-based fashion boutique Forty Five Ten as it looked for its first New York space. The shop had one caveat: “We did the deal with them at Hudson Yards, and they specifically chose the fifth floor of the project because on the fifth floor you’ll have four restaurants and they wanted to be in proximity to food.”

Menu or no menu, retailers want you to pull up a chair — or enjoy a performance — and ideally stick around and actually buy something. Even if that means the chairs themselves.

Mr. Gurung said he wanted to be able to highlight the furniture in his store. “We are teaming up with an interior designer,” he said. “If someone wants to buy that, they can.”

THE CUT: Has PETA Finally Won the War Against Fur?

THE CUT: Has PETA Finally Won the War Against Fur?

THE CUT | AMY ODELL

Last winter, on a frigid February day, a group of women gathered in front of London Fashion Week’s Store Studios headquarters and took off their tops. Clad in nothing but body paint reading “WEAR YOUR OWN SKIN,” they marched behind signs emblazoned with the logo of the organization they were representing, PETA.

“Animal skin is not fashion! Where the hell is your compassion?” they chanted as camera crews from the British tabloids scrambled to report a story about topless women in the streets.

Two weeks ago, another London Fashion Week wrapped up. But unfortunately for the Daily Mail, this one afforded no such salacious opportunities. According to the British Fashion Council, not one of the 80 designers who participated in the week showed real fur.

Animal-rights activists have become as much a fixture of Fashion Week as Anna Wintour. They regularly demonstrate outside major shows and occasionally manage to ambush a runway, the way one protester from the group Surge did at Mary Katrantzou’s February London Fashion Week show(ironically, she showed only faux fur). At Paris Fashion Week on Tuesday, PETA activists wore underwear and giant costume bunny heads to demonstrate at the Eiffel Tower, where Saint Laurent showed later that evening.

But these days a lot of people feel that fur is not acceptable, including some of the most influential names in fashion. Burberry, Michael Kors, Donatella Versace, Giorgio Armani, and Gucci’s Alessandro Michele and Marco Bizzarri have all recently made pledges to never use fur in their collections again. Other famous labels like Marc Jacobs and Givenchy haven’t officially gone fur-free, but showed only faux fur on their fall 2018 runways. The cities of Los Angeles and San Francisco have officially banned fur, too. In the decades-long battle between fashion and PETA, it seems as though PETA has finally won — despite its own best efforts.

The organization is loathed within the industry. In 2005, on her way into the Chanel show, a PETA protester threw a tofu pie in Wintour’s face. Almost ten years prior, PETA claimed responsibility for another famous attack on Wintour during lunch at the Four Seasons, in which a woman screamed “Anna wears fur hats!” before dropping a dead raccoon onto her plate and scurrying out of the restaurant (the co-owner of the restaurant later said Wintour “didn’t seem bothered at all” by the raccoon, which was removed and replaced with a burger).

In 1999, an unidentified protester threw tomato juice at then-Gucci designer Tom Ford at a fashion conference in Dana Point, California, while PETA protesters assembled outside in cages wearing donated fur coats to illustrate the inhumane treatment of animals on fur farms. Ford, who also showed faux fur in the February show for his namesake line, has said he remains distraught by the incident to this day. “[I]t was one of the most violent, frightening things that has ever happened to me,” he told WWD. When his attacker reached into her handbag, clearly rooting around for something, “I thought it was a gun,” he said.

Marc Jacobs called out animal-rights activists in an Instagram after a separate group protested his recent runway show, writing, “being abusive and aggressive to people while protesting about cruelty to animals is just plain hypocritical.”

PETA’s associate director of campaigns, Ashley Byrne, said the group never protests a designer publicly without trying to resolve their issues behind-the-scenes first, but feels their approach is justified: “I mean, I can’t think of something that exemplifies harassment and bullying more than killing someone and taking their skin.”

Perhaps unsurprisingly, fashion insiders don’t credit the industry’s newfound rejection of fur to the people who have been throwing food and dead animals at its most important members for 20 years. Instead, they cite a hyper–socially conscious generation of millennials who believe we should be able to experience luxury without contributing to animal suffering.

“The fashion industry’s always concerned with the millennial consumer and the next wave of consumers and I think they’re pretty firmly planted ‘anti-fur,’ ” said Robert Burke of the luxury fashion consulting firm of the same name. “The last thing fashion likes is feeling dated or old.”

Chloé Mendel is a self-described “sixth generation furrier” who worked under her father, Gilles Mendel, one of fashion’s most famous pelt dealers. She recently launched Maison Atia, a line of luxury, reversible faux-fur coats. With every purchase of one of her coats, a homeless pet gets transportation to a no-kill animal shelter from Paws Chicago.

“I’m young. I don’t buy furs,” said the 25-year-old. “If you’re going to buy something more expensive than a bottle of water, then you want something good to come out of it.”

Those who do still buy fur like to argue that it’s better for the environment than faux fur, which has a reputation for being bad for the environment. But even that millennial-friendly argument doesn’t quite scan. So little real or faux fur is used for clothing in comparison to other materials that it’s hard to find a detailed scientific study that properly assesses its carbon footprint. (Sales of fur and faux-fur items in the U.S. represent just 1 percent of total luxury apparel sales, according to retail data-tracking firm Edited.) At the least, it’s fair to say the verdict is still out.

When Gucci swore off fur last year, CEO Marco Bizzarri said the material wasn’t modern and that continuing to use it would impact his ability to attract the best (presumably millennial) talent to work at the company. (Half the label’s customers are millennials; it also employs as a “shadow committee” of millennial advisers.) Michael Kors echoed this sentiment after his fall 2018 show, his first since joining the Fur Free Alliance, telling reporters that even women on the Upper West Side weren’t interested in buying mink. Contrast this with the New York Times’s proclamation in just 2015 that “fur is back in fashion,” crediting Kors with “turn[ing] fur into a runway star.”

Even some activists aren’t sure how much PETA has contributed to the current faux-fur boom. The Humane Society’s PJ Smith, who works with fashion labels to craft fur-free policies, has seen the shock-and-awe tactics commonly associated with PETA backfire. Not long after he started in his position nine years ago, he went into a meeting with Barneys armed with an arsenal of disturbing media, including videos of animals being skinned alive and fetal lambs being used for astrakhan fur.

“I remember watching their faces and seeing them shut down, and it happened very early on in the meeting and we didn’t get anywhere,” he said. “They know it’s already bad and they don’t want to see it.”

PETA’s gruesome viral videos of coyotes being trapped for the benefit of a fur trim on those ubiquitous Canada Goose jackets may make sense to a social media–addicted generation. But their reputation of exploiting women to make their points, as in campaigns like “I’d rather go naked than wear fur” or their topless protests, look dated and problematic in an age of activism powered overwhelmingly by young women who are tired of being taken advantage of. (Jezebel has been slamming PETA’s controversial stances involving women — like Ingrid Newkirk’s statement that “discrimination” against chickens is as bad as that against women — for more than a decade. PETA’s Byrne says men regularly participate in nude protests but aren’t the focus of as much media attention.)

For animal-rights activists, the question isn’t whether the fur trade will end in their lifetimes; it’s who will be next to take a fur-free oath. Joshua Katcher, an adjunct Parsons professor, anti-fur activist, and author of the forthcoming Fashion Animals, has an idea. “Karl Lagerfeld has Choupette. He’s next.”

PETA has its eye on Prada, Byrne said, and wonders why Marc Jacobs hasn’t made a splashy announcement about his label going fur-free for the past year, when the brand has said in its own Instagram comments that it has done exactly that.

When I ask Byrne if she feels like PETA has finally won, she stops short of a simple yes. “Every one of our campaigns is a campaign for the animals. So the way we see it, this is a win for the animals.”

WSJ: Michael Kors Woos Versace in Push for Foothold in High Fashion

WSJ: Michael Kors Woos Versace in Push for Foothold in High Fashion

WALL STREET JOURNAL | MATTHEW DALTON AND SUZANNE KAPNER
Michael Kors Holdings
 Ltd. KORS +0.67% is close to a deal to buy Italian fashion house Gianni Versace SpA for about €2 billion ($2.35 billion), people familiar with the matter said Monday, in a move that would put one of the glitziest names in high fashion in the hands of a budding U.S. conglomerate better known for affordable luxury.

A deal would give Michael Kors a sought-after foothold in European fashion. Although Mr. Kors, who is the chief creative director of his company, has worked in high-end fashion, his brand is now best known for handbags priced at less than $500. Versace’s handbags start at $1,500; its ready-to-wear lineup includes extravagant designs, such as a velvet dress emblazoned with a leopard, with a price tag near $2,500.

The sale would also mark one of the first attempts by an American fashion company to run an elite European brand. With its sales sputtering in recent years, Versace presents Michael Kors with a significant turnaround project. Versace’s revenue stagnated at roughly €700 million in 2017; the brand eked out a profit of €15 million last year.

“Versace has struggled with its accessories business, and Michael Kors could help them with that,” said  Robert Burke, a former Bergdorf Goodman executive, who is now a consultant.

But Versace’s edginess also sits at the opposite end of the fashion spectrum from the Michael Kors aesthetic of classic American sportswear. Michael Kors investors panned the deal, sending its share price down nearly 8% Monday afternoon after news of the acquisition broke.

Versace has been tied for decades to the tumultuous history of the Versace family, whose members remain its controlling shareholders. Founded in 1978 by Gianni Versace, the label quickly became famous for his sexually charged designs, featuring colorful prints and daring cuts. He helped promote the idea of the supermodel, with Naomi Campbell becoming a muse.

In 1997, Mr. Versace was gunned down outside his Miami Beach mansion by a serial killer, who targeted him randomly. His sister, Donatella Versace, who had little formal training in fashion design, became creative director after his death.

