chanel the couturiere at work

Research
report,
n°16.
Six-monthly publication – June 2011
Editorial
This issue of Mode de recherche on the
subject of luxury follows on from the
international conference organised by the
IFM in April 2011 (Fashion between
Heritage and Innovation), in addition to
the recent publication by IFM-Regard of a
collective social sciences book on the theme
of luxury, Le luxe. Essais sur la fabrique de
l’ostentation.
While this issue essentially attempts to gain
perspective on the problems linked to outlining and managing heritage, a source of
added value for luxury brands, the issues of
innovation and fashion are also very much
to the fore. Taking their lead from the social
and management sciences, some of the
contributions deal with the symbolic spurs
behind luxury consumption. Others examine the economic perspectives and
tensions that characterise the luxury market
as it is torn between a growing demand for
short-term profit and the more long-term
issues of tradition, skills, durability and
sustainable development.
The IFM Research Center is supported by the
Cercle IFM that brings together the patrons of the
Institut Français de la Mode:
ARMAND THIERY
CHANEL
CHLOÉ INTERNATIONAL
CHRISTIAN DIOR COUTURE
DISNEYLAND PARIS
FONDATION PIERRE BERGÉ-YVES SAINT LAURENT
FONDATION D’ENTREPRISE HERMÈS
GALERIES LAFAYETTE
GROUPE ETAM
KENZO
L’ORÉAL DIVISION PRODUITS DE LUXE
VIVARTE
YVES SAINT LAURENT
On Luxury
Heritage and Innovation:
Charles Frederick Worth, John Redfern,
and the Dawn of Modern Fashion
Daniel James Cole
.4
Using a Professional Organization
to Enhance its Reputation.
The Case of the Parisian Haute Couture.
A Longitudinal Study (1973-2008)
David Zajtmann
.14
Vertical Integration in the Luxury Sector:
Objectives, Methods, Effects
Franck Delpal
.21
Luxury: An Industry Between
Heritage and Modernity
Dominique Jacomet, Franck Delpal
.31
The Made-to-Measure Approach:
The Example of Rome Today
Pascal Gautrand
.38
Luxury, the Accursed Share
and the Capital Gain
Nicolas Liucci-Goutnikov
.43
Responsibility and Profits: What Temple of
Luxury has Taken on the Role of Guardian?
Selvane Mohandas du Ménil
.47
Heritage and Innovation:
Charles Frederick Worth,
John Redfern, and the
Dawn of Modern Fashion
Daniel James Cole
Charles Frederick Worth’s story has been
told often and is familiar to fashion scholars. But while Worth has enjoyed a place of
significance in fashion history, the story of
his contemporary, John Redfern has been
ignored, or at best reduced to mere footnote
status. Nearly all well-known fashion
history survey texts give coverage of Worth,
but scant – if any – mention of Redfern.
Contini, Payne, Laver, and Tortora and
Eubank, all ignore Redfern. Millbank
Rennolds, in Couture, the Great Designers
omits Redfern while including some
markedly less important designers. Boucher
includes John Redfern, but distills his career
to a brief, mostly accurate, paragraph. In
Fashion, The Mirror of History, the
Batterberrys interpret a Redfern plate as:
“Another Englishman, working in Paris, the
tailor Redfern, had devised a neat “tailormade” suit with a short jacket for women,
4
but despite his efforts to simplify women’s
daytime clothes the usual effect was heavily
draped and fringed, and as stuffily claustrophobic as the gewgaw-cluttered interiors
associated with Victorian English taste”.
The Kyoto Costume Institutes 2002 publication of fashions from the 18th through the
20th Centuries includes a short, partially
accurate biography Redfern but with erroneous life dates that would have him
opening his business around the age of 5.
Recent scholarship creates a different picture of both Worth and Redfern. Pivotal to
the history of clothing, Redfern’s story is
only recently being rediscovered, and only
in the past few years has a proper exploration and assessment begun (primarily by
the work of Susan North). North (2008)
puts forward the thesis that in the late 19th
century, Redfern and Sons was of equal
importance to the House of Worth. It is
even possible to assert that Redfern, and his
legacy, were actually of greater importance
as shapers of 20th Century styles. An examination of Redfern and Redfern Ltd., in
comparison to their contemporaries, calls
into question not only the preeminence of
Worth, but also aspects of the careers of Paul
Poiret and Gabrielle Chanel.
The following explores how Worth and
Redfern, in different ways, shaped the tastes
and fashion system of the 20th Century –
themselves, and through the businesses that
bore their names after their deaths. Their
are intertwined with the major styles of the
second half of the Nineteenth Century, and
their stories are interwoven with important
fashion icons of the time, and demonstrate
the power of celebrity clientele to the success of a design house. Both Englishmen,
Worth and Redfern founded family businesses; both men died in 1895 and both left
there business in the control of sons and
junior partners. But in addition to their
similarities, their stories emphasize their
differences.
Charles Frederick Worth, and Worth &
Bobergh
Charles Frederick Worth is acknowledged
as the father of couture, rising from the
ranks of a notable fabric and dress business
in Paris, to leading his own house. As the
story goes, Worth was catapulted to success
by the court of the Second Empire. The
story of Worth’s rise to fame, and his associations with Princess Pauline Metternich
and Empress Eugenie, is a familiar tale but
one that has been embellished, even twisted
over time, beginning with the rather mythic
memoirs of Metternich herself (1922), and
of Worth’s son, Jean-Philippe (1928).
Born in 1825, Charles Frederick Worth
began his career at a London drapery house.
Moving to Paris in 1846, he found employ at
Gagelin-Opigez & Cie, a retailer of fabrics
and accessories, and a dressmaker. While in
their employ, Worth probably began designing in the dressmaking department. Worth
married a Gagelin-Opigez employee, Marie
Vernet, a model at the store. Leaving in
1857, Worth began his own business in partnership with Otto Gustave Bobergh, with
“Worth et Bobergh” on the label, and Mme
Marie Worth working at the business.
Records indicate that Worth and Bobergh
was an emporium, much in the model of
Gagelin-Opigez, and sold fabrics, and a
variety of shawls and outerwear, with ready
made garments as well as made-to-measure
couture (Hume, 2003, p.7).
Eugénie de Montijo, the Spanish-born wife
of Emperor Napoleon III, was the most
important female style setter of Europe during the years of the Second Empire and is
associated with many fashions of the time.
She encouraged glamour at the French
court that contrasted with the reserve of
Queen Victoria’s Court of Saint James.
According to some accounts, Worth began
his association with Princess Metternich,
the wife of the Austrian Ambassador to
France, in 1859. Worth set his sights on the
princess’s business; Mme. Worth paid a call
to Princess Metternich, and extraordinarily,
was received. Mme Worth presented the
princess a folio of designs and the Princess
ordered two dresses, wearing one to court at
the Tuileries Palace. “I wore my Worth
dress, and can say… that I have never seen a
more beautiful gown... it was made of white
tulle strewn with tiny silver discs and
trimmed with crimson-hearted daisies…
Hardly had the Empress entered the
throne-room…than she immediately
noticed my dress, recognizing at a glance
that a master-hand had been at work.”
(Metternich, 1922)
Eugenie’s admiration of the dress led to
her own commissions from Worth and
Bobergh, catapulting Charles Frederick
Worth to success as other ladies of the court
patronized the business.
This well-known story of Worth’s meteoric
rise to stardom has recently provoked doubt.
Worth scholar Sara Hume questions this
account on the basis that it is derived from
loving, but unreliable secondary accounts.
“The legend that has grown up around his
name was built up in large part by memoirs
by his son and famous clients written well
after his death. After Worth had achieved
fame, his clients such as the Princess
Metternich, nostalgically wrote of his
prominence under the Second Empire”.
(2003, p.80)
Hume also questions that the custom of
Eugenie and Princess Metternich came as
early in the decade as 1860, or that he held
a place of significant importance in the
French fashion system prior to mid-decade.
She notes that he did not receive mention in
French fashion magazines until 1863, and
press coverage for the remainder of the
decade was not plentiful. In addition, Worth
and Bobergh did not use the designation
“Breveté de S. M. l’Impératrice” until 1865.
Moreover, the number of existing Worth
and Bobergh pieces in museum collections
from this time is less than what such success
would indicate (Hume, 2003).
Worth’s status during these years has been
inflated retrospectively, and many other
dressmaking establishments were successful
at the time. In these years, several were well
established. Mlle Palmyre, Mme Vignon,
Mme Laferrière, and Mme Roger, all
contributed to the trousseau or wardrobe
of Empress Eugenie, as did Maison Felix,
and it was at this time that La Chambre syndicale de la Couture parisienne began. Also
emerging in these years, was the great couturier Emile Pingat, who came to rival
Worth’s importance in late 19th century
French couture.
“The frequent sobriquet of ‘inventor of
haute couture’ gives the misleading impression that…Worth introduced a completely
new method of designing and selling
clothes. In fact haute couture evolved gradually over the almost half century of
Worth’s career and represents only a segment of the new fashion industry which
developed through the century”. (Hume
2003, p.13) However erroneous the traditional accounts are, it is important to note
Worth’s designs for Eugenie and the court
promoted French industry and had a favorable impact on the textile mills of Lyon.
Soon the house had an impressive client list,
including Queen Louise of Norway,
Empress Elisabeth of Austria, along with
stage stars and glittering demimondaines of
Paris. Although men would dominate the
fashion industry in a short time, a man in
the dressmaking business was still novel:
Worth earned the moniker “man milliner,”
and by transforming dressmaking from
women’s work to men’s work, the activity
of designing fashions was taken more seriously as an applied art.
John Redfern of Cowes
Across the English Channel, in the resort
town of Cowes on the Isle of Wight, the
young John Redfern was transforming his
drapery house into dressmaking business.
John Redfern began his drapery business
during the 1850s. Although his business
developed slower than Worth’s, he eventually acquired a no less auspicious clientele,
including Queen Victoria, Alexandra
Princess of Wales, and Lillie Langtry.
Growing over the course of the decade, the
business was established for dressmaking by
the late 1860s, and its subsequent steady
growth rivaled the importance of The
House of Worth for 40 years.
In Cowes, Redfern was able to take advantage of the presence of Osborne House, one
of Victoria’s official residences; “the whole
island benefited economically and socially
from the need to supply the Household and
the attending high society (North, 2008,
p 146).” His sons John and Stanley joined
the business during the 1860s. The first
recorded clothing from John Redfern was
noted at the 1869 marriage of the daughter
of W.C. Hoffmeiter, Surgeon to HM the
Queen; Redfern provided the wedding dress
and the bridesmaids dresses (North, 2008,
p.146). Certainly the aristocracy noticed the
high-profile commission, and Redfern
understood the power of celebrity to promote his business in the coming years.
At this time a change in dress was underway: more sport and leisure activities were
developing specific clothing, and those
women who could afford a diversified, specific wardrobe sought more practical attire;
clothing for some activities showed the
affect of the Dress Reform movement.
Ensembles emerged, described in the fashion press of the day as “walking costume,”
“seaside costume, and “promenade costume.” More practical outerwear for
women was being introduced, even “water-
proofs” (Taylor, 1999). At the same time,
women’s equestrian clothes were crossing
over into town clothes in the form of a “tailor made” costume. For years men’s tailors
were producing women’s riding habits, with
jacket bodices made in masculine forms. As
men’s tailoring standards developed,
women’s riding clothes developed similarly,
and woolen cloth associated with men’s
suiting began to cross over into the general
female wardrobe (Taylor, 1999). British tailoring establishment Creed enjoyed the
custom of both Queen Victoria and
Empress Eugenie for riding habits; opening
a Paris store in 1850, The House of Creed
contributed significantly to this trend. As
tailor made ensembles emerged, lighter
weight versions developed for summer
activities outdoors.
John Redfern continued with success into
the coming years as a very fine ladies dressmaker. However, both of these trends –
sport clothing and the tailor made – figured
prominently in Redfern’s career as the 1870s
began and his business expanded. While
neither activewear nor the tailor made were
necessarily his “invention,” Redfern would
do more to promote these styles than any
other designer.
Worth After Bobergh
Worth and Bobergh closed during the
Franco Prussian War. Bobergh retired, and
Worth reopened as Maison Worth. The
Third Republic left Worth without an
empress to showcase his work, but other
European royals continued to give him
business. However the backbone of his
financial success now came from the wives
and daughters of American nouveau riche
tycoons, who sought the overt prestige of a
Worth wardrobe over the work of their local
dressmakers. His popularity with the
American wealthy is attested to by the large
amount of Worth dresses in American
museum collections. From all over Europe
and North America, customers came to his
house, willing to make the trip to Paris.
Worth’s sons, Gaston and Jean-Philippe,
joined the business in these years. His reputation was now so noteworthy that Emile
Zola created a fictional version of Worth in
1872. He excelled at the ornate draperies of
the bustle period, and he reveled in inspiration from 18th Century modes, especially
popular in the 1870s with polonaise style
drapery in the manner of Marie
Antoinette’s “shepherdess style.”
However, Worth’s true creativity in these
years (and in general) has been questioned,
and his Hume reputation viewed as
inflated: “Monographs of celebrated fashion
designers, such as Worth, typically focus on
individual genius as a primary force in initiating new fashions. As an individual
designer, Worth may not have been the creative genius that his reputation may
suggest. The traditional view that Worth
was a great innovator may be brought into
question by a comparison between fashion
plates and his designs”. (Hume, p.3)
In light of such opinion, it is possible to suggest that his true gift lay not in creating but
interpreting trends – already present in such
fashion plates – to suit the tastes of his rarified clientele. It is in these years that Worth
developed his system of mix and match
components of a gown (Coleman, 1989). A
series prototypes of different sleeves, different bodices, different skits were available to
be put together in different combinations
and different fabrics to create a toilette,
maintaining for the client the impression of
an original creation.
By 1878, a new silhouette was developing.
The understructure that enhanced the buttocks went away, and a sleek silhouette
emerged, and princess line construction was
essential to it. Worth was important to the
popularity of this silhouette. Though he is
often credited with inventing the princess
line (and supposedly naming if for
Alexandra the Princess of Wales) vertical
seamed dresses went back to the middle
ages. In the late 1850s and1860s, loose
dresses with such vertical seams were worn
in the as walking costumes, intended for
some measure of physical activity. In its
application to this new silhouette, this new
style en princesse used the princess line
seams in a smooth, fitted to the body
method, and the term was used to describe
both dresses (in one piece from the shoulder
to the floor) and with bodices with similar
construction. A correlation between
princess line construction and the increased
presence of women’s tailor made garments
has been made (Taylor, 1999): Charles
Frederick Worth, in developing and popularizing the en princesse style was applying
principles of tailored construction to dressmaking, cannily on top of developments in
women’s fashions.
Not only did Charles Frederick Worth
develop the couture system, he may have
truly invented the mystique of the fashion
designer as idiosyncratic, exalted artist.
Worth needed a personality to suit his fabulous clientele – especially to appeal to the
nouveau riche Americans – and the “man
milliner” affected the role of great artist. He
created an outrageous persona, wearing
dressing gowns (sometimes trimmed with
fur or even tulle) and a floppy black velvet
beret. “Such attire satisfied the illusion of a
creative genius at work (Coleman, p.25).
“Hollander in Seeing Through Clothes draws
a correlation between Worth’s affected look,
and images of Richard Wagner, and
Rembrandt (1993): such romanticized
deshabille was a calculated move, and such
affection may have been borne of a desire to
mask a lack of genuine creativity with the
image of a great artist. The 1880s saw
remarkable output from the house; the popular garish colors, the continuation of overt
historic inspirations, and the extremes of the
return of the bustle in 1883, suited Worth’s
aesthetic perfectly. Extant examples of his
work in museums from this time indicate a
synchronicity of the prevailing modes of the
day with his taste for flamboyant theatricality – the “man milliner” cum artiste at his
finest.
Although Worth was now at the top of Paris
fashion, many elite and moneyed customers
sought other designers. Emile Pingat’s
smaller business attracted the discerning
who appreciated the quiet elegance of his
work over Worth’s less subtle output
(Coleman, p.177). Also in these years,
Doucet, a decades old emporium of shirts
and accessories, launched a couture division
headed by third generation Jacques Doucet,
and soon rivaled Worth’s importance.
Redfern and Sons
As the Third Republic left France (and the
fashionable world) without an empress to
be a fashion icon, more attention focused on
Britain’s royals. Alexandra of Denmark
became the Princess of Wales upon her marriage to Prince Edward in 1863. Although
she was quickly celebrated for her style, her
ensuing six pregnancies kept her out of the
spotlight until she re-emerged in 1871 (well
timed to coincide with Eugenie’s absence.)
Alexandra’s style helped define fashion in
the next four decades. Also of importance
as a fashion icon was the Prince of Wales’
mistress, Emily LeBreton Langtry. “Lillie”
Langtry was the most noted of the
“Professional Beauties,” society women celebrated in the media simply for their looks,
and she was, likely, the first celebrity product spokes model. Lillie’s hourglass
proportions strongly contrasted the lithe
Alexandra, but both women were widely
celebrated for their beauty, and important to
the style of each were the fashions of John
Redfern.
By the early 1870s, fabrics from Redfern
were in the wardrobes of Queen Victoria
and Princess Alexandra, and their custom
was included in Redfern’s advertising. More
significant was the yachting boom that
came to Cowes with the Prince and Princess
of Wales’ enthusiasm for the sport. British
Aristocrats, American nouveau riche, and
other international elite were drawn to
Cowes for the developing regatta, and participated in other outdoor activities. The
yachting, the wealthy clientele, and the
development of sport clothing combined to
place Redfern at the right place at the right
time. Redfern became the source for yachting and seaside toilettes, and sailors’
uniforms often served as design inspiration.
