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PARIS — Crisis? What crisis?

Putting a brave face on the shrinking couture brethren, Christian Dior and Chanel are leading the charge of French houses that vow to soldier on no matter what, insisting high fashion is too vital for their image to leave behind.

This story first appeared in the July 2, 2004 issue of WWD. Subscribe Today.

“We strongly believe in couture,” said Francoise Montenay, president of Chanel. “As long as Karl [Lagerfeld] is Karl, we will never have any questions about couture because we know he’s so good at it.”

Sidney Toledano, Dior’s president, agreed, saying, “The impact [of couture] is huge on people worldwide. It’s our difference in the face of competition. I am convinced that couture is giving us an edge. It creates the magic of a brand.”

Still, the stunning news in May that Emanuel Ungaro and Donatella Versace would leave behind the couture runway is reverberating throughout the industry, with reactions ranging from regret to relative indifference. Just last week, Hanae Mori, a 27-year mainstay of the couture, said she would stage her farewell show July 7.

Despite these departures, no one is sounding the death knell for high fashion just yet, given its potent ability to give a brand luxury cachet — and the dream it inspires in women. Designers, executives and fashion editors acknowledge couture may be having serious problems, but it hasn’t dampened their collective resolve to continue designing, selling and covering it.

“Concerning Givenchy, the haute couture is historically essential,” said the house’s new president, Marco Gobbetti, who joined in February from Moschino. A small Givenchy couture collection is being prepared to show clients next week; however, the house is unlikely to return to the couture runway until a successor to Julien Macdonald has been identified. “Today, it represents not only a tradition, a proof of workmanship and fashion culture, but also a collection which is bought regularly by our loyal clientele.”

While most couture houses lose money on the venture — with the cost of mounting a major show running as much as $3 million or more — there remain a clutch of perhaps no more than 2,000 women willing to shell out five to even six figures for an outfit.

“Chanel has a real clientele, and that is and was the first reason for couture to exist,” said Lagerfeld. “It was created for women and their lives — privileged lives.

“Chanel has new work rooms, new clients and all the organization I expect a real couture house to have. As long as Mr. Wertheimer [Alain Wertheimer, Chanel’s owner] wants me to do couture, I will do it — and I love it.”

Montenay said Chanel’s couture sales surged 50 percent last year, no doubt benefiting from the shutdown of Yves Saint Laurent in 2002. Chanel employs almost 100 people year-round to handle couture demand, and just added a second atelier for “flou,” or garments with soft construction.

Chanel also recently acquired several specialty couture ateliers — from the embroidery house Lesage to haute shoemaker Massaro — and intends to add more. “We did not buy them to stop in two years,” Montenay quipped.

Dior, too, logged a double-digit increase in couture sales last year, and Christian Lacroix and Scherrer have seen sharp spikes in demand in recent seasons.

However, few are counting on couture to flourish as a business.

“The market itself for haute couture is not growing,’’ Dior’s Toledano said. “We have to be lucid about that. It’s an investment for development and image. For me, it’s worth it. Even if we don’t sell haute couture to Chinese people, it’s a tool for us to explain our know-how to them.”

Giancarlo Giammetti, Valentino Garavani’s business partner, acknowledged the number of big couture clients is shrinking. “And nobody buys more than two or three couture dresses these days,” he said.

Still, Valentino logged a 17 percent increase in couture sales last year. Giammetti also noted that royal weddings this year in Denmark and Spain have been a boon to the business.

But more than ever, sales are considered secondary as the face of couture changes yet again.

“The reason to do couture is to promote the luxurious side of the house,” Giammetti said. “If you always had couture, it’s very important to keep doing it until you can’t afford it…We can really justify our luxury positioning because of couture. That’s the justification to do it and to keep it.”

Giammetti also underscored the publicity value. Echoing other houses, he cited an uptick in couture coverage in a range of magazines and on television, despite fewer designers. In addition, he noted the enormous impact of celebrities wearing couture — either current or vintage — from Nicole Kidman in Chanel couture to Julia Roberts helping to fuel the vintage craze by wearing a 1982 Valentino to the Oscars in 2001.

“That’s an example how one dress can make a really important impact in the course of fashion,” Giammetti said. “The return from celebrities wearing your clothes is huge.”

However, he said Valentino couture would likely end when Garavani decides to stop making it or retires.

Didier Grumbach, president of the Chambre Syndicale de la Haute Couture, cites Jean Paul Gaultier’s entry into couture in 1997, and Ralph Rucci’s in 2002, as proof of the art’s vitality.

“No brand that has given up [couture] has gained from it,” he asserted. “Couture is not the only way, but it is perhaps the most effective way to make a brand timeless. Plus, it is the ultimate symbol of the luxury industry.”

To make the couture appellation more accessible, the Chambre Syndicale in 2001 loosened rules regarding the number of workers couture houses must employ and the number of garments it must produce. “Today, you can be a member without going bankrupt,” Grumbach said. “Of course, today you don’t open a couture house. That’s over. You open a house and you add couture to ready-to-wear. Up until Gaultier, it was the opposite.”

He allowed that new names are needed to regenerate the couture — and he cited Stephanie Coudert’s presence on the upcoming schedule, which runs Tuesday through Thursday, as proof.

Nevertheless, some consider the Ungaro and Versace news a grim omen. And question marks hang over houses like Lacroix, especially since the designer has yet to renew his employment contract with LVMH Moët Hennessy Louis Vuitton, which launched the couture brand in 1987.

