Return to “Luxury”

17 06 2009

Throughout the past few years, many luxury companies have followed the model of growth that includes frantic brand-buying sprees and diversification into complementary categories such as interior design and technology.

Based on the conversation among industry leaders that just closed in Monte Carlo at the Financial Times’ Business of Luxury Summit, that very trend is what will be avoided in the future, as luxury companies seek to preserve an image of quality in the eye of the consumer.

The Honeymoon is Over

honeymoon

During the boom years, many luxury companies ventured into secondary product and service endeavors spanning the range from cell phones to hotels, under the strategic principles that 1) these outshoots serve to further their brand image, 2) their reputation of quality could transcend from the product category they had built a name upon, and 3) that “everyone else was doing it” – they didn’t want to be left out of the game.

Pushing the Brand Image

building of armani hotel-dubaiThe idea that these complementary product categories could further the brand image began from the right perspective. After all, what better way to promote a fashion label’s home collection than to furnish an entire hotel under the brand name? When coupled with the managerial expertise of EMAAR Hotels & Resorts, the Armani brand has done just that. However, the brand image of Armani was established in sartorial minimalism and modernity, and while that can be reflected in some ways through the environmental design of a hotel, to convey the brand experience through hospitality is another matter. With tourism lagging in the economic crisis, it is doubtful that Mr. Armani wants the concept of minimalism conveyed through empty hotels.

The real problem emerges when the brand image is exposed to elements outside of the company’s core capabilities. Just as in licensing out fashion products for manufacture or sales to external parties, final control over the product and customer experience is lost. This poses a significant risk.

Transcending Quality

While the concept of co-branding is a nice way to give more consumers access to a brand they love, the benefits are often shortsighted. While the Total-Look trend died in developed markets in the 80s, co-branding projects served as a way to reignite the flame. Fashion companies went beyond the traditional accessories categories typically reserved for leather goods (shoes, bags, belts, etc) and began to venture into tech projects. Although this allowed several die-hard brand enthusiasts to more adequately encompass their life in a brand of choice, it also allowed some brand outsiders to have a “piece of the brand image” without the purchase of more traditional items.

lg prada phoneI have several points on this: for the fashion-cell phone explosion, brands from Prada to Dolce & Gabbana and Armani have played the game, coupling brand imaging in aesthetics with the technological capabilities of LG, Motorola or Samsung, respectively. However, the development process for the Prada cell phone was tedious and expansive, and Prada had to sacrifice some brand imaging points while LG had to sacrifice some cutting-edge technologies to bring the project to fruition. An equal compromise in aesthetic and technological appeal serves neither the fashion brand nor the technology company. The expertise of neither brand could be fully conveyed in the project, driving the perception of quality down. This is what happens when you venture too far from your core capabilities, without enough understanding of the new category.

hermes bugotti veyron-rbOn the other hand, Hermes worked on a limited-edition co-branding project with Bugatti to create the Bugatti Veyron Fbg par Hermes. While Bugatti pumped this high-performance dream car full of the best automotive technology on offer, Hermes stuck to their core capabilities in leather goods and sartorial excellence to outfit the vehicle in the finest interior upholstery and complementary accessories. The resulting product is a $1.5 million car that definitely will not be driven by every brand enthusiast, but it certainly represented the best of both brands! Furthermore, the project achieved greater market exposure for Hermes and Bugatti through a lot of positive press coverage in both the luxury, fashion, automotive and leisure categories.

Playing the Game

For years, the idea that luxury was an easy business to make money from prevailed. Companies entered the sector and shortened product cycles, product categories offered, store locations, and so on in an effort to milk the market for all it was worth. According to Bernard Arnault, “Some investors pushed by the frenzy of doing something were going to invest in almost everything. As luxury was perceived as an industry where you can make money easily, they were pushed to buy brands without knowing how to make them work.”

