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.

NEW YORK TIMES: With a Glance Backward, Brooks Brothers Looks to the Future

NEW YORK TIMES: With a Glance Backward, Brooks Brothers Looks to the Future

NEW YORK TIMES | TERI AGINS

In early 2002, just a few months after he officially took over as the new owner and chief executive officer of Brooks Brothers, Claudio Del Vecchio confronted the reality that the classic American retailer had largely lost its way.

Mr. Del Vecchio knew that many of the clothing fabrics were no longer of high quality, that too many of its shirts were ill fitting and that there were often disconcerting irregularities, like a rack of navy blazers that weren’t the exact same shade of navy.

And longtime customers had noticed.

Among Mr. Del Vecchio’s first acts as owner was to read a stack of angry letters from Brooks Brothers loyalists who griped about how the merchandise quality had fallen under the previous owner, the British retailer Marks & Spencer. They also balked at the limited selection of classic blazers and suits in the stores.

Those letters confirmed much of what Mr. Del Vecchio, a wealthy Italian entrepreneur, had seen for himself and stiffened his resolve to return to the company’s roots. “I saw the business opportunity to increase sales,” he said. “I knew how to fix this.”

A new executive team shifted into crisis mode. Led by an experienced chief merchant, Eraldo Poletto, with whom Mr. Del Vecchio had worked at Casual Corner (a women’s wear retail chain that Mr. Del Vecchio sold in 2005), they began to corral the company’s best suppliers to revamp all the store’s merchandise. Hundreds of garment styles required new specifications, better fabrics and apparel factories. It took about six months for the first shipments of the improved garments to arrive in stores — swapping out the oversize khakis and shapeless polo shirts.

Among the upgraded versions were luxurious three-ply Italian cashmere sweaters, replacing the two-ply Mexican cashmeres, and three styles of blazers and khakis, instead of just one. By April 2003, the store had completely overhauled its merchandise — and its loyal fans started coming back.

By 2004, Mr. Del Vecchio said, the privately held Brooks Brothers was modestly in the black, reversing a series of money-losing years that had begun in the late 1990s.

Brooks Brothers operates 244 wholly owned stores in the United States. This branch, in the Flatiron district of Manhattan, recently added a downstairs cafe, which has become a hangout for young tech workers.

The history of Brooks Brothers and the tenure of Mr. Del Vecchio — who has been wearing Brooks Brothers for more than half of his 61 years — will be celebrated on Wednesday evening, when the company will host a black-tie gala at Jazz at Lincoln Center for 1,000 of its best customers, friends and celebrity guests to mark its 200th anniversary. The all-American jazz program, produced by the Jazz at Lincoln Center Orchestra’s artistic director, Wynton Marsalis, befits the all-American clothier, which has been the group’s corporate sponsor and official clothier since the 1990s.

“Brooks Brothers is a special place,” Mr. Del Vecchio said during an interview in his upper-floor office at the 346 Madison Avenue store, where an antique grandfather clock owned by the store’s founder, Henry Sands Brooks, stands across from his mahogany desk. “This is a great institution with a heritage.”

Elegantly attired in a Brooks Brothers navy tweed sport coat, a white button-down shirt, a burgundy knit tie, slim gray slacks and brown oxfords, the chief executive spoke about what he saw as his mission.

“I am here to reinforce a culture,” he said. “I have to make sure that we are building a company that will last after me. I don’t want to be here another 20 years. Forget about another 200 years. It’s really about trying to build a culture that will last longer than the business. That will make it very hard for the next guy to screw it up.”

Bought at a Discount

Claudio Del Vecchio grew up in Milan, the oldest of six children of Leonardo Del Vecchio, the self-made billionaire founder of the Italian eyewear giant Luxottica Group.

Mr. Del Vecchio, like many other Italian men, first learned about Brooks Brothers through the stylish Fiat patriarch Gianni Agnelli, who started wearing Brooks Brothers original oxford shirts in the early 1960s. (He customized his shirts by leaving the collar points unbuttoned.) Generations of Italian men idolized the dashing Mr. Agnelli and copied what he wore.

When Luxottica sent Mr. Del Vecchio to New York to run its North American operations in 1982, the young executive headed straight to Madison Avenue to buy his wardrobe at Brooks Brothers. Later, in 1992, he got to know the store’s executives when he signed up Brooks Brothers to be Luxottica’s first eyewear licensee in the United States.

No-iron shirts, on display at the Brooks Brothers flagship store on Manhattan’s Madison Avenue, are the retailer’s best-selling item. CreditKarsten Moran for The New York Times

Over the next few years, however, he observed with increasing alarm how Brooks Brothers was abandoning its long tradition of being the standard-bearer of American business classics, one that came with its status as an outfitter of the nation’s presidents. It has clothed nearly all of them, including Donald J. Trump for his 2017 inauguration.

Under Marks & Spencer, which bought it in 1988, Brooks Brothers enthusiastically embraced the casual wear boom of the 1990s, as the store’s merchants were told to copy the business-casual look of Banana Republic. (Staff members jokingly called their store “Banana Brothers.”)

In the mid-1990s, the company’s executives even eliminated the signature Golden Fleece logo from its cotton knit polo shirts, which Mr. Del Vecchio, as an influential supplier, says he was able to talk them into restoring, he said.

