Thursday, June 7, 2012

New Paradigm Shift in the Luxury Brand Domain

Karl Lagerfeld and models walk the runway during the Chanel Ready to Wear Autumn/Winter 2011/2012 show during Paris Fashion Week at Grand Palais on March 8, 2011 in Paris, France.
Pascal Le Segretain/Getty Images Europe

Today’s customer spending pattern has changed. Seeing that high-end clients worldwide have abruptly suppressed their craving for luxury goods, what was once considered a recession-proof industry had been struck hard. Whilst Chanel recently declared the layoff of 200 temporary employees — only more than 1 percent of its 16,000-employees, the daily newspaper “Le Parisien” called the news a bombshell.

No category in the luxury brand domain has been spared a significant drop in sales including fine spirits, watches, clothing, jewelry and yachts. Suddenly, the perception on the street is that luxury goods are considered a sign of immorality, superficial and ostentatious. Restraint and modesty are in. A French trend expert described the changes as nothing less than “a revolution in values.”

Alain Némarq, the chairman of Mauboussin, the prestige jewelry firm, said in an interview that saving the luxury industry should be a national priority since it employs 200,000 citizens in France and has become part of the French heritage.

Rather than demanding to keep the machine going by pumping out high-price hand bags, shoes and other goods, he proposed the impossible: the entire luxury industry should slash prices. “We need a return to reason, decency, discretion, beauty and creativity — in other words, to true values,” Mr. Némarq said.

“This whole crisis is like a big spring housecleaning — both moral and physical,” Karl Lagerfeld, from Chanel, said in an interview. “There is no creative evolution if you don’t have dramatic moments like this. Bling is over. Red carpety covered with rhinestones is out. I call it ‘the new modesty.’ ”

In keeping with the new national mood — and in respect to the hard economic reality, designer Nathalie Rykiel will show the new Sonia Rykiel collection not with a grand spectacle for 1,500 people in a gigantic rented room, but with two small 200-guest mini-shows in her boutique on the Boulevard St.-Germain.

“It’s a desire for intimacy, to go back to values. We need to return to a smaller scale, one that touches people. We will be saying, ‘Come to my house. Look at and feel the clothes. ” she said over lunch at the Café de Flore.

reference: nytimes.com, jdrazure.wordpress.com

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