The period after Mr. Versace’s death marked a chaotic time for the fashion house. Ms. Versace struggled with drug abuse and checked herself into a rehabilitation program in 2004, casting a cloud over the label. Ms. Versace recovered and has overseen operations at the company ever since.

It is unclear whether the Versace family would remain as minority shareholders in the business, or whether Ms. Versace would stay on as creative director, if a deal is consummated.

Other suitors, such as Tiffany & Co., were involved in negotiations to buy the company, people familiar with the talks said. But they withdrew, concerned about the €2 billion price tag and the management challenges presented by turning around Versace.

Private-equity giant Blackstone Group LP bought 20% of Versace in 2014, hoping to orchestrate an initial public offering of the business. But those plans foundered amid Versace’s problems. Blackstone is planning to sell its stake in the business as part of the deal with Michael Kors, a person familiar with the matter said. Ms. Versace, her daughter Allegra, and her brother Santo own the other 80% of the company.

In recent years, Versace has struggled to boost sales, despite a luxury-fashion boom led by Chinese consumers. The brand has been slow to invest in digital marketing and e-commerce, losing market share among younger shoppers who have become one of the luxury’s core demographics.

Versace has been overshadowed by Italian rival Gucci, which has become one of the fashion industry’s fastest-growing brands. Gucci has embraced a quirky, at times resolutely unsexy, aesthetic.

The Italian newspaper Corriere della Sera reported the deal earlier.

In seeking another distinct brand, Michael Kors is taking a page from European luxury houses such as LVMH Moët Hennessy Louis Vuitton andKering , which own labels as diverse as Christian Dior, Fendi, Gucci and Saint Laurent. In America, it is following the path of Coach, the leather-goods and accessories owner that recently renamed itself  Tapestry Inc. Coach bought Stuart Weitzman in 2015 and acquired Kate Spade in 2017.

Both Kors and Coach turned to acquisitions after growth slowed at their core brands. Kors spent $1.2 billion in 2017 to buy high-end shoe brand Jimmy Choo.

Such conglomerates have striven to run the front end of the brands independently, allowing them to express their individual creative visions, while combining operations on the back-end business operations to realize economies of scale.

The designer Michael Kors got his start at Bergdorf Goodman before launching his own designer collection in 1981. While building his business, Mr. Kors also served as the creative director of French fashion house Céline from 1998 to 2004.

At one point, LVMH was a minority investor in Kors, but was bought out in 2003 by Silas Chou and Lawrence Stroll, the businessmen who turned Tommy Hilfiger into a household name. Under their direction, along with Chief Executive John Idol, Michael Kors expanded rapidly by targeting the affordable part of the luxury market, positioning itself in a similar way as Coach. Messrs. Chou and Stroll sold their stake in the company in 2014.

Both Kors and Coach have tried to appeal to shoppers who aspired to high-end goods but were on more of a budget. Kors rapidly expanded by opening its own boutiques, and it now has more than 800 stores world-wide. It had $4.7 billion in sales as of its most recent fiscal year, which ended in March. Helping the designer was a stint as a judge on the television show “Project Runway,” which vastly expanded his popularity.

Like Coach, the brand hit a roadblock in recent years, with critics calling it overexposed. It resorted to discounting to sell its goods. More recently, Kors has repositioned itself by raising the quality of its products and curtailing discounts.

—Ben Dummett contributed to this article.


WWD: What Is the Current State of American Fashion?

WWD: What Is the Current State of American Fashion?

WWD Staff | Women's Wear Daily 

“We started at the bottom of the American economy, so it’s not like we came into fashion at a time where makeup companies were giving away dozens and dozens of dollars to sponsor a show. We’re not used to that. So it sounds like it was all peachy for some people at some point, but for us, we’ve never known that so it all feels great.” Zoe Latta, cofounder, Eckhaus Latta

“[American fashion is] democratic in that training, experience and quantifications are less important. Anyone with a POV or one hero product can start a brand. A weakness is that many of these designers don’t have the structure and business acumen around them to find success. We shower them with praise and accolades and pages of press, but they don’t have a solid structure around their business to create longevity.”  Lauren Santo Domingo, cofounder and chief brand officer, Moda Operandi

“I think the one thing that’s hard in America — and I would say for myself, too — is we have a tendency to put a lot of light and flashiness onto young people very early on. Their first collection comes out, they’re a star, they’re going to change the industry. The reality is, when you’re running a business, there are going to be successes, there are going to be major failures. I wake up every morning just thinking, ‘Okay, what do I need to figure out today?’ You learn new things.”  Brandon Maxwell

“The question is, what do we qualify as ‘American fashion?’ America has pioneered and owns the concept of easy wear, making American sportswear the worldwide paradigm of great design with wearable usage. A few decades ago, when houses in Europe needed to bring freshness and wearability, many of them turned to American designers — Tom Ford at Gucci and at Saint Laurent, Marc Jacobs at [Louis] Vuitton, Michael Kors at Céline….Now, versatility and movement are new global paradigms that can be seen as opportunities for American fashion. We all watched the influence of Supreme, Alyx, etc., and question whether Nike is fashion? Yes, when we see the level of talent having contributed and contributing to Nike: Sacaï, Riccardo Tisci, Kim Jones, Virgil Abloh, A-Cold-Wall, Matthew M. Williams, Jun Takahashi, etc. — with success.  Floriane de Saint Pierre, Paris-based consulting and executive search specialist

“Perhaps instead of competing with each other, if we were to act as a kind of conglomerate, finding synergistic opportunities amongst ourselves, like brands under the umbrella of big European conglomerates do, big things could happen.” Jack McCollough and Lazaro Hernandez, cofounders, Proenza Schouler

“There is a huge difference in regard to the audience in Paris. That is one of the plus sides for me [showing] in Paris. It is a little bit of a challenge here in New York, just making the world see that New York is as important as it is.”  Thom Browne

“Fashion is evolving and so is the consumer. We’ve all become accustomed to instant gratification, and our consumers expect to have what they want, when they want it. The see-now-buy-now phenomenon in American fashion represents this impatience, and how the industry is becoming more efficient to address shoppers’ needs.” Vanessa LeFebvre, president, Lord & Taylor

“Today, more than ever before, you have to really put the fashion in front of the consumers’ eyes. You can’t wait in this retail environment for the customer to come to you. You have to find her. You [may be] finding her online, in a targeted situation, in a trunk show, in a resort — in the winter or the summer, at an event or at some sort of promotion. You can’t just sit back and wait for her to arrive. That’s key…The return of the quote-unquote trunk show is very much what’s happening in the retail world with direct contact with the consumer.”  Dennis Basso

“For production, there’s a limit to how much we can produce in the U.S. with the union factories. That’s why we’ve farmed it out to Italy for sample development, and they’re closed! I’m like, ‘I have a show in three weeks!’ I used to deal with it better when I was younger, but now I have two companies. Why do I have to deal with this? I pay them. I literally have nightmares every night because of the collection and no one’s sewing anything right now!”  Laura Kim, cofounder, Monse; co-creative director, Oscar de la Renta

“Maybe Europeans should change their vacation time a little bit. It’s really a disaster for us because it slows us down drastically. How can I do knitwear or shoes in August? Their factories are closed. Everything is closed in Europe. They’re all in Capri and Portugal. I think Europe will soon need to change this pattern. They could do much more business with America if we were able to buy fabric. We have to be so ready in advance. I ordered fabric today, because they delivered the wrong fabric twice. Now the factory is closed for a month. So I will have to cut something in the right color at the last moment after Labor Day when they reopen. Because no one can go to the factory to get the fabric that is waiting in a factory somewhere ready to go. That’s absurd.”  Hervé Pierre

“When I started, I always felt like Darwin — it was survival of the fittest. Now, for myriad reasons, the industry, globally as well as domestically, is at saturation. I also believe that building a legacy and building a brand takes a lifetime. Even if you build something — I go back to when I wanted to get into fashion and Helmut Lang was the hottest, most important brand in the world — just look at the evolution. Helmut Lang was hitting from the highest, snobbiest fashion insider to jeans and into luxury fragrances. Now, it’s a whole different brand; I don’t think 20 years ago was the trajectory that they thought it was going to be on, nor do I think Helmut thought that it would end up as the kind of brand it evolved into. People seem to be searching right now for ‘what is the right formula’ and there is no right formula — it’s individual.” Zac Posen

“It’s a very, very, very, very difficult time. I’m not going to say it isn’t. And if people think [fashion] is the way it was, it is not. I tell that to every single young person who wants to be a designer today. Parson’s School of Design is on fire. It’s never had more people wanting to be fashion designers. I sit on their board. I said, ‘Listen, we have to look at it with a different eye. We have to train them differently. Maybe it’s not about aperson, maybe it’s a group of people.’ Everything in life is changing.”  Donna Karan

“[Creativity] is impacted culturally. Meaning if you’re in America, you do not get any global news. I watch the BBC News every night so I don’t just hear Trump, Trump, Trump, Trump, Trump, Trump, Trump and, ‘Live at Five: Lose 11 pounds on the summer watermelon diet.’ You get nothing here. It is so isolated.”  Tom Ford

“The landscape in Europe is dominated by a handful of large, traditional luxury brands. In America, we do not nurture brands in the same way. American fashion needs to pivot; to have a long-term view focused more on longevity and sustainable brand equity. Our insatiable obsession with newness hasn’t set us up for success in terms of establishing heritage houses. The future of fashion cannot be solely a fascination with emerging talents.”  Tory Burch

“I think what we have in common right now is a call to action. The landscape has shifted dramatically — some brands have embraced see now/buy now, others have moved their business to focus solely on direct-to-consumer. Personally, I believe that wholesale, specialty stores and DTC will all continue to have a place and shine because they all work in tandem to create a healthy company. But this is for every business to decide for itself, both American and worldwide. At 3.1 Phillip Lim, we define ourselves as a global brand made up of global citizens. We make decisions based on what is right for the niche we have carved out for ourselves in the industry as a whole, not just in America.”  Wen Zhou, ceo, 3.1 Phillip Lim