Tods-ss08.previewAs consumers were hungry for “more, more, more,” the luxury companies were all too happy to provide it, with little consideration for consequences beyond the immediate bottom line. Referring back to brand diversification, CEO and founder of Tod’s Spa Diego Della Valle noted, “Several times I had to fight for our vision against external pressures, which were demanding we did perfumes, or mobile phones. My answer was that it wasn’t our competency. If I want a mobile phone, I want to buy it from Nokia.”

H&MWith market pressures mounting, brands began to churn out an ever-increasing supply of product collections. The highest brands of luxury in fashion found themselves competing on the same playing field of “fast-fashion” powerhouses such as H&M and Zara. You might be thinking, “How did this NOT seem like a problem?!” However, as long as the money was rolling in, shareholders were happy and companies felt little incentive to buck the trend in strategy.

The problem really emerged when the frantic consumer spending cycles ground to a halt after years of proliferation, luxury labels slashed their prices, and core customers were left wondering what they were paying for in the first place.

Saving the Marriage

couple

Just like any relationship on the rocks, luxury companies and their customers have to go back to their core values to re-build the bond that has been broken by years of inconsistency.

At the end of the day, a luxury company should represent solid quality and categorical leadership. The key words here are quality and leadership. When luxury brands diverge from their core capabilities where they exhibit the highest level of expertise, it is a letdown to all brand loyalists. When they chase the market instead of leading it, they let the brand down.

Many of the CEOs speaking at the Financial Times’ Business of Luxury Summit confirmed this attitude, including Berndt Hauptkorn, CEO if the privately held group Labelux. “During this period of growth, there were concepts that were superficial, that didn’t deliver in terms of product quality,” Hauptkorn said, arguing these brands won’t survive the economic downturn unscathed. “There will be a shakeout because there was overcapacity in the market. It will be a market with stronger brands and with a clearer message.”

Preserving Quality

italian footwear craftsmanThe industry has begun to realize that once the economy recovers, customers will place a particular emphasis on values like quality and craftsmanship, but also exclusivity, as well as commitment to social and environmental responsibility. Companies that have remained true to their capabilities and core message throughout the boom years have seen less damage and a faster rebound than others in the recession.

In an effort to protect the intrinsic value of luxury brands, companies and production regions are going back to their most valued resources in production to strengthen intrinsic values in quality. According to Imran Amed, editor of Luxury Society, “In the end, it is the enduring quality and craftsmanship that count the most because this goes right to the heart of the way luxury products are conceived and created. Combined with great design, service and innovation, craftsmanship is what enables us to deliver lasting products that resonate with a new consumer mindset fixated on value.”

While most luxury brands have cut back on retail space, collection sizes, and various departmental employees, for the luxury-savvy brands a focus remains on preserving the original craft of the brand. This includes the protection of craftsmen and artisans that produce their high-quality products, in addition to sustainable practices both environmental and strategic.

1854 louis-vuitton-luggageHaving been through several recessions since he began creating the world’s largest luxury group in 1985, Arnault stated that his key to success includes a solid long-term outlook: a generational business concept, not a 3-5 year plan. This allows a company to move forward with the big picture, and reduces the impulse to act on short-term trends in the market. “It is a natural tendency of companies during a crisis such as the one we are in to cut costs, drop prices, and stop expanding, because it has the most immediate impact on numbers,” he says. “But what we have learned in the many crises we have been through is that this is a mistake, especially when it comes to luxury.”

Mr. Arnault also believes the government investment, reactive companies and a refusal to change course in spite of the current market crisis will help companies and production regions to preserve their capabilities. However, while some long-term-minded companies such as Chanel, Bulgari and Hermès have taken affirmative steps to preserve the dwindling numbers of craftsmen that produce their goods, other companies have stood by while production has been outsourced to unskilled worker regions abroad in the effort to feed the speeding consumer cycles of the boom years. While this labor pool of skilled workers is all but lost in the UK, there are efforts to retain and nurture growth there as well as in France and Italy.

