Luxury World: The Past, Present and Future of Luxury Brands Read online

  LUXURY

  WORLD

  The past, present and future of luxury brands

  MARK TUNGATE

  Publisher’s note

  Every possible effort has been made to ensure that the information contained in this book is accurate at the time of going to press, and the publishers and authors cannot accept responsibility for any errors or omissions, however caused. No responsibility for loss or damage occasioned to any person acting, or refraining from action, as a result of the material in this publication can be accepted by the editor, the publisher or any of the authors.

  First published in Great Britain and the United States in 2009 by Kogan Page Limited

  Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the publishers, or in the case of reprographic reproduction in accordance with the terms and licences issued by the CLA. Enquiries concerning reproduction outside these terms should be sent to the publishers at the undermentioned addresses:

  120 Pentonville Road

  525 South 4th Street, #241

  London N1 9JN

  Philadelphia PA 19147

  United Kingdom

  USA

  www.koganpage.com

  © Mark Tungate, 2009

  The right of Mark Tungate to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988.

  ISBN 978 0 7494 5263 6

  E-ISBN 978 0 7494 5856 0

  * * *

  British Library Cataloguing-in-Publication Data

  A CIP record for this book is available from the British Library.

  * * *

  Library of Congress Cataloging-in-Publication Data

  Tungate, Mark, 1967–

  Luxury world: the past, present and future of luxury brands / Mark Tungate.

  p. cm.

  Includes bibliographical references and index.

  ISBN 978-0-7494-5263-6

  1. Luxury goods industry. 2. Brand name products. 3. Luxuries–History. I. Title.

  HD9999.L852T86 2009

  338.4′7–dc22

  2009027020

  * * *

  Typeset by JS Typesetting Ltd, Porthcawl, Mid Glamorgan

  Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall

  eBook by Graphicraft Limited, Hong Kong

  For Géraldine.

  Or perhaps I should say, for

  Madame Géraldine Dormoy-Tungate.

  It was a very good year.

  Contents

  * * *

  Acknowledgements

  Introduction: The evolution of luxury

  1 The dream weavers

  The road to ready-to-wear

  The YSL legacy

  The future of couture

  2 The last artisans

  The other side of Florence

  The shoemaker’s apprentice

  3 Romancing the stones

  Branding Antwerp

  Clarity and conflict

  Diamonds by design

  A tale of two cities

  4 Watching the watchmakers

  Selling time

  5 Auto attraction

  The Bentley Boys

  Marketing to the ‘autocracy’

  6 Fractional high-flyers

  A slice of the good life

  Jets for less

  7 Super yachts

  A passion for the sea

  How to show boats

  8 Haute property

  The business of villas

  9 Deluxe nomads

  Monte Carlo: the brand

  Hotel world

  Luxury travel services

  10 Art brands

  Branded collectors

  Branded artists

  Galleries, auctions and fairs

  The sale of the century

  11 Upscale retail

  Serving VIP customers

  Springtime for Printemps

  12 Digital luxury

  Luxe meets web: a hesitant romance

  The Vuitton case

  13 By royal appointment

  Royal warrants worldwide

  Fabergé: jeweller to the tsars

  14 In champagne country

  A name to reckon with

  Gold beneath the street

  Kings, tsars and rap stars

  Champagne bubbles over

  15 The wines of paradise

  Vintage branding

  The reign of terroir

  16 The chef

  A brand named Alain Ducasse

  17 Well-being

  Spas: The final frontier

  Rehab

  18 The knowledge economy

  Education brands

  19 The gift of time

  Your wish is their command

  20 Sustainable luxury

  Slow fashion

  Slow living

  Conclusion: The rehabilitation of luxury

  Treasuring

  Social luxury

  Analogue snobbery

  Disruption from Asia

  Guilt-free luxury

  References

  Index

  Acknowledgements

  * * *

  The great luxury of working on a project like this is that you aren’t on your own – in fact, you are obliged to get in touch with a wide variety of advisors and facilitators. On that score, I’d particularly like to thank Francesca Barba, who not only looked after me in Monaco, but also introduced me to several people who specialize in serving the very wealthy. A warm word of thanks, too, to Paul Coleman, whose excellent contacts led to two valuable interviews. Similarly, the persistence of Alexandre Wehrlin at Piaget made my visit to that company possible. Evelyne Resnick uncorked her extensive knowledge of wine. Genevieve Flaven of S-Vision was on hand, as ever, to provide advice and inspiration. I also owe a debt of gratitude to Jon Finch at Kogan Page, who remained patient in the face of missed deadlines. And of course none of it would be worth doing without Géraldine, whose love and support have a value beyond measure.

  Finally, thanks to all my interviewees. They will find their names in the pages that follow. Here are those who worked behind the scenes: Anais Caietta, Joanna Derain, Iris le Floc’h, Piyatchat Jiemvitayanukul, Alix Leonard-Morgan, Julia Marozzi, Karin de Mulder, Monica Paolazzi, Waike Papke, Emanuelle Perrier, Jimmy Pihet, Carole de Poix, Laetizia Saubesty, Alexia Uri. I wish you all the best of luxe.

