Latest news with #Solca
Fashion Network
7 days ago
- Business
- Fashion Network
Luxury fashion: what future for multibrand stores after a decade-long decline?
Squashed between luxury labels' boutiques and low-cost chains, such as Shein, Temu and Zara, independent multibrand retailers have gradually lost ground, and ceased to provide a market outlet for premium and mid-range brands. Having limited resources compared to large luxury groups, mid-size, emerging and new brands find it very hard to cope with the investment levels required to open stores, investments that are often unprofitable because they are way too high for these brands' size. 'These brands have positioning and durability problems. They have been penalised by the crisis of multibrand retailers, which used to play a crucial role in curating and discovering smaller labels, often less recognised by consumers. The role retailers play as talent-spotters is essential,' said Solca. 'Our customers don't need anything, but they're all looking for something. It's up to us to give it to them. Apart from those who already know which labels they love, there are other consumers, another 50% of the market, who are entering the luxury sphere now, and need to be guided, inspired. That's where our greatest challenge lies. To overcome it, multibrand retailers are sorely needed,' said Luca Lisandroni, co-CEO of Brunello Cucinelli, speaking at the Altagamma conference. 'Multibrand stores are very important, because they train our ability to listen. It's an extremely modern channel, much more relevant than we think, because it's an open system. It puts brands face to face with a different point of view, that of the retailers who select and interpret our collections,' he added. Among multibrand chains that are currently successful, the Bernstein study cited US group Mitchell Stores, and Sogo & Seibu from Japan, acquired by US investment fund Fortress Investment Group. Sogo & Seibu has successfully redesigned its flagship store in Ikebukuro in Tokyo, showcasing its range of men's and women's luxury ready-to-wear on the same floor. 'These two examples show how the traditional formula can be improved. There are also mass-market players, such as Inditex, which are successfully expanding into the premium segment. Finally, there are new players - online giants like Google, assisted by AI, or Amazon. Each in their own way, they're seeking to position themselves in fashion's medium and high-end segments. Adopting a hybrid physical/online format could enable multibrand retailers to make faster inroads into the premium segment, as shown by the merger between Amazon and US department store Saks. That's very interesting. In fact, it's opened the floodgates,' said Solca. Another interesting initiative is the partnership recently forged between Italian multibrand store LuisaViaRoma and the collective e-shop of the independent multibrand retailers affiliated with the Camera Buyer Italia (CBI) association, creating the first 100% Italian luxury marketplace. 'Major luxury labels owe a great deal of their success to Italian multibrand retailers. However, this channel has never been valued. The deal with LuisaViaRoma will enable us to create our own ecosystem and gain visibility,' said Maura Basili, president of CBI. Something to keep an eye on.
Fashion Network
7 days ago
- Business
- Fashion Network
Luxury fashion: what future for multibrand stores after a decade-long decline?