“The consumer has changed enormously and then retail has changed. I think designers are doing exactly what they did 10 or 15 years ago. That could be one of the issues — that the consumer has changed at a much faster rate than the designer has. The consumer today is so educated and so demanding for newness. Prior to [now] it was all in a very nice, little food chain that went from fashion shows to magazines and editors…and fed down to the consumer. Magazines would say, ‘These are the 10 handbags you have to have, and the five designer outfits you have to have.’ All of that got wiped away basically because of the Internet, and because the consumer started calling the shots, not the industry. Today, in many ways, it doesn’t matter what the fashion industry says or speaks to each other about. It’s really ultimately the consumer’s decision. That’s relatively new.”  Robert Burke, founder, Robert Burke Associates

“I don’t think anybody anticipated the Internet and the effect it would have on business. I don’t think anybody could have predicted the impact social media has had. Now, we’re having to deal with the impact of direct-to-consumer. The department stores couldn’t have predicted it, nor could the magazines. The traditional resources of how you would go into business has changed and so many of those businesses shifted. It was like, ‘Oh, no. What do we do?’ Another thing that happened was street culture became relevant in fashion circles. You could have a street brand do a fashion show in the system of your fashion week. And then the fact that a handbag is great, but a sneaker is almost a better proposition right now. All of these things have made it extremely difficult.  Julie Gilhart, consultant

“I think we will always be strong on talent and desire. The challenge lies in addressing sustainability in a meaningful way. We cannot continue harming the planet to the extent we have been through the production of textiles and clothing. Creating more sustainable avenues of production is not even on most American fashion companies’ wish lists, let alone mission statements. We need to be focused on long-term value, quality and artistry and less on cheap, throwaway items that will only end up littering the planet. I think our industry is still largely caught up in a race to the bottom. We have to wake up.”  Tracy Reese

“As a woman in this industry, I find this is where America is so behind what has happened internationally. When you look at Stella, Clare Waight Keller, Phoebe [Philo], Maria Grazia [Chiuri], Natacha Ramsey-Levi at Chloé — the number of high-profile women that get so much respect. They’re really championed. In America, it’s Phillip, Alex, Narciso, Prabal, Thakoon, Derek Lam, Altuzarra. What do you have to do as a female designer in America?” — Amy Smilovic, founder and creative director, Tibi

“I think that American fashion continues to be important. What Americans bring to our industry — it’s that Yankee ingenuity of clothes that have a realism to them that customers respond to and want to wear. I do believe that as an industry, we are very much in a moment of transformation, trying to find our place in the world of fashion capitals. Where we were once very coveted — people wanting come to New York City to see the amazing collections — somewhere along the way, the coveted quality has faded. It’s fallen from favor. I believe that a lot of the falling from favor isn’t from the lack of creativity, the lack of quality, [but] from the arduous fashion calendar that seems to bend and slip and jerk all over the city. There’s currently no central core to New York Fashion Week.” — Ken Downing, fashion director and senior vice president, Neiman Marcus

“The strengths of American fashion are access and understanding of the customer and an undying desire to create. There’s an incredible entrepreneurial spirit here and that spirit is valued. America applauds ideas, and there’s a constant appetite for newness from the customer. Its weakness is that it’s a crowded market and there are too many brands that can rise and then quickly fall. I think this shows there’s a lack of understanding of how to create and sustain longevity. The industry feels diluted sometimes because it puts so much pressure on being everything to everyone. That’s what Europe does so well: They’re specific and designers know their strengths.” — Tanya Taylor

“Timeless, basic fashion pieces like denim jeans or sneakers are coming from the United States and are must-haves all over the world. There are also influences from the American hip-hop scene, which actually created the athleisure trend.” — Klaus Ritzenhöfer, founder and owner, Apropos The Concept Store in Germany

“While at first one might be quick to think that American fashion talent is dissipating or migrating, it seems important to take stock, stack ourselves up against the other cities and give thanks for what we’ve got! Still, no other city incubates, encourages and supports rising talent the way the U.S./N.Y does. Even if the shows occur off-shore, the U.S. still has far and away the healthiest bench strength of emerging, established talent and tenured talent in the world….Whereas Europe leans on legacy brands and the power of loyalty to the brand over the designers themselves, enabling a revolving door of designers, the U.S. is a relatively reliable, proprietary and stable market. Most designers here can still boast their name on the door. #AmericasGotTalent.” — Linda Fargo

“Isn’t Carolina Herrera the quintessential American ‘fashion’ dream story — style icon, ago 40, four children, moves to New York and starts a fashion house? And three and a half decades later, [it’s a] globally recognized brand. Carolina Herrera started the company here, inspired by the opportunity to launch a house that blended the European approach to fashion — craftsmanship, couture techniques and gorgeous fabrics — with the pragmatism of American fashion and the desire to design wearable clothes for a modern woman’s lifestyle: bringing glamour to the everyday. That was 1981, but the idea, that fundamental platform, is still relevant.” — Emilie Rubinfeld, president, Carolina Herrera

“New York is an exciting, vibrant city. I always find the source of inspiration for new trends and new ideas here. For sure, the U.S. is the most developed country for the fashion e-commerce, and…is a market for quantity more than for quality. Europe has a lot to learn from how to develop a global business with a large number of customers.” — Riccardo Tortato, fashion director for men’s wear and e-commerce, Tsum

 “American fashion is great about balancing functionality with design. For me, I do have an avant-garde sensibility because I look up to the great Japanese designers, like Rei Kawakubo at Comme des Garçons and Yohji Yamamoto and Kenzo Takada. But I also really value dressing the real woman in everyday life, and I think clothing has to be practical as well as creative and artistic. A lot of great American designers, like Marc Jacobs or Proenza Schouler, do an amazing job of balancing the functionality and everyday aspect of fashion with the creativity.”  — Hanako Maeda, founder, Adeam

“American fashion, like many industries in this country, was largely built by immigrants or first-generation Americans — Oleg Cassini, Charles James, Oscar de la Renta, Carolina Herrera, DVF, Ralph Lauren and their vision of what American freedom represents in fashion. As long as we always welcome talent, no matter where they’re from, we will be diverse and produce interesting points of view.” — Gabriela Hearst

“I do think, though, that American fashion is solid. The customer has become so savvy that designers and retailers have really had to step up their game and provide fashion, styling and service to accommodate the sophistication of the end consumer. There’s a company that can cater to every niche in the market at the right price point, with the right styling, the right fit, the right this and that. Americans are very good at deciphering what women want in all different categories across the board. It’s approached very much as a business. It’s not just an art or an aesthetic.”  Mark Badgley, cofounder, Badgley Mischka

“I think that one of the biggest strengths of NYFW is its focus on products. You definitely see nice, wearable clothes on its catwalks. However, it’s not as relevant as Paris or Milan when it comes to scouting trends. At the same time, the quality of the show productions is really great.”  — Angelo Flaccavento, fashion journalist

“As a designer for an American house, I love that we can authentically reference the clothing archetypes that come from American style and that resonate around the world: the sweatshirt, the biker jacket, the T-shirt.  I think this can be a fresh alternative to some of the formality and conventions of European luxury. Coach’s roots in New York City also guide the attitude of our girl and guy. They have an effortless ease and lighthearted spirit that informs the way we approach our collections.” — Stuart Vevers, executive creative director, Coach

“American fashion is changing exponentially, through social media and the rise of style tribes to the growing awareness of environmental sustainability. We are seeing bold new designers reimagine fashion based on past and present influence, giving a multi-cultural mashup of ideas that is rewriting what it means to be American. It’s moving at such a rapid pace, sometimes it’s hard to [home] in on styles/trends — are [they] going to be here longer than a moment on Instagram?…It can be challenging to identify which of these ideas should be represented in our world and which ones might quickly expire. On the other hand, you have a larger variety of emerging brands popping up, providing a uniquely curated assortment and diverse point of view.” Ashley Petrie, merchandise director, Fred Segal

“I have remained an independent designer, which has kept me out of the politics of geography or comparison. This puts me in a unique position. My vision isn’t grounded in just one culture, one country. It’s really about the mix of inspirations from many. What I do know is, my dream was always to come to New York and become a fashion designer. New York made me who I am, I have a sentimental attachment to it. It is my home, my identity, and the birthplace of my success. I have tried my best to support the Garment Center here. Unfortunately, the difficult retail landscape and the loss of so much American manufacturing has been challenging to make product in the U.S. But the value and importance of American fashion needs to be appreciated and supported.” — Anna Sui

“I think excitement about American fashion has tempered. Partially, it goes back to having this whole crisis of who are we. We’ve become very individualized rather than working as a collective group. When I think back to when we used to show at the tents, you had a one-week New York Fashion Week. It was when it all happened, everyone would come in to see the collections and you had a lot of power as a group. Once everyone becomes individualized and does their own things, a lot of your power [diminishes].” — Lela Rose

 “In today’s market and industry, it’s hard to compare [New York, Milan and Paris] without understanding that we live in the Internet age. It’s much harder to find unique pockets of culture today than it was 20 years ago, for example. With apps like Instagram, a Parisian or Italian designer can be inspired by specific things in Los Angeles, Tokyo, Berlin, etc., all at the same time without having to even go there. Everyone is connected, which makes everything start to blend into one larger industry and scene. Every city’s fashion scene being connected makes designers draw from the zeitgeist as a whole instead of specific things in their surroundings.” — Reese Cooper