  Introduction: The evolution of luxury

  * * *

  ‘I can’t afford to buy cheap things.’

  It’s 10 am on a sunny Sunday morning and for once the Avenue des Champs Elysées is quiet. Normally the distant Arc de Triomphe is obscured by a haze of exhaust fumes rising from two crawling lines of traffic, but today the view up the avenue from the Place de la Concorde is diamond clear. One can almost imagine tumbleweed blowing across the attractively cobbled thoroughfare.

  The avenue is not entirely deserted, however. A motorcade of three large black automobiles makes its stately way to the Louis Vuitton flagship store at the corner of Avenue George V. The cars sigh to a halt outside the emporium, which has been specially opened for the occasion. A uniformed chauffeur emerges and opens the rear door of the middle car. From its cool dark interior emerges a vision in a cerise velour tracksuit. The tiny figure’s neck and wrists are weighed down with gold jewellery. In her arms, she c
radles a chihuahua. The girl is barely 17 years old, and she is a princess from one of the Gulf States.

  The princess is escorted into the store, where a personal shopper is on hand to help her. Although he speaks a handful of languages, his linguistic skills are not required. When the princess sees something she likes, she simply points. By the time she has left the store, she has spent tens of thousands of euros.

  This incident – sketched from life, with only minor embellishments – captures the essence of the luxury industry: an elite brand doing its utmost to provide a personalized service to a high-spending client. For most of us, the world inhabited by the princess is impossibly distant from our daily lives. And yet every year luxury brands spend millions trying to convince us otherwise.

  They’ve been at it for a long time. Certainly since the turn of the last century, when couturiers who made wildly expensive dresses for a narrow market of wealthy women began to diversify in order to boost their incomes. The fashion designer Poiret launched a perfume called Rosine – named after his eldest daughter – in 1911. Chanel No 5 was created in 1921. The house of Worth launched another famous fragrance, Je Reviens, in 1932. These pretty glass bottles were prisms through which everyday consumers could glimpse a life of luxury. Other accessories followed. In the 1970s, Cartier launched a range of affordable trinkets called ‘Les Must’: lighters, pens, watches and key rings, all trafficking the jeweller’s premium values.

  At the beginning of the 21st century, when established luxury brands fell into the hands of giant corporations with profit-hungry shareholders, this courtship of the mass market accelerated and intensified. Sunglasses, sneakers, scarves, belts and billfolds: lower-priced items put luxury tantalizingly within our reach. We found that we could enter the Louis Vuitton store on the Champs Elysées, purchase a relatively affordable gift (say, a US $260 monogrammed passport cover) and be treated with only slightly less deference than the teenage princess. The crystal-encrusted tentacles of luxury descended to caress our souls, and we grasped them.

  This development changed the luxury game. As Michel Chevalier and Gérald Mazzalovo observed in their 2008 book Luxury Brand Management, the traditional definition of a luxury brand was one that was ‘selective and exclusive... almost the only brand in its category, giving it the desirable attributes of being scarce, sophisticated and in good taste’. The scarcity and ‘aristocratic dimension’ of these brands went hand in hand with a lofty price tag, making them inaccessible to most people. But with the democratization of luxury, that definition had evolved. The sophistication remained, but the selectivity was less apparent. Now there were two sorts of luxury: the inaccessible and the mass. The factors that bound them were ‘an additional creative and emotional value for the consumer’ and the promise of quality – which was occasionally fulfilled.

  The rise of accessible luxury stoked a fascination with the sector that generated books, documentaries, magazines and even celebrities. For what was Paris Hilton if not a goddess of accessible luxury, sent down from the paradise of the rich to entertain the masses? The trend also provoked suspicion that the word ‘luxury’ had become devalued. The journalist Dana Thomas argued as much forcefully, in her 2007 book Deluxe: How luxury lost its lustre. ‘The luxury industry... has sacrificed its integrity, undermined its products, tarnished its history and hoodwinked its consumers,’ she wrote. ‘In order to make luxury “accessible”, tycoons have stripped away all that has made it special.’

  ‘Luxury’ had become a synonym for ‘overpriced’ – so-so products sold at huge margins in order to pay for the glitzy marketing that surrounded them. Those who worked in the trade began casting around for alternative terms. Tyler Brûlé, founder of the upmarket magazines Wallpaper and Monocle, offered ‘über-premium’, which he described as ‘a blueprint for the new luxury’. The idea was to take luxury back to its original form, ‘sourcing the rarest raw materials, reducing the number of items made, and [returning to] single-door availability’. Brûlé suggested shutting down chain stores in favour of ‘one amazing space on Madison Avenue’. It didn’t matter if the product was available only in, say, Tokyo: ‘You’re going to have to buy that Japan Airlines flight if you want to purchase’ (‘Über-premium separates the Have Lots from the Have Nots’, The Age, 10 December 2006).