Redfern set the benchmark in this category
of clothing. Both the Princess and Mrs.
Langtry enjoyed sporting activities often
wearing Redfern; as the widely imitated in
anything they wore, they set the styles for
this type of clothing.
Genteel activities such as croquet and
archery were still enjoyed, but more vigorous sports were becoming more popular.
These included hiking, golf, and shooting,
and often ankle length skirts (without the
fashionable bustles of the time) were worn.
Tennis also grew in popularity, with special
tennis ensembles. Redfern designed jersey
bodices and dresses for tennis (and other
sports) and although Redfern was not the
only house that featured jersey garments, it
became associated with him. Both Mrs.
Langtry and the princess wore them, and
they were documented in The Queen, the
leading British fashion periodical. Redfern
developed a strong relationship with the
publication, realizing that paid advertising
would lead to more editorial coverage
(North).
Redfern continued to popularize the tailor
made. The style was a favorite of Princess
Alexandra who wore Redfern’s, attracted to
the combination of style and practicality.
Riding continued to be a popular sport for
aristocratic women, and the influence from
equestrian wear to the tailor made continued. An avid horsewoman, Elizabeth of
Austria set styles throughout Europe with
her riding habits; a favorite detail was military inspired frogs and braid in the style of
the Austro-Hungarian military. This style
and other military inspiration quickly
found their way into women’s tailored costume, including Redfern’s.
With royal patronage and coverage in the
press, the business grew and expanded
internationally. A London branch was the
next to be established in 1878, where fashionable gowns were available along with
sport and tailored clothes. Managing the
London store was Frederick Mims, who
took the name Redfern. In 1881 a Paris store
opened that took its place in the French
fashion scene alongside Worth, Doucet, and
Pingat. Leading the Paris store was Charles
Poynter, who also took the name Redfern.
Under Poynter Redfern’s supervision, other
stores opened in France, notably a store in
the resort town Deauville. By 1884, Redfern
and Sons had crossed the Atlantic, and
opened a store in New York City managed
by Redfen’s son Ernest. While Lucile and
Paquin are both given credit for being the
first transatlantic fashion business, Redfern
preceded both of them by more than 20
years. The Paris and New York stores
offered the same variety as the London
store. Stores in Newport, Rhode Island, and
Saratoga Springs, New York catered to the
resort customer. While Redfern directly
challenged Worth at the Paris store, they
also appealed to a broader segment of the
market, making the business the more significant. While Maison Worth required its
clientele to come to the Rue de la Paix,
Redfern and Sons, with branches in
England, France, and the United States,
brought its product to more of the fashionable world.
Maison Worth after Worth
Redfern Ltd.
By the early 1890s Charles Frederick
Worth’s role in the house had declined, and
as both sons were now active in the company, he essentially retired. Worth left the
management of the business in the hands of
Gaston, who had already assumed much
managerial responsibility. The creative side
was left to Jean-Philippe. The exact chain of
events is unclear, as is also the extent of
Worth senior’s continued role in the house;
many Worth dresses from 1889-1895 are
unclearly attributed as whether father of son
designed them. “It is not possible to determine at what point Jean-Philippe became
the lead designer for the house; however
garments after 1889 show differences… that
suggest a different designer” (Hume, 2003,
p.11).
Nellie Melba, the noted Australian opera
star, was a long time Worth customer;
Melba was particularly fond of JeanPhilippe saying “Jean himself was a greater
designer than his father had ever been”
(Coleman, 1989, p.29). The output of the
house in the 1890s shows a remarkable synergy between fashion and L’Art Nouveau
and Japonisme styles developing in the other
applied arts. Like Redfern, Maison Worth
also showed the affect of the Dress Reform
movement, however, that affect showed
itself in the form of ravishing, languid teagowns along the rubric of Pre-Raphaelite
and Aesthetic taste. These were “artistic”
costume for the artistic aristocratic lady, and
did not show the practical affect that had
manifested itself at Redfern.
The decade of the 1900s saw the house of
Worth maintain continued success with
beautiful gowns, but other designers overshadowed its innovations and styles. Gaston
Worth’s attempt to enliven the house with a
young man named Paul Poiret proved short
lived and unsuccessful. The client base had
grown old, and now the aging house was
dressing aging women.
In 1892, the company incorporated as
Redfern Ltd. The death of John Redfern in
1895 had little affect on the continued success of the business; Redfern Ltd. had
transformed “from the most successful
ladies tailoring business to an international
couture enterprise equal of Worth” (North,
2009). Charles Poynter Redfern at the helm
of the Paris store, was the most important
designer in the company and was equal
of Jean-Philippe Worth, Jacques Doucet,
and Jeanne Paquin. Featuring designs by
Poynter Redfern, the company participated
in the Exhibition Universal of 1900. During
the 1900s, the focus of Redfern Ltd. was
more on couture, moving away from its
activewear and tailored roots, although still
offering selections in those areas.
Underscoring that shift was the closure of
the original Cowes store. Royalty still went
to Redfern’s stores to be dressed, and Les
Modes joined The Queen in devoting a great
deal of editorial coverage to the house.
North asserts that Redfern Ltd. was the
dominant force in Western fashion between
the years of 1895 and the 1908 work of
Paul Poiret (2009). It is possible to actually
establish the pre-imminence of Redfern
continued even further into the next decade
to 1911. Although these are few years, they
are pivotal to fashion history.
Many dress historians treat Poiret’s 1908
work as a watershed moment that captivated the fashionable world. One noted
fashion historian (Deslandres, Poiret,
Rizzoli, p.96.) wrote “[as] if women had just
been waiting for it, the Directoire line,
revived by Poiret, redefined elegance
overnight.” In light of the fact that Poynter
Redfern and Paquin were already doing this
line, the extreme nature of such a pronouncement can be easily called into
question. Further, the fashion press paid
virtually no attention to Poiret until a few
years later, making such an “overnight”
impact on fashion impossible. Redfern’s
output was well documented in the pages of
The Queen and Les Modes. Poynter Redfern
advocated soft styles, taking inspiration
from the 1780s and 1790s. He featured
“Romney Frocks” of white mousseline in the
manner of Marie Antoinette’s chemise à la
reine, and Empire waist à la Grecque styles
of Directoire inspiration – all beginning a
few years before Poiret’s 1908 collection
(North, 2009). The commonly held, but
retrospective, opinion that this was Poiret’s
“New Look” in terms of impact on widespread fashion and taste is simply not
supportable in this light.
On 3 October 1909, The New York Times ran
a full-page article on Paris fashions, covering the looks for Autumn and Winter 1910.
The article celebrates Orientalist styles for
the season, that included Byzantine and
Egyptian inspiration, but most importantly
Russian styles. Although many designers
are mentioned, Poynter Redfern is given the
most significance, and the New York Times
asserts that the Russian style was his creation: “Redfern is a master at these Russian
effects, which he is using very much this
season for street costumes. He has just
returned from Russia whither he goes
almost every summer.” Maisons Worth,
Doucet, and Paquin are all mentioned
along with other houses, but Poiret is not
mentioned at all.
The 1910s and Beyond
Paul Poiret became ascendant to Paris fashion, finally by around 1911. His knack for
publicity lead to elaborate Arabian theme
parties, and the press was hungry for the
exotic in the few years prior to the war.
Perhaps with Charles Frederick Worth as
his role model, Poiret postured himself as
the eccentric artist, and put forth his creations as great works of art. His designs of
these years, with their ersatz Near-Eastern
themes were sensationalist and hype provoking, such as his “Minaret” dress and robe
sultane; while much less elegant that his elegant languid Directoire looks of 1908, they
grabbed more publicity. The New York Times
began including Poiret in its fashion coverage in 1910, and the rest of the fashion press
followed, so that during the next three years
he dominated the fashion media and was
prominently featured in the pages of
Harper’s Bazaar, Femina, and The Queen.
Poiret was one of the participating designers
in the exciting new fashion journal, La
Gazette du Bon Ton. In addition to other
houses, the roster also included Worth and
Redfern. The freshness of La Gazette du
Bon Ton’s style brought life to the two
houses, and their designs as represented in
Les Modes were still stylish. Redfern’s relevance outlasted Worth’s by a decade, but by
now both houses were starting to decline
and the glory days of each house had past.
The affect on the aristocratic lifestyle caused
by World War I impacted both houses further, yet each carried on for several more
years.
Also emerging in this decade was the business of Gabrielle “Coco” Chanel. Starting
in millinery, Chanel expanded into sports
clothes and couture during the course of the
decade. A few aspects of her development
and story are worth considering. Her early
affair with the English-educated horse
breeder Etienne Balsam exposed her to an
equestrian set that certainly wore English
riding apparel and sport clothes, likely from
Creed, Burberry and Redfern among others.
This certainly contributed to her very lean
and tailored aesthetic that stood in sharp
contrast with Poiret’s opulence. But of even
more importance was Chanel’s choice of
Deauville as the location of her fist sportswear boutique. Redfern Ltd had a Deauville
store for sometime, selling the company’s
signature sports clothes; the young Chanel
would have unquestionably been familiar
with Redfern’s product and sport clothes
business model. An examination of Redfern
designs from the decade underscores the
similarity to the Chanel aesthetic. A tailor
made costume from Redfern illustrated in
La Gazette du Bon Ton from 1914, and a
sport ensemble from in the collection of the
Kyoto Costume Institute, dated c. 1915,
both show a marked similarity to Chanel
designs that came a short time later. Many
of Chanel signature styles, while strongly
associated with her today, were actually pioneered long before by Redfern, including,
most notably, the use of jersey for sportswear.
As for Worth, he left a legacy into the 20th
century was of lavish couture gowns and
ensembles that have always been a major
feature of the French fashion industry.
Edward Molyneux earned the nickname
“the New Worth,” as an Englishman who
conquered Paris, and he showed great
prowess for frosting his sleek elegant flapper
dresses with glitter. Perhaps his most significant contribution to the fashion industry of
the 20th Century was his invention of the
persona of fashion designer as flamboyant
great artist; and the persona took on even
more outrageous form in some of his successors. This can be exemplified in recent
years with the personalities and manner of
Karl Lagerfeld, Jean Paul Gaultier,
Alexander McQueen, and John Galliano,
among others.
The legacy of John Redfern may actually
define clothing in the 20th Century. The
intellectual lineage of Redfern is monumental and exemplary of the entire history of
20th century clothing: John Redfern mentored Charles Poynter Redfern, who in turn
mentored Robert Piguet, who mentored
Christian Dior, who lead the line to Yves
Saint Laurent. Redfern (and his companies)
focus on the emerging market of sports
clothes lead the way to the categories of
sportswear and activewear of the 20th
Century, and the gradually growing casual
aesthetic. The Redfern aesthetic could be
tied to such influential fashion design
minds as Claire McCardell, Vera Maxwell,
Calvin Klein, or Norma Kamali, whose
work was not typified by runway spectacle
but rather by real clothes.
Daniel James Cole
Professor, FIT New York
Special Thanks
Karen Cannell, Fashion Institute of Technology
Nancy Deihl, New York University
Susan North, Victoria and Albert Museum
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Using a Professional
Organization to Enhance
its Reputation. The Case
of the Parisian Haute
Couture. A Longitudinal
Study (1973-2008)
David Zajtmann
It has been shown (Selznick 1949) that an
organization’s objectives can be diverted by
the action of an ideologically homogeneous
minority. The membership collective organization may result from the presence of
selective incentives (Olson 1965), and may
also be characterized by the possibility of
quitting or publicly criticizing (Hirschman
1970). It can also result from the fact (Meyer
and Rowan (1977) institutions tend to
resemble each other. Moe (1980) considers
that Olson relies on hypotheses as regards
individuals which are too restrictive, Olson
considering individuals as rational, perfectly informed and economically selfish.
Olson, on his view, thinks that memberships with a political finding have a strong
role. Moreover, he introduces a leadership
dimension, the “political entrepreneur”
enabling participants like the personnel of
organizations or the outsiders to exist. We
accept from this view the accountancy of the
plurality of interest but also the recognition
of the role of third parties.
Granovetter (1973 and 1975) takes from
Polanyi (1944 and 1957) the concept of
“embeddedness” but considers it with a dif-
14
ferent logic because he estimates that the
embeddedness of economics into society has
not disappeared. He opposes to the view of
firms as isolated units and points to the fact
that firms develop cooperative relationships
with other firms. Uzzi (1997) pointed out
the fact that critical transactions are
dependent on firms that are embedded into
social relationship networks.
It has been highlighted that social movements can have a strong effect on the
institutional change of an industry
(Durand, Monin and Rao 2003). The fact
that particular industries offer products that
cannot be interchangeable has also been
shown (Karpik 2007). However, according
to our knowledge, little attention has been
drawn to the way a professional network
can be used in order to enhance the reputation of its members. In our opinion, we
need to go further than this holistic
approach.
Therefore, the research gap that is the following: which kind of benefits does a firm
search for when joining a collective organization?
A longitudinal study of couturiers and fashion designers operating in Paris between
1973 and 2008 has been conducted. Two
types of sources have been utilized: annual
reports from the Fédération française de la
couture, du prêt-à-porter des couturiers et
des créateurs de mode between 1973 and
2008 and interviews of past and present
members of this Federation.
This work has enabled us to identify three
different themes explaining the reasons for
joining and participating in a professional
organization:
– The members of a professional organization seek to preserve their reputation.
We believe that when the members of a
professional organization seek protection
against counterfeiting the main motivation
of this action is a protection of their reputation.
– The members of a professional organization seek financial incentives.
– The members of a professional organization seek for a privileged position towards
their national and international competitors.
It appears that the first theme is the first in
importance.
This research enhances the fact that a label
(in this case the “haute couture” name) possessed by a professional organization
constitutes a strong attachment of the members to the network. The reputation has
been thus externalized by the adhesion to a
collective organization.
In 1868 the Chambre syndicale de la couture et de la confection pour dames et
fillettes was created. In 1910, this organization (with a slightly different name :
Chambre syndicale de la couture, des confectionneurs et des tailleurs pour dames )
was dissolved. In 1911, the « couturiers »
estimating they should have their own body
created the Chambre syndicale de la couture parisienne. The last institutional
change took place in 1973 when two other
bodies were created : Chambre syndicale de
la mode masculine and Chambre syndicale
du prêt-à-porter des couturiers et des créateurs de mode. These three groups created
the Fédération de la couture, du prêt-àporter des couturiers et des créateurs de
mode .
It has been shown that couturiers can use
two strategies to enhance their position:
conservation strategies or subversion strategies (Bourdieu 1975). Therefore, it is logical
that newcomers using subversion strategies
question the current institutional frame.
What is original in the case of the Parisian
high-end fashion is that the professional
organization has dealt with this contestation by creating a new umbrella
organization which comprises both its historical body and a new body which accepts
the newcomers.
Couture as the Making of a Profession
Before the French Revolution, tailors (men
or women) did not have the right to sell
their fabrics and were then only subcontractors, obliged de facto to a public anonymity.
Parisian couture was really created under
the reign of Napoleon III. The mixture of
the renewal of a court life and the appearance of “nouveaux riches” gave an ideal
environment to the rise of a selective fashion. Worth, who was English, first started
with the haberdasher (in French: “mercier”)
Gagelin, and had an individual clientele
who asked him for advice on their clothes,
an attitude which was totally new, the tailor
having traditionally no word to say.
Worth then left Gagelin and opened his
own company on rue de la Paix in Paris. He
established all the codes of the Parisian
“couturier”: a clientele of celebrities (starting with the French emperor’s wife
Eugenie), a “bourgeois” style house, the
presentation of the clothes on real people,
and most of all, an authoritarian style, making the “couturier” the one who decides the
style of clothes.
Alongside and after Worth came a cohort of
couturiers (such as the Callot sisters,
Doucet, Paquin or Poiret). All these individuals needed to be clearly distinguished
from a lot of couturiers working in Paris in
order to justify their position and prices to a
national and international elite clientele.
Therefore the Chambre syndicale de la couture et de la confection pour dames et
fillettes was created in 1868.
The Chambre syndicale de la couture was
created in 1911. Article 4 of its status indicates that no demand for admission should
be made without the sponsoring of two
members of the Executive Committee of the
Chambre syndicale.
Two events brought significant changes to
this industry: the sequels of the 1929 crisis
and also the consequences of the Second
World War.
Before 1929, the French Parisian couture
industry was a major exporter. Among the
big clients were department stores in the
United Kingdom and in North America.
The Smoot-Hawley Tariff Act from June
17, 1930, by raising United States’ import
duties to couture related products (such as
embroidery) to high levels reaching 80%,
made French couture garments totally
uncompetitive.
During the Second World War, the
Chambre syndicale de la couture parisienne
had to deal with a project of the German
occupation authorities who wanted to
transfer the Parisian Couture either to
Berlin or to Vienna. The authorities of the
Chambre syndicale managed to make the
Germans renounce their project and seized
this opportunity to be the body, officially
recognized by the French Government,
which will allow the different quantities of
fabrics. This position was followed by the
new Government after France’s liberation.
Therefore, since then, a list of authorized
Couture houses is published by the French
Ministry of Economy.
Additionally, since the 1930’s, it is the
Chambre syndicale de la couture which
organizes the fashion show calendar. This
gives this organization a role that cannot be
easily bypassed.
In 1946, Christian Dior, leaving Lucien
Lelong couture’s house where he was working, decided to open his own couture house.
He signed very fast a lot of licensing agreements around the world. This licensing
system has allowed a lot of couturiers to stay
in the couture industry.