By 2001, it was clear that the British-American marriage wasn’t working, and Marks & Spencer, suffering from a global recession and a downturn in its home business, put Brooks Brothers up for sale. With American retailers shaken right after Sept. 11, Mr. Del Vecchio was able to swoop in and grab Brooks Brothers for $225 million, less than a third of what M & S had paid 13 years earlier.

After those frantic first years, when management worked on both quality and public perception, retail sales began to steadily improve. By 2017, Brooks Brothers had 244 wholly owned stores in the United States, up from roughly 160 in 2001; in both cases, half were factory outlets. It also had wholesale accounts with stores like Bloomingdale’s, Lord & Taylor and Dillard’s.

Globally, Brooks Brothers had blossomed with sales in 50 other countries, accounting for 35 percent of its total revenue. That was up sharply from 2002, when it operated international stores only in Japan, still its biggest overseas market.

Online and in Airports

Today, Brooks Brothers is typical of most retailers: Online sales now represent its largest percentage of revenue and is now the company’s fastest-growing category. As more people have migrated to shop online, Brooks Brothers has provided more detailed product descriptions and has featured photos of people in lifestyle situations, as opposed to models in studios, which a company spokesman said had helped increase sales.

Brooks Brothers ties are made in Long Island City, their labels embroidered with an American flag and the words “Brooks Brothers. Proudly Made in New York United States of America.”Karsten Moran for The New York Times

Mr. Del Vecchio credits Brooks Brothers’ 27 airport shops, operated by a licensee, for helping win back businesspeople who had rejected Brooks Brothers in the 1990s. He calls the shops a “great showcase” for the brand. (In the 2009 movie “Up in the Air,” George Clooney’s traveling businessman character lingers over a display of striped ties at a Brooks Brothers airport shop.)

Brooks Brothers has also reached out to established fashion designers for exclusive, high-profile capsule collections — Thom Browne from 2007 to 2014; Zac Posen for women’s wear since 2016 — but its business remains rooted in its classic men’s wear, which accounts for 80 percent of its business.

Dress shirts, now in about 1,000 varieties, have long been the calling card of Brooks Brothers, accounting for 30 percent of its sales. In a nod to contemporary trends and to buffed, young guys, the shirts come in four fits: the Traditional, the Madison, the Regent and, the slimmest, the Milano. (Mr. Browne, famous for his tightfitting men’s suits, helped steer Brooks Brothers toward slimmer silhouettes, said Lou Amendola, the store’s chief merchandising officer. “Today over 50 percent of our business is now in slim shirts and slim suits,” he said.)

Charles Moore, founder and president of the Banc Funds, a private equity firm in Chicago, said he had stopped wearing Brooks Brothers dress shirts for several years because “the quality of the shirt fabric suffered and the collar wasn’t fitting.” He shifted to $200 custom shirts until a few years ago when he returned to Brooks Brothers, for its trim Regent silhouette, which was new to him.

“I like the fine Supima cotton and the way the shirts ride on your neck — the spread collar and the button-down collar,” he said. For around $80, “they’re great value for the money.”

‘We Are Authentic’

The privately held Brooks Brothers has posted profits for 13 of the last 17 years. For the past three years, annual sales have hovered around $1 billion, with profits at a break-even level, according to figures provided by Mr. Del Vecchio. (In the current challenging retail market — with Ralph Lauren Corp. and Abercrombie & Fitch closing down stores, and J. Crew getting rid of its entire top management team to try to reverse that company’s revenue slide — steady results can be considered something of an achievement for Brooks Brothers management.)

Drawing hip, millennial shoppers inside America’s oldest retailer isn’t easy — even to check out novelties such as Brooks Brothers’ latest machine-washable merino sweaters, designed without side seams, and its lightweight hooded outerwear, rivaling labels like Moncler and Canada Goose.

“He’s elevated Brooks Brothers without deviating from its heritage and tradition,” Robert Burke, a New York retail consultant, said of Mr. Del Vecchio. CreditKarsten Moran for The New York Times

“We have a level of technology and performance that they can’t even dream about,” Mr. Del Vecchio said. “We are authentic, and we have the stories. We just need to do a better job with social media and the influencers.”

Still a big believer in physical stores, Mr. Del Vecchio sees promise with Brooks Brothers’ latest concept, Red Fleece boutiques, featuring midprice casual wear. Its popular Flatiron location recently added a downstairs cafe, now a hangout for the tech workers in the neighborhood.

“We need to refine it to create synergies between the cafe and the boutique,” Mr. Del Vecchio said.

Even with a challenging economic landscape, Brooks Brothers, with its freedom from public shareholders and the pressure of quarterly financial disclosures, “is suddenly the retailer that everyone wants to emulate,” said Robert Burke, a New York retail consultant.

Notably, Nordstrom, which had $15.48 billion in revenue in 2017 and which over the past year had tried to take itself private, finally pulled the plug on that effort in March after the board rejected the founding family’s $50-a-share bid, saying it wasn’t high enough. (Retail stocks, as whole, gained just 2.52 percent in 2017, well behind the 25 percent rise in the Dow Jones industrial average and the 19 percent return of the Standard & Poor’s 500-stock index.)

