Agenda-setting intelligence, analysis and advice for the global fashion community.
Hello BoF Professionals, welcome to our latest members-only briefing: The Week Ahead. Think of it as your "cheat sheet" to what everyone will be talking about on Monday.
THE CHEAT SHEET
Ralph Lauren Says a Painful Goodbye to Discounters
Ralph Lauren's 50th anniversary celebration included a touring installation of archival photos and videos | Source: Instagram/@ralphlauren
- Three American fashion companies report earnings this week: Ralph Lauren (Tuesday), Capri (Wednesday) and Tapestry (Thursday)
- All three are looking to sell more products at full price, less at T.J. Maxx or other discounters
- Ralph Lauren shares are up 6 percent in the last year. Tapestry is down 15 percent, Capri is down 36 percent
In the second half of 2018, Ralph Lauren took two steps to secure its future: it held an epic 50th anniversary celebration in Central Park and pared back shipments to off-price retailers. Both moves were meant to put a new shine on an old brand, with reduced sales to discounters eventually paying off as wealthier customers, particularly younger ones, came to see the brand as cool enough to pay full price. This week we’ll see if that strategy is paying off. There are promising early signs; Ralph Lauren’s Palace collaboration was well-received, and the brand’s Instagram following jumped from 7.5 million to 9.6 million over the last year, according to Cowen. Capri and Tapestry are taking similar approaches, with mixed results. Michael Kors has the furthest to go, with analysts noting plenty of holiday promotions even and predicting another drop in same-store sales.
The Bottom Line: Breaking the discount habit is a good start, but American fashion companies with luxury aspirations need to be equally disciplined at managing their brands' image, an arena where European players excel.
New York Fashion Week Searches for Its Story
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Protest of government shutdown by furloughed federal workers, contractors and their supporters | Source: Shutterstock
- NYFW begins February 5 with Tom Ford, and runs through February 13 with Michael Kors and Marc Jacobs
- Calvin Klein, Rodarte and Pyer Moss are not on the schedule this season
- Big fashion shows are increasingly concentrated in Paris; many rising American brands are in streetwear or direct-to-consumer categories that bypass fashion weeks altogether
There's a palpable lack of buzz about the Autumn/Winter 2019 shows in New York. Anecdotally, some international editors and buyers are sitting this one out or paying shorter visit than usual. That likely reflects Raf Simons' departure from Calvin Klein, as American fashion lacks the deep bench of internationally renowned designers who could serve as alternative tentpoles for the week. NYFW isn't without its storylines, from Ralph Lauren's follow-up to September's 50th anniversary extravaganza amid a corporate turnaround to Gabriela Hearst's first show since receiving investment from LVMH. Size-inclusive luxury site 11 Honoré holds its first runway show, and IMG and Harlem’s Fashion Row are celebrating legendary costume designer Ruth E. Carter.
The Bottom Line: This fashion week may best be remembered as the last to be held at Spring Studios, assuming organisers follow through with long-rumoured plans to move into the Shed culture space at Hudson Yards.
Saks Makes Its Case for Brick-and-Mortar Retail
Saks beauty | Source: Courtesy
- Saks is reopening its ground floor this week, part of a $250 million, multi-year renovation
- The new main floor is devoted to handbags; beauty moved up one level last year
- Parent Hudson's Bay Co. reported Saks same-store sales rose 7.3 percent in the third quarter
This is the year that may answer the question: does the department store still matter? Companies are still willing to pour hundreds of millions of dollars into their retail palaces, whether it’s Selfridges' recently completed overhaul or the upcoming opening of Nordstrom’s and Neiman Marcus’ first New York outposts. With much of what department stores sell available online, Saks is leaning into the "experience" of shopping at its flagship. A spinoff of famed Parisian restaurant L'Avenue opened earlier this month and the beauty floor has a "face gym" and resident podcaster. Turning over coveted main floor space to fast-moving, tourist-enticing handbags is riskier than it looks, with global sales of the accessory slowing and not all of the space's former occupants are happy about vacating.
The Bottom Line: Replicating the flagship's new formula may prove tricky. Indeed, earlier this month Hudson's Bay closed a Saks women's store in lower Manhattan as well as sister chain Lord & Taylor's Midtown flagship.
COMMENT OF THE WEEK
This graphic circulated the web | Source: Twitter
"For brands to succeed, they need to attach themselves to an emotion that consumers can buy in buying their clothes. The older fashion brands, like the ones all pictured above, are going to have to figure out what is the higher concept and emotion that they express in order to survive. As of now, they're riding on inherited structure of quality and that alone." -Matthew, commenting on "The Revolution Will Not Be Serifised: Why Every Luxury Brand's Logo Looks the Same"
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SUNDAY READING
Professional Exclusives You May Have Missed:
- Moncler says its "Genius" strategy was... really smart.
- Luxury players get Chinese New Year jitters.
- How to build a beauty brand with just one product.
- Why some brands survive bankruptcy, and others don't.
- Versace's new owner plans to build America's LVMH.
The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to brian.baskin@businessoffashion.com.
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