Follow the Leader

evolution

In addition to increasing fashion cycles to pander to the whims of a fast-fashion-oriented market, luxury companies have been tailoring their products and marketing campaigns to lure existing customers.

The very history of luxury illustrates the point that luxury brands and designers provide items for the customer, which are so exciting the customer hadn’t even thought of them. This is what originally made customers line up at the doors of the original artisans and designers- to see something new.

luxury strategyThe recent years of endless market research, managerial consensus and client-centric focus on demand has diluted the interesting aspects of luxury. According to Jean-Noel Kapferer and Vincent Bastien, authors of Luxury Strategy – Break the Rules of Marketing to Build Luxury Brands,  “Luxury brands today are the trailblazers of tomorrow’s taste. Once a consumer segment is identified it is too late to exploit it. …There is no surprise in existing demand. This is why all classic luxury… was created through emotional intuition.”

They go on to say, “As a cultural creator, luxury brands should set their own high standards. Listening to the consumer is the best route to a lack of differentiation, and failure to inspire the dream – the two levers of desire that are the only paths out of the recession in the luxury world.”

While that does not mean companies should ignore the customer altogether (of course not), it does basically state the obvious that luxury players must be leaders in quality and innovation at all times, without submitting to frivolous market demands that might inflate the bottom line temporarily, but in the long run will break the bank and eventually the brand.

However, it should also go without saying that in order to be a leader, luxury brands must appeal to new consumers in Gen X & Y as Baby Boomers retire. In order to do that, they must earn their trust through demonstrated quality, sustainability and a legitimate brand story.  And where will the new market hear that story? Online.

gen x online

More Info

Financial Times’ Business of Luxury Report 2009

http://www.ft.com/reports/business-luxury-2009

Luxury Society Issue 5: Return to the Craft

http://beta.luxurysociety.com/articles/a-return-to-craft

Luxury Execs Emphasize Exclusivity and New Focus

Luxury Execs Emphasize Exclusivity and New Focus – WWD.com

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The Italian System for Fashion

2 06 2009

1950s ferdinandi

Italian Fashion Industry – Cycles of Development

Though some could argue otherwise, according to the experts in Italy, there are 4 primary phases or cycles of Italian fashion industry development.

  1. 1950s-60s:  Industrial production systems are developed after WW2
  2. 1960s-70s:  Economic and social change emerges, apparel system reacts
  3. 1980s:  Democratization of fashion and surge of “Made in Italy” around the world
  4. 1990s:  Brand concentration, financing revisions and mergers & acquisitions

The 1st Cycle: 1950s-60s

Prior to industrial developments in Italy, which occurred only after WW2, 90% of Italians were rurally employed. The elite acquired their luxury products from France, and Italian goods were considered “poor”. Most higher fashion was reserved for men, as women did not have as many black tie events to dress for.

At the time, the fashion industry in Italy was largely non-existent. With the high-end consumers buying their fashions from Paris, or having copies made by local tailors, some industrialists noticed a gap in the market supply, which called for functional, durable, high quality garments. To begin to meet this demand,  Italian company Gruppo Finaziario Tessile (GFT) took the first initiative to measure a wide sample of the Italian population to create national sizing system.

Italian Apparel Finds a Niche

giorgini's la sala bianca show of italian designs for the us market, 1951In 1951, an Italian importer for American goods, named Gian Battista Giorgini, realized the the US market was also ready for something new and different from that offered by France. They had mass-produced garments, the elite could buy haute couture from Paris, and yet there was nothing in between. Giorgini used his US contacts for market research and development, and began to organize Italian designers, whom he encouraged to abandon their French knock-offs and pursue an affordable Italian style. With new production technologies from the States being imported into Italy as part of the recovery plan, and a large skilled workforce of women to operate the machinery, GFT and other Italian manufacturing firms such as Marzotto and Lebole developed the production end of the industry. As many of top producers had a background in men’s tailoring, there was still a strong industrial concentration in menswear, but the mass-production capabilities in the States would find their way into Italian womenswear production soon enough.