I think it would be awfully presumptuous of me to sum up the state of American fashion — I have one point of view, which is [that of] our company….I think that the term ‘American fashion’ is perhaps a bit of an anachronism, one that used to mean some things design-wise. I think American companies were known for certain things, sportswear, whatever — and everybody’s doing everything now….so the idea of American fashion is a little more amorphous. I think we as a group, we could be doing better in terms of common interests. For our company, anyway, issues like immigration and trade have forever been problems. I can’t get people here because H1B visas are taken up, by the likes of Microsoft and IBM, within a nanosecond of those visas becoming available. For me to get a qualified premiere for our sample rooms is incredibly difficult. I can find them, but to get them here is tough….The second issue [is] trade. We’re an odd duck because we manufacture about half of our stuff here in the United States and half of it in Italy. So we face the issues both as an importer and an exporter, both of talent and of goods. So it’s difficult both ways.” — Alex Bolen, ceo, Oscar de la Renta

“While I am loving some of the emerging designers coming out of New York like Rosie Assoulin, Monse, Brandon Maxwell, Gabriela Hearst as well as some of the more established brands such as Alexander Wang, who is really having his moment, I think as a whole, the American market is being overshadowed by Paris and Milan. If you look at the most influential brands at the moment you have Balenciaga, Gucci, Dior, Fendi and of course we cannot forget Off-White. It is all about branding, for now. But ask me the same question next season and my answer will likely be entirely different.” — Eda Kuloglu, chief merchandising officer, Al Tayer Group

“Now is the time for American fashion. We’re in a transition period where streetwear and sportswear are exploding in Europe, and this is inspired by the heritage of our country. Look at what Virgil Abloh, Kanye West or Supreme are achieving. They are bringing back the power of American fashion in a very modern perspective. I think U.S. labels are no longer looking at what other regions are doing and completely embracing their sportswear roots.” — Tommy Hilfiger

“[American fashion’s strength is that] It has a big client base (U.S. citizens, primarily). Its main weakness is a certain middle-of-the-road quality, not very adventurous, not very luxurious…Obviously, you have designers who are extremely creative and also very luxurious. But speaking generally, it’s not what American fashion is known for. From the Seventies through the beginning of the 21st century, off and on, there was a sense that New York was becoming more dynamic. Although you still have some Americans that go, ‘Oh, America has no fashion. It just did blue jeans, nothing else’….A sportswear feeling was very much associated with being modern and American. America is still producing a lot of sportswear and street style, which everybody is doing. Somehow, we’re not getting credit for it in a good way. It only becomes exciting when a European luxury brand does their version of sweatpants or running shoes, things that are primarily American. If you look at American fashion as this giant thing, then the bulk of it is not as well executed. There are definitely many that are well-executed, and also many niche Americans are the ones being copied. I think Thom Browne is fantastic. It was clear to everybody when he showed in Paris that was one of the most exciting shows that season in Paris. Even though Rodarte, Proenza and Joseph Altuzarra have decided to come back to the U.S., these are designers who are doing exciting things and the quality is very, very high. A lot of them don’t get as much credit as they would if they were French or Italian designers. Often because they are American, people are not taking them as seriously.” —  Valerie Steele, director and chief curator, The Museum at the Fashion Institute of Technology

“I really do still feel that American fashion is still a very dominating, creative force. Obviously, I think Paris will always be held to maybe a different place, but I still think that there is such amazing talent coming out [of the U.S.], especially in New York. But it is definitely changing. Retailers have really been dominating the designers for the last couple years. I think, unfortunately, that old model where a buyer comes in and buys the product and it goes on the floor and they hope it works doesn’t really work anymore. There has to be more of a partnership, more communication. The customer is so much more involved, more than ever. We have decided to go in a different route where we got very private client-heavy. Probably at least 60 percent of our clients are private. Some of them are literally spending double what our retailers are spending. So that’s very interesting.” — Christian Siriano

BoF: How to Avoid Becoming a One-Hit Wonder

BoF: How to Avoid Becoming a One-Hit Wonder

BUSINESS OF FASHION | LAUREN SHERMAN

LOS ANGELES, United States — It took Cult Gaia designer Jasmin Larian more than two years to get consumers to notice the “Ark,” a bamboo-cage clutch inspired by Japanese picnic bags from the 1940s. For outsiders looking in — or at least on Instagram — the style, which was first introduced in 2012, appeared to be an overnight success. However, it wasn't until the summer of 2016 that it started popping up everywhere: the kind of accessory that social media influencers, from Marais USA shoe designer Hayley Boyd to retailer Claire Distenfeld Olshan, were happy to buy themselves. No gifting required.

But with a flood of Instagram posts came the threat of ubiquity. “At the time, I had one product that I was pushing constantly,” said Larian, who started Cult Gaia as a range of flower crowns and turbans made from deadstock fabric. (She phased out those products as they lost their edge.) “Our entire Instagram was that bag.”

The fact that Cult Gaia’s initial success was predicated on a single hero product — the item that helps to define a brand — is not necessarily a bad thing. In an increasingly crowded market, a sharply executed, recognisable item can be a boon.

“The strategy of launching with a hero product can be an effective way of building a brand,” said Ari Bloom, founder of A2B Ventures. “You get famous for doing something well.”

And yet, a hit single doesn’t guarantee that the band — or in this case, the brand — will fare well in the long term. For every brand that is able to diversify past its first success, there are dozens more that putter out, becoming fashion’s version of a one-hit wonder. Cult Gaia, which derives nearly 80 percent of its sales from handbags, grapples with this every day. “It’s amazing we’ve gotten so many seasons out of this bag,” Larian said. “My paranoia and obsession with the idea that things aren’t going to go well means that I have forced myself and my team to work on creating a world beyond it.”

Even brands that were able to scale a single product into hundreds of millions of dollars in revenue have proven that it’s difficult to sustain that success over time.

Consider Toms, which launched with a “buy a pair, give a pair” model in 2006 and generated more than $400 million in sales last year, according to Moody's. However, growth has slowed in recent years and the company, which sold a 50 percent stake to Bain Capital in 2014, has about $350 million in total debt.

In December, the ratings agency Moody’s downgraded Toms to Caa3 — a junk rating that indicates the company is a high risk to default — citing a “weak liquidity profile in the next 12-18 months, including negative free cash flow."

While Bain and founder Blake Mycoskie provided an additional $18 million in cash at the end of last year, the rating also took into consideration the fact that Toms has a “high fashion risk” because it hasn’t diversified, as about half of its revenue comes from its classic slip-on “alpargata” style.

When asked about the Moody's rating, a Toms spokesperson wrote in an email to BoF that the alpargata shoe is what makes the brand "authentically unique." Regarding diversification, the company is "focusing on those brand identifiers and incorporating them into new silhouettes" like boots, sneakers and sandals. According to Toms, there has been "measurable growth in these styles," contributing to an increase in overall sales.

Whether a brand can expand beyond its first bona fide hit — be it Vetements’ patchworked jeans or Mansur Gavriel’s bucket bag — depends on how they execute what comes next.

As for Cult Gaia, sales of handbags are up 54 percent from last year in the wholesale channel, while ready-to-wear, a category Larian soft-launched in the fall of 2016, is up 400 percent. Still, 77 percent of the business is handbags, 13 percent is jewellery and 8 percent is clothing. A new category – shoes – is showing early traction.

Overall, Cult Gaia is on track to hit $15 million in sales in 2018. But Larian understands that the Ark’s appeal may dip at some point. (It has already been copied with great frequency, compelling her to sue trendy shoemaker Steve Madden for $15 million in damages.) For now, she has extended its life by offering it in different colours and materials. Interest in her other handbag styles is also growing.

So how can brands at every scale, from indie startups to high-concept labels, avoid being labelled a one-hit wonder?

Plan ahead. Even if a brand launches with a single product, the founders should be thinking about what the next few products could look like. That idea may change as you learn more about your customer, but there needs to be some planning.

“Some people get lucky with a single product,” Bloom said. “But any brand needs to be thinking three-or-four steps ahead. Long-term solutions and value is especially important with the space getting so crowded. ”

Don’t base a collection on the product, base it on a concept. If you become well-known for a super-soft v-neck t-shirt, focus on what makes that t-shirt special: its soft fabric. “Own your key characteristics,” said retail advisor Robert Burke. Alessandro Michele’s Gucci, for instance, had an early hit with the creative director’s interpretation of the Italian house’s classic loafer. However, Gucci’s success is not based on a single popular item, but a larger idea that is communicated through a variety of items: Michele's magpie, fancy-dress wardrobe is made up of dozens of novelty knits and odd-bird embellished logo bags.

Test new products in direct channels. Retailers often fear the new: if something’s working, they keep returning to it instead of taking a risk on the unknown. When introducing a new product or category, selling it direct first can allow you to build a proof of concept.

“Nobody picked up my first ready-to-wear collection, but I pushed it really hard [online],” Larian said. “We had to be successful on our own. If the buyer doesn’t get it, we’ll show them.”

Wholesale orders for Resort 2019 ready-to-wear were up 400 percent year-on-year, with major stores like Net-a-Porter and Saks Fifth Avenue signing on.

Limit distribution. Tight distribution — being mindful of where you sell your product and how much of it you sell — allows you to not only minimise excess inventory at the end of the season but also better control the narrative around the product. Waitlists can create a (positive) frenzy. However, overly conservative forecasting can also mean losing out on sales.

“It’s a bit of a dance,” Burke said.

Diversify when you have momentum. Many brands only start putting together a plan to move beyond the “it” item until after that item is already in decline. A brand should begin moving on — or expanding — when other brands and designers begin copying it en masse. For instance, jewellery designer Rebecca de Ravenel’s $275 “Les Bonbons” earrings are frequently knocked off by fast-fashion players and peers alike, and yet her collection maintains a certain freshness. She is playing offence through her launch of ready-to-wear.

Pull back before it’s too late. Sometimes brands raise money and hire new employees based on the success of one item without considering that sales will eventually slow.

“It’s very tempting to keep going,” Burke said. “You have to know when to pull back so that you don’t run the risk of overexposure.”