“Claudio has been very disciplined and measured on how he has grown Brooks Brothers, focused on where the brand will go, upping the quality, not going for the quick sales and not opening too many stores,” Mr. Burke said. “He’s elevated Brooks Brothers without deviating from its heritage and tradition.”

Mr. Del Vecchio said, “I am naturally a long-term thinker, and I don’t see the benefit of going public.”

Though much of Brooks Brothers’ apparel is imported, including its best-selling no-iron shirts (made in Malaysia), Mr. Del Vecchio says he remains committed to producing many signature items at home, including its made-to-measure suits, in company-owned factories where he has invested in new machinery and in the training of workers.

Brooks Brothers, which has outfitted 40 of the country’s 45 presidents, is celebrating its 200th anniversary this year.

Its ties, for example, are manufactured at a factory in Long Island City, with a label embroidered with an American flag and the words “Brooks Brothers. Proudly Made in New York United States of America.”

There are two other domestic factories. One is in Haverhill, Mass., which makes men’s suits, sport coats and trousers, and has produced clothes for the designer Todd Snyder and uniforms for United Airlines. It employs 550 workers, up from 300 in 2008. The other is in Garland, N.C., where 250 workers produce the classic $140 oxford shirt — and is the only domestic factory that operates at a loss, Mr. Del Vecchio said.

“Part of the Brooks Brothers institution are its factories and what it means from a social standpoint to put things together,” he said. “Not every consumer can afford to buy ‘Made in America.’ But we have a brand that can justify that cost, and there are enough customers who understand this.”

Mr. Del Vecchio said he knows that closing the Garland factory would erase the livelihoods of half the town, which has fewer than 1,000 inhabitants.

“Many of the decisions we make are with that in mind as well,” he said. “We keep saying every year this is the year we aren’t going to lose money, so that’s the reason to keep trying to improve. But until the day I can’t afford it, we won’t close it.”

The philanthropic-minded Mr. Del Vecchio began the practice of hiring English-language tutors to teach the immigrants who work at his factories. In Haverhill, the workers speak 30 languages, from countries including Afghanistan, Poland and Myanmar.

“We don’t hire illegal immigrants, but now there are the laws that stop immigrant refugees, which were a great source of skilled labor for our factories,” he said.

He and his wife, Debra, and members of his executive team visit each factory every Christmas season, donning blue aprons embroidered with “Brooks Brothers” to serve lunch to workers. Mr. D., as they call him, joins in to dance and to speak Italian and Spanish with the workers. He also gives out certificates for graduates of the English classes and awards for years of service.

“Whenever he walks into the factory, everybody claps,” said Adriana Lucin, the production manager at the tie factory. “He’s like a star. Everyone wants to take a selfie with Mr. D.”

BoF: Capitalising on the Footwear Opportunity

BoF: Capitalising on the Footwear Opportunity

Business of Fashion | Lauren Sherman

For the luxury industry, future growth may be at its feet.

Footwear is the product category thought to have the greatest potential for rapid expansion. It has certainly attracted the interest of some of America’s biggest fashion players. Just last year, Michael Kors acquired Jimmy Choo for £896 million (or about $1.2 billion), quite a windfall for previous owner JAB Holding, which bought the British luxury shoe label in 2011 for a little over £500 million. Meanwhile, Tapestry’s 2015 purchase of fast-growing accessible-luxury line Stuart Weitzman for $574 million has helped to boost its bottom line as the newly formed American luxury group has focused on improving performance at Coach and Kate Spade New York.

On the other side of the Atlantic, Europe’s biggest mega-brands have reason to be just as enthusiastic about the category. At Gucci, for example, shoes drove 19 percent (€1.2 billion) of the brand’s 2017 revenue, up from 13 percent (€409 million) in 2011. And Louis Vuitton, which has also enjoyed traction in shoes, invested more than €30 million on building a footwear product-development facility near Venice's Riviera del Brenta.

The wider market for luxury shoes hit €18 billion in 2017, up 10 percent year on year, according to Bain & Company. In terms of percentage growth, it was matched only by jewellery. But the size of the footwear category is still dwarfed by handbags, worth €48 billion in 2017, and apparel, which generated €61 billion, signalling significant space for growth.

Footwear is attractive for other reasons, too. “Shoes wear out, so their replacement cycle is short — even established consumers need to buy them again and again,” wrote Luca Solca, head of luxury goods at Exane BNP Paribas, in a recent report. And even though there are plenty of shoes priced over $1,000, like handbags, footwear has lower cost-per-wear and higher margins than apparel.

Consumers are also spending more on shoes than ever, averaging $248 on shoes in 2016, up from $212 in 2006, according to data from the American Apparel and Footwear Association. And they're buying more pairs, too, at least in the US: Americans purchased an average 7.6 pairs of shoes in 2016, up from 5.9 pairs in 1996. “In the past you only needed three or four pairs of shoes and you were sorted,” said Sagra Maceira de Rosen, non-executive chairperson of Naga Groupand co-author of The Towering World of Jimmy Choo. “Now, there are so many more categories. Fashion is driving the market more than ever before.”

But footwear is more complicated than it looks and performance in the category has been inconsistent from brand to brand. “There is significant polarisation between brands,” said John Guy, an analyst at Mainfirst AG. “Some of it has to do with product and price positioning.”