You could summarize that the beginnings of the Italian Fashion Industry were characterized by:

  • Large manufacturing facilities
  • Economies of scale (primarily the US market)
  • Strong specialization

The 2nd Cycle: 1960s-70s

girl_trioIn most cultures, up until this point, children and adolescents had dressed as their parents dressed. In the States and the UK, pop culture shifted in the wake of the Baby Boom as young people struggled to develop a new identity and used fashion as a means to demonstrate their separation from the values of their parents’ generation. (England was becoming a hub for the new youth culture, inspiring fashion and trends around the world, in addition to American hippies.) Women had entered the workforce in increasing number, and no longer wanted to dress as housewives. Further, as there were fewer and fewer occasions for dressing up, people began to seek more informal clothing. Trends had begun to be driven by market needs, as opposed to the stylistic direction set in Paris.

Big Business Gets Smaller

woolworths union strike 1970At the same time, there were many social and union conflicts that helped create increased labor costs in developed countries, resulting in a surge of apparel imports from developing countries. The combination of these elements together with the oil crisis of 1974 and the Italian economic crisis of 1975 caused the big manufacturers to lose their hold on the mass market. There was no longer a one-size-fits-all model for fashion (and that was only the beginning, as we now know!).

As the big manufacturers in the States and elsewhere had maintained large scale standardized production even after consumer demand had decreased and diversified, the labor costs in Italy were falling and new small/medium-sized production companies were forming. Manufacturers began to outsource production in Italy, and even France began to rely heavily on the cheap yet skilled Italian labor pool for their pret-á-porter lines.

Designers Respond to a Changed Environment

1979 versace for genny adA new generation of designers emerged in Italy, capable of working with industry partners to produce collections that were fashionable and more affordable than their French counterparts. (Consider Armani & Cerruti, Versace & Genny, or Soprani/MaxMara.) These designers had relationships with market-savvy business leaders, who ensured that the Italian form of fashion would meet the demand of developed markets. The Italian Fashion Week cycle, following on the heels of Paris, became increasingly popular to buyers and press who saw the potential of Italian fashion’s middle ground between haute couture (France) and mass fashion (the US).

In summary, this cycle of development in the industry of Italian fashion can be characterized by:

  • New consumer values and lifestyles (youth, rebellion, rock, women in business, etc)
  • Market segmentation (no longer one-size-fits-all)
  • Increased demand for informal wear
  • The decrease of influence from Paris and haute couture
  • The increase of influence from London and the youth culture

The 3rd Cycle: 1980s

DynastyCast-Season6-1985-1986This was the decade where the world found Italy.

By the 1980s, Italy had little competition from other developed countries for quality textile production. However, developed markets were building a habit a rampant consumerism, with a renewed interest in fashion. The Italian style had gradually been gaining consensus, especially in the States, which had become the largest consumer market. Meanwhile, Italian industry was looking for new formulas to stay (or get) on top of the fashion game.

Total Look, Branding & Hollywood

A new type of relationship began to form between industry and the designers, which was more a partnership that a contractual business relationship. With the craze for “Total Look” taking the fashion scene by storm, designers began to throw their labels onto every conceivable product in their quest for notoriety and brand building.

Internationalization, mass media and the help of Hollywood brought Italian industry onto the main markets. For example, Armani exclusively clothed actor Richard Gere for his role in American Gigalo, bringing the brand notoriety throughout the States and abroad. You can see an early example of product placement with Armani’s menswear collection in the closet scene of American Gigalo, in the clip below:

Love for Licensing

Licensing agreements had become the method of choice for labels to expand their designer names into new product categories (including second and third lines, kids wear, athletic wear, homewear, eyewear, fragrances, etc.). The cooperation between industrial companies and designers, mainly based on these licensing agreements, was the key success factor to growth for the Italian fashion industry.