BoF: Inside the Luxury Personal Shopping Wars

BoF: Inside the Luxury Personal Shopping Wars

BUSINESS OF FASHION | VICTORIA BEREZHNA

LONDON, United Kingdom — In a high-rise skyscraper in Dubai, one very wealthy woman recently threw a dinner party for a few friends — and Net-a-Porter and Mr Porter president Alison Loehnis. Alongside elaborate table settings were rails filled with some of the site’s most exclusive gowns, the latest salvo in the battle to capture the wallets of the global elite.

Net-a-Porter is one of several e-commerce companies vying for the same set of ultra-high-net-worth customers. Consumers spent $262 billion on personal luxury goods worldwide last year, according to Bain. But for online retailers, just 1-to-3 percent of clients can make up anywhere from 20-to-40 percent of revenue.

That’s triggered an arms race between the biggest retailers in the space, including Net-a-Porter, MatchesFashion and Moda Operandi, to provide one-of-a-kind products, services and experiences. Where private shopping once meant a monthly trip to a department store, online retailers have teams of personal shoppers available to chat around the clock on WhatsApp, fly to clients' homes for last-minute couture appointments and make the buy for an entire holiday wardrobe. E-commerce sites are also opening physical spaces dedicated to personal services for their highest spending customers.

“How do you make sure you don’t become industrial about it?” said Ulric Jerome, chief executive of Matches. “The biggest challenge is to build and operate a private shopping team at scale that still has a very personal approach.”

At Net-a-Porter, a priority customer is called an EIP — short for “extremely important person.” An EIP spends an average of $64,000 annually on fashion — $18,000 at Net-a-Porter — and travels 11 times a year from cities like New York, London, Hong Kong and Dubai, according to Net-a-Porter. They might expect to have clothes flown in for a gala event or arrange for a wardrobe overhaul at their home.

EIPs receive private home appointments, invitation to industry events and front-row seats at fashion shows. Sometimes brands looking to boost online sales get in on the action. At Paris fashion week, some customers attended a private dinner hosted by Balmain’s Olivier Rousteing and Loehnis.

The goal is to provide one-of-a-kind experiences, since benefits like same-day shipping have become ubiquitous.

“Product is product, and buying items becomes the basic expectation,” said Robert Burke, chief executive at advisory firm Robert Burke Associates. “Being able to have a custom item no one else has — that raises the bar.”

Online, these sites are continually one-upping each other with digital innovations designed to give customers a more-intimate experience.

MatchesFashion created a chatbot that makes daily recommendations, and the site’s personal shoppers are available 24/7 to customers worldwide. They may adopt a casual tone, switching to Instagram or swapping screenshots or videos. The goal is to turn popular messaging services — WhatsApp in Western countries, WeChat in China and Line in Japan — into customised personal shopping apps as customers provide more data about their preferences, Jerome said.

The payoff can be huge: Net-a-Porter last year sold its most expensive single piece — a nearly $150,000 Panthère de Cartier watch — on WhatsApp.

A client of 24 Sèvres said the e-commerce site, launched by LVMH last year, is her favourite place to shop online because of the recommendations her private shopper sends by text and email. The customer, a 42-year-old mother of three in London, said she enjoyed the perks, ranging from a handwritten note from 24 Sèvres chief executive Eric Goguey at Christmas to being placed first in the queue for a new Céline skirt when the brand debuted on the site in March.

“Personalisation is essential,” Goguey said. “We see personal shopping as something that should remove the hassle out of shopping completely.”

24 Sèvres is one of several sites incorporating offline locations into their high-end service. At Parisian department store Le Bon Marché, private shopping customers can have their orders delivered to the ground floor, complete with private fitting rooms and a stylist at-hand.

At Moda’s by-appointment showrooms in New York and London, its personal shoppers, or “stylists,” account for 49 percent of revenue.

“When a customer walks into one of our showrooms, the space has been curated and transformed to reflect her tastes,” says Lauren Santo Domingo, one of the site’s co-founders. For example, Moda might throw a party designed around a customer’s taste or host a dinner with favourite designer. Moda plans to open a third showroom in Hong Kong.

MatchesFashion is set to open Carlos Place in London’s Mayfair neighbourhood on September 3. The ground floor will include a café, and rotate between events and brand takeovers, with two upper floors set aside for personal shopping clients.

“It’s a strategic space for us,” Jerome said.

Net-a-Porter has hosted pop-ups around the world to present seasonal edits, but has no plans to open a permanent location.

“We’re a digital business at heart, which is why one-to-one experiences happen on customer terms,” said Loehnis. “We’re not looking at a physical space and see it advantageous to be nimble and local.”

WSJ: Designers Hope ‘Drops’ Make You Shop

WSJ: Designers Hope ‘Drops’ Make You Shop

WALL STREET JOURNAL | RAY A. SMITH

To get consumers into their stores more often, mainstream fashion brands including Alexander Wang, Burberry and Public School are putting out new items more frequently, with “drops” of merchandise as often as 12 times a year, instead of the usual two to four.

The tactic—a hot concept in fashion today—involves more than just releasing new clothing more often. Designers typically promote a “drop” with lots of marketing hype on social media and limit the offerings so that items sell out.

The strategy follows a playbook perfected by influential streetwear brands like Supreme, Palace Skateboards and Nike . These brands, popular with millennials, have created buzz, long lines and a sense of urgency around releases of limited-edition products for short windows of time. Traditional designer brands and retailers are trying to whip up this kind of excitement at a time when, outside of streetwear, many consumers are choosing to spend on electronics or travel instead of fashion.

The goal: “Someone coming into the store knows there’s going to be something there they didn’t see a month ago, and they’re going to come back,” says Lisa Gersh, chief executive of Alexander Wang, which will soon start delivering new merchandise to stores 10 times a year instead of four.

MR P. has sought to put out clothes when men would actually need them. Instead of putting tropical-print shirts and linen-blend cargoes on sale in March or April, this year the line released a ‘high summer’ collection with such items in July.

Designers generally aren’t planning to increase the overall amount of merchandise they make each year, but are releasing it in smaller quantities more frequently. Alexander Wang will put out part of a new collection in October, and parcel out additional drops in November, December, February and March. In May, it will put out part of another new collection, followed by more in June, July, August and September.

The move reflects shoppers’ changing habits. “People used to go in the beginning of a season and buy their wardrobe for their season,” Ms. Gersh said. “Now it’s more common for a customer to say, ‘I’m going out this weekend, I need a dress’ on a Thursday.”

A model walks in a runway show for Alexander Wang, which will soon start delivering new merchandise to stores 10 times a year instead of four. 

The idea is to create the feeling that “you’ve got to get here first and if you don’t, you lose,” says Fiona Firth, buying director at luxury menswear online retailer Mr Porter, whose new private-label line, MR P., puts out a limited-quantity, trend-driven collection every two or three months. MR P. has also sought to tie its clothing deliveries closer to the weather. Instead of putting tropical-print shirts and linen-blend cargoes on sale in March or April, this year the line dropped a “high summer” collection in July.

The fashion industry has faced pressure to speed up its metabolism for years. Traditionally, designers released two big collections a year. In the mid-aughts, as mainstream interest in women’s fashion exploded, designers began adding one or two more drops of merchandise. But the clothing still stayed on racks for months, leaving shoppers little motivation to return.

Meanwhile, fast-fashion retailers like Zara were quickly turning out reinterpretations of runway looks. And the rise of social media beamed images of runway designs instantly around the world, immediately dating the industry’s usual six-month wait to get runway looks in stores. In response, some labels, including Burberry, Tom Ford and Ralph Lauren tried “see now, buy now” collections that made merchandise available right after their runway debut, with mixed results. Robert Burke, chief executive of luxury goods consultancy Robert Burke Associates, views drops as an improvement on the “see now, buy now” concept.

Luxury streetwear-influenced label Off-White recently doubled the frequency of its men’s collections from two to four. Designer Virgil Abloh cited male consumers having ‘a higher bandwidth for new ideas in fashion.’ 

Some fashion executives warn that drops, while buzzy, aren’t a panacea for the industry’s ills. Louis Vuitton’s menswear line did a collaboration with Supreme that sparked a sales frenzy last year. This year it hired as its artistic director Virgil Abloh, the designer behind luxury streetwear-influenced label Off-White, which recently doubled the frequency of its men’s collections from two to four. Still, at Vuitton, CEO Michael Burke says that “‘Supreme’-like drops, for us, is not a fundamental business model.”

Mr. Burke believes that simply changing the timing of merchandise won’t fix a troubled brand. “If you’re having a problem with traffic in your stores or fundamental problems, a drop is not going to solve it,” he says.

Heather Gates, a graduate student from Brooklyn, N.Y., who likes brands such as Marni, COS, Everlane and Paris shoe label Philippe Zorzetto, said more frequent deliveries of merchandise might make a difference to her—but not necessarily. “It would very much depend on whether or not ‘new’ items really looked distinctively different from whatever had been available previously,” she says.

Here’s how three fashion brands are rethinking their approach:

A new batch of merchandise ‘definitely’ will drop monthly, if not sooner sometimes, said Public School co-founder Maxwell Osborne. 

BURBERRY

Burberry plans to move to a system of frequent deliveries beginning in September, after designer Riccardo Tisci’s debut collection for the British fashion house is revealed at its fashion show in London Sept. 17. Pieces from that collection will be available in a series of “instant drops”—where the designer may keep the exact release date a surprise to try to generate more excitement—in stores and online. Later releases could be as often as once a month.

A collaboration with British designer Vivienne Westwood will also be released with a drop strategy. Mr. Tisci, who joined Burberry as its chief creative officer in March, is familiar with streetwear and its merchandise-delivery tactics, having incorporated street influences in his previous job as Givenchy’s creative director.