For example, Italian shoes and leather goods business Tod’s has struggled to maintain market share as competing brands develop their own versions of its iconic driving shoe — often at a lower cost. In 2017, the company reported sales of €963.3 million, down more than 4 percent from a year earlier. Another Italian heritage label known for its footwear, Salvatore Ferragamo, saw net profits drop 42 percent in 2017. In early 2018, chief executive Eraldo Poletto exited the company and the 90-year brand is aiming to course correct by installing British-American shoe designer Paul Andrew, whose footwear collections for the brand have been well-received, as its head of women’s ready-to-wear as well. Andrew showed his first collection at Milan Fashion Week in February 2018.

So, what makes footwear so tricky?

One challenge is that a shoe’s success is predicated on the temporal relevance of its silhouette, even more so than fashion or handbags. (Kitten heels and flats may be having a moment, but just a few years ago platform pumps were de rigueur.) If a creative director is not able to master the current look — all while maintaining a distinctive brand identity — it’s difficult to sustain momentum.

“The big question for investors is, 'How long can a business that’s made up of a single shoe last?'” asked Robert Burke, chief executive of advisory firm Robert Burke Associates. “Can they go beyond what they’ve done in the past or is it a one-trick pony?”

And yet, the category continues to hold the interest of investors and luxury groups, in part because of the expertise needed to produce a quality shoe. “It is the most difficult category in terms of product development and manufacturing,” says Franco Pené, chairman of Onward Luxury Group, which acquired a controlling stake in London-based label Charlotte Olympia in 2017 for its manufacturing expertise. “A one-millimetre difference can be a pain for your feet. It’s not a product that is so easy to manage.” (In February 2018, Charlotte Olympia’s three American subsidiaries filed for bankruptcy protection in the US, citing “unprecedented brick and mortar retail disruption.” These businesses were separate from the UK-based business in which Onward invested.)

Consumer appetite for luxury sneakers — which generated €3.5 billion in 2017, up 10 percent year-over-year — is also fuelling the footwear fire. From Balenciaga’s “dad” sneakers to Valentino’s low-top trainers, nearly every major fashion brand now has a robust sneaker programme. “Women come to lunch in Chanel suits and sneakers,” said Karine Ohana, co-managing partner of the Paris-based Ohana & Co, an independent investment bank that advises on M&A and represented Onward Luxury Group when it acquired Charlotte Olympia. “Whatever happens, the trend of tomorrow is that shoes will become more and more technical and support the physical needs of individuals.”

So, which brands are investment targets? Makers specialising in trainers are top of mind. (As are the stores that sell them: In February 2018, LVMH’s investment vehicle Luxury Ventures put money into New York-based multi-brand retailer Stadium Goods.)

But it's the labels with classic sensibility and operational know-how that are most coveted. There is plenty of interest around ultra-high-end Italian brand René Caovilla, but family owners say they do not want to sell. Mansur Gavriel — which started in handbags, rode a successful expansion into shoes and now generates well into the eight figures annually, according to market sources — is a possible target. As is Aquazzura, which generated more than €100 million in retail revenue in 2017, with double-digit growth projected for 2018 amid plans to open nine new stores.

What these brands have in common is a diverse product offering that can theoretically weather aesthetic shifts. “A trend-driven and specific brand can grow quite fast in the early days, but then it plateaus a bit unless the creative director is able to broaden up,” Maceira de Rosen said. “Aquazzura is doing extremely well because it was able to build a very nice range beyond the lace-up that made it famous.”

Out of the larger, more established brands, Christian Louboutin is the one investors are watching closely, though its signature red soles read as passé in some circles, with high heels making up 44 percent of its product range. (Its second-largest category is sneakers, which make up 15 percent of the line.) But it’s certainly a widely distributed brand with global name recognition, as well as proven success in category extensions including handbags and beauty — in particular, nail polish. “The one that everyone is waiting for is Louboutin,” Ohana said. Earlier this year, the independent French brand signed a licensing deal with Puig in hopes of expanding the beauty line’s distribution.

But the true white whale may be the most well-regarded shoe brand of all: Manolo Blahnik. The label is enjoying the spotlight once again after receding to the background during the years dominated by platform pumps. “What’s so interesting is that Manolo has stayed so true to his design aesthetic,” Burke said. “Whenever everyone was doing a platform, he refused.”

BNN: Canada Goose plans more in-house production as it eyes higher margins

BNN: Canada Goose plans more in-house production as it eyes higher margins

BNN | Nichola Saminather

Luxury coat maker Canada Goose (GOOS.TO 1.58%) plans to bring more manufacturing in-house in a bid to boost margins and help it live up to lofty investor expectations as the most expensive stock among major luxury brands.

The Toronto-based company aims to make at least half of its outerwear itself in a few years, up from about a third now, Chief Executive Officer Dani Reiss told Reuters in an interview at the company's Toronto headquarters.

"We'd like to grow our internal capacity," Reiss said, referring to the move as one of its "pillars of growth."

"Here's an opportunity for us to have more in-house capacity and increase our profit margins, which is important for our investors and for us," he said.

By tightening their hold on manufacturing, luxury outerwear makers such as Canada Goose and Italian rival Moncler as well as Kering's Italian fashion label Gucci are able to increase control over quality to justify charging eye-watering prices.