Fashion companies moved from product-specialization to develop multi-product capabilities through their licensees. In addition to manufacturing, licensees were used to handle distribution and retail activities for the licensor brands, while the brands in turn provided the design concept, the brand name and image.

Throughout the 80s, much of the Italian fashion system depended on licensing agreements for growth and for specialized production (after all, what does a ready-to-wear designer know about producing furniture or fragrances if he can’t rely on experience professionals to help him?). However, as the brands amassed capital, and learned from their licensees about best (and worst) practices, it became clear that licensing could be equally beneficial and detrimental.

Brands like Gucci were widely diluted through numerous licensees, all whom had a different idea of what the brand represented and how their designs should appear and retail. On the verge of bankruptcy, they needed to build capital and buy back their licenses, in order to impose a universal brand strategy throughout their comapnies.

Within the decade, four different groups of players on the Italian fashion scene had clearly emerged. They were:

  1. Industrial companies (GFT, Marzotto, Miroglio)
  2. Small to medium-sized industrial companies with product orientation (Max Mara, Zegna, Genny, Aeffe, Ittierre)
  3. Designer/entrepreneurs who both design and produce (Missoni, Mila Shon, Mario Valentino)
  4. Pure designers who take designs to production firms (Versace, Armani, Ferré, Moschino, Krizia)

By the end of the 1980s, Italian designers had entered into a new system of growth:

  • Most remained family industries (Missoni, Prada, Versace, etc)
  • Designers maintained direct control over their “first lines” (the highest line in their brand’s “food chain”  –   typically ready-to-wear)
  • Brands developed second lines and brand extension, typically under general artistic direction of the original designer and through licensing agreements
  • Brands developed direct control of distribution, taken back from licensees
  • Focus was kept on retail, to create a unified harmony across a branded retail outlets

You could therefore conclude that the Italian model for the fashion industry, at this point, consisted of designers sketching models for the primary line, with manufacturing and additional product development farmed out to licensees, with the finished products then brought back under internal control for distribution and sales. Just ten years prior, licensees had handled everything but the initial design, brand name and image direction for the Italian brands.

Unlike France, Italy typically relied on lower-end textiles – not fragrances and accessories – to make the big money.

The 4th Cycle: 1990s

Versace w supermodels 1991 guardianTowards the end of the 20th Century, the fashion system was undergoing many changes. The fashion system had become increasingly global in supply and demand, affecting Italian, French and American firms together.

versace-couture 1994New players were entering the field; for example, the luxury conglomerates. New market segments were being created as well, including the bridge segment, which spoke to a market beneath ready-to-wear but above mass fashion. Entry barriers into the industry had become increasingly higher, with great investments required in marketing (fashion show and advertising extravaganzas, parties, supermodels, etc) and retail. Retail itself was undergoing change through the introduction of the lifestyle concept, pioneered by American designer Ralph Lauren.

Fronting the Tab

In order to meet the new financing needs of the fashion system, many companies opened on the stock exchange. With this move came a market rush by the luxury conglomerates to acquire and reposition the Italian brands with marketable heritage. Much like the French houses before them, Italian brands were gradually having to transfer creative direction from the original designers onto new creatives.

As for the four groups of players on the Italian fashion scene, the 90s saw the following changes:

  1. Industrial companies: begin to acquire brands – typically from past licensors, launch their own brands based on their acquired capabilities, or develop retail strategies (Aeffe/Moschino, GFT/Valentino, Exté, Max Mara, Zegna)
  2. Designer/entrepreneurs: control production and distribution processes with the purchase of production facilities, utilize very few licenses (Versace, Dolce & Gabbana, Armani)
  3. Multibrand Groups: conglomerates acquire brands and designer companies (LVMH, Gucci Group, Prada)
  4. Pure designers: sell their companies to industrial or multibrand groups (Jil Sander, Valentino)

In “Short”

The Italian fashion industry really took off after WW2 with the help of technologies provided as part of the Recovery Plan, the entrepreneurship of business and manufacturing leaders who saw an opportunity, a newly-urbanized population of skilled textile workers, and a burgeoning demand for quality apparel and ready-to-wear.