Squashed between luxury labels' boutiques and low-cost chains, such as Shein, Temu and Zara, independent multibrand retailers have gradually lost ground, and ceased to provide a market outlet for premium and mid-range brands. Having limited resources compared to large luxury groups, mid-size, emerging and new brands find it very hard to cope with the investment levels required to open stores, investments that are often unprofitable because they are way too high for these brands' size. 'These brands have positioning and durability problems. They have been penalised by the crisis of multibrand retailers, which used to play a crucial role in curating and discovering smaller labels, often less recognised by consumers. The role retailers play as talent-spotters is essential,' said Solca. 'Our customers don't need anything, but they're all looking for something. It's up to us to give it to them. Apart from those who already know which labels they love, there are other consumers, another 50% of the market, who are entering the luxury sphere now, and need to be guided, inspired. That's where our greatest challenge lies. To overcome it, multibrand retailers are sorely needed,' said Luca Lisandroni, co-CEO of Brunello Cucinelli, speaking at the Altagamma conference. 'Multibrand stores are very important, because they train our ability to listen. It's an extremely modern channel, much more relevant than we think, because it's an open system. It puts brands face to face with a different point of view, that of the retailers who select and interpret our collections,' he added. Among multibrand chains that are currently successful, the Bernstein study cited US group Mitchell Stores, and Sogo & Seibu from Japan, acquired by US investment fund Fortress Investment Group. Sogo & Seibu has successfully redesigned its flagship store in Ikebukuro in Tokyo, showcasing its range of men's and women's luxury ready-to-wear on the same floor. 'These two examples show how the traditional formula can be improved. There are also mass-market players, such as Inditex, which are successfully expanding into the premium segment. Finally, there are new players - online giants like Google, assisted by AI, or Amazon. Each in their own way, they're seeking to position themselves in fashion's medium and high-end segments. Adopting a hybrid physical/online format could enable multibrand retailers to make faster inroads into the premium segment, as shown by the merger between Amazon and US department store Saks. That's very interesting. In fact, it's opened the floodgates,' said Solca. Another interesting initiative is the partnership recently forged between Italian multibrand store LuisaViaRoma and the collective e-shop of the independent multibrand retailers affiliated with the Camera Buyer Italia (CBI) association, creating the first 100% Italian luxury marketplace. 'Major luxury labels owe a great deal of their success to Italian multibrand retailers. However, this channel has never been valued. The deal with LuisaViaRoma will enable us to create our own ecosystem and gain visibility,' said Maura Basili, president of CBI. Something to keep an eye on.
Mint
17-06-2025
- Automotive
- Mint
Gucci Owner Kering Banks on De Meo's Record for a Turnaround
(Bloomberg) -- While fixing French carmaker Renault SA, Chief Executive Officer Luca de Meo pursued a hobby that would feed into his next job as CEO of Kering SA: A taste for the finer things in life, particularly Swiss watches. 'Brand management and marketing are his forte, which dovetails with what the luxury industry does — for which he seems passionate,' Luca Solca, an analyst at Bernstein wrote in a note, recalling a conversation about fine timepieces with De Meo at a Renault event three years ago. Now that De Meo has been named as CEO of the French owner of Gucci and other luxury brands, 'it is not hard to imagine how intriguing he found the Kering opportunity,' Solca said. Although De Meo has no direct fashion or consumer-goods sector experience — having spent his entire career in the auto business — luxury industry observers are betting his keen sense for what clients want and the attention to detail he displayed at Renault may be just what Kering needs. De Meo led the turnaround of Renault after taking charge of the French carmaker about five years ago, returning it to profit and growth despite substantial challenges facing the global auto industry, including an uncertain transition to electric vehicles, escalating trade tensions and the rise of highly competitive Chinese rivals. Kering shares, which on Monday recorded the biggest one-day jump since December 2008, slid as much as 2.3% in early trading in Paris. Renault, which tumbled 8.7% on Monday, was little changed. Kering, led by Francois-Henri Pinault for more than two decades, can use the help as the luxury industry weathers a slump in Chinese demand and the threat of higher US tariffs. Before the jump on Monday, Kering's stock had lost almost 80% of its value since reaching a record in August 2021 as it fell further behind rivals such as LVMH and Hermes International. The group has tried to turn around its main brand Gucci by naming new designers but the efforts have failed. Kering has also appointed new CEOs for labels including Gucci and Yves Saint Laurent in the past year. 'De Meo has a titanic challenge ahead of him' said Solca. 