"If you’ve got a multi-tier supply chain, you’re leaving profit margin throughout every element of the supply chain for everybody along the way," said Rod Sides, Deloitte's U.S. retail and distribution leader.

Companies still have to be able to predict future demand accurately for the strategy to succeed, and other factors, like the location of new facilities, can make a difference.

For instance, putting new facilities in Canada Goose's home province, Ontario — which has the highest electricity rates in Canada and raised the minimum wage 21 per cent this year — would likely not help the bottom line, said Brian Madden, portfolio manager at Goodreid Investment Counsel.

But the risk is worth it for Canada Goose, which has all of its coats made in Canada and sells them for between US$725 and US$1,695. The company posted December quarter operating margins of 60 per cent on online and own-store sales versus 43 per cent from wholesale, causing investors to cheer the growth in its direct-to-consumer business.

The stock has almost doubled since it listed a year ago, vastly outperforming the flat Toronto stock benchmark, and is trading at 55 times forward earnings, more than double Moncler's.

Canada Goose, which opened the first of its own stores in 2016, plans to have as many as 20 by the end of 2020 from six now, compared with Moncler's 201 stores.

"At this point they're relatively under-penetrated across their ultimate audience, and they're going to grow into that," said Nomura equity analyst Simeon Siegel.

Despite Siegel's positive view, he has a neutral rating because of its valuation.

As it expands its footprint, and starts selling online in China and possibly Russia beyond that, Reiss said the company needs to ensure it can keep up with demand.

GRIP ON QUALITY

For many luxury companies, having a tight grip on quality for big ticket items is often crucial to convince customers to fork out small fortunes. Most luxury companies would also rather sell out temporarily at full price than produce too much and have to discount merchandise.

Moncler took control of its own jacket manufacturing site in Romania and slightly reduced the number of its suppliers in 2016. Most of its manufacturing and supply chain remains outsourced, though it declined to detail how much.

Kering's Gucci is also looking to bring more of its handbag production in-house this year with a new facility near Florence.

Though operating in a different sphere, France's Hermes, best-known for its US$10,000-plus Birkin and Kelly handbags, makes all its leather goods at its own domestic workshops.

But outsourcing can also make sense, especially for basic items like T-shirts, if there are compelling cost reasons, or if expertise lies elsewhere.

Canada Goose has no plans to change suppliers for its knitwear lines from Italy and Romania, nor the exclusive external suppliers for its coats' components, according to the company.

It has six factories that make its outwear in Canada, and has lifted manufacturing capacity by building new sites, acquiring contractors and adding employees.

"What this offers is more control on the quality and timing and product," said luxury consultant Robert Burke, who has counted Canada Goose among his clients. "The risk is to ensure you buy [a facility] that's big enough for future growth but not cumbersome."

ROBB REPORT: Change Agent Natalie Massenet Helps Kick Off Muse by Robb Report

ROBB REPORT: Change Agent Natalie Massenet Helps Kick Off Muse by Robb Report

Robb Report | Christina Binkley

Natalie Massenet does not heed barriers. During her time as a fashion journalist, she saw women struggling to locate designs they’d discovered in magazines. This launched an idea that became Net-a-Porter, an e-commerce juggernaut that defied the luxury industry’s objections about selling online and, since its 2000 debut, has transformed how fashion brands operate. As a former chairman of the British Fashion Council (a position she held for five years starting in 2013), Massenet noted a gaping hole in the fashion awards system, so she launched the Fashion Awards—a global awards program that replaced the former British Fashion Awards. Her cool demeanor at the 2016 announcement, at a breakfast at Soho House West Hollywood in Los Angeles, belied what had just transpired: The American, French, and Italian fashion awards would thereafter be regional prizes, while London’s would rule the world.

Massenet’s determination to improve the status quo is an ongoing mission. The Los Angeles–born Massenet, now 52, begins each January with a fresh diary in which she lists her major projects for the coming year. In 2017, these included “have baby.” In September, she checked that off with the arrival of her third child, Jet Everest Torstensson, a son with her partner Erik Torstensson, a photographer and entrepreneur who cofounded Wednesday Agency and FRAME fashion brand. Massenet thanked her surrogate in an Instagram post of her baby’s tiny fist.

“I can definitely attest to the fact that you can survive having a baby at my age,” says Massenet, who has two teenage daughters from her previous marriage. “It’s actually even nicer because you know how brief those moments are.”

Her juggle now includes serving as non-executive cochairman of Farfetch, an e-commerce venture that connects independent luxury retail stores and fashion brands with shoppers, a concept like Airbnb or Uber but for fashion. Massenet says she sees in Farfetch, which was founded in 2007 by entrepreneur José Neves, the opportunity to further her mission to connect designers with consumers who want to buy their most creative work. “José called me and basically said his plans for Farfetch were what I felt were the next obvious step for e-commerce,” she says. “He’s not a disrupter, he’s an enabler.”

Neves caught Massenet at an opportune moment. She had left Net-a-Porter Group in 2015, shortly after the company was sold and became Yoox Net-a-Porter Group. At that time, it was reported she sold her approximately $153 million stake in Net-a-Porter. Without a company to run for the first time since launching the portal in 2000, she had thrown herself into building up the British Fashion Council, but she remained engaged in the future of retail fashion. “She was very interested in the vision for Farfetch,” says Neves. “Natalie brings her incredible expertise in brand building and a love for customer experience with her, which she shares with our team here at Farfetch as we develop and build our brand.”