PUBLIC SCHOOL

In December, Public School, a New York-based label whose mix of streetwear, tailoring, sports influences and avant-garde silhouettes has earned it lots of industry buzz, announced it was converting its business from a designer brand sold through department stores and specialty shops to a direct-to-consumer model. In a few weeks, it will launch an e-commerce site, followed by the opening of a “Public School space” downtown where consumers can buy clothing or “be immersed in Public School’s world,” said co-founder Dao-Yi Chow.

Releasing new clothing more frequently is a big part of the strategy. A new batch of merchandise “definitely” will come out monthly, if not sooner sometimes, said co-founder Maxwell Osborne. “It can be two drops a month in terms of product and capsules. It’s less seasonal, more based on what we’re feeling.” Previously, Public School released new items four times a year.

ENTIREWORLD

Designer Scott Sternberg, who rose to fashion industry darling status in the aughts with his preppy-meets-hipster label Band of Outsiders, describes his latest venture, launched online in April, as nonbasic basics. For now he sells on Entireworld’s website and Gwyneth Paltrow’s Goop, but plans to eventually sell in physical stores and in partnership with other retailers.

Entireworld plans a fluid, idiosyncratic delivery schedule that includes five drops during its first year that operate on a “cycle meant to trigger desire at different points of the year,” Mr. Sternberg says. The first delivery, in April, was of core pieces including socks, underwear, T-shirts, and camisoles, followed by “thematic” releases like “May Gray/June Gloom,” consisting of three men’s items and three women’s items made out of gray recycled cotton.

Mr. Sternberg said dates of deliveries will vary and that the company will mix it up with “a core drop every three to four months, and then little drops every other week or so. It’s less about the mood of the season and more about this idea of emotion and desire and how to stir that up in people.”

WSJ: Retailers Stalk the Elusive Millennial Shopper

WSJ: Retailers Stalk the Elusive Millennial Shopper

WALL STREET JOURNAL | RAY SMITH

What kind of clothing sale has DJs and performance artists as the stars? Or pairs designer fashions with hoodies and sneakers? Or offers piercings along with $4,850 Givenchy orange leather pants? Call it the millennial mashup.

Old-line department stores and fashion brands are rejiggering sales floors and websites to court millennials in their twenties and thirties and the even younger members of Generation Z. To woo this elusive demographic, department stores like Barneys New York and Nordstrom are concocting entertainment-filled Instagrammable shopping experiences with exclusive “drops” of limited-quantity products. They are hosting brief pop-up sales, merchandising high-end brands alongside casual ones and loading up on items that can be personalized and customized. Among their exemplars are Dover Street Market, Ssense, Maxfield and other specialty stores that have figured out what makes millennials tick—and shop.

Here’s how veteran retailers are taking a page from their cooler counterparts to captivate the next generation of shoppers:

Millennials defy uniforms but one fixture of their wardrobes is streetwear—hoodies, tees, sneakers and baseball caps often emblazoned with bold graphics, colors or logos. “Basically, streetwear is fashion today,” said Robert Burke, of luxury-goods consultancy Robert Burke Associates. Prices range widely, such as $155 for Nike Air Force high-top sneakers and $575 for a logo hoodie by the label Off-White.

But streetwear alone won’t draw younger consumers. Stores have to mix up the selection, offering high-fashion options, too. Traditional retailers’ practice of compartmentalizing brands and categories “is not appealing today,” to millennials and Generation Z, Mr. Burke said.

Dover Street Market, the avant-garde store created by the heads of label Comme des Garçons, was a pioneer in displaying streetwear labels alongside designer offerings. In its New York shop, which opened in 2013, streetwear brand Supreme was next to Prada. The approach reflects how younger consumers dress and made high-end designer fashion seem less intimidating to them.

Nordstrom took note. The Nordstrom Men’s store that opened in New York in April carries more streetwear and edgier fashion brands, said Paige Thomas, Nordstrom’s executive vice president and general merchandise manager for men’s apparel. To draw younger shoppers, she said, the store mixes brands at different prices and styles more than usual, “from Vans to Valentino and Nike to Balenciaga.”

To sustain its mix-it-up appeal, Dover Street Market departed from another retail tradition. “When we open a new store,” said general manager James Gilchrist, “we do our very best not to tell the brands who they’re next to so that they design the space they’re in without the knowledge of what’s going next to them.” Dover Street Market, which has stores in Tokyo, London, Singapore and Beijing, plans to open a Los Angeles outpost this year.

Specialty retailers are attracting young people by mounting temporary “pop-up” spaces and in-store events involving creative types such as artists, indie musicians and tattoo designers.

In recent years, Maxfield has run pop-ups that are both an art installation and a boutique for edgy or streetwear-inspired brands, including Off-White, READYMADE, Maison Margiela and Vetements. The pop-ups at the Los Angeles store often feature limited-edition exclusive products—in retail parlance, a “drop.” The events are popular with millennials, said Sarah Stewart, the buying director for Maxfield. “There’s a line outside waiting to get inside them,” she said. As word spread, the events “brought in a client that might not have known about us.”

“Millennials are the ‘experience generation,’ so pop-up and store events work well to draw their interest,” said Melanie Shreffler, senior director, insights, at research firm Cassandra. “They judge a good experience on its share-ability. For example, will they get some great photos for their Instagram to show off that they were a part of the cultural moment?

Last fall, Barneys New York joined with fashion blog Highsnobiety to host a weekend-long event aimed at millennials and Generation Z shoppers. Called “thedrop@barneys,” it featured exclusive, limited-edition merchandise and appearances by designers of streetwear and other brands such as Fear of God and Palm Angels, which are popular with millennials and Gen Z. Shoppers could get custom sneakers, tattoos and piercings. There were exclusive launches by Gucci and Alexander Wang, as well as by fashion-insider labels Ambush and Unravel Project. In its first day, the “drop” led to a 25% sales increase, with 20% of the customers new to Barneys. This weekend, the retailer will host a “drop” at its Beverly Hills store.

Jeff Carvalho, managing director of Highsnobiety, said that to attract younger shoppers, traditional department stores “are all pulling cues from those ‘indicator’ retailers”—meaning smaller, hip counterparts.

“Clienteling has to be rethought” by old department stores, Mr. Carvalho said. Such stores “have to cater to them differently if they want that youthful mindset to become clientele.”

Daniella Vitale, Barneys’ chief executive and president, said the concept came from a “company-wide effort for innovation” and acknowledged other influences.

While department stores traditionally hosted events for one individual, smaller boutiques often bring together several designers and artists. Dover Street Market periodically hosts a sprawling Open House that includes book signings, art installations, live music and sales of exclusive merchandise. The unique blend of attractions “really resonates with younger people,” Mr. Gilchrist said.

Ssense, a 15-year-old online retailer, scarcely promotes clothes on its site the way most mainstream retailers do. Instead, Ssense (pronounced essence) offers profiles of top musicians, artists, and recently, a chef. The site’s editor-in-chief founded the Berlin-based culture magazine 032c.

“Millennials don’t see distinctions between fashion, music, content and commerce,” said Krishna Nikhil, Ssense’s chief merchandising officer. The Montreal-based retailer, which opened its first bricks-and-mortar outpost there early in May, sells streetwear-leaning brands like A-COLD-WALL* alongside luxury labels like Givenchy. When a customer clicks on an item, it usually appears with merchandise from other brands, a departure from the retail playbook of showing a head-to-toe ensemble from one label. “That’s something young consumers in particular have connected with very strongly,” Mr. Nikhil said. About 80% of Ssense’s customers are between 18 and 34 years old, he said.

Bloomingdale’s has refreshed its web site to emphasize storytelling, adding curated content on trends and buzzy designer labels rather than merely filling the home page with merchandise. The goal is to create more engagement with consumers, especially younger ones.

“We have incorporated more editorial content created for the millennial customer,” said Frank Berman, Bloomingdale’s executive vice president and chief marketing officer. “In addition, we have been actively acquiring a younger consumer through advanced targeting on digital social platforms such as Instagram and curated influencer programs.”

“A key to understanding young retail consumers is to realize that many of them, especially Gen Zs, have been shopping online their whole lives,” said Ms. Shreffler, of Cassandra, the research firm. “While it may still seem revolutionary and simple to older consumers, young people are looking for this mature market to evolve and show them something new.”

Matthew Godin, a 22-year-old personal stylist in Toronto said Ssense is “the first place I check for anything.” He occasionally shops at Barneys but finds other department stores like Nordstrom and Saks staid. “Ssense has a really great mix of high-end, contemporary and emerging designers,” Mr. Godin said. “They also do a really great job at styling looks together in a really non-traditional way.”

Gian Rodriguez, a 17-year-old high-school student in Dublin, Ohio, said that aside from Supreme and Nike, he doesn’t “shop that much from other sites except Ssense.” He loves the range of brands and said the store appeals to members of his generation who are “starting to get into fashion and …need a reliable site” that understands what they want.

 

NYT: The Return of Marchesa

NYT: The Return of Marchesa

NEW YORK TIMES | VANESSA FREIDMAN

Thus begins the rehabilitation of Marchesa, the fairly or unfairly damned-by-association red carpet brand that was a casualty of the Harvey Weinstein horror story: with the Met Gala, a Vogue story and the support of the American fashion establishment.

Marchesa, as you might remember, was the latterly tarred and always feathered line codesigned and co-founded by Georgina Chapman, the now-estranged wife of Mr. Weinstein, which at one point was a red carpet staple. Seemingly beloved of women from Renée Zellweger to Anne Hathaway, it became another symbol of Mr. Weinstein’s abuse of power when stars suggested they were strong-armed into it: an example of how the producer manipulated the women in his orbit to do what he wanted, whether come to his hotel rooms or wear his wife’s dresses.

