CLOSING DOWN by pengtt


									6   February 5, 2009                                                                                                                                                              

    essential cover story

Is luxury dead?
As the credit crunch continues to sink its teeth into the fashion world,
many are wondering if we have had our fill of excess.

Words Natasha Silva-Jelly                            particularly among a specific subset of aspi-          gins Holdings, which also has the
                                                     rational shoppers.                                     cheaper Scooter and Mollini brands in
LAST week in the rarefied world of Paris haute          ‘‘From what I hear from some of our whole-          its fold, all four Evelyn Miles emporiums
couture, where an outlandish one-off creation        sale accounts, the aspirational customer who           are primed to reopen as more affordable
can fetch a million-dollar price tag, the most       buys the occasional handbag or pair of shoes           Midas stores.
famous – and exquisite – couturiers on the           from our competitors is probably not making               And the experts say more Australian retailers
planet were busy unveiling their latest master-      those purchases now,’’ he says.                        could find themselves in crisis, as is the case in
pieces to the usual crowd of royalty, oil tycoon        And whether or not she will again, especially       Britain where it’s estimated 200 businesses are
wives and mega rich movie stars.                     when she has to return to paying full price, is        in danger of folding each day.                               The author of Deluxe: How Luxury Lost Its
   Back in the real world, however, the future of    anyone’s guess.                                           Anecdotal evidence suggests new labels in             Lustre, Dana Thomas, says: ‘‘The luxury mar-
luxury appears threatened. From every angle.            This is not news to Richard Evans, executive        Melbourne are angling for cheaper leases in              ket has become so soulless and so over-
   In December, Chanel dropped the bomb-             director of the Australian Retail Association.         Flinders Street, while stalwarts in Sydney strug-        saturated, it’s about marketing and profit and
shell that 200 employees were being ‘‘let go’’;         ‘‘Over Christmas, apparel generated                 gle to pay their rents in Paddington.                    the antithesis of everything that’s green.’’
Tiffany’s Christmas holiday sales fell 21 per                                                                                                                            Which goes a way to explaining why we’re
cent; luxury shoe maker Ferragamo cut new                                                                                                                            now questioning everything around us, says
store openings by 50 per cent; and Louis Vuit-       Wealthy shoppers in New York and London are requesting                                                          Thomas, ‘‘like logo monogrammed handbags
ton cancelled a new flagship store in Tokyo –                                                                                                                        by the dozen, bottles of perfume and sun-
usually one of its top markets.                        plain paper bags to disguise their Prada purchases.                                                           glasses with someone else’s name on it’’.
   At the same time Richemont, the world’s                                                                                                                               According to global style barometer Wom-
second biggest luxury goods group – owners of                                                                                                                        en’s Wear Daily, such sentiment was on display
Cartier, Vacheron and Montblanc – reported           $2.59 billion but that has been driven                             Others have already fallen to the cre-       at a luxury briefing conference in London
sales were down by 12 per cent in the crucial        by sales and there’s no denying this                             dit crunch. Australian luxury shirting         recently, where former Morgan Stanley Luxury
last quarter of 2008.                                industry has been hard hit,’’ he says.                            company Herringbone went into                 analyst Claire Kent was quoted as stating: ‘‘An
   And it’s not just the fashion sector that’s       ‘‘We first saw it drop off in January                             receivership in December and the Silk         ‘it’ handbag will become an embarrassment –
hurting. Antiques and art dealers are reporting      last year and in June-July it was at its                          Shop in Sydney is closing its doors           a clear sign that you don’t have your own view
sales down between 20 and 35 per cent; sales         lowest point since 1992.’’                                       permanently next week after nearly             of fashion.’’ (Which is great news for those who
of prestige Bentley cars are down 25.2 per cent,        Admitting that we’ve had ‘‘10 years                          three decades in business.                      having been squirrelling away their pennies for
while Porsche (16.1 per cent) and Mercedes           of economic sunshine’’, Evans says it’s                         Despite swathing prime ministers’ wives         years in the hope of one day owning a Hermes
(8.4 per cent) are not too far behind.               the established brands which have lived                     and Brunei princesses in fine fabrics, the          Birkin bag – which, since you ask, can set you
   Online auctions are one of the few benefici-      through a downturn that will weather                        founder of the Silk Shop in Sydney, Herbert         back $50,000 and upwards.)
aries reporting an increase in business due to       the storm.                                                  Cocks, has opted to bring his retirement                There are already reports that wealthy shop-
the sales of repossessed items such as jet skis,        In Australia, the statistics speak                        forward a few years after realising he could       pers in New York and London are requesting
boats and jewellery and wine collections.            for themselves: 54 per cent of us                            no longer compete in a market where                plain paper bags to disguise their Prada pur-
   But when it comes to high-end style, one          believe the economy is on a                                   women want fast fashion at budget prices.         chases, or shopping online for anonymity.
need only look to the slash and burn January         slippery slope to nowhere                                            ‘‘Years ago you could not buy a                The bottom line? In the current climate
sales season here and in the fashion epicentres      and things will get worse                                          beaded silk top, you’d have to have it       being too flashy or too excessive is definitely no
of London, Paris and New York to see the             before they get better,                                             made,’’ he says. ‘‘Nowadays you can         longer de rigeur. Clearly, we’ve all developed a
panic. At Saks on New York’s swanky Fifth            while two-thirds admit                                                pick one up for $100 that’s been          healthy bout of ‘‘luxury fatigue’’.
Avenue (incidentally Saks has reported an 81         they have cut spending on                                              made in India.’’                             Coupled with this weariness is a new atti-
per cent drop in share value), consumers were        luxury goods altogether.                                                  Consumer analysts say this has        tude to consumerism, according to the execu-
spied nosing like truffle hounds through racks       Evans says luxury items such as                                         certainly contributed to the            tive director of research group the Nielsen
of designer clothes with prices that would           designer shoes are usually the first                                    downfall of luxury, as much as          Company, Gillian O’Sullivan.
make your head spin. Could those columnar            to topple.                                                         the spiralling global economy.                   ‘‘We believe that people are re-evaluating
Valentino evening dresses in signature red              Case in point, the recent closure                                The new era of fast fashion – where a       the way they shop and are less inclined to shop
really be 70 per cent off the original price of      of Evelyn Miles stores nationally.                                plethora of chain stores have become          on autopilot,’’ she says, describing the changes
$2950? Was one reading right the $129 tag on         A favourite haunt of well-heeled                                   masters in the art of catwalk-inspired       as evidence of the ‘‘most significant shift in
that black satin skirt from Comme des                fashionistas for a decade, Evelyn                                  creations at lightning speed and             consumer mindset in 15 years’’.
Garcons?                                             Miles was the place to go to get a                                 minus the expensive swing tag –                  To cope with the shift, many companies, like
   The chief executive of established luxury         Carrie Bradshaw-style fix from the                                 along with a consumer shift towards          Figgins, are restructuring and looking at ways
New York brand Oscar de la Renta, Alex Bolen,        likes of Jimmy Choo, Christian                                     more eco-friendly choices, have              to recession-proof their business.
admits the recession in the US is taking its toll,   Louboutin and Manolo. Owned by Fig-                                impacted on the allure of luxe.                  Andrew Michael, the managing director of