From the beginning of her shift to e-commerce, Massenet presented herself as a consumer advocate for the luxury sector. Working as a fashion editor at Women’s Wear Daily, W, and later Tatler, she saw the frustration of many women who were unable to locate the edgy clothes that appeared in fashion-magazine editorial spreads. Often, those clothes came right off the runway and
were never manufactured because they were deemed either too outlandish or too expensive. Massenet begged to differ.

At a time when industry logic held that people would buy books or pet products online but not expensive luxury goods, she went to friends, family, and angel investors to raise cash and to designers, asking them to allow her to put their designs on a website without, in those early days, paying for them up front. Tamara Mellon (then at Jimmy Choo) and Anya Hindmarch were first to agree. “Two women, mothers,” Massenet notes. “We’re risk takers, having that feminine outlook.”

As Net-a-Porter grew, the staff exuded Massenet’s take-no-prisoners approach to getting the newest, most directional looks before the department stores. Net-a-Porter buyers would enter a Paris showroom and needle a designer to produce theatrical runway pieces they had thought too outlandish or pricey to sell—zany $2,000 sunglasses, fully sequined gowns that cost tens of thousands of dollars. There might be only a few clients for such pieces, but with its global reach, Net-a-Porter could sell from Dubai to Shanghai or New York.

The website took an editorial attitude, with fashion shoots that were more like magazine spreads than Amazon.com pages. “It was turning a media platform into a shop, not the other way around,” says Massenet.

Robert Burke, now a business consultant, was an executive at Bergdorf Goodman, a rival whose executives bumped into Massenet and her buying team in Paris, Milan, and London. “We were always kind of in awe of her in the showroom,” Burke says. “At that time, luxury department stores were extremely full of themselves and refused to believe that some little Internet site could come in and make a difference.

“Natalie came in with no boundaries and great vision and great creativity,” continues Burke, “and she did what everyone thought was impossible.” He chuckles at a memory of getting access to a collection that Massenet had wanted exclusively for Net-a-Porter: “She was not messing around. She did not enjoy sharing exclusivity with other retailers. She was not keen on sharing, and rightfully so.”

The e-commerce site’s success fueled expansion into men’s online site MrPorter, an off-price brand the Outnet, and a glossy fashion magazine, Porter, and Richemont ultimately invested in Net-a-Porter Group.

Massenet is now Dame Natalie Massenet, having been awarded in 2009 an MBE, or Most Excellent Order of the British Empire, and in 2016, a DBE, or Dame Commander of the Most Excellent Order of the British Empire, for her contributions to British fashion and retail. She’s based in London, but spends an increasing amount of time in Los Angeles these days.

She recently started her 2018 diary, with a new list of projects that she describes as “shorter but bigger” than usual. Stay tuned for the debut of a venture capital business called Imaginary Ventures and for further developments at Farfetch, which inked a deal with Condé Nast last June to direct the media company’s consumers to shop on Farfetch (the deal involved Farfetch acquiring Condé Nast’s style.com shopping website).

Down the road, Massenet says, “I probably have a start-up or two under my sleeve. I’m putting those at the bottom of my list.”

FINANCIAL TIMES: Now Amazon is disrupting fashion retail, too

FINANCIAL TIMES: Now Amazon is disrupting fashion retail, too

FINANCIAL TIMES | ANNA NICOLAOU AND LESLIE HOOK

According to the book The Everything Store, Jeff Bezos told Amazon employees in 2007 that “in order to be a two-hundred-billion-dollar company, we’ve got to learn how to sell clothes and food”. 

Amazon is expected to report next week that it made about $175bn in sales for 2017, closing in on the $200bn mark thanks in part to its acquisition of grocery chain Whole Foods Market. 

But while that acquisition, which firmly establishes the company as a force in food, grabbed the headlines, more quietly Amazon has also been improving its position in clothes.

In the past year the company has rolled out private label clothing brands, such as Lark & Ro, which resembles fast-fashion looks from the likes of Zara. It has placed adverts on the pages of Vogue, struck partnerships for collections with Calvin Klein and actress Drew Barrymore, and unveiled a camera for customers to send selfies of their outfits to an artificial intelligence-powered stylist. It even convinced Nike, a longtime holdout, to begin selling shoes on its site. 

The company’s moves pose the same question for fashion executives that hovered over book publishers, movie producers and big box retailers in previous years: is their industry Amazon-able? 

By some measures, Mr Bezos has already succeeded. Amazon is set to overtake Macy’s to be the largest seller of clothing to Americans this year. Analysts are bullish. Nomura estimates apparel could be a $45bn-$85bn business for Amazon by 2020. 


The global apparel and accessories market is worth more than $1tn, and margins are higher than in other categories like electronics or food, making it an attractive source of profits to fund Amazon’s other ambitious investment plans, Nomura points out. 

So far, though, the majority of Amazon’s apparel sales are not designer dresses but rather basic commodities, like socks and T-shirts. 

