Sunday, August 24, 2008

Luxeletter - May edition

INDIA NEWS


India will soon wear Prada
Its IPO plans may have been delayed yet again, but that hasn’t stopped the Prada Group from planning an entry into the Indian market. Thanks to the current boom in the country’s luxury sector, Sebastian Suhl, CEO, Prada , Asia Pacific has said that there’s tremendous potential for the brand in the subcontinent. “We’re continuing our search for the right opportunity to launch our brands in the market. India is a longer-term project compared to China—development comes at a slower pace,” Suhl has said to WWD recently.


Couture eye candy
The €300-million French couture brand Guy Laroche too is eyeing a piece of the Indian luxury pie. The brand is currently seeking Indian partners for commercial retail of its women’s ready-to-wear line, and also manufacturing and distribution licensees for products sold under the Guy Laroche brand, including leather goods, shoes, belts and ties. The company has plans to open standalone boutiques in major malls and is also looking at creating shop-in-shops in department stores, CEO Hendrik Penndorf has said.


'Phone'y tunes
Taking a cue from Prada and Armani, Tag Heuer too is going the brand extension way. A division of the LVMH luxury goods empire, the brand is all set to launch luxury mobile phones in the Indian market. Positioned at the top end of the spectrum, the phone will come at a hefty price tag of €3,500 or $5,500 (Rs 2,21,000), just a few thousands short of Vertu’s cheapest luxury phone. What’s more, LVMH has recently announced plans to invest over a billion rupees in India over the next three years, increasing the number of Tag Heuer boutiques from 12 to 30 by 2010.


Emaar plans Armani Residences in India
While DLF has firmed up plans of introducing Giorgio Armani to the Indian luxe lover, the Dubai-based Emaar Properties is planning to launch private residences, designed by Armani himself, to India. A spokesperson for Emaar Properties has admitted evaluating the possibility of introducing Armani Residences in India, with the project possibly being developed by its Indian JV, Emaar MGF Land Limited. Recently, Emaar unveiled 144 Armani Residences at its iconic Burj Dubai development, predicted to be the tallest man-made structure in the world.

India: Asia’s goldmine?
According to The Global Emerging Markets Survey report prepared by the London-headquartered real estate services firm C.B. Richard Ellis (CBRE), 27 per cent of the 300 international retailers surveyed have opened their first store in India in the last year or are planning to do so soon. The report has cited India as the most sought-after global emerging retail market, with Ukraine, Russia, Malaysia and Turkey rounding up the top five spots. Over the past year, the Indian market has recorded the second fastest growth in the number of high net-worth individuals (a staggering 20.5 per cent), according to the 2007 Asia Pacific Wealth Report.


Ferrari to zoom into India with six stores
Luxury Italian automobile company Ferrari has announced that it will be opening six showrooms in India by 2010. Recently, the brand sent out two 612 Scaglietti super cars to tour the sub-continent’s pot-holed roads to showcase the strength and reliability of the car. Spread across 57 Indian cities over 64 days, about 13,000 kms will be covered during this tour. Ferrari has five models which range between US $276,280 on the lower side to US $363,120 at the upper end.

INTERNATIONAL NEWS


Hublot snapped up by LVMH
Luxury giant LVMH Moët Hennessy Louis Vuitton is all set to acquire Switzerland’s Hublot watch group from founder Carlo Crocco. An LVMH spokesperson has said that Hublot is “a very complementary acquisition” as its high-end positioning, selective distribution, financial performance and growth potential make it a rising star. LVMH already has a successful watch portfolio which includes Tag Heuer, Zenith, Dior Montres and Louis Vuitton.


Million dollar fantasy
For those of you who want to travel in luxury and style, the Leading Hotels of the World is offering a US $1 million trip around the world over 28 days. This includes being housed in the group’s most opulent hotels and resorts, private air transportation and customised luxury experiences throughout. Dubbed ‘Around the World in 80 Ways’, the trip starts in London and follows Phileas Fogg’s journey in the Jules Verne classic, going on to Paris, Dubai, Mumbai, Jaipur, Udaipur, Hong Kong, Tokyo, Honolulu, San Francisco, Chicago, and New York. Highlights include a camel safari in Dubai, dinner at Le Jules Verne restaurant at the Eiffel Tower, and a private visit to the Gem Palace in Jaipur to see the jewels of the maharajas. Ten per cent of the cost of the trip will be donated to the Elton John AIDS Foundation.