Ms. Chapman announced she was leaving Mr. Weinstein, and went to ground, but it didn’t seem to matter; celebrities appeared to abandon the brand, which disappeared from premieres everywhere as if it had never existed. A collaboration with the Helzberg Diamonds was put on hold. It was reported that employees were fleeing. Faster than you could say “bugle bead,” stories appeared last October asking, as the Daily Beast put it, “Did Harvey Weinstein Kill his Wife’s Fashion Label?” A February New York Fashion Week show never materialized.

And then this week happened.

On Monday Scarlett Johansson wore an off-the-shoulder blood-red dégradé Marchesa gown strewn with flowers on the Met Gala red carpet, becoming the first star to appear in the brand since the allegations against Mr. Weinstein broke. “I wore Marchesa because their clothes make women feel confident and beautiful, and it is my pleasure to support a brand created by two incredibly talented and important female designers,” the actress said in a statement to Entertainment Tonight.

Then, on Wednesday evening, Anna Wintour, the editor of Vogue and artistic director of Condé Nast, told Stephen Colbert on his TV show: “I think it was a great gesture of support on Scarlett’s part to wear a dress like that — a beautiful dress like that — on such a public occasion.”

The next morning Vogue posted the editor’s letter from its June issue. The letter was entirely devoted to a feature on Ms. Chapman that ran inside the magazine.

Under a photo by Annie Leibovitz of Ms. Chapman standing on a pebble-strewn shore as her two children with Mr. Weinstein played, and with the title “Starting Over,” Ms. Wintour wrote: “I am firmly convinced that Georgina had no idea about her husband’s behavior; blaming her for any of it, as too many have in our gladiatorial digital age, is wrong. I believe that one should not hold a person responsible for the actions of his or her partner.”

Both Ms. Wintour’s and Ms. Johansson’s highly visible statements followed Ms. Chapman’s appearance on March 18 at a board meeting of the Council of Fashion Designers of America, the governing body of New York fashion — the first time she had attended such a board meeting since the exposure of her husband. According to Steven Kolb, the organization’s chief executive, she was greeted by applause from the gathered designers.

“The feeling was of universal support,” said the designer Prabal Gurung, who was there and clapping.

It is increasingly clear a carefully orchestrated public rehabilitation is underway. The fashion world is ready. But is everyone else?

At a time when Charlie Rose and other men brought down by the roiling wave of revolt against sexual harassment have reportedly begun to plan their returns to the public eye — largely to incredulous reception — Ms. Chapman, once seen as an enabler, now framed as another victim, is another kind of test case.

“Well, everyone loves a comeback, and now the dust has settled,” said Robert Burke, founder of the luxury consultancy that bears his name and former fashion director of Bergdorf Goodman (which sold, and continues to sell, Marchesa).

Indeed, fashion has a history of welcoming back the exiled after a period of atonement; see John Galliano, the former artistic director of Christian Dior, who was fired from that house after a drug-fueled anti-Semitic rant in a Paris bar, and is now the creative director of Maison Margiela.

Not coincidentally, his return also was bolstered early on by Ms. Wintour, who wore a Margiela dress of his design in 2014 when she received a statuette for Outstanding Achievement at the British Fashion Awards. She believes in redemption of talent.

Still, the editor has also been embroiled in the sexual harassment scandals, thanks not only to her former friendship with Mr. Weinstein, but her professional connection to the photographers Mario Testino, Bruce Weber and Patrick Demarchelier, all of whom have been accused of sexual misconduct and dropped by Condé Nast. It could be that she has her own interest in helping those found guilty by association.

Yet, Mr. Burke said, “It was smart of Georgina to start with the Met instead of the Oscars, as the Met is really an event for the fashion world; it’s a kind of safe space for her.”

In addition, he pointed out, “the timing is good. This is a moment of solidarity with women, and Georgina has always positioned herself as part of that axis.” Hers was a rare female-run company; and she and her co-founder, Keren Craig, were known for their fantasy dresses that seemed to speak to the fairy-tale imaginings of women the world over.

According to someone familiar with the situation but not authorized to speak about the matter, it was actually Ms. Johansson, who was lauded for her speech at the 2018 Woman’s March in Los Angeles but also excoriated for earlier seeming to defend Woody Allen, who reached out to Ms. Chapman, as opposed to the brand approaching her, to demonstrate female fellowship.

Pointedly, much of the social media reaction to Ms. Johansson’s appearance was positive, in contrast to the mood last October, which blamed Ms. Chapman for being complicit (or willfully ignorant) in exchange for the leverage that her husband’s job and power could provide for the brand.

Although the Weinstein Company has been facing bankruptcy and struggling to find a buyer, Marchesa and Marchesa Notte, the lower-priced line, are still sold in stores, including Neiman Marcus, Saks Fifth Avenue, Lord & Taylor, Net-a-Porter and Moda Operandi, among others.

“Our customers never abandoned the brand,” Ken Downing, fashion director of Neiman Marcus, said in an email sent from a store event. “The Marchesa and Notte by Marchesa businesses continues to be very strong.”

Besides, he added, “Many, if not most, of our customers haven’t connected the dots between the designer and her marriage.”

Now the question becomes what happens next. Will Marchesa be on the Cannes red carpet? Will Ms. Chapman appear at the CFDA awards on June 4?

“I hope so,” Mr. Gurung said. “They do beautiful and unique work, and it was an important part of New York fashion. I definitely missed it.”

And Mr. Kolb said, “Marchesa deserves a place on the red carpet.

“Scarlett wearing the dress at the Met hopefully begins to move the brand away from an unfair exile,” he added. “It should have a voice and place in our industry.”

All of which suggest this may be a strategic paving of the way for a Marchesa return to New York Fashion Week in September. In which case the brand’s time in the wilderness may, indeed, be up.

BoF: Ssense’s Billion-Dollar Ambitions: More Than Hype

BoF: Ssense’s Billion-Dollar Ambitions: More Than Hype

BUSINESS OF FASHION | CHRISTOPHER MORENCY & BRIAN BASKIN

MONTRÉAL, Canada — For a would-be luxury retail mecca, Ssense’s new flagship doesn’t stock many clothes.

Merchandise is confined to a few suspended metal racks — and for the Calvin Kleinpompoms, a display case — spread across five David Chipperfield-designed floors. The space is designed for maximum flexibility; on Thursday, the building was given over to a launch party that featured the performance artist Arca diving into a pink-hued pool. A few hours later, racks and mannequins were in place for the store’s May 3 opening.

But selling $2,000 Gucci brogues to Montréal tourists isn’t really the point. Five years in the making, Ssense’s new store, here in its hometown, is the company’s coming out party — a sign the company, which started over 15 years ago as a student project and today sells high-end streetwear and avant-garde emerging labels, is positioning itself for a run at the top echelon of luxury retailers.

Chief executive Rami Atallah said Ssense is "on track" to hit 1 billion Canadian dollars (about $800 million) in sales in 2020, and plans to open distribution centers in Europe and Asia in the next 12 to 18 months. Ssense declined to disclose current revenue figures.

It’s a long way from the single warehouse and small boutique near its Montréal headquarters that the company operates today. But hitting ten figures won’t be easy. Dozens of companies are competing for luxury goods spending online, a fast-growing market that has tripled in size over the last five years, to about $23.5 billion in 2017, according to global consultancy Bain & Company.

Ssense certainly has some catching up to do. MatchesFashion reported about $280 million in revenue for the year ending in January 2017, and operates three stores in London to complement its online sales. Farfetch moved $800 million worth of merchandise in 2016, and may ride its “Store of the Future” retail technology platform to a $5 billion initial public offering later this year. Richemont’s Yoox Net-a-Porter hit $2.5 billion in sales last year, and LVMH launched its own multi-brand e-tailer in June 2017, though it remains a small player.

But Ssense is also plotting its expansion at a time when global demand for its streetwear-meets-luxury aesthetic is surging. Designers who Ssense championed at the start of their careers, like Virgil Abloh, are hotter than ever.

And unlike many of its competitors, Atallah says Ssense has been profitable from day one and hasn’t raised outside investment. He said that enables the company to play the long game, taking risks on unknown designers, investing in editorial content and projects like the Montréal store that may not significantly boost sales in the short term.

Atallah said the plan is to use Ssense's profits to open the new warehouses in Europe and Asia. He wouldn't rule out going public in the future. The company is also mounting a campaign to boost sales in China, one of the world’s largest luxury markets, with Mandarin and Cantonese versions of its website set to launch in July.

“I believe in sustainable growth,” says Atallah. “You hear a lot about companies that get a lot of funding and two years later you don’t know what’s happening with them. We’re only investing what we’re making, which makes our business a lot more robust.”

Born in Syria, Atallah emigrated to Canada with his family at the age of 15. He built Ssense in the early 2000s as part of his graduate thesis in computer engineering.

He enlisted the help of his two brothers Firas and Bassel — now chief financial officer and chief operating officer, respectively — to transform his part-time passion project into a fully-fledged business.

In 2004, Ssense opened a small boutique in Montréal. The following year it moved into its first headquarters and warehouse, with ssense.com launching in 2006. Early versions of the website featured mainstream brands like Juicy Couture and 7 For All Mankind. Sales quickly started to rise; the company has seen revenue grow an average 60 and 80 percent annually.

Ssense’s big break came in 2009 when it began carrying a more unconventional and tightly curated assortment. Over time, that came to mean uniting established luxury brands like Saint Laurent and Givenchy with streetwear-inspired emerging designers such as A-Cold-Wall and Fear of God.

Where some stores still separate high fashion and mass-market goods, a search for tops on Ssense pulls up options ranging from a $25 Adidas t-shirt to a $1,500 offering from Yohji Yamamoto.

Atallah and other executives said their approach is supported by reams of customer data, which informs decisions ranging from what products to stock to which editorial features to display on the homepage.