Observers say that the fickleness of clothing purchases makes the sector less susceptible to ecommerce. “Selling underwear is easy, but fashion is a browse, and Amazon is not a browsing experience,” says Simeon Siegel, analyst with Nomura Instinet. 

Amazon has already become a go-to destination to restock basic necessities — it is the largest seller of batteries in the US, for example. But finding something less specific on its sprawling website is trickier. Searching for “black dress” on Amazon.com yields more than 20,000 results.

Elaine Kwon, a former executive at Amazon’s fashion business, who helped build its relationships with luxury brands and who now runs the consultancy Kwontified, believes this is changing. “For a long time people thought of Amazon as the place to get toilet paper or cat food,” she says. “In 2014, many brands were very hesitant to even let it be known publicly that they wanted to work with Amazon.” 

But as Amazon’s influence has deepened, and the department stores that brands have relied on struggle, the power has shifted. In the UK, for example, a quarter of clothing sales are now made online, and Amazon dominates. 

“Brands are now realising that people are buying from Amazon, and if I, as a brand, refuse to participate, someone else can take my product and make that money,” says Ms Kwon. 

At least part of the fashion industry remains dismissive of Amazon’s entrance. Andrew Rosen, chief executive of clothing label Theory, told a conference last year that “fashion sort of looks good to [Amazon] . . . but I don’t think they’re really that serious about it”.

Amazon has unveiled a number of new private-label apparel brands in recent months, including seven in the UK in September. It now has “dozens”, spanning women’s, men’s, children’s and baby clothing, a spokesperson said, without providing an exact number. The looks range from Amazon Essentials, which sells $12 men’s polo shirts to Lark & Ro, which is more fashion-forward but still reasonably priced. The most expensive Lark & Ro item listed is a $199 women’s scuba leather jacket. 

Amazon Essentials was the biggest seller among its private brands, according to a report from research group L2 in August, and the top-performing garment was the men’s polo shirt.

Private-label clothing brands could be a new profit stream, and they also give Amazon control of transactions from start to finish. As it stands, the company can’t control which brands decide to sell on its website, or stop them from leaving. 

“They want to own the brands and own the sourcing. That’s important to them,” says Robert Burke, who consults for designers such as Marc Jacobs, Ralph Lauren and Vera Wang. “The problem is that building a fashion brand takes a long time, even for Amazon.”

Amazon does not disclose revenues from its private-label brands. Mr Siegel says it is difficult to estimate at this stage, and that it will be “an uphill battle”. The company has taken strides to make browsing for clothes on its site easier, hiring fashion editors to make “shopping guides”, and testing a service called Prime Wardrobe, that lets customers try on clothes at home before buying them. 

An Amazon spokesperson said the strategy with private-label apparel brands is “to give customers what they’re looking for, and we’re constantly exploring ways to do just that”. 

Ms Kwon likens Amazon’s dive into private-label fashion to that of Zara. “Zara was laughed at by the fashion industry initially, but that changed,” she says, calling some of the brand launches part of Amazon’s “awkward phase” of testing customer appetites. 

Amazon is well equipped. The company hired Christine Beauchamp, former chief executive of Victoria’s Secret, as president of its fashion business in June. Megan Salt, the former head of public relations for Vogue, is its head of brand communications. 

It also has deep pockets. Amazon is scheduled to report financial results for its fourth quarter on Thursday next week, and analysts are expecting record revenues. The average forecast is about $59.8bn in revenue, a 37 per cent increase from the same time last year, and profits of $900m, which if achieved would make it the company’s most profitable quarter ever. 

Most importantly, Amazon has the data to know exactly what people are buying, and when. 

Chip Bergh, chief executive of the jeans maker Levi Strauss, recently said his “big challenge” is Amazon’s private label apparel business. “They’re going to be massive in apparel over time,” he told Business of Fashion, the trade publication, this month. “Their real power, over time, is going to be the data they’re able to collect on their consumer. It’s just a question of time.”

It’s unclear just how far Amazon wants to go with clothing. The company sparked rumours last year with a patent for an automated clothing factory, potentially allowing it to make its own custom ranges. 

James Thomson, a consultant and former Amazon manager, views this as a logical next move.

  “Imagine if Amazon had the body dimensions of 100m customers . . . if Amazon will deliver a custom suit quickly to me for $400, I don’t care what the brand is,” he says. “Amazon doesn’t replicate other people’s businesses. They find a cheaper way to do it at a mass scale, and catch everyone going, ‘what just happened?’”

Is Amazon friend or foe to fashion brands?

Fashion’s biggest brands are struggling to work out how to deal with Amazon’s quiet transformation into an apparel powerhouse. Is it friend or is it foe?

“Amazon is like Voldemort,” says one fashion executive. “You hear people talk about it in hushed tones.”

For more than a decade, Nike resisted adding its popular sneakers and athleisure clothing to Amazon, even as competitors Adidas and Under Armour gave in and decided to offer themselves to the ecommerce site’s growing customer base.

Yet Nike was already among the most common brands found on Amazon — because third party sellers were snapping up shoes and re-selling them. As online shopping has become a bigger part of all shopping, brands have struggled to keep tight control over where their products end up. Brands scored a victory last month with an EU ruling that luxury goods companies can ban sales of their products on Amazon to protect their “aura of luxury”. The European Court of Justice determined that US cosmetics group Coty did not break competition laws when it blocked distributors from selling its products on Amazon.de.

