Bloomingdale’s eyeing the Middle East; Yohji Yamamoto and Nike staging fashion shows in Beijing’s Forbidden City; Istithmar of Dubai buying Barneys New York; Chinese consumers snapping up Vuitton bags and Mercedes cars, and Martin Margiela planting stores in the Middle East.
This story first appeared in the April 22, 2008 issue of WWD. Subscribe Today.
Talk about pluralism.
Arguably one of today’s most Teflon-coated industries, fashion continues its global advance at breakneck speed, seemingly immune to any geographic, nationalist, political, religious or moral barriers.
To be sure, politics threaten to become the third rail, as anger surges in China toward Carrefour and other French brands as retribution for disrupting the Olympic torch relay in Paris. So far, the Chinese government has been restraining the demonstrations that began last week, and on Monday Carrefour said it had yet to see any impact on its business in China.
But typically such boycotts of foreign products are short-lived — consider how quickly “freedom fries” went the way of trade quotas — and are mere glitches in the recent globalization of the fashion industry. And fashion can even break down political barriers: Yamamoto’s show in the Forbidden City Thursday is seen as a watershed moment in relations between Japan and China (see sidebar).
Consider some other headlines that barely caused a ripple or raised an eyebrow:
– Fendi, which sells such extravagant items as 60,000 euro, or about $96,000 at current exchange, knitted sable throws, staged the first fashion show on the Great Wall of China, an event that was concurrent with the 17th National Congress of the Chinese Communist Party last fall.
– Louis Vuitton plans to send some of the world’s finest vintage cars roaring through China next month as it opens its second location in Chengdu — and is considering third and fourth locations in that city alone as demand for European luxury booms in the Asian giant.
– The front rows of Paris Couture Week in January swelled with bigger client contingents from emerging luxury markets such as Russia, India and China — in addition to regulars from the U.S., Europe and the Middle East.
– Istithmar, a private equity fund in Muslim Dubai, acquired Barneys New York, a landmark American retailer founded by a Jewish family.
– Mikhail Gorbachev, the last General Secretary of the Communist Party of the Soviet Union, became a poster boy for Louis Vuitton in its “core values” ad campaign.
– Who.A.U., a South Korean brand with a passion for the California lifestyle, revealed plans to open more than a dozen stores in the U.S., going head to head with the likes of Abercrombie & Fitch and American Eagle Outfitters.
– Moscow’s Pushkin Museum recently hosted an exhibition devoted to Chanel, exemplifying a fixation with Western luxury goods in once-Communist Russia.
– Russian teen idol Kira Plastinina plans to open two stores, one in Manhattan and another in Stamford, Conn., next month, and a total of 15 in the U.S. this year as she rolls out her fashion brand in America.
Indeed, fashion brands and retail banners — American, European, you name it — are being embraced with fervor in China, India, Brazil, the former Soviet bloc and the Middle East, suggesting that country-of-origin is becoming an anachronistic concept for consumers hungry for style and status.
“Years back, fashion was somewhat segregated. The French wore French fashions; Italians wore Italian fashions,” said Tommy Hilfiger, whose American-as-apple-pie firm is now headquartered in Amsterdam. “Now we’re living in a global community, certainly sharing ideas about not only fashion, but all sorts of products….There are very few boundaries to doing business. People in Japan are as interested in fashion as people in Argentina or Russia or Dubai.”
Designers, manufacturers and retailers agree that barriers, short of those metal ones needed for crowd control during fashion shows or store events, have practically vanished at a time when democracy, economic growth and communications are advancing like never before.
Executives note that fashion is a global business, as brand distribution extends into all sorts of emerging markets, accompanied by the higher profile of fashion as entertainment in broadcast media and on the Internet.
Rita Clifton, chairman of Interbrand, a brand consultancy based in London, stressed that money is today’s consummate leveler and that fashion and luxury tap into basic human drives to look and feel better, and keep up with the Joneses.
Where there is money to be made, business people tend to put aside any differences, she stressed. “Money is an extraordinary club. It’s a global club, and money talks very loudly. And business runs the world, whether we like it or not,” she said.
What’s more, global brands are increasingly adept at tapping into aspirational instincts.
“There are uberrich people all over the world and they have a lot in common, whether they are from India, China or any large city. They’re highly mobile, have global lifestyles and second and third homes,” Clifton said. “Even if you’re not superrich, it’s a normal part of the human condition to want to improve your life, and part of that is about treating yourself well and looking good. So, even if you’re not spending like the superrich, the trend is similar: You may be buying into a subbrand or mixing your designer goods with mass brands. There is this blurring across luxury and mass.”
Executives were stumped to cite an example of a fashion or retail brand that was stymied in its global expansion for reasons beyond simple taste preferences or economic barriers. In fact, they cited low brand awareness and low spending power as the principle roadblocks in today’s market.
“We are all the same market: the world. There are no frontiers,” said Didier Grumbach, president of the French Fashion Federation and the organizer of a Paris Fashion Week last March that was almost as diverse in nationalities as the United Nations. “Fashion develops with the economy, but it liberates with the society. Where there is no freedom, there is no fashion. There was no fashion in China when [its economy] was Communist. There is no fashion in Africa because the economy doesn’t allow it.”