Crystal gazing
The famed Parisian crystal house Baccarat has commissioned two designers to create special collections for 2008. New York interior designer Vicente Wolf’s ‘Latitude’ collection includes rippled crystal vases, bowls, and candlesticks, while Stéphanie Balini, who won the Comité Colbert’s Young Designer’s competition with her ‘Damoiselles’ glassware for Baccarat last fall, has produced the 12-piece collection for spring. The distinctive crystal glasses (US $2,500 for a set of four) feature garlands of flowers on clear crystal, scattered with wheel-engraved designs in both black and white.


Keep a watch on this auction
After setting nine world records at a vintage Rolex auction last month (and netting more than US $8.5 million), Antiquorum is readying another auction. This time around, the auction will feature a private collection of more than 700 contemporary watches, with prized timepieces like the F.P. Journe’s Sonnerie Souveraine and Tourbillon Souverain à Remontoir, Vacheron Constantin ‘Saint-Gervais’, Patek Philippe ‘10 Days Tourbillon’ Ref. 5101P and Glashütte Original ‘Julius Assmann - Tourbillon 3’, and Richard Mille “Tourbillon RM003”, to name just a few. The auction will be held at the Richmond Hotel in Geneva on May 10 and 11, with previews in Monaco, Shanghai and Hong Kong.


Claire Danes: New Gucci girl
Gucci has signed Hollywood actress Claire Danes as the new face for its fine jewelry ad campaign. To be shot by Inez van Lamsweerde and Vinoodh Matadin, the ads will appear in magazines worldwide in the fall. “Claire Danes is a modern icon and one of the most interesting young actresses on the international scene. Claire’s sensual, confident beauty and her passionate, independent and strong character embodies today’s Gucci woman,” said Gucci creative director Frida Giannini.

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LUXURIATE

The business of celluloid chic


Ahead of the release of the Sex and the City movie this month, Zahra Khan deconstructs the stylish union between luxury fashion and films



Thanks to the footwear-obsessed ladies of the American TV series Sex and the City, luxury shoe brands Jimmy Choo and Manolo Blahnik became part of the global style lexicon and highly influenced the relationship between pop culture and luxury brands. Next came The Devil Wears Prada, instantly catapulting the Italian brand to superstar status. Now, with luxury brands once again wooing the makers of the upcoming Sex and the City movie (releasing May 21st), industry insiders are hoping this will translate into stupendous sales for the brands associated with the movie.


Louis Vuitton trunks in Karan Johar’s film Kabhi Alvida Na Kehna

Closer home in Bollywood, filmmakers like Karan Johar and Farhan Akhtar have lent a stylish edge to their films, with Indian designers and international luxury labels adding that extra dose of flair to the characters. While Johar has a long-term agreement with Louis Vuitton and Alfred Dunhill (he is also the brand’s Indian spokesperson) to promote the brands in his films and on his talk show Koffee with Karan, the directors of the recently released Race (among other directors like Aditya Chopra and Johar) entrusted Vogue India Fashion Director Anaita Shroff-Adajania with the task of styling all six characters in the movie. And the results couldn’t have been more spectacular.

Says Anaita, “Brands help give life to characters and establish the reality of the world they live in. For example, Saif Ali Khan, who played a suave businessman in Race, carried a Burberry briefcase and wore Marc Jacobs sunglasses; while Bipasha, who played a model, carried the Dior Gaucho bag and wore a Cartier watch. That’s how these characters would dress in real life too, so there’s a lot of attention paid to the smallest of details. Naturally, people in the press were talking about this, increasing the audience’s appetite and awareness for the film and the brands.”

Adds designer Neeta Lulla, who has dressed Aishwarya Rai in most of her films (most recently Jodha Akbar) and has also designed her wardrobe for the Cannes Film Festival, “Fashion and films go hand in hand. Without the right look, the film is incomplete; and without the film creating a style statement, the fashion is incomplete.”

Without a doubt, fashion and films compliment each other. However, there’s more to this stylish union than just photo-ops and huge press interest. Being prominently placed in films means big business for brands and is just as important to the attitude films want to portray. “It’s a very strong association and can lead to profitability for all concerned; while brands gets tremendous mileage, films gets extra marks for being cutting edge and stylish. It makes great business sense for brands to be part of big films because it is the biggest advertising campaign for them and helps them sell at no cost whatsoever. What’s more, they are assured of being projected in the right manner to the discerning public eye,” says Anaita.