But Nike in June had already revealed that it was testing out selling a “limited assortment” of products on Amazon. The reversal “showed the want, need or something in between, to sell through Amazon”, analysts at Nomura said.

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Analysts do not expect the most elite luxury brands to start selling on Amazon, but it is already becoming common for more middle-of-the-pack brands. More than 20 brands listed Amazon as a major customer in their disclosures last year, including Hanes, Fossil and Perry Ellis, according to Nomura.

Goldman Sachs expects to see Amazon establish “additional direct relationships with major brands”, which would “only further its momentum in apparel as the category continues to move online”.

BoF: The Art of the Markdown

BoF: The Art of the Markdown

BUSINESS OF FASHION | VICTORIA BEREZHNA

NEW YORK, United States — After a tumultuous 2017 with a record-breaking number of store closures and bankruptcies in the US, retail’s great transformationis anything but over. However, end-of-season markdowns — which accelerate the offloading of leftover inventory — offer a boost not only to those that are struggling, but also to those making some headway.

In November 2017, US retail sales were $492.7 billion, up 5.6 percent from a year earlier, according to the Department of Commerce. The jump was spurred by holiday shopping’s brisk start online. On Black Friday alone, e-commerce sales hit $5 billion, a 17 percent increase year-over-year, beating records.

But while the industry has long relied on aggressive markdowns to boost holiday shopping, overdoing discounts may sacrifice long-term margins and dilute brand image.

Research firm Edited, which analyses online sales of over 11,000 fashion brands and retailers, found that the US luxury industry experienced the highest volume of discounts on Black Friday, with 46 percent of products discounted. (Almost a quarter of those goods were discounted by 40-to-50 percent.)

In the mid-priced market, 24 percent of items were discounted, while only 20 percent of mass-market items were marked down. The top five biggest retailers by number of products discounted by 40 percent or more by the first week of December were Bluefly (an off-price outlet), Farfetch, Saks Fifth Avenue, Neiman Marcus and Ssense.

Traditionally, retailers prefer to hold off on markdowns until later in the year, as discounting too early and too deeply can shrink already squeezed profit margins. Sometimes, it can also cheapen the perception around a brand or retailer. However, for the past decade or so since the financial crisis, post-Thanksgiving discounting has become commonplace.

This year, many retailers — including luxury department stores Neiman Marcus and Saks Fifth Avenue, and e-tailers Net-a-Porter and Moda Operandi — began discounting in the days leading up to Thanksgiving. Brands including Balenciaga, Tom Ford and Prada were already reduced on Black Friday via their own websites and e-commerce sites alike, according to Edited. Michael Kors was the brand with the most products discounted by over 50 percent by the first week of December. The company did not immediately respond to a query regarding the differences in markdowns.

Brands including Salvatore Ferragamo, The Row, Fendi and Stella McCartney were not marked down until the first week of December, Edited reported. A few brands, including Gucci, remain full price, with products selling out anyway.

Early discounts are “generally not a positive sign,” said Robert Burke, founder and chief executive at Robert Burke Associates. “The retailers would want to sell full prices as long as they could, meaning merchandise is moving well at full price.”

Sometimes, early discounts reflect overall malaise at a retailer and have little to do with individual brands. And other times, the store buyer has simply made a bad call about a specific style. “That is the nature of buying. No one has a crystal ball,” Burke said. “You certainly make some mistakes, but those are generally gaged.”

Labels with good sell-through and limited distribution can take a hard stance on markdowns, negotiating up front when their products are permitted to be discounted during the sales season.

While the ultimate goal is to remain full-price for as long as possible, “What we see happen more often now is that brands are being selective about what products they put on sale,” Burke said. If a piece has sold well, it will be kept at full price. Take, for instance, Balenciaga’s Bazar Python Shopper XL, which is reduced by 50 percent on the brand’s site, while Graffiti and leather shoppers remain at full-price. The brand did not immediately respond to a query regarding the differences in markdowns.

“Whether there was a poor performance and excess of stock, or it was a great performance, there’s always a discussion with [department stores and] brands about when to break sale,” Burke said. “A retailer can’t be shortsighted in the sense of a quick markdown in the risk the brand may not sell with them going forward.”

The case certainly holds true for brands like Saint Laurent and The Row, which both went on sale on e-commerce site Net-a-Porter on December 1 and 2 respectively, while Prada and Miu Miu were marked down on Thanksgiving, and Fendi, Marni and Balmain followed the subsequent week, according to Edited.

Of course, positive gross sales generated by holiday season discounts don’t necessarily equal high margins. While retailers saw a 36 percent lift year-over-year in the number of items that sold out at first discount on Thanksgiving Day through Cyber Monday, the effects on retailer margins were negative. The average price of luxury products sold in November 2017 was $661, compared to $780 in November 2016.

Is there a sweet spot between Gucci’s non-markdown stance and desperately deep discounting? “The ultimate goal is to remain full price for as long as possible and to train the customer to not buy on sale,” said Burke. “What Gucci is doing is such a bold move, and they’re in a position to do it. They’re a highly desirable brand, and have differentiated.” But for the rest, a combination of scale and approach — that is, being selective with marked-down items and avoiding early sales — is key.