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Fashion’s Big Issue: Succession Planning

The scale of today’s most powerful brands is increasingly insulating them from turbulence when designers depart.

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PARIS — Crafting succession plans for its creative departments is no doubt a smart strategy for any large fashion firm.

But the scale of today’s most powerful brands is increasingly insulating them from turbulence when designers depart — whether from death, retirement, flameout, poaching or otherwise.

Christian Dior — one of the hottest topics of this European fashion season — is a case in point.

The search for a successor to disgraced designer John Galliano has now clicked into its second year — a delay which so far has not proven an impediment to the French firm’s business momentum. Operating profits more than doubled last year as sales in Dior’s own stores advanced 28 percent.

Dior has remained mum on its intentions, insisting it will take all the time it needs to find the right designer.

RELATED STORY: Christian Dior RTW Fall 2012 >>

The house is believed to be mulling continuing with a team approach, possibly adding some young, up-and-coming talents. The studio is currently headed by longtime Galliano collaborator Bill Gaytten, who has earned encouraging reviews — and traction at retail — for subdued collections faithful to Dior’s iconic, Fifties-flavored glamour.

As reported in these columns, Dior has also conducted talks with hot young Parisian design Maxime Simoens, who made his debut Monday as the creative director at Leonard. Sources indicated Leonard and Simoens are likely to reveal a separation by mutual agreement.

While far less known and accomplished than other contenders for the Dior job — who have ranged from Marc Jacobs to Alber Elbaz — Simoens’ story is a compelling one with echoes of Yves Saint Laurent, who famously succeeded Christian Dior following the founder’s death in 1957.

Aside from a physical resemblance — a reed-thin physique and prominent eyeglasses — Simoens, 27, is a French wunderkind. The bio on his Web site notes that he became the first designer ever to be accepted as a member of the French Fashion Federation before having shown any of his collections.

Simoens has repeatedly denied to WWD that he has had any contact with Dior.

Dior officials had no comment on Monday.

Observers agreed that decisions today about creative leadership are tied to the brand-related considerations, rather than a designer’s vision or personality.

“The overused term of brand building has become paramount,” said Robert Burke, president and chief executive officer of the consultancy Robert Burke Associates in New York. “The brands today more than ever are attuned to how to run a business.…No longer is it a one-man show — not with so much business at stake.”

“When a designer has managed to turn his/her company into a brand — with product pillars, codes and strong identity, combined with very efficient management — then succession remains a big issue, but at least there is less pressure on timing,” agreed Floriane de Saint Pierre, who runs an executive search and consulting firm in Paris.

Besides the Galliano drama, the industry has been shaken by other unexpected designer shifts.

In 2010, there was the suicide at age 40 of Lee Alexander McQueen, and the sudden exit of Christophe Decarnin from Balmain following stress-induced health issues. Designer underlings succeeded both men: Sarah Burton and Olivier Rousteing, respectively.

More recently, the Jil Sander company persuaded the house founder to return once again, dislodging Raf Simons as creative director, despite almost universal acclaim during his seven-year stint.

Also, amid robust growth in sales and profitability last year at Yves Saint Laurent, Hedi Slimane is expected to succeed Stefano Pilati, who staged his swan-song show on Monday.

RELATED STORY: Yves Saint Laurent RTW Fall 2012 >>

Succession is also a timely and highly sensitive subject given that a good number of major designers — including Giorgio Armani, Oscar de la Renta, Karl Lagerfeld, Krizia’s Mariuccia Mandelli, Vivienne Westwood and Ralph Lauren — continue working into their 70s.

It’s widely known in the industry that the “S” word is verboten at companies including Armani and Chanel. “And look what happened to Alber Elbaz and Jean-Paul Knott when they dared enter the Krizia lair,” said one European source, referring to short-lived stints by the Israeli-born and French designer, respectively, at the Milan-based house.

Executive search and other experts agreed that a visionary creative leader adds vital verve to a fashion brand, making succession planning crucial, while cautioning that transitioning to new design talent is a murky enterprise fraught with complications.

“We’ve all seen what’s happened when it’s the wrong designer,” Burke pointed out. “But that tends to happen when there’s less clarity about the direction of the brand or the label.”

He cited Valentino as an example. The Rome-based house endured a few turbulent years following the retirement of its founder in 2008, and before the current designers, Maria Grazia Chiuri and Pierpaolo Piccoli, found their footing. The duo, who had been in charge of accessories under the house founder, have been faithful to the founder’s vision and the brand’s values, treated with a lighter, fresher hand.

“It took not just designers. It took the ceo and all the people in the organization to take it in the right direction,” Burke said.

“I think it’s terribly dangerous to not have a succession plan,” stressed Vanessa Denza, the founder and owner of Denza, a London-based fashion recruitment agency.