A still from Jodha Akbar, with costumes by Neeta Lulla

In India, Bollywood films are the biggest influencers of fashion and star power is very serious business, which is why they are pursued so ardently by Indian and international brands. It’s a win-win situation for everybody. “When Shah Rukh Khan wore DKNY shirts and tees in Dilwale Dulhaniya Le Jayenge, people started relating to the brand and bought it on their trips abroad. Fashion statements like that create the right kind of aspiration for the brand and give it the best possible mileage in terms of reaching out to consumers,” adds Neeta.

However, Anaita cautions, "I think it's a natural connection, but it needs to be real. Brands are more than happy to give you their merchandise, but there has to be a strong connect to the film, the character and the situation. After all, you don’t want to be making the wrong kind of style statement!"

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IN THE SPOTLIGHT

'There's far too much hype and not enough cause for consideration'


Guy Salter of the Walpole Group tells Zahra Khan why luxury brands should be cautious about entering India



Walpole Group, the respected British luxury collective, will be holding its first seminar of the year on May 21 in London, with the subject du jour being ‘East… Or Bust’, concentrating on the main markets for luxury in Asia with a particular focus on China and India. We spoke to Guy Salter, Deputy Chairman, Walpole Group, on what he really thinks of the Indian luxury market.

Can you give us an idea about what the Walpole Luxury Summit will talk about this month?
Over a period of time, the Walpole Group has been increasing the amount of seminars because we feel the luxury industry is at a very important stage of its development. The first phase, which was a rather easy one, is coming to end and the industry is now entering a more complex phase. On the one hand, mature markets are fragmenting between very discerning customers and entry-level customers, and emerging markets are growing tremendously. We feel we have to shift from being just an organisation that brings people together to also having a point of view, which we call Luxury Thought Leadership. So we will have two seminars in London this year. The first one (in May) will focus on China and India because they are the few areas of potential growth and revenue upside for the industry. In October, we will host our annual luxury online seminar, which we feel has tremendous untapped potential and also revenue upside for luxury brands.

There’s been a lot of talk about how India is the next China in terms of luxury consumption, but what do you think is the real picture?
There’s far too much hype and reckless enthusiasm and not enough cause for consideration as to how to enter the Indian market. It’s very interesting when you look at China: lots of people are rushing in and losing a lot of money, and indeed some of the bigger names are not making a profit in China. So it’s a good warning to those who are thinking of entering India to approach it in a cautious and carefully considered way.

In fact, that’s what we are aiming at getting across to people at this particular seminar. Firstly, we are trying to set India in the broader context of the global luxury market and of history, which is why we have Amin Jaffer (International Director of Asian Art at Christie’s), who has written the book Made for Maharajas: A Design Diary of Princely India, as one of the speakers. The idea is to get people to understand that India has always been a luxury market and luxury brands are not entirely new to the country. Secondly, we want to get across the tactical detailed steps required to enter into the Indian market, which is why we have speakers like Mohan Murjani (Chairman, Murjani Group) and Nicolas Coleridge (Managing Director, Condé Nast) who have first hand experience of setting up businesses there.

What according to you are the attitudes that drive the Asian market?
Obviously, the most important aspect is consumer attitude, and we have done lots of work on this. In 2005, we conducted a piece of research where we looked at wealthy consumers across a number of mature and emerging markets. We discovered that there was one common theme in all markets. Basically, wealthy consumers were buying luxury items because they wanted two key things: love and respect. In other words, even a sophisticated customer buying Bottega Veneta wanted the love aspect, i.e. the passion, desire and fashionability aspect from that bag, but also respect from other people who would recognise a Bottega bag. The same thing applies to a new customer buying an entry-level Gucci bag.

However, there were also very significant differences in terms of how this love and respect manifested itself in different markets. For example, we found a very superficial desire to associate with obviously expensive luxury brands in the Chinese market, whereas in the UK or Japan there was a more sophisticated and subtle approach. In between that study and now, surprisingly little has changed in the case of China. It is still an entry-level market and the brands doing well there are premium brands. It is still to become a true luxury market, with the exception of Hong Kong, and evidence of that is very clear. All you have to do is take a walk around the country’s luxury shopping malls and see how empty they are.