A stronger source of income was the perfume and cosmetics activity. The case of
Chanel, where the same shareholder controls both the couture and perfume
activities, is the most explicit example of this
situation.
The Rise in International Competitors
In the 1950s a growing competition came
from Italy. An initiative by an Italian businessman, Giorgini, led to the growth of
fashion shows in Florence, and to the interest of American buyers for the Italian offer.
Since the 1970s the main fashion shows in
Italy have taken place in Milan. However,
unlike the Parisian fashion shows, they mix
different lines of same brands. A coordination and promotion body, the Camera
Nazionale della Moda Italiana (The
National Chamber for Italian Fashion) was
founded in 1958.
In the 1970s, the USA also developed their
own high-end fashion industry. Companies
such as Calvin Klein, Donna Karan and
Ralph Lauren thrived without having a
fashion show in Europe.
The Rise in National Competitors
On a national level, the couture industry
was also challenged by national newcomers.
The so-called créateurs de mode (such as
Kenzo) organized fashion shows outside
the official calendar and won high approval
from left-wing magazines. Some of the
newcomers came from the retail industry,
others began their careers as fashion journalists. New couturiers decided also to mix
haute couture and ready to wear. This led to
a first initiative: the founding of the
Groupement Mode et Création.
The Role of Fashion Journalists or how External
Actors can have an Influence on Institutional
Change
In contrast to French gastronomy, where the
Guide Michelin has over the years remained
a recognized source of quality approval
(Durand, Rao, Monin, 2003), there is no
admitted rating book or guide in the haute
couture. Public approval depends as a con-
sequence a lot on the fashion journalists.
However, in France, a clear distinction
should be made between the situation
between before 1945 and after. Before the
end of World War II, the magazines for
women reproduced the models of Parisian
Couture, and no other kind of fashion was
considered. Two women journalists Hélène
Lazareff and Maïmé Arnodin changed this
situation, using what they experienced during and after the war in English-speaking
countries. Back in France, the former
founded Le Jardin des Modes and the latter
Elle. These two magazines progressively
introduced in their publications ready to
wear products, sometimes even created in
collaboration with producers and department stores.
This produced a marginalization of haute
couture product for the young Parisian
working in the fashion magazine industry.
Later, generalist left-wing magazines such
as L’Express, Le Nouvel Observateur or
Libération promoted new comers.
How did the Professional Organization Deal
with Activists
This situation had to be addressed by the
professional body. Two phenomena
occurred: a leading personality, Pierre
Bergé, understood that the industry should
change its structure in order to stay at an
important level. And some of these créateurs
were eager to join the official body in order
to benefit from the visibility of a common
Parisian ready to wear show. Mr Bergé
became the President of the new Chambre
syndicale du prêt-à-porter des couturiers et
des créateurs de mode.
It must be noted that before 1973, the ready
to wear collections of couturier houses were
presented during a week that was managed
by another professional body: the
Fédération des industries du vêtement
féminin. All the couturiers who were in the
situation, asked to be removed from this calendar.
As in French gastronomy, where the nouvelle cuisine movement was followed in
1969 by a new name of the former Maîtres
queux et cordons bleus de france into
Maîtres cuisiniers de france (Durand, Rao,
Monin 2003), the change of the power configuration of the French high-end industry
has resulted in a new shape of the professional structures.
It seems, although we cannot rely on
knowledgeable figures, that couture activity
has, during the 1980s, faced a decrease in
the number of its clients. The main attention of young people, was, as in the 1970s,
concentrated on non couture designers, such
as Thierry Mugler, who organized dramatic
fashion shows. This situation may have led
to an aging image of haute couture at the
beginning of the 1990s.
A dramatic change in the structure of the
industry has also been noticed. A lot of
brands are now subsidiaries of publicly
owned companies. Therefore, these brands
rely less on a professional organization to
have help on tax or export matters, for
example. The size of the companies has also
changed dramatically. For example
Christian Dior couture 2009 turnover was
€ 717 million.
In 2001, Chambre syndicale de la couture
changed its name to become chambre syndicale de la haute couture and officialized in
this way the use of the name haute couture.
Reputation
The presence of reputation leads to the use
of a premium by firms, premium which also
a compensation for firms’ investment in
reputation (Shapiro, 1983). In activities
where status and reputation matter, a firm’s
current affiliations have an effect on following affiliations (Benjamin and Podolny,
1999) It has also been shown that organiza-
tions can enhance their value by the building and the exploitation of a reputation
(Shamsie, 2003).
When the study was started (2008), one
must notice that the members faced different situations. Some of them produce both
haute couture and women ready to wear,
some of them also produce menswear, some
of them only produce women ready to wear,
or only menswear. The designer of the
brand may either be exclusive, or may work
for his/her own brand or even for other
brands. If we take the case of young designers, some of them absolutely need to
participate in a fashion show in order to
gain audience. But in this case, some of
them are attached to a regular participation
in either the “haute couture” or the ready to
wear week, but others will, for cost reasons,
ask to skip a season of presentation.
As in the cuisine industry, where a Chefrestaurant dyad can be observed (Durand,
Rao, Monin, 2003), we can, since the 1980s,
observe a designer-house dyad which complicates the situation. The objectives of
these two parties could in fact be different
and sometimes divergent.
Direct access to all the reports of the
Fédération française de la couture, du prêtà-porter des couturiers et des créateurs de
mode between 1973 and 2008 has been possible. The President and Executive Director
of the federation have been interviewed.
The Executive Director of the French
Clothing Industries Federation has also
been interviewed. We also met major fashion consultants who were in the business
between 1955 and 2010. We finally met participants of the Federation, including
former CEOs of companies such as Dior,
Givenchy and Kenzo and also young
designers who have recently joined the
Federation.
Some managers were the CEOs of both
couture and ready to wear houses, others
managed only ready to wear houses. Some
of them also managed high-end fashion and
textile brands in Europe (Germany and
Italy).
The themes that were treated were the reasons for joining the organization, the
benefits sought, as well the relationships
with the other members. A thematic analysis has been conducted.
The use of two different sources (annual
reports and face to face interviews) has
allowed us a triangulation of our data.
Results
It appears that the members of the
Federation had, since their entry into this
organization, a clear idea about their aims
and that the reputation given by the membership to this organization, was the main
motivation of membership.
– The members of a professional organization seek to preserve their reputation
The reputation of “couture” is used as a way
to allow diversification into other products.
For example, one former CEO of a major
ready to wear brand of the 1980s explained
to us: “It’s like in the Bible, at the beginning
was the Word, and the Word became flesh.
Design is the first level, it’s like in the Bible,
and after, classically, we learn that in school,
design enhances the product. And the product
will generate a brand. (..) I had this pattern in
mind as soon as I joined the company”.
Another one hence told us: “I gave my
designer a total freedom, within the limits of a
budget, for the couture collection, but the
ready to wear collection he had to respect a collection plan”.
The access to the fashion show calendar
seems to be the most important motivation.
As one referee told us: “I think that fundamentally the first motivation of a newcomer is
the calendar”.
The annual meeting reports show also that
the aims of the members were quite clear.
Hence, the first annual meeting report from
1976 quotes the President saying that: “as
concerns haute couture, the idea was to preserve it, to protect a non substitutionable
brand image and to prove it was not dead”.
– The members of a professional organization seek financial incentives
The search for financial incentives was also
a motivation for membership. Two main tax
deductions have thus benefited the members of this organization: until 1979 a pay
back of fabrics used for haute couture collections to the condition that they were
produced in France, and from 2008 a tax
deduction for the expenses related to the
design of clothing collections (whether they
be haute couture or ready to wear products)
– The members of a professional organization seek a privileged position towards their
national and international competitors
Members from the organization ask to be
protected by the actions from national competitors, in particular a protection against
infringement.
They also ask their organization to promote
their activities at an international level.
They also ask the organization to pay attention to the politics of the same industry’s
organization in other countries. This was
the case with Italy, a country with whom an
agreement has been signed by the two professional bodies representing high-end
fashion.
Contribution to the Theory of Collective Action
This study has brought in our opinion some
contributions to the theory of collective
action.
We do not agree that social changes are the
reason for the changes of the professional
structure. Rather, in accordance with
Bourdieu (1975), we think that the political
vocabulary is being used by newcomers to
make themselves a place in the market
structure. We however agree that we face an
identity movement. We also think that, in
order to renew old houses, the transgression
logical has been introduced in these houses,
whereby, by staying in the couture scheme,
the privileges (as regards the aristocratic
image given by this label) are maintained.
The challenge underlined by Bourdieu in
1975, attracting young clients and also new
members of the “dominant” classes, was in
our opinion the same in the 1990’s, and
therefore superficially related to the 1968
movement.
As a conclusion, we think that professional
groups, in what Karpik (2007) called “singularity economics”, tend to be more a tool
for a public judgment hierarchy than a traditional lobbying body. By incorporating
new players, they can ensure themselves to
be a strong tool and to face international
competition. What is significant in this case
is that very few defections can be found.
We also consider that this study showed that
a purely “monetary” approach (by this
we mean thinking in direct benefits) should
be completed by a view considering the
long-term objectives of the firms where in
this case reputation reveals to be a decisive
factor.
David Zajtmann
Professor, IFM
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Vertical Integration in the
Luxury Sector: Objectives,
Methods, Effects
Franck Delpal
The luxury market has grown impressively
over the past three decades. The figures
supplied by Bain & Company testify to this
fact: sales of luxury products went from 72
billion Euros in 1994 to 168 billion Euros in
2010, which makes an annual growth rate
average of 5%. Fashion items (ready-towear, shoes, leather goods) still retain a
considerable market share as they represent
half of this figure. In addition to its economic weight, the luxury fashion sector merits
analysis due to the evolution in its structure
(number, size and organisation of companies) over the past few years. Companies
whose main profession is fashion have
experienced much more structural change
than other companies that began as jewellery makers, watchmakers or perfumers.
The big players in the market are thus showing a higher level of internationalisation
and diversification, as well as much more
vertical integration compared to earlier
decades. Vertical integration as a strategic
orientation is the subject of this paper.
The objective is to outline the causes of the
process through a series of case studies
–whether it results from changes in the
basic market conditions or is a deliberate
strategy on the party of the players to change
their economic model– and the consequences it has had on the way the luxury sector
functions.
A company is considered to be vertically
integrated when it is present at a number of
successive stages of the production process.
However, a number of studies have outlined
the various methods of integration, that go
well beyond the simple full ownership of
two successive production phases. Harrigan
thus defines the different degrees of integration implemented by companies, from
complete control to total dis-integration via
intermediary levels that concern only a
selection of the production process or forms
of control that are alternative to ownership
(quasi-integration, vertical restrictions…).
This analytical table corresponds more to
the diversity of the practices observed.
Schematically, in the case of luxury fashion,
we can outline four distinct phases in the
making of a product:
– Design;
– The production of intermediary goods
(fabrics, leathers…);
– Manufacturing the finished product;
– Distribution, wholesale then retail.
We are aware that this level of simplification
forces us to set aside numerous essential
divisions in a company (quality control,
advertising…) in order to solely concentrate
on the activities that are visibly necessary to
actually make the product. While design
remains the backbone of all luxury companies, we will highlight the fact that most of
them are heavily involved in the production
phases, whether this is directly or indirectly,
and in distribution. In addition, some of the
bigger names have already taken over the
supply of raw materials for the most part in
leather tanning.
I am basing my findings on a monographic
analysis of French and Italian luxury companies that was carried out for my PhD for
the université Paris-Dauphine as well as a
series of studies carried out by the Institut
21
Français de la Mode. This approach was
chosen as the luxury sector is not like any
other sector as it encompasses a part of other
sectors (clothing, accessories…) and doesn’t
really exist as an aggregate. The terms that
define the content of the statistical data that
is used to scientifically validate economic
theory do not take it into account, which
makes any in-depth statistical analysis of
the luxury business very complex. This
limitation is compounded by the availability
or lack of data in a sector where there is a
very high level of secrecy. The main sources
of these monographs are the available literature about the companies (books, annual
reports, case studies, press) in addition to a
number of semi-directive interviews with
some companies who accepted to answer
my questions.
Originality in the luxury industry
A number of writers have covered the growing disintegration of companies over the
past few years linking this to a certain number of changes on an individual and global
level. Taking computers as an example,
Quelin thus highlighted five factors that
have pushed companies to outsource a part
of their activities.
– Focus on strategic activities. Only functions that contribute significantly to the
competitive edge of the company remain inhouse.
– Economies of scale and cost. Quelin notes
that “in some cases, economies of scale are
easier to reach by the sub-contractor than
the user”. A sub-contractor that bulks up
orders from a number of principals is thus
in a position to produce more effectively
than if each principal owned their own production outfits.
– Reorganisation policies. Companies have
overall tended to refocus on their fundamental profession and to get out of activities
that are not directly related.
– Technological change. Faced with rapid
technological advances, companies may
choose to outsource in order to avoid investing heavily in technology that may not last.
I should add that on a more managerial
level, new technologies and information
systems have enabled the implementation
of more complete and more reactive checking procedures which reduce the risk of
suppliers and sub-contractors not respecting their commitments.
– Market globalisation. This has led to a
redistribution of the cards between companies, as they now have to face competition
from other countries. Opening borders and
more and more out-sourcing abroad often
go hand in hand as shown by McLaren.
These decisions rely on strategies devised in
a macroeconomic environment in full
upheaval. In the fashion sector, not including luxury, the growing opening of
economies has considerably upset the value
chain. Now, most companies only retain the
activities that are essential to the creation of
added value and the perception of that
added value by the client (design, distribution) and outsource manufacturing stages
to sub-contactors located in countries where
the cost of labour is lower (North Africa,
Asia…).
The fact is that the luxury sector has gone
the opposite way. Luxury companies have
in fact gone for more integration in the production phase.
My thesis was based on the study of twenty
case studies of companies. Here we present
ten of those which seem to best represent
this mutation. These companies all have
different countries of origin, ages, specialisations and sizes.
Table 1 – Luxury companies that control the value chain upstream: how and why
COMPANY
LOUIS VUITTON
CHRISTIAN
DIOR COUTURE
HERMÈS
YVES SAINT
LAURENT
ARMANI
GUCCI
BOTTEGA
VENETA
GROUP
LVMH
RAW MATERIALS
SOURCING POLICY
Bought outside the
group for the most
part. The company has
just recently bought the
Tanneries de la
Comète, in Belgium.
Fabric manufacturing
is outsourced.
MANUFACTURING CONTROL
PPR
Outsourced.
(Gucci Group)
Armani
Outsourced.
Outsourced. Gucci has
about 200 main suppliers for materials for
PPR
bags, 267 for elements
(Gucci Group)
for shoe manufacturing.
PPR
Outsourced.
(Gucci Group)
DED BY THE COMPANY
12 production sites in France for
bags and small leather items.
3 workshops in Spain, 2 in the U.S. The need to fulfil a
all for leather products. 4 shoe
growing demand and
workshops in Italy. Clothing manu- to maintain quality.
facturing is outsourced.
5 production sites in leather goods
and shoes all in Italy run by local
Outsourced. The com- partners. The company bought out
pany commits many
its licensee for children’s clothing
months in advance to (les Ateliers Modèles).
Christian Dior future purchases in
Manufacturing takes place in France
order
and Thailand. The haute couture
to reserve the best qua- workshop is still in existence. In
lity leather.
ready-to-wear, the company develops products but outsources
manufacturing.
The company possesses
6 production sites for
textiles and 4
Hermès
tanneries. it also
International has a minority shareholding in the
manufacturers Perrin,
who specialise in silk
EXPLANATIONS PROVI-
The company also controls 11
leather goods production sites.
Ready-to-wear is outsourced to subcontractors though the
company ensures the design, development, pattern cutting, sourcing
materials and quality control…
Baby Dior is seen by
the company to be a
high-potential activity in terms of image
and turnover.
The guarantee of the
best possible quality,
the need to train
craftspeople for years
so that they can work
for the company.
The Gucci Group bought out
To control all of the
Mendès in 2000. Mendès was licen- development and
sed to produce YSL’s ready-to-wear distribution process.
line and owned 25 YSL boutiques.
The company owns production outTo control quality
fits for ready-to-wear, shoes, bags,
and skills.
knitwear, denim and
children’s clothes.
The company has three workshops
(Casellina for leather goods, Baccio
for shoes Novara for women’s
ready-to-wear) but the employees
Direct control of
focus on product development and
quality, costs, timing,
quality control. Production is
deliveries and stocks.
carried out by a number of subcontractors: 500 in leather goods,
26 shoe factories, 4 of which are
controlled by Gucci.
The company owns production sites
for accessories (leather goods), and
partially for shoes and ready-toQuality, unique
wear. The latter is manufactured in skills, protection of
part in factories that belong to the
craftsmanship.
Gucci group.
COMPANY
GROUP
TOD’S
Della Valle
Group
SALVATORE
FERRAGAMO
PRADA
Ferragamo
Prada
RAW MATERIALS
SOURCING POLICY
MANUFACTURING CONTROL
EXPLANATIONS PROVIDED BY THE COMPANY
Outsourced.
The company produces most of its
To control quality,
products (shoes and bags) in its own
efficiency and brand
factories. Casual garments, jewelprestige.
lery, and glasses are outsourced.
Outsourced to
450 suppliers.
For shoes, bags and clothes, the
company relies on a network of
small workshops, all located in Italy.
Flexibility, efficiency.
The company focuses on product
development and checking the
finished product.
Outsourced.
9 company production divisions
produce knitwear, ready-to-wear,
belts, shoes, leather clothing and
bags. Certain production outfits are
shared with Miu Miu, another
brand belonging to the Prada
Group. The company makes most
of its own prototypes, most samples
and a part of the finished products.