The first phase of industrial fashion in Italy was made by a few concentrated, large-scale production facilities. As the economy turned south and many new market segments emerged, big business lacked the flexibility to diversify their business model, and small to medium-sized manufacturing companies took the lead.

Designers and their business partners (typically family) recognized the changing market as an opportunity, and developed partnerships with manufacturers who had once contracted work to them. Under this model, the designer became responsible only for the initial designs of his collection, while his business partners managed the brand and image, and licensees took care of the rest – from manufacturing through distribution and retail.

By the end of the 1980s, many brands had gained the capital and the knowledge base to buy back their licenses in specific product categories, as well as their distribution and retail systems. Some were able to purchase their own manufacturing facilities. The typical model now had the design company controlling the initial designs of the highest line and whatever licenses they had brought in-house, as well as their distribution and retail. Manufacturing was still typically licensed out.

During the final years of the 20th Century, the costs of running a fashion business had exploded with a need for mass marketing. Many companies went on the stock exchange to build capital investment. While some brands took control back from their licensees, others were acquired by luxury conglomerates. Some manufacturing leaders developed their own lines or acquired brands they had once licensed production rights from.





Dior & LVMH: The French Business Model for Fashion & Luxury

30 05 2009

Christian Dior (1905-1957) was born in Normandy, France, and in his short 52 years managed to revolutionize the business model for the fashion industry. Years later, his company would become a key holding of Bernard Arnault’s LVMH, the conglomerate that revolutionized the business model for luxury.

There are many available histories of Dior himself online, so let’s dive into the business side of things.

The Brand’s Origins

As many are well aware, Dior became famous with the New Look after WW2, and was integral to bringing French fashion back to the forefront after the occupation years.

Dior was the first to exploit his name with licensing agreements, which at the time tailored products to local markets and offered unique price per value products at varying price ranges. (It is very difficult to do this today- a company must maintain consistency across all markets because information is so easily exchanged over the internet and worldwide travel. People don’t like to see plastic pens being offered by their favorite luxury brands in certain markets when they are paying the big bucks for couture by the same brand at home. If products are to be specialized for separate markets, they must remain within the same quality and price range as all products offered elsewhere.)

new-look-diorDior was the first to give a name to each collection, alluding to future generations of designers, both high and low end, who name their collections based on an inspirational theme. He used garment models and made spectacular fashion shows, which are of course used by everyone today (we’ll see how that keeps up as carbon footprints and insane exchange rates mixed with a faltering economy effect travel plans).

Many copies of the New Look and subsequent collections were made around the world, proving that one man could influence the style of the world while isolated in his studio. This is no longer possible today.

From Single Brand to Luxury Conglomerate

LVMH CEO Bernard ArnaultBy 1984, as a result of diminished stylistic value after the death of the brand’s namesake and a brand image spread thin through various uncontrolled licensing agreements, Dior was on the verge of bankruptcy. Bernard Arnault took a major stake in the textile group Boussac Saint Fréres, to whom Dior belonged, and converted it into the Christian Dior S.A. Holding.  Just 5 years later, in 1989, the holding became a major shareholder of LVMH at 42%. Arnault had become the president and chairman of the largest luxury group in the world in a number of years. Christian Dior was divided into the CD Couture Management Group and the LVMH management group for a brand turnaround.