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LUXE LIFE

Giving India a luxurious image makeover


Noona Smith-Petersen, one of Europe’s high profile PR forces, wants to change the country’s perception in the West



By Zahra Khan

“I’ve been here seven times, and it’s amazing how things have changed in India! I remember there only used to be Burlington’s at the Taj Mahal Palace & Tower. Today there’s Zegna’s huge store, Louis Vuitton, Moschino, Canali and several others,” declares Noona Smith-Petersen, as we sit down to chat about all things luxury on her latest trip to the country.

Born to an Italian mother and Danish father and based in Milan, Noona speaks six different languages and is a 24-year-old veteran of the international fashion and luxury industry. “The industry has been booming since I was here last, and you can see how fashion and luxury is evolving. Internationally too there’s a huge interest in India but the country is still associated with poverty. It’s time that image gets a makeover,” says Noona.

She should know a thing or two about makeovers. After all, Noona is one of Europe’s highest-profile public relations forces, and has headed the press office and PR activities for some of the biggest names in the business, including Giorgio Armani, Valentino, Calvin Klein, Gianfranco Ferré, Zegna and Tod’s.

'Demonstrate your commitment'
Having spent eight years at Armani and eleven years at Calvin Klein, Noona says, “At that time, we didn’t have strategies and big budgets.It is only now that the industry has become corporatised. It’s another world now; there’s big money involved and there are budgets for everything. However, both Giorgio Armani and Calvin Klein are hardworking perfectionists with tremendous drive. In fact, Armani is like a machine. He’s been so systematic in building his brand and has extended it into so many things. Today, everyone is following his lead.”

Which brings us to the India story. In the last few years, pretty much every major luxury brand has opened or is in the process of opening stores here. The new darling of the luxury world, India is poised to take over from China as the second largest consumer of luxury goods in Asia. In fact, the arrival of fashion bible Vogue has cemented the international interest in India.

Says Noona, who helped organise Vogue India’s launch party at the Umaid Bhavan Palace in Jaipur last year, “I am trying to convince Zegna to do a big event in India this year. I think it’s important to do it soon because most major luxury brands are coming to India and you need to create buzz around your brand to stand out. In fact, with Formula One now getting an Indian-owned team (Force India), there’s great opportunity in dressing the driver Giancarlo Fischella and demonstrating the brand’s commitment to India.”

She adds that it’s also important to bring big names in the international media like Suzy Menkes (of International Herald Tribune), Cathy Horyn (of New York Times) and others from Europe and America who are curious about India to these high-profile events. “It’s the right time to bring them here and show them what India is all about. A lot of people have misconceptions about India. I remember Calvin didn’t want to open stores here. Then he came to India for three weeks and returned with a completely different notion.”

While advertising is the biggest tool for communicating the message of a brand to the audience, Noona says PR and communications is what helps drive the message home. “It’s very important to give one message and create a dream; the product has to be very desirable. When you talk luxury, it shouldn’t be accessible to everyone. From the price tag to the campaign, everything has to translate into the luxury experience,” she says.

India on her mind
So what does she think of Indian designers turning into successful international brands? Noona says, “There’s huge opportunity but it’s going to take time. It took Armani nearly 30 years and Valentino 47 years to get where they are today. I think what has worked for them is having successful business partners like Sergio Galeotti (Armani), Giancarlo Giammetti (Valentino) and Barry Schwartz (Calvin Klein), who let the designers concentrate on creativity alone. Bringing down global press for the Indian Fashion Weeks is another important aspect. Fern Mallis of IMG has been doing some good work and taking some designers from India to New York, but I don’t think that’s enough. You need to create awareness about your brand and get into the radar of American, French and Italian Vogues. Maybe I can help them with that!”

Which is when she opens up about her India plans. She says, "I have very close ties to India. I got married in Goa and have many close friends here. I’m here to understand the market and see what I can offer. I’m currently holding preliminary talks with this company who wants to bring 10 top Italian designers to Mumbai for a show at the Gateway of India and invite 10 Indian designers to be a part of it. What’s more, Zegna will celebrate its 100th anniversary in two years and they would like me to help. Maybe we could do something special for India then!"

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