Sources: Annual reports, press, interviews.
If we start with upstream control (manufacturing models or in certain cases
semi-finished products such as textiles and
leather), it would appear that a number of
luxury companies have a base, however
limited, in the production sphere. We
should however point out that this concerns
mainly leather-related activities (luggage
and shoes), and that clothing manufacturing is outsourced for the most part.
Retaking control upstream in the value
chain happens in two ways: the complete
vertical integration of certain activities and
putting a stop to manufacturing licences for
others, going back to a focus on subcontracting. In the latter, companies have
taken back control of product development,
production, and quality control.
We should point out that these integration
measures are recent, most having taken
place in the nineties. Louis Vuitton realised
that its original Asnières workshop was no
longer big enough to satisfy the demand for
product so they opened a second workshop
in 1977 and are still opening new production units to this day. Hermès has invested
Control production
skills, production
costs, flexibility and
quality.
hugely in its luggage and leather goods production site in Pantin that employs quite a
number of skilled craftsmen and they have
also bought certain French manufacturers
such as the Manufacture de Haute
Maroquinerie and the Gordon-Choisy tannery. Christian Dior put an end to a number
of licences in the second half of the nineties
and is currently taking back control of all
leather goods. In the same way, Gucci and
Yves Saint Laurent followed this strategy of
taking back control of production and put
an end to a number of licences.
The arguments put forward by the companies to justify the integration of certain
activities do throw up some questions
however. The need for high-quality and
consistent product or the existence of a specific skill that can not be found outside the
company are pre-requirements in the
luxury industry but cases of integration
involve in most instances just a part of the
production and a few segments of products
(for the most part leather goods and accessories). Are the products made by
sub-contractors of inferior quality compared to those made by the company itself?
The answer is probably no. In addition, if
the integration went hand in hand with
skills, what can we say about Christian Dior
which produces its own bags but contracts
out its ready-to-wear? By this reasoning,
one could be led to believe that the star of
Parisian fashion does not have the specific
skills to produce clothes outside its haute
couture activities, which is obviously not the
case. So in this paper, using economic literature and publications, we will explore the
reasons that push luxury companies to integrate one activity over another and to what
extent. We will see that economic issues are
never far away when these choices are
made, as well as the environment in which
these firms evolve, marked by a weakening
of production sources in Western Europe.
tiques, department stores…).
These forms of direct control are supplemented by strategies that are aimed at
ensuring the correct manufacturing or distribution by third party companies with
whom the luxury companies collaborate
(retailers, sub-contractors…). This is referred to as “quasi-vertical integration”, where
the market conditions made the direct
control of production or distribution unnecessary as Blois depicted taking the example
of luxury car manufacturing.
Companies claim the reasons for this growing shift to the end of the value chain are
most often the need to have a coherent
image and offer on a worldwide level with
disappearing trade restrictions, the guaran-
Table 2 – The growing shift of luxury companies toward the end of the value chain (Forward integration)
COMPANY
GROUP
NUMBER OF IN-HOUSE
STORES (2003)
NUMBER OF IN-HOUSE
STORES(2010)
PERCENTAGE OF RETAIL IN
TURNOVER (2010)
LOUIS VUITTON
LVMH
317
459
> 95
CHRISTIAN DIOR
COUTURE
Christian Dior
159
237
81
HERMÈS
Hermès International
125
193
84
YVES SAINT
LAURENT
PPR (Gucci Group)
58
78
55
ARMANI
Armani
119
130
68
GUCCI
PPR (Gucci Group)
198
317
73
BOTTEGA VENETA PPR
59
148
85
TOD’S
Della Valle Group
95
159
49
SALVATORE
FERRAGAMO
Ferragamo
n.a.
312
70
PRADA
Prada
n.a.
319
70 (group)
Sources: Annual reports, interviews
n.a: not available
The situation is even clearer in the development of distribution/retail. All of the luxury
companies studied have shifted towards a
high level of integration in distribution over
recent years. The share of sales in retail now
largely exceeds that of external clients (bou-
tee of a better service during and after sales
and better customer knowledge. Again,
these explanations do not, to me, seem to be
telling the whole story as to why companies
want to control their own distribution/
retail. We will also examine the integration
theory in order to analyse the ramifications
of the movement.
The theoretical justifications for vertical
integration
The economic theory behind vertical integration can be outlined in three main
arguments that make integration attractive
to business: growth in market power (1),
economies of scale and increased efficiency
(2), reduced uncertainty (3).
As Harrigan notes, the benefits of vertical
integration are often studied on a microeconomic level, based on the behaviour of one
single firm, frequently in a monopolistic
situation. However, vertical integration also
intervenes in competitive situations as a
means to stand out. It then takes on a strategic dimension in as much as it guarantees
the companies in question a competitive
edge under certain conditions. This is for
example the case for companies that practice double mark-ups. The most written
about theoretical case is that of two successive monopolies, with a unique
manufacturer that sells to one client only.
Both add a mark-up maximising their
monopolistic profit margin and limiting the
quantities sold. The existence of only one
company, present in two stages of manufacturing and retail should improve the
well-being of the economy by enabling a
larger number of individuals to consume
the products at a lower cost and enabling
the company to have a bigger profit margin.
Firms may also be tempted to integrate
towards the end of the value chain in order
to make sure the right type of effort is being
made to highlight their products. Visibility,
customer advice, the qualitative environment and after-sales service reflect
positively on the manufacturer’s products,
which explains why they might wish to take
the place of external retailers that are less
sensitive to this objective. A number of
researchers have proven a statistical link
between the effort a manufacturer puts into
promoting the products and the tendency
towards forward integration.
Backward integration enabling the substitution of inputs from a firm with a monopoly
is also justifiable in order to reduce dependence on this supplier. Vertical integration
is, in addition, a means to close access to the
market and prevent other companies from
producing their products by buying out a
supplier. Salop and Sheffman analysed the
case of a dominant company that managed
to increase costs for the competition
through integration. This can be compounded by adding all types of entrance barriers
put into place by established firms to prevent or slow down the arrival of new
competitors. Forward integration has an
important role here as we will see in the case
of the luxury industry.
In terms of the search for savings and efficiency, a number of themes have been
examined. Bain, who was one of the first
writers to show the importance of the vertical integration process to the economy,
notably put the emphasis on the conditions
of the emergence of integrated companies
for technological reasons. He thus mentioned the case of companies led to carry out
two production phases conjointly due to the
interdependence of two technologies. The
most frequent example used is that of steel
production where then heat given off by the
tasks upstream means the steel doesn’t need
to be reheated for rolling. This particular
benefit of vertical integration gets the least
amount of coverage in the literature.
On the other hand, the exploration of the
multiple savings that result from integration
and the higher level of efficiency it can lead
to take the lion’s share of research on the
subject. The sine qua non of sources for this
type of research is the theory of transaction
costs as defined by Williamson using
Coase’s celebrated work. This theory compares the cost of an action carried out inside
the firm with the cost of a transaction with
an external company hired to do the same
job. The transaction costs cover the traditio-
nal costs (land, work, capital, materials…)
to which are added the extra cost of managing the relationship between the
companies over time (sharing information,
legal costs, organisational costs, the cost of
inefficient behaviour…)
A number of factors influence transaction
costs that businesses need to pay: uncertainty about partner’s possible behaviour,
the complexity of the action to be taken, the
size of the specific investment needed and
non refundable costs, the frequency of
transactions…
A number of theoretical and empirical studies have tested all of these issues
– The results of these tests, based on different methods and samples, come up with
the same answers overall.
So, the level of integration downstream will
be equal to the extent the company tries to
highlight its products; and symmetrically
the level will be lower when the retailer
shows it is making a big effort. In most
empirical tests, vertical integration is correlated positively with the development of
specific skills by the service provider
(human capital specificity) or by any
demand for specificity on the part of the
client.
– According to Williams’ theory, the objective of this integration is to reduce the
chances of a « hold-up » by suppliers that
have become indispensable. This theory
was criticised by Coase and Simon.
– The complexity of the production process
is also one of the recognised reasons behind
vertical integration. As for uncertainty, it has
a knock-on effect on integration but only
upstream.
Without going as far as total integration
which can be costly and inflexible, vertical
restrictions implemented by companies also
enable them to establish advantageous relationships with their sub-contractors. With
greater bargaining power, they can impose
their views on a great number of points
(keeping of stock by the sub-contractor,
delivery deadlines, and access to the production site, product specifications, the
sub-contractor’s marketing policy…).
Why are luxury companies moving more and
more towards vertical integration?
Integration practices in the luxury fashion
sector as is evident from the monographs
and interviews carried out here, tend to validate certain economic theories:
– Production efficiency and retaining manufacturing profit margins. The savings
achieved thanks to integration (the search
for efficiency, retaining manufacturing profit margins) are very present in the theories.
However, this argument is valid only for
activities where the manufacturers make a
profit on their sales which is only the case in
leather goods in France. Indeed, as is evident from INSEE documents on garment
manufacturers, their operating results have
been in the red for many years (their operating profit margin was - 3,3 % in 2007)
which explains along with other elements
(complexity, seasonality…) why luxury
companies do not wish to buy out their subcontractors. It is important to note that the
high level of growth in the accessories market (shoes and bags) compared to
ready-to-wear has reassured companies on
the low level of risk of their production
capacity being underused.
– Ensuring delivery of inputs. Still upstream,
in line with the economic theory of the guarantee of the offer, the rarity of leather in
Europe has led to tanneries being bought
out by certain luxury companies in order to
ensure their supply. Adelman’s work has
already told us that in a market in a big
growth phase, a firm can be incited to integrate upstream out of fear that the suppliers
of intermediary goods are unable to fill their
orders.
– Aversion to risk and integration for survival.
Integration that happens to avoid being run
for all intents and purposes by the subcontracting company is a case that is more
specific to luxury and can be seen as a risk
aversion tactic. If a client controls the lion’s
share of a company’s turnover or if it is deeply involved in its management through the
orders it gives, the supplier can turn against
it in case of financial difficulty.
Certain professionals interviewed even
admitted that cases where a principal covers
over half the turnover of a sub-contractor
are not rare, and the percentage is sometimes even higher. The risk is far from
negligible in as much as numerous vertical
restrictions and quasi-integration scenarios
leave very little room to manœuvre for partners of the luxury companies.
– Production and integration branches.
Following on from Chandler (1962) and
Arrow (1975), Bolton and Whinsto highlight the need to compare the presence of a
firm at the production and distribution
levels with the nature of the relationship
that already exists within the manufacturing and distribution network of the branch
under examination. Taking this as a starting
point, we examined all of the examples in
the luxury industry in detail. Indeed, the
clothing, leather goods and shoe sectors
each have their own specific characteristics.
In France, clothing still has its own network
of manufacturers, essentially women’s
ready-to-wear specialists, on whom the
principals can rely and which avoids them
having to integrate. They do however possess a high level of market power in as much
as, after the huge movements of delocalisation in the eighties and nineties, luxury
companies are the only ones left who still
manufacture in France. However, the
French leather producing sector is weak.
The leather goods sector is still in one piece
which has enabled companies to integrate,
in France for the most part. In Italy also,
locally available skills have enabled companies to constitute their own production
outfits. However, the shoe sector has practically disappeared in France; even for luxury
products and the biggest brands were obliged to set up their own production outfits in
Italy or to work with Italian sub-contractors.
Table 3 – Production networks and integration
choices made by French companies
CLOTHING
LEATHER
GOODS
SHOES
DIRECT
CONTROL
Very rare
Frequent
Frequent
Exists (in
women’s
ready-towear)
Practically
Weakening nonexistent
BY BRANDS
STATE OF
FRENCH SUBCONTRACTING
Source: IFM, Distribution of added value.
– The advantages of integrated
distribution/retail. As for integration in retail
(forward integration), the facts comply with
the economic theory that says that integration is more common for companies with a
strong brand value (Lafontaine and Slade,
p.632). It is clear that this groundswell
movement followed by all luxury companies fulfils the need to make a huge effort in
valorising the products of the company in as
much as its economic viability relies on
cumulating profit margins. Richardson also
highlighted the role of a retail network and
its capacity to react to market changes quickly. The fact is that luxury companies are
increasingly being run from the end of the
value chain and that feedback from stores
constitutes information of the highest significance to ensure the success of the
company. The domination of retail has also
resulted in a demand for a more flexible
organisation. In fact, unlike the wholesale
schema where only the items that are sold
are produced, the company that sells
through retail must stick to market changes
to avoid being left with costly left-over
stock.
– Quasi-integration. Finally, in terms of vertical restrictions, those that exist in the
luxury universe are numerous. In addition
we should add that even when luxury companies fit the model of sales to outside
distributors (department stores, multibrand boutiques); they manage to sell on
their own terms when their market power is
strong enough. A desirable brand can thus
impose a certain number of conditions on
retailers in order to ensure the correct selling conditions for its products. What Hata
has to say about the development of Louis
Vuitton in Japan is edifying on the subject.
Conditions of various natures are often
mentioned by companies: the definition of
the minimum quantities purchasable, the
predefinition of the purchasable range so
the identity of the collection is respected
regardless of the store…
The consequences of vertical integration in
the luxury market
This stricter vertical integration by some
players is, as we have seen, partly the result
of strategic considerations: guaranteeing
supplies and possibly hampering the competition, preventing or slowing down the
arrival of new competitors.
In the case of luxury companies, the barriers
at the entrance are already quite high: a
company must have a recognised brand, an
established reputation for quality products… However, this point is not always
the most difficult to handle. Recent relaunches (Balenciaga, Vionnet…) show that it is
possible to rely on the legacy of a defunct
brand to become competitive. These prerequirements are compounded by the huge
economic constraints that jeopardize the
room to manœuvre a newcomer has up
against the establishment.
The latter has, as we have seen, taken over
the production end, either through direct
control or through the favourable market
conditions that result from their huge bargaining power (earmarking the best leather,
dictating the most advantageous delivery
deadlines…).
As for distribution/retail, the shift to the end
of the value chain by established firms and
their high level of internationalisation
makes the “entry ticket” to the market all
the more difficult to obtain. If luxury companies are for the most part renting the
retail spaces they occupy, their longevity
means that their rental arrangements are
much more favourable than thus available
to newcomers. In addition, the fact that
some belong to big multi-brand groups
gives them more leverage in negotiation as
they have the power of all of the group’s
brands behind them.
So the vertical integration process plays the
role of what is known as strategic engagement in game theory.
The established firm makes it known to
potential newcomers that it is massively and
irreversibly committed to the market. The
newcomers thus understand that the entry
fee is too high for them and they decide not
to get into competition.
This increase in the number of barriers at
the entrance point explains the ever increasing concentration of the structures of the
luxury industry and the reasons for which
despite the high growth levels, few new
companies have emerged over the past
twenty years.
Franck Delpal
IFM, University of Paris-Dauphine
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Costs, American Economic Review, vol. 73, n° 2.
Williamson O.E (1985) The Economic Institutions of
Capitalism, The Free Press.
Luxury: An Industry
Between Heritage and
Modernity
Dominique Jacomet, Franck Delpal
The aim of this article is to show that the
specifics of the luxury industry mean that,
to a certain extent, it is one of the sectors
where new business model trends are more
clearly visible. Whether this is a question of
product differentiation pushed to the limits,
the weight of the representative and the
immaterial, the globalisation of markets or
the need for absolute control over design
and distribution in a market where reputation and coherence are cardinal values, the
components of the luxury economic model
display a level of modernity that would have
been difficult to predict twenty years ago.
Luxury companies are the main players in
the new age of capitalism referred to by
some writers as cognitive capitalism, by
others as the economics of singularity, and
others still as the economics of the immaterial. Yann Moulier Boutang outlined the
main traits of cognitive capitalism1. He cites
the primacy of the immaterial investment
over the material investment and the end of
the division of work that holds back innovation in favour of organisations that make
the development of quickly-made complex
products in small quantities possible.
Olivier Bomsel2 defines a new type of goods
known as “significant goods” which are in
addition to the goods of research and experience that economists already know. These
significant goods do not specifically serve “a
strict demand, but are impulse buys that
suggest experiences to the purchaser”. The
central value of these goods is the message
they convey thus underlining the importance of the signalling of the products
(through advertising, quality labels,
brands…). Taking the example of Louis
Vuitton, he feels that a high level of vertical
integration is necessary for these types of
goods to succeed. It is interesting to note
that both writers make the connection between the overall evolution of the economy
and the business models necessary to adapt
to the economy. Here we wish to show that
luxury companies are mines of information
on today’s economy in terms of the way they
function and their organisation. To do so,
we will take a micro-economic approach to
outline the main characteristics of the different business models in the luxury industry.
The Rebirth of an Industry
In the past, the attitude to the production
and consumption of luxury products was
not without contrast. The siècle des
Lumières defended luxury as is evident
from reading Montesquieu, Mandeville,
Voltaire or Saint-Lambert’s article in the
Encyclopédie3. Luxury was considered to be
a source of wealth for individuals and for
the state. As such, they were breaking with a
long tradition that Henri Baudrillart4 referred to as “rigoriste” (strict), that had notably
been supported by the Greek stoics and
French moralists (Montaigne, Pascal) who
thought superfluous spending was to be
frowned upon.
In his Political Economics Class5, Charles
Gide tries to bring both strains together. He
proposes the idea that luxury consumption
31
should not have to take the blame for the
rapid change in needs and technology: the
luxury of one era is no longer a luxury in the
decades that follow: “ ...At certain times in
history, a shirt was considered to be an item of
great luxury and constituted a royal gift. A
thousand other objects can be said to have the
same story […] It is not possible to condemn a
purchase from a moral point of view or even
from an economic one for the sole reason that
it fulfils a superfluous need, that is to say
superfluous right now, without being able to
predict what will happen in the future”.