“It’s about cutting costs,” Suzy Menkes, fashion editor at The International Herald Tribune, said about recent closures. “I’m certainly sad to see Mr. Ungaro end his career in this way. It’s sad that someone who has given so much to fashion should fade away so unceremoniously.”

Menkes said she found it ironic that, despite growing demand for “one-offs” and individuality in fashion at large, “couture seems to be having an identity crisis.”

Charles-Edouard Barthes, managing director at Scherrer, called the scaled-back July schedule “catastrophic.” He predicted the shrinking calendar would be reflected in fewer journalists attending fashion’s glitziest event. “If couture is about image-building, you need to have enough journalists at the shows to justify the effort,” he said.

For his part, Lacroix said it’s a “pity” to see Ungaro and Versace stop.

Indeed, if wars and political events were the biggest threats to couture in the Nineties — when the potential end of couture created an outcry — “now some companies or groups deciding to stop investing in couture are a danger, too,” he said. “I’m not sure that the houses that stop showing couture are strong enough for selling ready-to-wear, fragrances and licensed products without the fascinating impact of couture week and the free advertising, which is quite proportional to the investment.”

He continued: “Paris has to understand that the whole world is expecting from us something unusual, astonishing and brand new. People — wealthy customers, the press and television viewers — want haute couture to keep something unique and magical.”

Rucci said in an interview he was “disappointed” to learn that Versace and Ungaro were exiting couture, but insisted it would not change his resolve to keep showing in Paris. “There will always be women who are interested in custom-made clothes,” he said. “We’re continuing because I’ve been selling couture and I’ve been able to carve an audience for it and it is growing.”

Rucci declined to give any figures, but it is believed his firm’s total sales have doubled since he began showing in Paris. To be sure, the move has translated into “enormous exposure” and “the ability of my workrooms to make couture has allowed me to make better ready-to-wear,” Rucci said. “I don’t think statements like ‘couture is dead’ are in any way applicable. This is because you have this church known as Chanel — the greatest atelier on the planet. It doesn’t matter about the quantity of the houses, but the quality.”

Grumbach said about 800 journalists are expected to attend the shows next week — about the same as last season. And a sampling of top publications suggests it is business as usual.

Sally Singer, fashion news-feature director at American Vogue, said the scaled-down couture calendar would not have an impact on the magazine’s attendance or its coverage.

“We see the couture as an important laboratory for fashion,” Singer said. “It’s where ideas can find their most extravagant and wonderful expression. It’s the fantasy of fashion and it’s one part of what we cover. Our readers just love it and they would miss it if we didn’t have it. It’s one of the few places where fashion can be concerned with something other than mundane preoccupations. It’s not just getting dressed for work.”

“As long as the red carpet is there, there will still be a form of couture — a dress created especially for her,” added Elizabeth Saltzman, fashion director at Vanity Fair. “With couture, it’s not going to be overexposed and available to everyone.”

“At couture, you get a taste of what’s going to follow in ready-to-wear,” said Kristina O’Neill, fashion features director at Harper’s Bazaar. “This will always be relevant to us as editors and to our readers. As long as Dior, Chanel and Gaultier are still showing, couture has a reason for existing. Couture makes people dream.”

Wonderment aside, the remaining players in couture are grappling with how to make couture week a compelling proposition.

Montenay said she’s concerned about dwindling press attendance. To wit: She reiterated Chanel’s willingness to take couture on the road and show in other cities, perhaps New York. However, she said it would be her preference to remain in Paris.

Toledano argued it’s a “necessity” to keep couture shows in Paris, but said it is also vital to stage couture spectacles in other cities to help convey the luxury image of the brand. To that end, Dior hopes to reprise its Tuesday couture show in Tokyo in September as a centerpiece to celebrations for its new flagship in Ginza.

Dior recently broadcast scenes from couture shows on massive television screens in Hong Kong as a way to promote its brand and a new store at the Landmark there — a spectacle that attracted thousands.

To foster business, Scherrer also has begun staging shows abroad. It did Vietnam last spring and is aiming to do something in China.

“It is a challenge for those who remain to make it attractive,” Gobbetti said. “The challenge is to modernize haute couture to attract new clients.”

Some houses have famously grumbled about the likes of Yohji Yamamoto and Loulou de la Falaise parading ready-to-wear during couture week. Citing “creative” reasons, Yamamoto will not show next week and instead will revert to the rtw calendar in the fall. “Personally, I am very much against [mixing ready-to-wear and couture],” Lagerfeld said.

But the press seems willing.

Vogue’s Singer touted couture week as a good forum to discover younger designers and attend left-field events, like Rick Owens’ first Revillon presentation last year, or E2’s presentation of its vintage redux.

Toledano said couture week should showcase emerging and experimental designers as a counterpoint to the big houses. He drew a parallel to the Cannes Film Festival, which fetes output from big Hollywood studios and tiny independent filmmakers.

“If you want to see what’s going on in the movie industry, you have to go to both kinds of films,” he said. “Couture should be in the same spirit.”

Grumbach agreed, and remains staunchly optimistic that young designers will continue to be attracted to the rarified world — and thus keep it going.

“Let me remind you that in 1925 people were already saying couture was dying,” he said. “It was a subject then and 80 years from now we will still be having the same conversation.”

— With contributions from Robert Murphy