She lamented that few designers deliberately cultivate and retain their eventual successors. In her view, Graeme Black was a “natural” to eventually take over from Armani. However, the Scottish-born designer exited Armani in 2001 after seven years, and has since done stints at Ferragamo, his own brand, and Boss Black women’s.

Denza applauded Diane von Furstenberg for last year recruiting Yvan Mispelaere, a seasoned talent with experience at Prada, Gucci, Louis Féraud and Chloé, to be her creative director. “She’s the president of the CFDA. She is a pragmatic woman,” Denza commented.

Observers agreed that securing design talent today is increasingly challenging for a multitude of reasons, including such contractual obligations as non-compete clauses that limit mobility.

Concetta Lanciaux, who runs a luxury advisory company based in Switzerland, noted that finding successors is more difficult today because senior “high-talent” designers prefer to continue working with the brands they have relaunched. Examples of this profile would include Elbaz at Lanvin and Nicolas Ghesquière at Balenciaga.

What’s more, the promising “next-generation” talents — including Christopher Kane, Alexander Wang and Damir Doma — have succeeded in building successful, sizable companies, making moonlighting for another brand a less urgent priority, and a less sought-after career path, Lanciaux said.

A pioneer who introduced management succession planning as the longtime head of human resources and synergies at LVMH Moët Hennessy Louis Vuitton until 2007, Lanciaux noted that the vagaries of creativity make it more challenging to anticipate what to do when a brand requires new design leadership.

“Designers, you have to leave them free to develop their creativity,” Lanciaux explained. “There is this affinity to the brand — this is paramount in creative functions, while management is transversal.”

Design studios can yield high-talent successors.

“Nobody could anticipate that Tom Ford would emerge at Gucci, or that Sarah Burton would emerge to the extent she has today,” Lanciaux said.

Yet she cautioned that not all second-in-command designers can rise to the challenge. “Next to these successful examples there are many unsuccessful ones,” she said. “Being a No. 2 for too long may freeze a designer in that profile.”

De Saint Pierre noted that France is the first country with a strong fashion industry to have dealt with major successions: Dior in the late Fifties, Chanel back in the Seventies, in addition to Givenchy and Yves Saint Laurent more recently.

Multiple observers noted also that once-strong houses can recede from prominence, with Emanuel Ungaro and Claude Montana frequently cited as examples of ill-handled successions.

According to de Saint Pierre, there is no rule for finding a suitable successor. “It just depends on talent and personality. One needs to be creative, to deal with an extremely high level of work and pressure, to have a modern inclusive management style and to fit with the brand,” she said. “Creative directors with true creative vision and true capacity to understand the newness of the 21st century are key to driving luxury global brands. “

Echoing other observers, Mary Gallagher, Paris-based associate for New York search firm Martens & Heads, noted that Dior is still performing very well even without a star designer.

Still, “I do think a figurehead helps sell the dream, especially a rare talent like Galliano,” she said. “I think the customer, unless it’s a die-hard fashionista like Daphne Guinness, does not need to have Lee [Alexander McQueen] or John [Galliano] actually sketch and drape her dress. The customer buys into the quality, design, cachet and reflected glory of a fashion house. And in most cases, it’s the studio that is proposing to the creative director, who then approves the sketch or collection.”

Observers noted that brands also require an up-front designer because the press, especially, often demands a name — and in some cases, a hero — to engender their ongoing interest.

Joelle de Montgolfier, director of Bain’s luxury group for EMEA (Europe, the Middle East and Africa), noted that human resources departments are typically engulfed in the immediate needs of business, and “not systematically forward looking.” Where succession planning exists, it rarely goes beyond management and the ceo position.

“It’s the common bottleneck: People are absorbed in daily execution,” de Montgolfier said, noting that’s especially the case during times of economic downturn and at a time when the “speed of change” in business life is accelerating.

What’s driving growth in luxury goods is the expansion of directly operated store networks and emerging markets, and creative concerns are rarely top of mind, she said. Still, “we are absolutely advocates of advance planning for future growth, and talent would be part of that,” she added.

De Montgolfier noted that many luxury brands have been around for generations, meaning they have survived the passing of their founders.

“Look at Hermès. They don’t have that famous designer in place and no one’s worrying about how they’re faring,” de Montgolfier said. “The weight of power is a bit more balanced with the rest of the organization. People have come to realize that the thrust of the company and its ability to grow goes beyond the creative talent,” she continued, mentioning the example of Ford, whose 2003 exit as creative director at Gucci Group did not impede its global advance.

Brands can become so significant in the marketplace that they live a “life of their own,” de Montgolfier said.

“It’s become a global industry and a very professional one,” she said. “It’s not about a person making an impression. It’s about a brand meant to survive across decades.”

 

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