However, luxury consumption should not
take over too great a part of limited production elements (earth, work and capital) so as
to avoid the reduction of social well-being.
In the seventies, the theme of industrial
redeployment was in vogue and France
wanted to shift away from traditional industry. Georges Pompidou mentioned it in a
press conference in 19726: “good cooking…
haute couture and good exports […] that’s
all over… France has begun and is well into
an industrial revolution”. However, in the
nineties, luxury came to the fore again: two
of France’s biggest companies, LVMH and
PPR, became world leaders in the sector
and the French luxury business contributed
significantly to the international development of the country, through exports and
investment abroad.
We have estimated that the world luxury
goods market is worth 168 billion euros7,
and French companies cover a consequential part of this market. The market can be
divided into two segments with a relative
share that is practically equal: ready-towear8 and accessories (just over a quarter)
on the one hand; perfumes and watches
(around 20%) on the other. France has pride
of place in a number of specialities (leather
goods, high-end jewellery and perfumes).
The different luxury markets in 2010
Turnover in
billion euros
Share of market
as a whole
Ready-towear
45
27 %
Accessories
44
26 %
37
22 %
32
19 %
Tableware
5
3%
Other
products
5
3%
168
100%
Sector
Perfumes &
cosmetics
Watches &
jewellery
Total
Source: Altagamma
Luxury has become a veritable industry.
The supply chain goes from raw materials
to finished products. Luxury companies
manage complex value chains that combine
production, logistics and distribution.
Finally, its development implies the production and reproduction of items in quantities
that have grown considerably as the market
has grown.
However, the exact contours of the industry
are difficult to outline. If we define a sector
as all of the companies that have the same
main activity or that fulfil the same consumer need by supplying the same market, it
is difficult to constitute a coherent statistical
whole. In terms of activity, the high level of
differentiation in the range proposed by
luxury companies and the diversity of the
business models encountered undermine
an approach based on the substitutable character of the available offer9. In market
terms, the notion of identical needs disappears faced with the importance of
representation: the immaterial wins out
over the functional utility of the luxury product. Ultimately, the players themselves are
the best placed to define what constitutes
luxury: a company belongs to the luxury
sector once other luxury companies designate it as the competition10.
The Originality of an Extremely Differentiated
Offer
The first characteristic of luxury companies
is the level of differentiation of their products, through branding but also through
more subtle methods of prompting the
immediate identification of their products
as analysed by Jean-Marie Floch11. This
brand “vocabulary” that builds up over time
constitutes the real, immaterial asset of
these companies. Commercial success relies
entirely on understanding and respecting
this asset.
The three levers of differentiation are creative input or design, the specific crafts and
skills acquired by companies and the innovations they introduce at any given time.
First of all, design is the basic foundation of
any differentiated offer. Investment in
design is seen first of all through the multiplication of collections: in addition to the
traditional Autumn-Winter and SpringSummer collections we now have
pre-collections which have significantly
grown in size and between season collections (resort, cruise…), to which we can
also add, in some cases, men’s collections or
haute couture. Some fashion houses produce up to eight seasons annually. As
Roland Barthes wrote in the introduction to
Système de la mode12, “to capture the buyer’s
accounting conscience, one must create a
veil of images, meaning, reasons in front of
the object, to elaborate a mediate substance
around it, like an aperitif, in short to create a
simulacra of the real object, by substituting
the weighted time of wear and tear with a
sovereign time that is free to destroy itself by
an act of annual potlatch”. Luxury companies incontestably carry out the practices of
the fashion sector in creating “this unconscious that is constituted with desire as its
goal”. At the same time, it is clear that many
forms, whether it be Christian Dior’s
“tailleur bar” or a Hermès bag, are part of
the collective memory and enable companies to claim a certain permanence in their
design thus ensuring that they are not associated with the world of throwaway fashion
and can claim their rightful place in the
timeless universe of luxury. In addition, skill
and craftsmanship and the artistic professions are some of the aspects most valorised
by these companies in as much as they
create a connection between the company’s
history and its current activity. Whether
they come from a saddle-making, handmade shoes or couture background,
companies systematically highlight their
connection to a noble profession, trumpeting the way they have mastered the most
complex craftsmanship. Companies with a
high level of legitimacy in terms of craftsmanship thus feel the need to renew their
established skills by collaborating with fashion designers.
Finally, innovation also enables differentiation. This can take on various forms
whether it means honing new techniques,
such as in high-end jewellery, using new
fabrics (new textiles) or adapting products
to the changes in living habits (Louis
Vuitton replacing their trunks with raised
lids with flat trunks, Chanel’s stark garments or the way Yves Saint Laurent
borrowed from menswear to accompany
women’s liberation…). These three sources
tend to increasingly cross over and play off
one another to attract consumers.
Haute couture and high quality craftsmanship are the two main professions behind
contemporary luxury companies, and they
have resulted in different business models.
The companies who have their origins in
craftsmanship have, in general, a profitable
core profession, whether this is leather
goods or jewellery for example. This means
their diversification is explained by a new
valorisation of their skills (jewellery and
watch frames, leather work and shoes…).
We can also note that certain luxury brands
that come from a craftsmanship background remain specialists in their original
trade: this is the case for most watchmakers.
The diversification of leather goods companies into ready-to-wear whether it be recent,
(Louis Vuitton in 1997) or well established,
(Hermès did so before the Second World
War) tends to follow a logic of establishing a
global brand rather than fulfilling a need for
economic balance. The brand then becomes
an “editor, a studio, a symbolic operator of
the validation of the meaning associated
with the product”13. It proposes “editorial
choices” but can only do so “in a field where
it has proven legitimacy”. “Brands are a
chance to make economies of scale that enable multiple experiences to be categorised
under one name”.
The more financially fragile fashion houses
with their origins in haute couture went
looking for complementary activities early
on: in perfume as early as the inter-war
years, then in licensing contracts and today
in accessories. Tomoko Okawa14 notes that
in the seventies, the couture and ready-towear activities at Christian Dior were in
deficit and were held up by the sales of
accessories and licences. More recently,
licencing has become rarer and is usually
reserved for activities that involve specific
skills (perfumes, glasses…). Leather goods,
shoes and accessories have acted as internal
growth mechanisms that have ensured their
development. The share of ready-to-wear in
terms of turnover is often down, and smaller
than that of accessories.
The Originality of Vertical Integration
One of the main changes to have had a huge
effect on the luxury industry is vertical integration which enables companies to control
their offer, from the design phase to the
point of sale. This movement went against
the disintegration trend of the past thirty
years with the globalisation of the economy15. While they were originally
concentrated on the design and production
in short series, companies progressively gained market power over their suppliers and
developed direct sales through a network of
self-owned stores. To begin with, in terms of
production, a growing number of luxury
firms got involved in the control of their
supply chain, both directly and indirectly. In
France for example, Louis Vuitton, Hermès
and Chanel have invested in production
units often located in France or have bought
out some of their suppliers. This integration
process is particularly obvious in leather
goods where the high growth levels and
profit margins have reassured companies in
terms of their manufacturing commitments.
Certain players have also invested in shoe
production outfits in Italy, but also in
France such as J.M. Weston in Limoges. In
addition, the existence of production bottle
necks such as the one in leather tanning has
led Hermès and Louis Vuitton to buy tanneries to ensure their supply.
In ready-to-wear, integration is less common in France, but quite frequent in Italy.
There are a number of reasons for delegating this type of manufacturing to
sub-contractors. So French companies,
unlike a number of Italian ready-to-wear
companies, are rarely directly involved in
the production end of things. Their history
does not encourage them to take on this role
in as much as some have built up close,
long-term relationships with some of their
sub-contractors even though relationship
between brands and sub-contractors are not
always easy. The need to regularly supply
the production outfit while sales of garments are more and more marked by
seasonality and are experiencing a low level
of growth compared to accessories has discouraged companies from investing
upstream in the supply chain.
The second change concerns the integration of retail by a number of luxury
companies. The advantages of direct control
are legion: the accumulation of profit mar-
gins as manufacturer, wholesaler and retailer; more brand image coherence; direct
contact with customers and very valuable
feedback.
It is important to note that the specialist
professions of each company do play a part:
the leather goods people are mainly retailers
while those who come from fashion still use
external wholesalers. Watch companies are
mainly wholesalers while jewellers distribute most of their products through their
own retail network.
However, all companies do not have the
means or the vocation to become retailers.
They then tend, if they are going through
external clients (department stores, multibrand boutiques), to implement a certain
number of vertical restrictions so that the
retailer ensures the best possible sale conditions for their products. This can take on
different forms including a selection of
approved distributors and predefining the
range (in quantity and quality) to ensure
the best level of visibility possible for the
brand at the point of sale. This strategy can
be analysed via the theory of the agency.
According to Olivier Bomsel, these restrictions enable them to avoid opportunistic
behaviour on the part of retailers who might
be tempted to push the sale of products
which provide a bigger profit margin for
them or take a lower level of investment to
convince clients.
Number of
stores (2010)
452
317*
193*
% of retail
in turnover
over 90 %
73 %
84 %
Bottega Veneta
Prada
Salvarore Ferragamo
148*
207*
312*
85 %
71 %
69 %
Armani
130
68 %
Burberry
Christian Dior
Yves Saint Laurent
417
240
78*
64 %
81 %
55 %
Company
Louis Vuitton
Gucci
Hermès
Source: Annual reports of the companies listed.
* branches only
The Originality of the Significance of
Representation and the Immaterial
These objective elements of differentiation
are combined with more subjective aspects
that are essential to the luxury sector. The
valorisation of their history, meaning their
heritage, the storytelling behind this, the
way products are presented in the point of
sale and the location of the stores are some
of the levers for added value used by luxury
companies. Through a series of signals, that
can be real or implied, companies manufacture consent to pay more and consumers
comply. This is linked to the nature of
“positional” object of luxury that represents
the psychological or social aspirations of the
consumer.
Bernard Catry17 has examined the different
forms of rarity among luxury products.
Natural rarity linked to a penury of production factors is combined with techno-rarity
created by the marketing of an innovative
product, different types of limited editions
or when a company itself decides to limit
the distribution of a product and finally
subjective or virtual rarity that is the result
of an overall strategy on the part of the company. The latter in fact has a range of
elements at its disposal: pricing levels, retail
mode, and advertising. It is clear that the
retail choices for a product influence its visibility and as such the idea of rarity it
represents. The growing level of forward
integration of companies and the development of self owned retail networks fulfil this
objective to create added value as well as the
need to control the spread of the offer.
This determination to develop a perception
of rarity has consequences on the choices in
terms of the value chain and consequently
on business models.
The Originality of the Acceleration of
Globalisation
Globalisation is not new in the luxury business. On the one hand, the small size of the
national market makes it essential to develop business on a worldwide scale; on the
other, while it is very difficult to export products that do not stand out as their
equivalent is available in other countries,
exceptional products with strong identities
are attractive to consumers all over the
globe.
Patrick Verley18 notes that in the 19th century, where exports were out of the question
due to transport costs, only products that
benefited from a price-elasticity had a positive demand. This was the case for luxury
products. He adds that between export and
import countries, the perception of the quality of the products never coincided: an
imported product that was considered
distinguished was only rarely seen to be a
luxury product in its own country.
Conquering international markets became
one of the major characteristics of luxury
companies.
This development has, of course, taken on
different forms according to the periods in
question. The rise in the standard of living
in the different continents over the past two
decades has profoundly modified the cartography of the luxury market. In addition,
the accelerated globalisation process has
worked in favour of the international development of luxury firms. In a closed
economic context, where exports were hindered and setting up office abroad was
difficult, companies tended to delegate to
licence holders for distribution but also for
the manufacture of their products. Newly
open markets enabled companies to take
back control of their activities in most
regions, by direct investment, thus enabling
the establishment of a coherent brand
image and offer all over the world.
Until the end of the seventies, the United
States and Europe constituted the main
international markets for luxury companies. Japan’s economic catch-up after the
Second World War and in particular the
taste of the Japanese for western products
made the archipelago a key location for
growth at the end of the seventies up until
the Asian economic crisis at the end of the
nineties. Since then its relative position in
worldwide terms has diminished to a great
extent due to the rapid development in
other geographical zones. The ex-communist countries (Russia and Eastern Europe),
the Asian dragons and other emerging economies (China, Latin America…) have
taken over a growing share of sales by
luxury companies. The progressive opening
up of markets as well as the emergence of a
middle class in these countries are the signs
of a dynamic that continues to grow.
Geographical zones and turnover share (2010)
Company/
Group
Europe
Asia
Rest
AmeJapan (but
of the Total
ricas
Japan) world
LVMH –
29 %
Fashion &
leather goods
18 % 16 % 30 % 7 %
100 %
Hermès
38 %
16 % 19 % 26 % 1 %
100 %
Gucci
Bottega
Veneta
Bulgari
30 %
18 % 12 % 36 % 4 %
100 %
26 %
16 % 24 % 31 % 3 %
100 %
35 %
13 % 19 % 27 % 7 %
100 %
22 % 9 %
13 % 8 %
100 %
16 % 10 % 33 % 1 %
100 %
22 % 16 % 34 % 4 %
100 %
Yves Saint
48 %
Laurent
Prada
40 %
Salvatore
23 %
Ferragamo
Source: Annual reports of companies listed.
In conclusion, the characteristics we have
covered briefly show that the luxury business displays a rare combination of fierce
competition and of monopolies of varying
lengths in Edward Chamberlin’s view19.
The keys to success come from creativity
and innovation, both of which constitute
the ultimate boosts in firm’s differentiation
policies that enable them to establish their
market position.
This situation is all the more favourable as
some studies show that coming up to 2025,
the luxury market may reach 1000 billion
dollars20. This perspective, that is by no
mean a forecast, is based on the growth of
emerging markets (as they are responsible
for two thirds of the anticipated growth),
but also a higher level of urbanisation in the
world, not forgetting the growth potential of
a number of product categories (products
for men, leather goods and shoes…).
Dominique Jacomet, Director General
IFM, Franck Delpal, IFM, University of
Paris-Dauphine
1. Y. Moulier Boutang, Le Capitalisme cognitif. La nouvelle grande transformation, Paris, Éditions Amsterdam,
coll. Multitudes/Idées, 2007.
2. O. Bomsel, L’Économie immatérielle. Industries et
marchés d’expériences, Paris, Gallimard, 2010.
3. Montesquieu in Lettres Persanes ; Mandeville in La
Fable des abeilles ; Voltaire in Lettres philosophiques (on
trade) ; Saint-Lambert, in “luxe”, an article for the
Encyclopédie.
4. H. Baudrillart, Histoire du luxe privé et public, depuis
l’Antiquité jusqu’à nos jours, Paris, Hachette, 1880.
5. Ch. Gide, Cours d’économie politique, t. 2, livre IV,
Paris, Librairie de la Société du Recueil Sirey, 1919.
6. 7th press conference from the Président de la
République (September 21st 1972), source: INA.
7. Source: Altagamma 2010 Worldwide Markets
Monitor. This study covers fashion accessories (leather
goods, shoes, watches, jewellery) perfumes and cosmetics and tableware.
8. A number of writers use the term fashion: ready-towear is more appropriate as leather goods and
especially shoes are also subject to fashion.
9. In economic theory, two companies that belong to
the same sector of activity have either a high level of
crossover in their offer, which means that their production techniques are similar, or a high level of crossover
in their demand, which means that their products are
interchangeable in the eyes of the consumer.
10. This is the approach chosen by O. Bomsel, E.
Fieffé-Prévost et P. N. Giraud, L’Industrie du luxe dans
l’économie française, CERNA-Ecole nationale supérieure des Mines de Paris, 1995.
11. J. M. Floch, L’Indémodable total look de Chanel,
Paris, IFM-Regard, 2004 ; Identités visuelles, Paris,
PUF, 2010 (réed.).
12. R. Barthes, Système de la mode, Paris, Seuil, 1967.
13. This and following quotes from O. Bomsel, op. cit.,
2010.
14. T. Okawa, « La maison Christian Dior, modèle de
référence pour les années 1960 », in La Mode des sixties,
Paris, Éditions Autrement, 2007.
15. On the subject of the links between globalisation
and the vertical disintegration of companies see J.
McLaren, “Globalization and Vertical Structure”,
American Economic Review, vol. 90, n° 5, December
2000.
16. For a more in-depth analysis on brand discourse
and in particular an analysis of Chanel, Christian Dior
and Yves Saint Laurent, see Bruno Remaury, Brands
and Narratives. Brands and the Cultural Collective
Unconscious, Paris, IFM-Regard, 2004.
17. B. Catry, « Le luxe peut être cher, mais est-il toujours rare ? », Revue Française de Gestion, n° 171,
Lavoisier, 2007.
18. P. Verley, « Marchés des produits de luxe et division
internationale du travail (XIXe-XXe siècles) », Revue
de synthèse, 2006/2.
19. E. Chamberlin, Theory of Monopolistic Competition,
1933.
20. Goldman Sachs, A Trillion Dollar Global Industry
by 2025?, June 2010. This study includes the wines and
spirits market.