Guy Salter, who works in private equity and serves as deputy chairman of Walpole, the organization that represents Britain’s luxury brands, said growing prosperity around the world has consumers marking their territory and superiority via luxury and fashion.
Salter cited a Walpole research report called “The DNA of Luxury,” which studied the common threads among luxury consumers in cities ranging from Tokyo to Moscow to London to New York to Shanghai. “It turned out they were all looking for the same thing — love and respect. What I mean by that is the brands had to deliver a feeling of passion and integrity,” he said.
Certain American brands, from Gap to Calvin Klein Collection, have had a tough go on the European market (Gap exited Germany in 2004, while Klein shuttered its Paris flagship on Avenue Montaigne in 2006). But such troubles relate more to style preferences or competitive issues rather than because of consumers out to castigate the U.S. for unpopular foreign policy, observers said.
“I’m sure certain countries are negative towards American brands, but there are so many countries that are positive towards brands in general we don’t feel it,” Hilfiger said.
As recently as 15 years ago, Hilfiger sold 100 percent of his products in the U.S., whereas today America accounts for only a third. Hilfiger described his business as robust in diverse markets such as Dubai, Ireland, India, China, Turkey, Greece, South Korea, Taiwan and the Netherlands. Hilfiger started selling his products in Dubai three years ago “and the acceptance has been very positive, and growth in India and China and all over Asia is very strong,” he said, attributing it partly to a fashion trend.
“For us, the casualization of the world has a lot to do with the growth,” he said. “For example, other than the banking industry, England has all gone casual. That’s just a lifestyle change that has driven our business.”
Executives noted that international fashion titles also have sprung up in all sorts of emerging markets, quickly raising awareness of the key designers and brands around the world.
Franco Pené, chairman of the Italian manufacturer Gibò, said economic growth has opened up many fashion frontiers, with consumption growing in many parts of the world. “There is so much money there — just think of the Bank of China — and chances to invest. These production countries are now moving towards the market, as in other sectors. They don’t want to remain manufacturers,” he said. “As for the Middle East, there’s an incredible quantity of money generated by the oil business.”
Pené said fashion has an immediate and universal appeal in these constituencies. “Everybody likes fashion,” he said. “It’s a business that fits the needs of investors, it potentially has high margins and is the only business that develops so quickly.”
Jil Sander is an example of a pluralist fashion firm. The German-founded house was bought by Italy’s Prada Group and later was sold to London-based private equity fund Change Capital, which is backed by a French family and run by Belgian Luc Vandevelde. Today, Jil Sander’s multicultural ranks include Italian chief executive officer Gian Giacomo Ferraris, Belgian creative director Raf Simons and German ceo Armin Mueller. “We are not treated like an Italian company and I’m proud of this, I have to say,” Ferraris said.
Majed Al-Sabah, president of Kuwait-based Villa Moda Lifestyle, said the wealthy, fast-growing Middle East is getting increasing attention from foreign luxury brands, whose representatives are constantly visiting the region. “The appetite is all about the Middle East and Russia,” he stressed.
To be sure, fashion imagery can be provocative and encounter sensitivities in certain countries. Dolce & Gabbana even endured a backlash at home in Italy for ad campaigns depicting themes of violence or sexual domination. And there is censorship of nudity or other imagery in China — although that hasn’t stopped Calvin Klein Underwear from putting up billboards in Hong Kong with actor Djimon Hounsou in his briefs to promote the Calvin Klein Steel line. Bob Mazzoli, chief creative officer of Calvin Klein Underwear, said, “Our goal is to communicate one message around the globe that presents the iconic brand voice of Calvin Klein Underwear. While all advertising may be subject to local and cultural interpretations, our creative delivers on that singular message, while addressing, where necessary, region-specific product offerings.”
Al-Sabah said European and American brands have become more cooperative in providing not only advertising images that won’t offend Middle Eastern customers, but in creating fashions that suit their penchant for expressive, glamorous style. “Most, maybe 70 percent, of our women wear the abbayas and head coverings, so they’re looking for expressive fashion items: handbags, eyewear, shoes, jewelry,” Al-Sabah said. “The brands are becoming superflexible. Even the ads are modified for our market.”
Grumbach noted that the “individual style” phenomenon in fashion, which permits many disparate trends to coexist, has speeded its advance across the globe. That might not be the case if, say, miniskirts were an overarching trend.
Joseph Velosa, co-owner of Matthew Williamson, concurred, saying, “The only things we really have to think about are different market needs such as warmer coats for the Russian market. Our only international challenge, sometimes, is fighting against the stereotype and prejudice against British designers, that they can’t deliver on time, for example, which is no longer true.”
Grumbach argued that the nationality of a designer is becoming moot, noting that during Paris Fashion Week, one can view collections from up to 10 different nations in one day, all of them sold in Europe.
“Gradually, there will be no more Chinese fashion, French fashion, Italian fashion,” he said. “There is no nationality in fashion; it’s impossible.
“The Indians and the Brazilians are not at all yet in this attitude. They believe they’re in Brazilian fashion. They believe they’re in Indian fashion. We have American designers in the calendar and we forget they are American.”