  London department store Selfridges also rejected the L-word when it launched a space devoted to premium products in September 2007, instead christening it The Wonder Room. ‘We wanted a word that conveyed something special, accessible and exciting,’ the store’s creative director, Alannah Weston, told the Financial Times. ‘Luxury seemed dated to me’ (‘What luxury means now’, 7 September 2007).

  The credit crunch and ensuing global financial crisis heralded a new phase. As the economy spiralled into recession, most consumers were forced to cut back on luxuries – accessible or otherwise. But the concept of luxury was too alluring to be banished altogether.

  BEYOND BLING

  While ordinary people curbed their dreams in order to get a handle on reality, luxury brand consultants – a breed that had proliferated with the democratization of the sector – advised their clients to concentrate on the super rich: in other words, the über-premium market. The number of billionaires had risen dramatically in the preceding years, and their individual wealth continued to grow relative to that of the rest of society.

  The media’s fascination with the sector remained undimmed. Indeed, they had an interest in promoting luxury goods. Many newspapers had launched ‘luxury lifestyle’ supplements to mine advertising income from premium brands. The trend arguably began with the Financial Times’ How To Spend It magazine, launched in 1994. More recent additions to the genre include Time Style & Design (2003) the New York Times’ T magazine (2004) and The Wall Street Journal’s WSJ, launched on the very cusp of recession in September 2008. The latter seemed a risky proposition, but luxury advertisers are attractive to publishers precisely because their most expensive products are held to be recession-proof.

  It’s worth noting that, even in their darkest hour, the luxury brands spoke of a ‘slowdown’ rather than a collapse. After all, they had a long way to fall. In 2007, Verdict Research estimated that the global market for luxury goods was worth US $263 billion. Two years later, in the depths of economic gloom, Hermès announced a modest rise in profits. Louis Vuitton parent LVMH said the brand had posted ‘double digit gains’ in Asia – home to almost 40 per cent of the world’s luxury consumers. While the global luxury market slumped, sales in the Middle East and China grew by 2 per cent and 7 per cent respectively. The recession shook the luxury giants, but they comforted themselves with the thought that they were somewhat sheltered from the storm.

  An article in the International Herald Tribune captured the mood of brittle confidence. The fashion designer Karl Lagerfeld said recession was merely a time for ‘moral and physical’ spring cleaning. ‘There is no creative evolution if you don’t have dramatic moments like this,’ he pronounced, adding: ‘Bling is over.’ In the same piece, Frédéric Verbrugghe, director of the food hall at upmarket department store Le Bon Marché, offered a more measured interpretation. He said customers would now look for luxury products that had savoir faire rather than flash (‘In the lap of luxury, Paris squirms’, 15 January 2009).

  This parallels the ‘flight to quality’ theory: given the choice of buying an expensive hand-crafted product that will last or a cheap off-the-rack one that will fall to bits a few months later, the discerning customer takes the former option. As an elegantly dressed man once said to me in a Paris department store, when we had agreed on the doubtful quality of a selection of ties, ‘I can’t afford to buy cheap things.’

  Lack of affordability does not seem to limit our appreciation of luxury. We are tempted to despise those who enjoy sybaritic lifestyles, but somehow it feels like cheap jealousy. In a separate interview – this time with BBC Radio 4’s Today programme – Lagerfeld observed: ‘If you have no dreams... people would ask why t
hey get up in the morning... If you want only things you can afford, it’s boring... It is very ugly to think [things] shouldn’t exist because you cannot buy them’ (2 February 2009).

  Finally, there remains the argument that true luxury is beyond price. ‘Definitions of luxury change according to era, location and who you ask,’ observes Lorenz Bäumer, who designs jewellery for Louis Vuitton. He mentions the Vélib rental bike scheme in Paris, which allows users to borrow a bicycle free of charge, provided they pay a refundable deposit with their credit card. ‘Today, it’s possible to pick up a bicycle anywhere in Paris and cycle through the city, for nothing. That, to me, is a great luxury.’

  The aim of this book is to consider different interpretations of luxury by taking a closer look at a variety of goods and services. What is the history of these brands? How do they communicate with their customers? What, if anything, do they have in common? And how are they weathering these turbulent times?

  THE NECESSITY OF LUXURY

  It may well be that luxury is a basic human need – a way of winning something back against the cruelty of life. The urge appears to have been there from the beginning. In his 1992 book Histoire du Luxe en France, Jean Castarède mentions a 30,000-year-old ivory figurine known as the ‘Venus of Brassenpouy’. He notes that she has braided hair. ‘As bizarre as it might seem, one of the first concerns of man (or woman) was not clothing or protection, but seduction.’ Ornamentation predates clothes and weaponry, he argues.

  Castarède also points out that early man shared another of our basic urges, which is to dream. Dreams and longings provoke not only self-expression through art, but also the impulse ‘to single oneself out through ornamentation, make a mark through monuments, seduce others by acquiring or giving rare objects, and finally to better enjoy life by improving one’s food and surroundings. Voilà le luxe.’

  In other words, man has aspired to better things since he first glimpsed the stars.