The Made-to-Measure
Approach: The Example
of Rome Today
Pascal Gautrand
It so happens that local, regional or national
particularities are generally linked to the
historical and contemporary way of producing and acquiring garments. As such, a
particular point in space, such as a city, can
produce a diachronic series. So my study
will concentrate on the city of Rome –
where I was resident at the Villa Médicis in
fashion design for a year – on the political,
legal and diplomatic heart of Italy with a
high population of politicians, government
employees, lawyers and diplomats. In
today’s world, these professions require
suits and shirts that correspond to very precise codes and are worn by a multitude of
working men. So Rome has developed a
local system of made-to-measure men’s
shirts and suits in addition to the international ready-to-wear system. In 2010 over
230 such places were listed1 which means a
large swathe of the male population have
retained a taste for bespoke garments. Far
from carrying out a complete analysis of a
local fashion micro system, this paper will
cover the point of view of one particular way
of approaching fashion and clothes with
regard to heritage-based particularities.
38
How can fashion design renew itself inside
this relatively restrictive Roman framework?
On a historical level, when we observe the
contemporary western fashion system, it
tends to mainly valorise the aesthetic and
the creative. Throughout the 19th century,
the fashion system relied on a direct relationship between the client and the
manufacturer: local seamstresses abounded
along with women who knew how to sew
and made garments for the whole family.
The number of locations and the omnipresence of the producers of the work made the
activity and a certain culture of manufacturing extremely visible in society at large.
During the 20th century, the huge industrial
and marketing progress that occurred in the
clothing sector brought the idea of design
and the figure of the designer to the fore
as the main values of a brand. As a result,
fashion moved from being manufacturingbased to being image-based, from the
production of objects to the production of
brands, from the real to signs. In Europe,
the movement of production overseas has
made the stages involved in production
practically invisible to the consumer.
Design and aesthetics have become the
main components in the fashion system,
leaving little space for the values linked to
manufacturing and the techniques involved
in producing garments.
On the other hand, one of the interesting
points that comes from the examination of
the particular case of “work clothes” is the
basic primordial issue of their functional
nature. The importance of this notion leads
to the design, trend or style aspects of the
work garment finding themselves relegated
to a supporting role. So this notion of permanence in the work garment means we
can observe and isolate certain issues that
are also true for fashion garments. Style and
design include just as many issues linked to
the oscillations between the unique and the
collective, between the individual and the
group, between the exception and the norm,
between the one-off piece and the massproduced, between craftsmanship and
industry. However, to a certain extent, heritage seems to be well placed to re-inject
some uniqueness to a system that is largely
dominated by mass-production.
During my time as resident in the “fashion
design” section at the Villa Médicis in
Rome, in 2008-2009, I took a keen interest
in what is behind this huge trend for unique
garments. In order to illustrate this I will
base my analysis on an experiment developed in collaboration with the local
hand-made fabric manufacturers, which
produced a sort of map of skills that in turn
became the exhibition “When in Rome, do as
Romans do” that was presented at the
Valentina Moncada gallery in January 2009
as part of Rome’s fashion week.
With the aim of establishing a parallel
between the local system –based on the
manufacturing of unique pieces– and the
international retail distribution system, I
came up with an exhibition project that
entailed having thirty Roman tailors of
bespoke shirts “copy” a mass-produced shirt
from Zara the most standardized product
available –both in terms of the product but
also in terms of the stores that sell them. It
was a cotton blue and white striped men’s
shirt, a traditional, relatively timeless model
that has been around for over fifty years and
will probably be still around in fifty year’s
time! It is an industrially produced shirt that
is sold all over the world in huge quantities
in a chain of stores that even standardise
their points of sale: the perfect example
of the current fashion system, based on
low production costs and a maximum retail
capacity on an international scale. The high
level of internationalisation in fashion
leaves little room these days for the idea
of local particularities or a culture of manufacturing.
On the contrary, the system of the Roman
tailors relies on the direct retail relationship
between manufacturer and client; I was
interested in highlighting those particular
values by inviting thirty Roman tailors to
“re-make” the same shirt. So thirty unique
pieces were made each characterising each
tailor’s own culture, not to promote their
own design skills or creativity as it was a
question of “copying” a precise model, but
more to display the particularity that the
skills of each tailor imprinted on the shirt
that made each product unique. As a result,
the same object, made by thirty different
people, is still a different object, even if the
aesthetics are the same. In addition, the
installation of the thirty shirts was accompanied by a series of video portraits of men,
each of whom told a story about a shirt.
This set up, besides the invisible values
linked to the manufacturing of the garment,
underlined the idea of the appropriation of
the garment by each client-consumer. The
idea was to show how a standard shirt can
become a good-luck charm or an object that
projects values that go beyond the aesthetic,
values that are invisible to others but that –
for those of us who create that particular
link and the projections on to the garment –
change the meaning and value of the object.
Rome may not be a fashion capital – in the
same way as Paris, Milan, New York or
London –but it is unquestionably the political capital of Italy. It is the country’s legal,
diplomatic and aristocratic centre that at the
same time includes many professional
congregations that are obliged to dress
themselves in a classic, even traditional
manner. Why then, in the eyes of the client,
would a bespoke shirt be more singular than
a ready to wear shirt? There are doubtless a
number of reasons. The very act of having a
shirt made to measure supposes an arbitrage
between personal choice and the obligation
to belong to a group when the time comes to
choose one’s tailor. The share of personal
expression relies first of all on the choice of
fabric, colour, motif and details such as the
type of collar, its rigidity, the shape of the
cuffs or the different types of buttons and
buttoning options. Through the choice and
enumeration of his own taste, the level of
implication on the part of the client in the
creation of the garment is obvious. The fact
that the client is ordering a product that
doesn’t exist yet confers a greater responsibility on the client in terms of design, unlike
the ready to wear system where the onus is
on the brand, the designer or the couturier
and his team. Involvement on this level
inevitably changes the client’s perception of
his own shirt. In fact, in Italy the concept of
the Latin term ad personam2 is very present.
The term is often used in everyday language or in the press, not merely to define a
political stance; it is also frequently found in
presentation brochures or on the Internet
sites of Italian tailors who provide a made to
measure service.
Beyond personal aesthetic preferences, the
personalisation of the made to measure
shirt also occurs through the application of
the client’s initials. According to a frequent
custom in Rome, men have their initials
stitched on the left side of the shirt. They
can be placed elsewhere, on the cuffs or on
the collar. Choice is expressed through the
thread used, its level of contrast with the
fabric of the shirt, and the type of characters
used: capitals, lower case, straight or in italics. This factor is crucial in terms of
self-presentation but also in terms of the
position one adopts relative to the group
one belongs to, or, on the contrary, the
group one wishes to be differentiated from.
In Milan in the eighties for example, ambitious young men had their initials stitched
very obviously on the collars of their shirts.
Their symbolic importance is such that tailors offer to stitch them by hand even if the
rest of the shirt is entirely machine-sewn. It
is as if the most obvious reflection of the
client’s personality on the shirt must imperatively be the result of the most “human”
part of the manufacturing process.
In addition to the degree of representation
and self-valorisation, for the client, having a
shirt made to measure also represents the
notion of belonging to a group. First of all
the very product in question, the shirt, is a
veritable archetype of male clothing, in as
much as it expresses the passage to adulthood and the representation of masculinity.
As such, when a young man turns eighteen,
he is often given the gift of a made to measure shirt by his loved ones. So having a
garment made is almost a ritual or a rite of
passage. As for the representation of masculinity, I can quote a story told to me by
one of the tailors. It was about a police
woman who came to have her work shirts
made to measure as her male colleagues had
theirs done at the same tailor. And while
salaries in general are not very high in
Rome, she insisted on only wearing made to
measure shirts at 100 or 120 euros each
under her uniform… Having her shirts
made to measure was also doubtless a
means for the policewoman to compete
with her male colleagues on an even playing
field by joining the “club who wear made to
measure shirts, made by this tailor”. In
other cases, the colours and choice of fabric,
types of stripes are often also used to show
one’s membership of a particular political
party. In the same way that a tie of a certain
colour can also make a political reference,
these extremely traditional garments use
numerous symbols that are not written
down but that nonetheless exist and project
the idea of belonging to a group.
I should point out that word of mouth is
essential in this system as it doesn’t rely on
marketing or advertising. When one knows
a good tailor, one passes on the information
only to colleagues or people one likes. As a
result a system has developed that is not
unlike that of private clubs, to the extent
that certain tailors I approached to make a
shirt and take part in this exhibition did not
wish to participate and above all preferred
not to have any kind of publicity or even to
avoid any confusion with the thirty other
tailors. Their usual clients are often made
up of politicians and international businessmen whose custom enables the tailor to fill
his orders and leaves no room for new
clients. These boutiques are often invisible
from the street and are not in either the yellow pages or on the Internet, they represent
the marketing antithesis of the average
ready to wear chain that searches for the
best sales zone with the most footfall
and the highest possible level of visibility
through advertising.
The manufacturing process is invisible in
the contemporary fashion system. When
the client walks in to a ready-to-wear store
the product is already there, most often the
result of overseas production. One doesn’t
know where it has been made, some “made
in” labels indicate the origin of the product
in a very vague manner –and at times are
completely false. For all of these reasons, it
is quite difficult to get a real idea of the
manufacturing and work involved. Both the
manufacturing and the human input to that
manufacturing are major components of
the design of these garments, most often
ignored by current brands. In fact, this local
micro-system relies on the handing down of
skills, on heritage and the notion of family
to which Romans and Italians in general are
much attached. Until now, all of these
points work in favour of the continuation of
a system that has almost disappeared everywhere else in Europe. Most of the tailors I
met in Rome are tailors from father to son
for many generations often in the same
location with the same skills and a clientele
that is also passed down from one generation to another. This entails an emotional
attachment to the work that can be felt, it is
symbolically very important for tailors to
practice and maintain the profession of
their ancestors. This is becoming an issue
today in as much as the younger generation
do not have the same emotional ties to the
job and sometimes finding someone to take
over the business is not easy.
The idea of manufacturing is also extremely
important for tailors as it is handed down
orally from father to son, from master to student. For example, when his parents died,
one of the tailors I met inherited a groundfloor shop and a basement workshop. His
first reaction was to break with tradition and
to modernise everything. He went to Ikea to
buy office furniture: a mixture of “fake black
wood” melamine panels with smoky glass
and brushed aluminium. Once the store
was refurbished, he soon found it impossible to be both in the workshop and the store
as he took care of both the shirt cutting and
the customers. So to solve the problem he
set up a big plank of chipboard on a table in
the centre of the store, totally out of keeping
with the sparse Ikea look of the furniture
and that is where he now cuts the shirts for
his clients. In doing so and in a completely
involuntary and unthinking manner, he
shifted manufacturing right into the centre
of the point of sale, by pure necessity. His
initial wish to have a fashionable, modern
store meant the type of furniture he chose
had a certain neutrality to it, but at the same
time, his almost emotional attachment to
both manufac-turing and customer relations (the two mainstays of his profession)
meant he had to make some awkward modifications to his space, thereby proving the
importance of the visibility of manufacturing in this system.
The idea of handmade garment and specifically things that are “made in Italy”, are a
question of national pride in Italy, much
more than in France. When one lives in
Italy, it is common to hear the expression
“made in Italy” every day. This subject is in
the news at the moment as a law3 has just
been gone through to control fake labels
and to give a real value to the term “made in
Italy”, as it has been tarnished by the scandals of the clandestine Chinese workshops
in the Prato and Naples regions and
imported Asian products with fake “made
in Italy” labels.
To conclude, it is easy to believe that all of
the elements that make up the links
between the client and his garment,
between the tailor and the garment he
makes and between the client and the tailor,
contribute to the “design” of the garment
and the choice of tailor. Whether they come
from one’s own personality or narcissism,
from one’s relationship with the social environment or the local manufacturing
culture, these elements are added on as an
extra layer to the garment, not a visible layer
–the aesthetic is untouched– but symbolically to the extent that they transform the
perception the client has of the garment.
The translation of these elements into the
contemporary fashion field would doubtless
be an efficient means to bring some meaning back to the international fashion system
and to ready to wear brands who only very
rarely take these values into account. But
how is it possible to introduce non industrial, truly singular actions to a milieu that is
completely industrialised from manufacturing to advertising?
Pascal Gautrand
Independent Fashion Designer
1. Un guide sur mesure. Rome, 239 lieux de la Capitale où
l’homme peut se faire réaliser vêtements et accessoires sur
mesure (A made to measure Guide. Rome, 239 places in
the Capital where a man can have clothes and accessories
made to measure), by Andrea Spezzigu and Pascal
Gautrand, introduction by Silvia Venturini Fendi,
Palombi Editori, 2010 (The Italian and English versions have already been published.
2. Latin term: that which addresses the private individual, that which comes from his private life.
3. The “Reguzzoni-Versace” n.55 law of April 8th 2010,
unanimously voted by the Italian parliament, forbids
the use of the label “Made in Italy” on textiles, shoes
and leather goods whose different production stages
have not occurred for the most part in Italy. At least two
of the following must take place in Italy: threadmilling, weaving, dye-finishing and manufacturing.
Luxury, the Accursed Share
and the Capital Gain
Nicolas Liucci-Goutnikov
The confiscated excess. “Luxus” is excess and
debauchery1. It is the excess inevitably produced by all human society, the surplus
referred to by Georges Bataille as the “part
maudite”2 (the accursed share) and which
has but two uses: to be spent by all in an
extension of the democratic process, or to be
used, excessively, meaning in debauchery,
by a certain minority who appropriate the
monopoly of the excess. As the economical
mechanics of managing excess, luxury corresponds to the latter. It entails the
confiscation of the accursed share for the
benefit of a minority. Once this confiscation
takes place, a monopoly on the enjoyment
of this accursed share is established. When
this happens, luxury comes into being3.
A quality of possession. Luxury thus only
represents the monopolistic quality of the
use of a certain surplus of energy, crystallised in the form of certain objects or events4.
It is the term that signals the appropriation
of a more or less long-lasting but always
exclusive object by a minority.
To sum up, we must go with Sartre who
said: “luxury does not designate the quality
of the object possessed, but the quality of
the possession”5. Let’s reiterate: a quality of
possession that is monopolistic. As such,
luxury is necessarily subsumed by the
category of quantity; the exclusive appropriation of a flow demands the possibility of
quantification.
Enumeration and authenticity. That which
through its nature cannot be quantified, can
not be termed a luxury. This is the case for
everything that is related to Ideas, as in
concrete terms, it is not possible to confiscate ideas. Of course, one can wish to
appropriate the physical manifestation of
those ideas (a book, a sheet of music, etc.),
meaning objects and events where their different notations are written or expressed.
But this appropriation is always doomed to
fail as another notation, as perfectly identical to the idea as the first can always be
reproduced. This is why literary or musical
works can not be deemed luxury objects,
unlike some of their physical manifestations
(and in a perfectly contingent manner):
books with pages made of 18 carat gold, platinum compact discs, five-star concert halls,
etc. As Nelson Goodman6 showed us, for
these types of works – allographic works of
art – the notion of counterfeiting doesn’t
apply: “Haydn’s own manuscript is no
more authentic a version of the music than
a copy that was printed this morning”7.
There can not be a fake version of the Eroica
or Le Bateau Ivre: the terms used would be
plagiarism, pastiche or parody.
Luxury refers only to objects that can be
enumerated. Objects that, unlike allographic works, are nothing more than their
own physical manifestation (this object I
am holding, this object I see, etc.). In other
terms, as Gérard Genette8 showed us, autographic objects. And the autographic
regime relies essentially on the notion of
authenticity. A work of art is autographic “ if
and only if the distinction between the original and a fake has a meaning ; or even
better, if and only if it’s exact reproduction
does not have, de facto, the status of authenticity”9. As such, there can be no luxury if
the exact reproduction of a luxury object
makes it authentic also. This is why, like
paintings, luxury objects are often signed10.
43
Rarities. More than any others, objects that
exist in limited quantities are ripe for confiscation – this explains why we often establish
a correlation between luxury and rarity.
Whether or not it is necessary, this rarity
does not have to be natural in any case. It
matters little that it is an actual fact or an
artificial construct. The rarity that is monopolised in luxury is a rarity that is identified
in nature or one that is man-made with the
aim of confiscating the usage thereof. This
almost mechanical rapport with rarity highlights luxury’s most admirable dimension,
whose producers seem to be urged, as if by a
natural vocation, to protect the most fragile
of skills. In the world of artefacts, the most
immediate rarity is that of exceptional skills
which today means craftsmanship and
skilled techniques.
An unnameable quality. Luxury concerns
only objects that can be enumerated and
that exist preferably in limited
quantities. Nevertheless is it possible to
establish a typology? Apparently not. Any
kind of object can be a luxury object on
condition that its use, within a group, a collective, a human society, is monopolised by
a minority. So the idea of luxury must be
removed from taste systems, which deem
that the use of goods is relatively evenly distributed throughout the different regions of
the social space. Thus, the concept of luxury
can not find its place within the schema of
La Distinction, according to which one can
only love what one is used to; the proletariat
get red meat and open legs, the bourgeois
fish and stiff backs. Indeed, red meat and
fish constitute luxury objects here and now
if and only if their use is monopolised here
and now by a minority. Corollary: seeing as
monopolies can be broken and usage democratised, there is no type of object that
remains a luxury object permanently.
However, there are solid beliefs according to
which certain types of objects are necessarily
luxury objects: precious stones, hand-sewn
embroideries, wines from certain cepages,
etc. These same beliefs enable a subject to
recognise and call objects endowed with
certain substantial characteristics at first
glance “luxury objects”. Their origin resides
in the confusion that leads people to see the
cause of luxury in that which is but the provisional consequence of a monopolistic
situation. As a quality of monopolistic possession, luxury necessarily presents itself in
certain particular forms that depend on the
very nature of the monopoly in operation.