The combination of streetwear savvy and data analysis has cemented Ssense’s cultural cred with millennials, who today account for 76 percent of sales. The company has few equals in getting customers to open their wallets online: Ssense says its average order size is nearly 800 Canadian dollars ($700), more than Net-a-Porter’s average of nearly $400, though less than Moda Operandi’s $1,400 per order.

“I think that [Ssense] has been extremely smart and laser-focused in their approach to attracting this customer,” said Robert Burke, founder and chief executive of retail consultancy firm Robert Burke Associates. “They’re not trying to be everything for everyone.”

Ssense’s data-driven approach led it in April to purchase some of the assets of digital fashion community and search engine Polyvore from Verizon subsidiary Oath Inc.

The site’s users learned of the deal when they were redirected to Ssense’s homepage, where a popup displayed the message “Polyvore is now Ssense.” Users rebelled, with over 16,000 signing an online petition to bring the site back, and flooding third-party rating sites like Sitejabber with one-star reviews of Ssense.

Atallah wouldn’t say why Ssense bought Polyvore, other than as a means to extend his site’s audience. Arnie Gullov-Singh, Polyvore’s chief operating officer until 2017, said the company had developed an advertising platform that promoted products in search results, then measured the sales and new customers those ads generated. However, he added that Polyvore’s community was its most valuable asset, making it a “bizarre” choice to shut it down.

“I didn’t realise the intensity of the relationships being formed on the platform. In this case we could have handled it differently [but] business is about taking risks,” Atallah said.

Ssense is investing in global expansion just as some of the biggest fashion houses embrace streetwear’s aesthetics to lure younger customers. Just last year, Ssense added key luxury brands including Gucci, Balenciaga and Prada to its online selection. While that’s likely to bring in more mainstream shoppers, Ssense also risks alienating its original customer who comes to the platform to discover "in-the-know" brands instead of commercial labels.

“[In order for] Ssense to grow, they need to keep that niche focus as opposed to a commercial focus,” says Burke. “If it starts to feel commercial or if it loses its cool factor, that customer is the first to abandon it and move on.”

So far, the site’s youth-friendly presentation and knack for listing just the right items still makes it an appealing platform for the next generation of designers, said Matthew Williams, who has been selling his label Alyx on the platform since early 2017. And Ssense is still the go-to website for in-the-know fashion devotees looking to find relevant luxury streetwear.

“It’s that unique combination of their buy that gives them that edge which I would largely attribute their success to,” says David Fischer, founder and chief executive of youth culture title Highsnobiety. “At the same time, they present all that in a very minimal aesthetic that a lot of people really connect with because it comes across as very high quality and contemporary.”

In 2015, Ssense hired Joerg Koch, editor of German contemporary culture magazine 032c, as the website’s first editor-in-chief, and last year redesigned the homepage to hide the site’s products behind a drop-down menu, putting front and center Koch-commissioned articles, photo editorials and interviews with a wide range of cultural leaders from Peter Saville to Donatella Versace.

For Atallah, the investment in editorial was another strategic attempt to stand out from competitors. Koch said he initially presented ideas for product-focused content that would drive the most direct sales, a strategy widely used in online retail. But Atallah told him to focus on stories and interviews that would help create an emotional connection between Ssense and its customers, as well as bring in new audiences.

Today, 29 percent of revenue is generated via Ssense’s readers. Atallah has described content as a relatively untapped revenue stream, and the company plans on ramping up its editorial division in the near future.

Koch said he attempts to strike a balance between data-informed content he knows will go viral or drive sales, and features that might prove less popular but will help sustain Ssense’s credibility.

“When you talk about a story that doesn’t relate to product and you try to shoehorn the product in, it’s not authentic,” Atallah said. “There’s a lot more value in engaging emotional attachment than trying to force the product as [shown by] the data.”

Ssense Montréal is part of that effort, with plans to make the flagship a cultural hub that will stage events, launch products and ongoing cultural programming led by Koch. Already on the calendar are events staged by designers such as Abloh, Craig Green and Grace Wales Bonner, with plans for happenings such as book clubs, record launches and meditation sessions.

Chipperfield’s design is meant to make each event a unique experience. The building’s floors, walls and ceilings are pockmarked with hundreds of convertible sockets, making everything in the store — from displays to lighting — interchangeable.

The top floor is given over to a café and bookshop, while two floors are dedicated to personal shopping appointments. Customers can pick from 20,000 products offered online and have them whisked from Ssense’s main distribution centre within an hour.

While Ssense was developing its store, competitors have focused on speeding up delivery to customers’ homes. Ssense ships to 136 countries out of its Montréal warehouse, but next-day delivery is its fastest service, and free express shipping can require orders as high as $500 in far-flung countries. That compares with 90-minute fulfillment for Londoners shopping with MatchesFashion and some Gucci purchases on Farfetch in 10 cities. Net-a-Porter opened a warehouse in New Jersey in addition to its London distribution center, allowing it to offer same-day delivery in the New York City area.

Relying on express airfreight out of Montréal is likely costly and slower than similar service out of the U.S. or European Union, said Satish Jindel, president of shipping research firm SJ Consulting Group. Opening warehouses in other countries would cut those expenses by as much as half and reduce the number of orders that get held up at customs.

“Every time you cross a border, your shipping charges go up,” he said.

Atallah said the company is looking into ways Ssense can offer same-day delivery, which he said will become more feasible as Ssense opens additional warehouses.

He said the content produced in the Montréal store will help promote Ssense’s brand worldwide, as well as provide a testing ground for Ssense to observe customer behaviour and generate yet more data. The goal is to replicate the Montréal store model in other cities, with each location tailored to local tastes. Atallah declined to say which cities are under consideration.

“I believe we’re doing something no one else is doing or can do,” says Atallah. “We need to raise customers’ expectations and blow people’s minds.”

Disclosure: Christopher Morency and Brian Baskin travelled to Montréal as guests of Ssense.

DIGIDAY: How Net-a-Porter’s 70-person content team operates online and in print

DIGIDAY: How Net-a-Porter’s 70-person content team operates online and in print

DIGIDAY | HILARY MILNES

After running Porter and The Edit, Net-a-Porter’s print and digital titles, separately since 2013, global content director Lucy Yeomans combined the department into a unified front under the Porter name.

“Finally. We had been wanting to do it for a long time,” said Yeomans, who also serves as Porter’s editor-in-chief, a title she previously held at Harper’s Bazaar UK. “Porter is a brand name; it’s rooted in Net-a-Porter, whereas ‘The Edit’ as a title had gotten quite ubiquitous. Now, all of our content happens under one cross-channel platform. It’s more consistent.”

Content is a robust piece of both Net-a-Porter’s marketing and merchandising strategies: The company employs 70 people on its editorial team, and it publishes six issues of Porter’s print edition per year, which have featured celebrity cover stars like Viola Davis, Penelope Cruz and Bella Hadid. Previously, the print team at Porter and the digital content team at The Edit operated separately; while Yeomans oversaw both, there were silos separating each side of the content strategy. The Edit focused on trend-driven content, while Porter covered lifestyle, women’s issues, career and business content alongside its fashion editorial.

But as Net-a-Porter’s traffic shifted to more than 50 percent from mobile, Yeomans said, the need for a cohesive digital content platform became clear. Now, the combined content team works on Porter’s print magazine, as well as The Porter Edit, the digital content site on Net-a-Porter that is refreshed on a daily basis. Previously, The Edit was updated once a week. The editorial site is also translated for a global audience in French, German and Mandarin.

As the lines between editorial and advertising blur at other revenue-starved fashion publications, Net-a-Porter’s content-and-commerce play is working off of the advantage that it’s not dealing with dueling agendas. And in online luxury, as competition among multi-brand retailers stiffens, a strong editorial point of view is emerging as a key differentiator and loyalty driver, an important piece in driving down the steep cost of customer acquisition.

Since Porter sits in Net-a-Porter’s broader ecosystem, editorial’s positioning is the glue bonding marketing and merchandising together into a more consistent machine.

“Today, the customer expects content over straightforward advertising,” said Robert Burke, the CEO of retail and fashion consultancy Robert Burke Associates. “What these retailers can offer, that no one brand can, is industry context. That’s why content sounds fluffy, but is so critical.”

In Yeomans’ eyes, fashion magazines are always trying to sell us something, anyway, and we read them for inspiration. Net-a-Porter’s publications just create a shortcut to getting to the purchase.

“As long as we have our customer in mind throughout everything we do, there’s no reason content and commerce can’t work together,” said Yeomans. “We have a single, editorial point of view that we communicate with the merchandising team and that the marketing team promotes. It all makes sense in the end, if you’re taking the approach of, ‘What would our customer actually wear? What is she interested in?’ That’s our editorial integrity.”

To get on the same page, the editorial team will preview new collections at the same time the merchandising team does, and then they’ll discuss what brands, products and trends they feel strongly about and believe will perform well on the site. That conversation continues as both departments discover new brands: If an editor comes across a new accessories brand not carried by Net-a-Porter, it will tip off the merchandising team, and the merchandising team will flag undiscovered designers for potential coverage.

The editorial team also looks to customer data when deciding what customers want to hear about, from Net-a-Porter’s trend performance reports, personal stylists and conversations with “EIPs,” or extremely-important people, Net-a-Porter’s highest-spending customers that drive about 50 percent of the company’s sales.

“When I was the editor at Harper’s Bazaar, I would have no idea what our readers were responding to,” said Yeomans. “Now I can watch what’s flying off the shelves and I know exactly what she’s buying.”

With editorial now backing one digital-print platform, there’s more opportunity for involved initiatives that extend beyond the publications. Yeomans said an editorial committee is working on a “content plus commerce plus cause” event this summer that, in partnership with a philanthropic organization, will include a content series, an event and a limited-edition capsule collection sold through Net-a-Porter.

“We can now take a cross-platform approach that we really couldn’t before,” said Yeomans.