Reviving Dior

ferre for dior 1991-2Because the French luxury brands are typically older than those borne of Italy, the UK and the US, they have already faced the brand transition that must occur if a brand is to continue after the death or retirement of the founder (“founder’s dilemma”). We have yet to see examples of this in the US market, with a few notable exceptions, but in Italy, two prominent houses are currently undergoing the transition this year: Valentino and Gianfranco Ferré.

dior by john galiano 1997It was, in fact, Gianfranco Ferré who was placed as the Art Director of Dior in 1986, however, he did very little to move the brand forward. After understanding that fashion needs a wow-factor, the company wisely placed wild boy John Galliano at the helm of Dior in 1996. Galliano had a way of making headlines, and advanced through the company as quickly as he helped bring Dior back to the forefront of the fashion scene. He began as the Head Designer of women’s haute couture and ready-to-wear collections, and became the Art Director for all Dior women’s brands by 1999.

John GallianoGalliano created a buzz through his design of outrageous characters on the runway, making his fashion shows a mix of art exhibit and theater. However, in addition to revamping the look of the brand through his couture creations, he also focused on beautiful ready-to-wear and accessories and cosmetics (the real money makers today). This is where the real success of the brand’s renewal came from.

CD fragrancesAs you can see by looking at the CD and LVMH websites, a great deal of the marketing budgets are set aside for fragrances (64%) and only a small portion for fashion (6%). Today’s Christian Dior is therefore not so much a house of haute couture as it is a part of the luxury cosmetics industry. However, without the built-in marketing genius of Galliano and his couture shows, all other lines and products under the brand would be devalued. He is needed to sell the dream.

Conglomerates: The Modern French Model for Luxury

Today the French model gives complete freedom to designers in high fashion only. In the end, even the wildest designer must be able to design the bag of the season and design ready-to-wear that is in fact wearable. This is often done in collaboration with marketing and merchandising teams.

lvmhLuxury conglomerates such as LVMH allow line and brand extension, as well as brand-buying to serve various levels of clients and all the needs of the high-end clients. LVMH carefully manages brands to have the correct balance of cash cows and strugglers. They also work to ensure that there is limited collaboration between brands within the holding to limit the dilution of brand identities (this includes dedicated production staff per brand, often within the same facility). When buying a tired old brand, the holding company must also decide if it’s worth the time and effort needed to revamp the brand.

A Sustainable Element

edun logoThe most recent brand acquisition of LVMH is the ethical fashion label Edun, brainchild of U2’s Bono and his wife, Ali Hewson (LVMH took a minority stake, estimated at 45%).  This brand has been at the forefront of sustainable fashion and advocacy, and has implemented guerrilla marketing tactics and pop-up stores recently. It also provides a great compliment to the LVMH portfolio, at a time when consumers want their purchases to mean something beyond frivolity. Caring is the new black, and philanthropy is beginning to represent status at an increasing rate. One would hope that the brand’s acquisition will not hamper their youthful marketing or ethical initiatives. There is every reason to believe that the brand will be nurtured to continue in this way, in spite of the lackluster economy.

At this month’s annual shareholders’ meeting, Chairman Arnault announced that first-quarter revenues gained 0.4 percent to 4.02 billion euros, or $5.26 billion, and added “April continues this trend, with a very slight improvement” [WWD] Louis Vuitton continues to be the group’s biggest cash cow, continuing to grow with their no-sale-ever policy. The profits from the booming brands are used to further nurture the newcomers, and those brands whom might be struggling.

For me personally, coming from a background in sustainability, it is inspiring to see this recent development within LVMH. The idea that the primary example of French luxury, the powerhouse of LVMH, has made a commitment to advance Edun also suggests that the holding will create synergies between the ethical brand and it’s other holdings. Perhaps the future of luxury may be a sustainable one, after all.

By the way, the LVMH site has included some information on the main page about CSR activities the holding participates in.

A word on digital marketing (because I must): the LVMH site also hosts an online magazine, which is a nice start, but it proves *visually non-engaging* at best. Keep working, guys!