One can, at any point, establish a synchronic list of objects whose use has been
monopolised, and manage, by reduction, to
work out the properties (which is exactly
what Bourdieu does in La Distinction).
However, these properties are as fleeting as
the monopolies. As monopolies fall, the
luxury object loses its label and demeans
itself; inevitably, degradingly, its properties
appear out of date. This has been the fate
of a whole range of objects, from the automobile to cotton clothes, from enamel to
perfume.
Let us note that the clues to the unnameable
quality of luxury popped up at the start of
this article. The only quality of the accursed
share is that it is an excess, unformed, that
can also be spent by all in an extension of
the democratic process. Luxury merely corresponds to the complementary occurrence,
exclusive to the first, the confiscation by and
for a minority.
Prior confiscation of means of production.
Luxury is the confiscation by a minority of
the excess produced by the collective that
exists virtually for the collective. For the
confiscation of the accursed share to take
place, there has to be an imbalance of power
within the society. A certain dominant relationship must exist for the excess to be taken
from the collective by a minority; and this
minority must possess the necessary power
to deprive the collective. However, power is
the ability to produce effects. Being power-
ful is being in possession of the means to
produce effects, to possess the means of production. A minority that has the capacity to
confiscate the accursed share is a minority
that “already” owns the means necessary to
produce such a confiscation. In other words,
luxury is based on the partial or total always
major, prior confiscation of the means of
production of effects.
In feudal societies, the means of producing
the confiscation were traditional and legal:
certain fabrics, certain colours, certain
accessories were restricted by law to the aristocracy. The sumptuary laws of the late
middle ages and the Renaissance made sure
the monopolies were respected had the need
arisen. But in the particular conditions of
the capitalist democracy that consecrates
equality in the law, no privilege can be given
to a minority for the sole reason of the individual qualities of its members (inheritance,
physical strength, etc.). The confiscation of
the excess is thus based on other foundations: the inequality of means that
accompanies the equality in law. To be more
precise, in a democratic and capitalist
regime, the objects that can be confiscated
are in the form of merchandise and their
confiscation occurs through the exchange of
money. The means to produce the confiscation are, as such, fundamentally financial.
They are subject to the prior accumulation
of economic capital. The object, now a
luxury merchandise, has thus become a
piece of merchandise of universal virtual
use that is expensive enough to produce
confiscation.
The signals and symbols of luxury. Money
constitutes the universal equivalent11 as it
can be exchanged for any merchandise. It is
a sort of floating signal that can express all
types of signs. In this regime of equivalence,
the price does nothing but call the money
towards the merchandise. As a result, a
piece of luxury merchandise, as it can only
be defined by its price, high enough to pro-
duce confiscation, can, like money itself,
adopt infinitely diverse forms. It owes this
contingency to the essential tautology that
forms it and makes it, like wordplay in
which “une marchandise de luxe est chère
parce qu’elle chère” (a piece of luxury merchandise is dear, because it is dear). In other
words, the only constraint to its appearance
is to signal its economic confiscation, in
other words it has to look expensive.
Evidently, the signs that display a crystallisation of a high level of social work in
a piece of merchandise can be listed:
diamonds, pearls, gold, platinum, silk,
embroidery, ribbons, stitching, overstitching, hand stitching, saddle stitching,
sophisticated cuts, etc. Each of these signs
attests to the superior exchange value of the
merchandise, and as a consequence, its
price. These signs are what Emile
Benveniste12 refers to as signals, as they are
linked to that which they signify “naturally”: it is clear that diamonds, pearls or
platinum signal a natural rarity, meaning a
high level of crystallised work, as it is particularly difficult to extract these precious
materials. This also goes for any kind of
complex work (embroidery, sophisticated
cuts, etc.). All of these things are expensive,
so all “naturally” signal a higher price tag.
Because signs are not linked to what they
signify in a “natural” manner, symbols can
also signify a higher price tag. Symbols
(logos, signatures and other autographs) are
for example what enables a simple cotton tshirt to be transmuted into a piece of luxury
merchandise. It would appear that what
Roland Barthes considered to be arbitrary
semi-logical systems, systems in which the
signs are “based not on contract but on unilateral decisions”13; Barthes had identified
the fashion system as such. Fashion, apparently demands significations: “Blue is in
this year”, “We love, we hate”, and so on.
The symbols that refer to luxury appear to
impose themselves in the same way. They
signify economic confiscation, finding
themselves, according to methods that we
will not develop here14, invested with a mysterious power to make things expensive.
The ideal. In a democratic and capitalist
regime, economic confiscation is the necessary and sufficient condition for luxury to
exist. This implies that the minority that is
capable to confiscate luxury objects is also
that which has accumulated the economic
capital prior to this. In other words, the
accumulation of capital is the differential
function of luxury. It is easy to determine
the optimum of such a function: it corresponds to the total confiscation of the
means of production that means the confiscation of the capital itself. The ideal set-up
of for luxury is then the ideal individual
who possesses the means of production
exclusively, in other words, the capitalist.
This explains why the topics of luxury never
fail to signify the monopolisation of the
means of production; meaning non-work or
otium; which refers to work that is accumulated and crystallised and accomplished by
others; meaning everything that follows,
including, but as a sideline, the cultural
refinement that goes with a life of
contemplation15.
From the accursed share to the capital gain. As
the confiscation of the accursed share by a
minority, luxury now reveals itself to correspond to the exploitation of over-work –
meaning, in Marxist terminology16, work
accomplished by the worker and not paid
for by the capitalist. As such, like the accursed share, over-work is itself an excess: it is
that which, during a day’s work, is added on
to the necessary time for the reproduction of
work. The capitalist extracts the added
value from the overwork. When the added
value is converted into merchandise and it
“dissipates (…) like revenue, instead of (…)
growing like capital”17, then the luxury
merchandise appears. And the capitalist
behaves like the nobility in feudal times,
“impatient to devour more than their due,
parading their luxury, their numerous and
lazy domesticity”18.
Nicolas Liucci-Goutnikov
Researcher and Curator
1. Cf. Gaffiot, article “luxus”, Paris, 1934.
2. Georges Bataille, La Part maudite, Paris, Editions de
Minuit, 1967.
3. Luxury as a complementary and exclusive occurrence of the “democratic use of the excess” is logically
the opposite. There can therefore be no such thing as
the “democratisation of luxury”. To democratise
luxury would mean the end of luxury.
4. Gérard Genette, quoting Wittgenstein, reminds us
that things are merely “relatively stable conglomerates
of events” (L’Œuvre de l’art, Paris, Seuil, 1994, p. 39).
We will use the term “object” for its ease of use.
5. Jean-Paul Sartre, L’Etre et le néant, Paris, Gallimard,
1943, p. 666.
6. Nelson Goodman, Langages de l’art, Nîmes,
Jacqueline Chambon, 1990.
7. Ibid. p. 146.
8. Cf. Gérard Genette, L’Œuvre de l’art, Paris, Seuil,
1994.
9. Nelson Goodman, op. cit., p. 147
10. This is why luxury brands fight counterfeiting so
intensively.
11. Cf. Karl Marx, Das Kapital, Book 1, Section 1.
12. Cf. Emile Benveniste, Problèmes de linguistique
générale, Paris, Gallimard, 1966.
13. Cf. Roland Barthes, “Eléments de sémiologie”,
Communications, n°4, 1964, p. 111.
14. The value of symbols must as such be placed in the
perspective of a belief system of a magical type. On this
subject, the writer refers you to his own article “L’œuvre
d’art, idéal-type de l’objet de luxe ? Michael Jackson and
Bubbles et la Maison Jeff Koons”, in Le Luxe. Essais sur
la fabrique de l’ostentation, Olivier Assouly (ed.), Paris,
IFM-Regard, 2011.
15. Cultural capital is thus independent of the system.
It is certain that the accumulation of cultural capital by
a fraction of the minority with the means to produce
the confiscation enables it to stand out from the less
endowed fractions. But that the merchandise confiscated by the cultivated fraction making it “refined
luxury” and the merchandise confiscated by the less
cultivated fraction make it “vulgar luxury”, is of no
importance. The cultural leap, which is qualitative,
from vulgar to refined, remains outside the realm of
luxury. Luxury is not a distinction. It is, for better or for
worse, a confiscation.
16. Cf. Karl Marx, Das Kapital, Book 1, Section 3.
17. Ibid, p. 600.
18. Ibid, p. 601.
Responsibility and
Profits: What Temple of
Luxury has Taken on the
Role of Guardian?
Selvane Mohandas du Ménil
A New Situation
“Faire du ciel le plus bel endroit de la terre”
(Making the sky the best place on earth):
the Air France slogan first used in 1999
illustrated the extent of the ambition of the
French national airline’s company mission.
From then on, the issue was no longer a
simple means of transport with clear, fixed
promises –“La ponctualité est notre
meilleure publicité1” (Punctuality is our
best advertisement)–, or even simpler, evoking just movement –“L’Art du Voyage2”
(The art of travel), “Demandez-nous le
monde3” (Ask us for the world)–, it became
a way of approaching the universe from a
new angle, even considering another way of
life. The brand itself was no longer enough
to attract clients, despite the fact that it was
absolutely evocative of its offer.
Another big name, the EDF (French electricity company), that even had the advantage
of a monopoly until 2007, illustrated this
point to an even greater extent: “Nous vous
devons plus que la lumière” (We owe you
more than just light), thus evoking an emotional connection with the client-partner
rather than the client-payer, and even
“Donner au monde l’énergie d’être
meilleur” (Giving the world the energy to
be better), positioning itself as the means
through which the world could be made a
better place, as simple as that. Their most
recent slogan, “Changer l’énergie ensembleiv” (Changing energy together)4, reflects
both the idea of a partnership and a quasimessianic ambition for a different,
transformed and better world thanks to the
efforts of the company and the moral and
financial support of the end client.
In both cases we are dealing with brands
whose role and function are clear and even
mentioned in the company name, but who
are no longer just selling a product or a service –“Air France transporte tout, partout5”
(Air France transports everything, everywhere)– like they did in the fifties, or
proposing a getaway to a client in search of
self-affirmation and success and under
social pressure like in the eighties, or even
attempting to re-enchant a client who is sick
of the consumer system as was the credo of
worried brands not so long ago. If we take
things literally, it has now become a simple
question of proposing a new vision of the
world rather than an attempt to re-enchant:
the individual is no longer a client; he or she
has become a partner, the centre of the company’s preoccupations, and co-author of the
efforts that the brand is making to change
the world. In exchange the brand requires
his or her total submission as is evident from
the obligations forced on Flying Blue6 passengers to retain their status or by simply
reading the EDF’s Terms and Conditions.
The brand becomes an artificially created
interest group, and makes the means available, in particular in the form of rights and
duties, that enable the new client-actor for
change to become responsible for the mutation of his or her own consumption, of his
or her own life. In a globalised world that
makes national differences obsolete, it is
tempting to talk of a quasi “brand citizenship” that shapes the identity of the client. It
is edifying to see the virulence of the
exchanges between the pro-PC gang and
the pro-Mac gang on discussion threads, or
even to listen to the treasure trove of arguments put forward by loyalty-card holders
to prove the superiority of the airline they
use. We find ourselves emotionally defending a project that is dear to our hearts
instead of rationally comparing the pros and
cons of a simple brand.
In retrospect, it is enticing to see here the
premise for a 2.0 world where the client
contributes to his or her own consumption,
which is then theorised and improved
though social networking sites (Facebook,
Twitter, and Google). But beyond this
vision, in a jaded world with no belief system and where trust in institutions is
flaking away, is it not possible to extrapolate
the notion of “brand citizenship” to also see
a political angle? After all, nothing is stopping brands from injecting a bit of ideology
to the mix. If we read the brands’ “master
plans” –making the sky the best place on
earth, giving the world the energy to be better– they start sounding like an ambitious
and poetic pseudo-political programme, to
which we latch on willingly, becoming de
facto members of the brand’s community7.
Luxury in Context
Now, let’s look at the luxury industry, an
industry that by definition possesses all of
the components necessary to gather a group
of clients together around the same vision,
whether it be historical, qualitative or emotional, and who, in return, actively
participate in its mission and legend, fifty
years ago by wearing haute couture, ten
years ago by placing a special order and
today interacting with the brand online.
The notion of “brand citizenship” is not
new: twenty years ago one “was” either a
Lamborghini person or a Ferrari person;
today we interact in an almost intimate fas-
hion with our favourite brands (whether we
are actual clients or not is practically irrelevant). Burberry is a case in point. It hit the
three million fans mark on Facebook in
November 20108 and was redefined by the
vice President of Facebook EMEA–
“Through the creation of original content,
Burberry is no longer just a fashion company –today it is a thriving media business”
illustrating the brand’s capacity for generating content to make the clients faithful as
they become both spectator and actor
thanks to the tools available through
Facebook9.
Luxury is a dream for most people and
numerous sacrifices are possible in order to
acquire a product. But beyond hedonism,
individual pleasure, aesthetics and enjoyment, is it possible to detect a political angle
in this “dream brand citizenship”? And
taking things further than simply the product, are luxury brands ready to adopt a
public political stance that goes beyond the
quest for profit? What are the issues at
stake? Is this fundamental for the future of
the industry? What are the consequences
for Europe?
The notion of “brand citizenship” which is
not unknown to luxury brands is evident
today in the Luxury Lifestyle, which represents the latest evolution in the sector. The
conspicuous consumption of luxury products was traditionally meant to reflect
social status, to transmit a veritable message
to the spectators of this ostentation10. By
buying a luxury car, the buyer was affirming
to a family car owner that they didn’t need
to restrict their consumption according to
their needs. However, this repetitive
consumption of luxury, associated with the
continuous increase in buying power since
the Second World War, has distorted the
representation we have of the world.
Luxury went from exceptional to normal
and became a way of life rather than a mere
ornament of life. Patrick Bateman11 turned
his existence from the initial, hedonistic life
decorated with rare and costly objects, into a
hell controlled by possessions and neverending lists of the luxury brands that made
up his universe, the sine qua non condition
for his happiness, independent of the nature
of the products in question.
That this luxury has now become a “lifestyle” is obviously good news for brands, as
sales have multiplied exponentially: the
industry is set to make stupendous profits
this year12 and is seen as the goose with the
golden egg, not only recession-proof but
benefiting from the recession, given the
impressive growth rates of the companies
involved, and totally unaffected by the
macroeconomic environment. These profits
are the result of unbridled expansion, whether it be through the products–, by
expanding ranges–, through the clientele –
by attracting a client base that gets broader
every day and is more sensitive to the brand
itself than the intrinsic quality of the product–, or through geographical expansion –
which today enables relatively easy access to
brands, regardless of the location–. The
priority of the big groups is to make the
most profit possible and they don’t make
any attempt to hide this, as their growth
rates soar while the brands themselves
become banal. The have gone from being
the ambassadors of a certain “European art
de vivre”, to becoming simple logos or labels
to be collected, or to be replaced as quickly
as possible according to the seasons and
trends instigated by the system itself to keep
up the rate of constant trend renewal13.
All of the big players are increasingly committed to this route, aided and abetted by
high sales and total commitment from an
aspirational clientele looking for material
happiness. This however means a brand
citizenship totally empty of meaning:
luxury federates, but federates around
nothing, luxury is convincing, but of
nothing. Indeed, it can not be reduced to a
hollow “Luxury lifestyle”, the simple possession of rare and costly goods. According
to Vincent Bastien and Jean-Noël Kapferer,
“luxury is based on hedonism and aestheticism, and not on an overconsumption that
leads to saturation and disgust; the world of
luxury is to be, for oneself and others, and
not to have”14. To sum luxury up by the
mere overconsumption of expensive products removes everything that makes it
specific and its differences relative to any
other type of product15.
We should also ask ourselves what the
future holds for brands that are, in the end,
relatively similar except through their history, accessible to all and everywhere, whose
unique characteristic is now merely of high
cost “market positioning” and not a message whatever it may be16. The sales results
are undeniable, so is it really important to
worry about this lack of commitment or
stand? It is perhaps useful at this stage to
remind ourselves that historically, luxury
possesses an important political component
through the power it displays and confers.
It began to materialise in the shape of the
expression of brute force and the financial
or temporal capacity to focus huge resources
toward a non military or strategic aim.
The statue of Athena in Phidias, inaugurated at the Parthenon in 438, twelve metres
high and entirely covered in marble and
over 100 kilos of gold, is a perfect example:
such expense merely went to prove the city’s
capacity to mobilise precious resources, it
was a demonstration of unused power. In
addition, the statue was really a safe; the
gold could be removed at any moment. This
unused power did not just have geostrategic
interests; it also played a role of internal
regulation. The Chinese showed this as
early as 1364 with the introduction of signed
ceramics, for imperial use only, on pain of
death. The inaccessibility of luxury – today
through the cost of the products but then
through the accreditation system of the dif-
ferent powers that were –thus also had a
political function, something that Louis
XIII understood perfectly when he tamed
the French nobility by creating the Court
and its refined but ruinous and addictive
pastimes. Colbert, by developing manufacturing and luxury fabriques, added a new
component: luxury was no longer a passive
political element (an affirmation but with
no precise action), it could also serve the big
picture, in this case financing the armies of
France and its foreign policy.
In addition, this political component was
something Napoleon, and more recently de
Gaulle, understood fully. The ocean liner
France and the Concorde aircraft, with their
luxury finishes and services (a great number
of craftsmen and suppliers were involved,
beyond the simple cost of the service), were
glossy proof that France was capable of
incarnating a third way, an alternative to the
United States and the USSR, in addition to
displaying its economic independence.