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  The Sydney Morning Herald                                                                                                                       February 5, 2009   7

      Big Apple crumbles
      With the US economy officially in recession, wealthy style-
     conscious New Yorkers — those whose fortunes has
    dropped from $US40 million to, say, $US20 million, have
   developed what experts have dubbed the Latte Mentality.
    To ensure they still get to drape themselves in the latest
 designer clothing, they have apparently cut back on Starbucks
lattes (this explains all the closures), manicures, blow waves
and botox.
  An elite few — who are so rich they are not even bothered by
the financial meltdown — are managing to keep some top high-
end brands bulletproof.
  Bucking all trends, the high-end handbag and accessories
brand, Tod’s (fronted by Gwyneth Paltrow), declared a 7.7 per
cent increase in sales, while Burberry has announced plans to
open 50 accessory concept stores throughout Japan.

the Apparel Group, which owns Australian
brands Sportscraft and Saba, says business is
not a disaster.
   ‘‘I’m a bit over hearing about the economic
meltdown,’’ he says. ‘‘We definitely felt the
benefits of the Government’s pre-Christmas
stimulus package, though it would be silly to
say nothing has changed.
   ‘‘Like all people in the fashion business, we
are not going to put our head in the sand but
we will be risk adverse because future
markdowns can kill you.’’
   The real test will be in the coming weeks as
new season stock starts arriving in stores and
the international collections kick off in New
York – minus the appearance of any Australian
designers this year and in what insiders say will
be a pared-down event.
   It’s shaping to be the same story in Australia.
While David Jones and Myer would not com-
ment on the state of the holiday sales season, it
has not been lost on the fashion industry that
their annual autumn-winter collection laun-
ches will not be the glitzy, no-expense spared
events of previous years.
   Instead of a celebrity-fuelled champagne
evening soiree, David Jones is set to hold a low-
key morning event next week, while rival Myer
has downgraded its Melbourne bash from the
usual 550 glitterati to 300 guests, choosing
instead to invest funds in store promotions and
clever ways to get people spending.
   But you can certainly never underestimate
the ability of fashion powerhouses to reinvent
themselves in a way that will be appealing to
the masses.
   ‘‘This whole crisis is like a big spring house-
cleaning,’’ says Chanel’s Karl Lagerfeld of the
global upheaval. ‘‘There is no creative evol-
ution if you don’t have dramatic moments like
this. Bling is over. Red carpetry covered with
rhinestones is out. I call it the ‘new modesty’.’’
   Long may it reign.

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