Luxury and Responsibility
Today, we are forced to admit that the big
names in the sector are obviously taking
great care not to take a stand, to avoid any
possible misunderstanding, and their involvement in the social fabric is becoming less
and less obvious or visible. This strategy is
certainly lucrative in the extreme, but it is
far from safe in terms of the very future of
the luxury sector. By appealing to a clientele
that with each purchase is less convinced as
to the specific nature of the purchase, selling
a product that is more and more accessible
and less and less exceptional, the industry is
gambling with what has always made it
unique.
Indeed, what does luxury really mean today,
as an idea and not as an industry? Quality,
skills, but also values of generosity, humanity, hedonism and real knowledge on the
part of the client to appreciate the object,
understand the cost, be aware of its specific
nature. These elements are all communicable and all belong, obviously, to European
culture. So today we can see a component of
European “soft power” in luxury, and as
such imagine that it is possible to inject
content. The Hollywood dream machine,
on another register, is the best example in
the U.S.
At a time when Europe’s decline is acknowledged, visible and tangible, as Europe
loses confidence in itself as Asia rises and
the U.S., even when under pressure, has no
intention of resigning itself to the inevitable,
luxury may enable the European political
block to transmit a cultural and voluntarist
message, that goes beyond the simple promotion of a way of life that is nothing but an
illustration of the “museumisation” of the
continent, of Italy and Paris in any case, that
is out of touch with most of its citizens. Of
course, luxury should not be seen as an
offensive diplomatic weapon, but at least as
a rampart that protects European specifics
in terms of culture and skills.
Are such positions financially feasible? Is a
clear commitment to national and continental skills compatible with financial
results given the profits the sector is currently making?
The increased responsibility of a few fashion houses doesn’t seem to have had an
adverse effect on their profits, as they themselves are experiencing the same boom as
brands with an exclusively economic realpolitik. Hermès and Chanel are the best
examples, through their exclusively French
manufacturing units for the products in
question, including ready-to-wear and leather items, but also for their defence of
specific skills through financial participation in structures that are not necessarily
profitable but illustrate and preserve the
technologies necessary to product luxury
goods.
Bruno Pavlovsky, the CEO of fashion at
Chanel, is clear about his intentions: “We
wanted to make sure that the skills and professions that are essential to the luxury
industry stayed in France. With no investment and a lack of successors, they were
running the risk of disappearing altogether”17. Hermès is a stockholder in, among
others, Puiforcat, the Cristalleries de Saint
Louis, Perrin & Fils, Bucol, and announced
in its first quarterly financial report for
2011, that “the long term strategy, based on
mastering skills (…) remains a priority. The
theme of the year 2011 (…) focuses on the
excellence and authenticity of the crafts and
skills that constitute the base on which this
house has built its success and its future”.
The message is clear, for Hermès and
Chanel: European skills are non negotiable.
This is also true for Van Cleef & Arpels who
have kept manufacturing in France for skills
that mean that 80% of their turnover is on
special orders rather than on mass produced
items thus going against the trend of
modern economic logic. In addition, the
house is constantly investing in research
and development to retain their technological edge over the competition and thus keep
producing exceptional products. So here we
are dealing with the preservation of skills,
with probably lower profit margins than
with those manufactured externally, even if
this information is obviously impossible to
verify.
What about the necessary education, the
culture required? Luxury is not only a
question of skills; it must also be something
one deserves, either in terms of understanding or product accessibility. At a time when
practically all brands are available in stores
in the most remote cities of Eastern Europe
or Asia, not to mention online, certain houses have gone down the inaccessible route.
Hermès, Chanel, yet again are very good
examples, as they have no wholesale18 setup or do not produce enough to fulfil the
demand. Goyard is another good example:
the house chose to wait for many years
before opening its Mount Street store in
London in 2009, rather than giving in to
Harrods demands, even though Harrods is
courted by all luxury brands, and a presence
there would probably have enabled the
small house to expand more rapidly. But
rather than go for growth at any cost, the
family that owns Goyard decided to choose
its own store location and wait patiently. In
this case, the limits it put on sales despite
the natural need for growth, displays an
almost ideological and antithetic vision of
the current dominant thinking: luxury is
not for everyone.
A Crisis in the European Monopoly?
Does this mean that taking a stand in favour
of local skills and high quality is a swan
song or a nostalgic vision of a glorious past?
After all, as Christian Blanckaert readily
admits19, “The theory that luxury is the preserve of the French and the Italians is now
losing credibility (…). The world of luxury
is starting to lose its borders”. So why stick
to a position that is inherited from the past?
The few houses mentioned above such as
Hermès, Chanel, Van Cleef & Arpels,
Goyard, do not seem to be resting on the
laurels of their past, on the contrary: their
competitiveness and innovative edge are
very real.
But business is business, and that applies to
the luxury industry also: reducing production costs means more profits. This precept
is in part responsible for the complete disappearance of the luxury shoe sector in
France, after having been the leading
manufacturer up until the seventies. As the
CEO of Oscar de la Renta, Alex Bolen, said
in 2010: “Ultimately we have to sell stuff,
this is not an art project”20. The changes in
luxury detailed above, led by the big groups,
goes against the idea of cultural preserva-
tion or the affirmation of one of the last
technological superiorities of the continent
of Europe21. This would involve the houses
taking responsibility, and not all are prepared to do so, like Prada or Burberry who
outsource for cost reasons only, respectively
in Turkey for Prada’s leather goods and
China for the British brand’s shorts22. In
addition, the profits made ensure French
luxury the support of specialist institutions
like the Comité Colbert: when, questioned
on the painful subject of outsourcing in
luxury, they reply that no one asks Renault
where their cars are made, and claim to
believe more readily in “made in Dior”
rather than “made in France”23.
However, the Stakes are High
The increasing banality of the big name
luxury brands and the loss of their distinctiveness in the mind of the client – or at least,
as it is envisaged in France – as the consequence of the spread of the Luxury lifestyle
is disturbing. We should remember that
luxury brands are brands of image rather
than brands of accounting columns24 proof
being the total volume of sales in the sector,
164 billion Euros in 2008, or the equivalent
of Toyota’s sales25. The banalisation process
is already happening in emerging markets,
where we can see that the perception of
brands is often the complete opposite to the
reality. Should we also note that luxury
doesn’t have a slogan? In the absence of any
cultural content and clear strategy besides
that of making profits, there is a huge risk of
confusing consumers forever. Of course, we
are constantly hearing that luxury has survived its own moral crisis without a scratch,
that it is no longer a question of flashy,
consumer-based luxury. How are we to
believe this at a time when growth is being
led by emerging markets with different and
status-based logics of consumption, and
with spending by luxury tourists, also moti-
vated by status26? Luxury products are now
bought for the most part by the middle classes rather than by the “super-rich”27.
Luxury is now run by business and not by
brand and is losing itself in the massive proliferation of objects when the industry really
should be trying to create bonding, despite
the risk of rejection, instead of spreading all
over the place. It is, in fact, the only legitimate industry that can adopt this kind of
behaviour, if only it would remain faithful
to its own values.
We could also object to the position adopted
by the Comité Colbert when production
outsourcing is dismissed in the name of
brand power. In addition to the fact that a
banalised brand (or to attempt a neologism
“commoditised”) will necessarily be weaker
and less powerful, pure design is in no way
a competitive advantage. On the one hand it
would be incorrect to believe that emerging
powers will never be in a position to compete with western designers, and it would be
irresponsible to think that this will not happen in the future. In addition, design used
as a creative advantage is completely at the
mercy of the threat of counterfeiting. Only
skills and technique provide true protection
against pure copying. How can this advantage be preserved if it evaporates from the
continent due to lack of orders or due to the
constant pressure from fashion houses on
suppliers to reduce their prices in the hopes
of getting down to costs closer to those available from outsourcing, while benefiting
from the magic “Made in”? The parallel
that can be drawn with the Chinese brand
Shang Xia is edifying: Hermès created a
completely new brand from the ground up,
based on Chinese craftsmanship and aimed
at the Chinese market28. It seems clear that
the anchorage of skills and technique are
basic, so why is production constantly being
transferred abroad by European brands
enabling them to produce for less but diluting their message and their very essence?
It would appear, as if proof were needed,
that luxury is one of the elements of
European “soft power” that as such should
project the values that the continent
defends29.
Other sectors are trying to federate their
communities of “brand citizens” through
slogans or an ambitious vision of the world,
like the Dyson group, that promotes healthy
and sustainable growth by looking to individual responsibility and collective efficiency
more than profitability and planned obsolescence30. But luxury is going down a
path that is diametrically opposed to this
one, evacuating all disruptive elements in
case they affect sales, and in doing so no
longer inspires any kind of elevation or aspiration other than the material kind31. It is
thus decisive and curious that neither
Hermès nor Chanel really advertise their
initiatives in safe-guarding European skills.
We could reasonably hope that European
luxury companies would take more collective responsibility both in terms of the
values they promote that could be more
offensive and supportive of their regions of
origin, and their direct economic impact in
their own social fabric32.
Of course, this is a big ask. Should it not
come to pass, which seems to be the way
things are going, the luxury industry will
lose what makes it unique, it will become
like any other common or garden activity, a
first in the history of luxury. This would
open the way for emerging countries to
recreate new legendary brands after having
exhausted existing brands33, causing
Europe to lose yet more of its soul and its
power.
European luxury will then have become an
industry like any other.
Selvane Mohandas du Ménil
Graduate from HEC and IFM
1. Air France Slogan, 1985.
2. Air France Slogan, 1988.
3. Air France Slogan, 1992.
4. EDF slogan, 2009. EDF slogans have long had the
same educational, responsible and emotional bent:
“L’avenir est un choix de tous les jours” (The future is a
choice made every day), “Nous sommes l’énergie de ce
monde, nous sommes fiers d’être la votre” (We are the
energy of this world, we are proud to be yours), “Notre
énergie sera toujours à vos côtés” (Our energy will
always be with you).
5. Air France Slogan, 1952.
6. Air France’s frequent flyer programme.
7. Of course, this is merely an ambitious and demanding extrapolation, the marketing departments of the
big name brands always take great care to remove any
hidden references from their intellectual productions,
as they are a potential threat to the brand’s reputation.
They erase any position-taking that could be interpreted as compromising by any social group, to the extent
that the message becomes absurd and bland. The only
thing that remains is the poetic dimension, free from
any real or serious commitment on the part of the
brand which is probably damaging from an economic
and philosophical point of view at a time when faith in
all existing value systems is waning. The maths are
simple: it is better to sell a lot of products with no commitment and no hidden agenda to the multitudes,
rather than trying to convince or even conscript truly
committed and as such faithful consumers but with
resulting lower sales. All this despite the fact that in the
long term, the latter is the more rational choice (but
requires more courage).
8. http://www.enmodeluxe.com/burberry-premieremarque-de-luxe-a-reunir-3-millions-de-fans-facebook/
9. The full quote from Joanna Shields, VP Facebook
EMEA, goes into detail: “Through the creation of original content, Burberry is no longer just a fashion
company –today it is a thriving media business.
Burberry is now the most widely followed fashion
brand on Facebook. It works because not only does
Burberry make beautiful clothes, but as a brand it
understands the importance of taking a real interest in
the community and it knows how to use social media
to create fidelity and entertain customers. Whether it is
relating to consumers by promoting indie bands on
their Facebook Page or celebrating the ideas of the
most stylish customers, The Art of the Trench,
Burberry is building its brand not simply by broadcasting and advertising to them, but by creating new
media experiences for them.”
10. Thorstein Veblen, Theory of the Leisure Class, 1899.
11. The emblematic hero of Bret Easton Ellis’
American Psycho, 1991.
12. Hermès announced profits that were up 49.5% on
August 31st 2011, for Salvatore Ferragamo the increase
is +32.4%, and +25% for LVMH.
13. The book Deluxe, How Luxury lost its luster, by
Dana Thomas, Penguin Books, 2007, casts a particularly harsh light on the way in which luxury brands
have established a never-ending system to maintain
demand. The system has destroyed creativity in brands,
as they are constantly under pressure to fulfil the need
for more collections to keep profitability levels up in
order to justify the investments made.
14. Luxe Oblige, Vincent Bastien et Jean-Noël
Kapferer, Eyrolles, 2010.
15. For those who doubt the absolute uniqueness of
this industry, the book by Vincent Bastien and JeanNoël Kapferer, Luxe Oblige, Eyrolles, 2010, focuses on
the particularity of luxury brands and how it is impossible to compare them to other sectors, even harder to
run them using techniques from other industries.
16. The example of the perfume industry is edifying in
this case: in 20 years, under pressure from producers
that have become more and more concentrated
through a system of licences given to groups whose
interchangeable decision-makers have applied marketing techniques that work but that ignore the natural
specifics of luxury brands, and the distributors, who
have established a mass retail strategy to take advantage of economies of scale in supplies and running
costs, perfume as a product has entirely lost its dream
dimension and has become just another commodity
++, an object that smells nice rather than an aspirational element aimed at an educated, however slightly,
client who is looking for a little difference or an instant
crush, and not a calibrated product. The omnipresence
and globalisation of perfumes have removed their inaccessibility and in doing so, their specific nature. And it
doesn’t seem to matter that this is the very essence of
perfume. This goes a long way to explain the upsurge
in luxury perfumes today from Serge Lutens, l’Artisan
Parfumeur, Frédéric Malle, Histoires de Parfums, to Jo
Malone.
17. “Chanel : l’art du beau geste”, Paris Match, January
17th 2011: Since 2002, the brand has bought out seven
specialist workshops, from the hat maker Michel to the
floral accessories maker Guillet, the embroiderer
Lesage to the feather-maker Lemarié.
18. A form of distribution that entails selling the merchandise to wholesalers. This strategy enables the
network to grow and make money without making any
serious investment, counterbalanced by a loss of
control in the retail process.
19. Le luxe bouleversé… et bouleversant, Rana
Andraos, Economie (Lebanon), July 8th 2010.
20. Luxury sector to see niche deals, Reuters, June 3rd
2010.
21. Is it necessary to mention that the military, rail or
nuclear development of many emerging countries has
been encouraged by transfers of technology agreed to
in the hopes of an immediate and huge profit, while
ignoring the fact that the approach creates new competitors? We can refer to an interesting document
concerning Areva and China on this page:
http://www.medefparis.fr/areva_chine.php . How can
we ignore the nuclear power megacontracts signed by
the Koreans in 2009 with Abu Dhabi, when France is
one of the most advanced countries in terms of civil
nuclear technology? In fact, Yves-Michel Riols and
Nicolas Reynaud, in their article “Comment les Etats
ont liquidé leur capital crédibilité”, in L’Expansion,
September 2011, are merciless: “do not hesitate to do
what the Chinese and American do totally without
complex: defend one’s strategic industries and demand
symmetry in newly opened markets. Europe is, for
example, the only continent in the world where the
telecoms sector, the pillar of new technology, is totally
open to the competition, with no reciprocal obligation”.
22. Les géants du luxe assument leurs délocalisations,
Le Monde, Nicole Vulser, October 15th 2009.
23. Ibid.
24. Les marques françaises sauvées par le luxe, La
Tribune, September 21st 2009.
25. Les codes secrets des griffes du luxe, Capital hors
série, October 2009.
26. Le salut du luxe est dans ses réseaux, Sophie
Bouhier, Journal du Textile.
27. Les codes secrets des griffes du luxe, Capital hors
série, October 2009.
28. Comment le luxe fait recette, Rita Mazzoli, La
Tribune, May 31st 2010.
29. Which, it is true, remains to be seen.
30. Le design durable : pour une croissance saine et
durable, James Dyson, Le Monde, September 1st 2011.
31. This is probably why we have seen more and more
one-off initiatives not aimed at consumers but at “amateurs” (lovers), like the well-known perfumer Francis
Kurdjian’s current solo project, or Pagani Zonda, that
only produce 30 vehicles a year.
32. Some brands are trumpeting the fact that they’ve
created 250 jobs in France (Le luxe repart de nouveau,
Sid-Ali Chikh, News Fashion Daily, 2010) when all of
their shoe soles are produced in India (Le haut de
gamme européen toujours dans la course, Sophie
Bouhier, La Tribune, November 22nd 2010).
33. The goldrush has already started: the Chinese have
bought Omas pens, vineyards in Bordeaux, the
Koreans are financing the leather goods brand Louis
XIV. « Demain, le luxe 100% chinois ? » Sophie
Lecluse, La Tribune, July 7th 2010.
Six-monthly publication in French and English: IFM Research Report
The publication is an informative research tool in the areas of fashion and design on an
international level.
Research Report, n°1.
Research Report, n°9.
February 2004 (The Immaterial)
January 2008 (Fashion and Modernity)
Research Report, n°2.
Research Report, n°10.
June 2004 (Luxury and Heritage)
June 2008 (Management of Design)
Research Report, n°3.
Research Report, n°11.
January 2005 (Brands and Society)
January 2009 (Perfume)
Research Report, n°4.
Research Report, n°12.
June 2005 (Sustainable Development in the
Textile Industry)
No English version available
Research Report, n°13.
Research Report, n°5.
January 2006 (Intellectual Property)
Research Report, n°6.
June 2006 (Fashion as a Topic for Academic
Research)
No English version available
Research Report, n°14.
June 2010 (Defining Design: Between Use,
Aesthetics and Consumption)
Research Report, n°15.
Research Report, n°7.
No English version available
January 2007 (Customisation: Fashion
between Personalisation and Normalisation)
Research Report, n°16.
Research Report, n°8.
June 2007 (Fashion as an Economic Model)
June 2011 (On Luxury)
Research Report, n°17.
January 2012 (Open Innovation)
Research
Report
n°16.
June 2011, Six-monthly publication
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