'Critically, investors will need to hear what it is that De Meo plans to do and digest how soon his plans can be realized. If he says 'more of the same,' then investors would (quickly) go back to where we are now. If he comes in with a vision, then it could be something else.' In addition to finding growth again at Gucci, De Meo will need to win the trust of all the teams after sweeping changes of top managers in recent years, said Ariane Hayate, a fund manager at Edmond de Rothschild Asset Management. He'll also need to tackle the group's elevated debt, which has soared over the past three years, she said. Some investors are worried that De Meo's lack of experience in the luxury industry will mean a failure to address the absence of revenue growth in a difficult industry context, according to Zuzanna Pusz, a UBS analyst. 'The concern is that the focus could potentially be on cost cutting,' she said. What the executive has going for him is the fact that he's an Italian who has worked for many years at French groups, noted Morgan Stanley analysts including Edouard Aubin and Grace Smalley. Kering's Italian Gucci brand accounts for almost two-thirds of its profit. Also, De Meo 'has a strong track record as a turnaround executive and is very well regarded within the automotive industry,' the analysts said. Renault was in crisis when De Meo — who had previously worked at Fiat and Volkswagen AG — took charge in mid-2020. The French company was coming off a record first-half loss and had announced plans to slash almost 15,000 jobs. Then, even after Russia's invasion of Ukraine prompted the manufacturer to pull out of what had been its second-biggest market, Renault vastly outperformed its European rivals and its longtime Japanese alliance partner Nissan Motor Co. 'We credit him for bringing back 'color,' energy and peak results to Renault after years of sub-par product and financials,' Jefferies analyst Philippe Houchois wrote in a note. During his tenure, De Meo inked partnerships for Renault with fashion brands such as Agnès B. His affinity for style has also been evident in his custom-made suits and his pocket squares — always impeccably folded with three or four points. A polyglot — he's fluent in Italian, French, Spanish, English and German — De Meo has authored a book entitled 'A Dictionary for Car Lovers,' showing a commitment to the emotional appeal of brands. For instance, one of the first big moves he made after taking over as CEO was to re-brand Renault's Formula 1 team as Alpine, starting with the 2021 season. Alpine, a more than half-century old French marque that Renault had revived only a few years earlier after two decades of dormancy, could become 'a mini Ferrari,' the executive boasted in October 2020. He then set out to build up the brand's scale and status. While the Alpine efforts have yet to show success in Formula 1, De Meo impressed investors by the pace of the company's new model launches. Last year, Renault introduced 10 new car models, including the Renault 5 — with accessories, including a wicker basket as baguette holder. This year, it is launching seven, including the electric Renault 4 and Alpine A390. De Meo's approach became a case study for Harvard Business School. Just how critical he considers brand building was evident at the Geneva car show last year. Even as almost all of the world's carmakers stayed away, calling car shows a thing of the past, De Meo and Renault turned up, winning a lot of attention they may not have gotten for the launch of the new Renault 5 — a car of the past that Renault modernized and launched as electric for the future. It was vintage De Meo — and helped make R5 one of the company's most high-profile new launches in recent times. De Meo is someone who has 'great brand insight but who's also able to re-energize the teams he works with and has the courage to try new things,' said Fabrizio Ferraro, professor of strategic management at IESE business school. That's crucial for Kering since 'the usual playbook of the luxury industry seems to have run out of steam,' he said. (Updates with shares in fifth paragraph.) More stories like this are available on
Business of Fashion
23-05-2025
- Business
- Business of Fashion
Inside The Great Luxury Reset
Listen to and follow the 'BoF Podcast': Apple Podcasts | Spotify | Overcast Background: Instead of his usual place in the host's seat, BoF founder and CEO Imran Amed appears this week as a guest in an interview with Jonathan Wingfield, editor-in-chief of System Magazine, alongside Luca Solca, senior research analyst at Bernstein — as featured in the debut issue of System Collections. This conversation was recorded on March 14, about two weeks before Donald Trump's shock announcement of so-called reciprocal tariffs on countries around the world, most notably China. Together, Amed and Solca explore major shifts in the global luxury market, the growing fatigue with high prices and mass production, and why creativity, innovation and strategic alignment between business and creative leadership are more crucial than ever. 'These companies are run by human beings, and if you don't give people incentives to change, they will kill you. If you see that you're making as much money as you like, and the business is as good as it ever was, then you probably will not change very much,' says Solca. 'I think that adjusting to a more normal environment is causing a lot of soul-searching and is getting these companies back in line.' Amed adds: 'Where brands work best is where there is that impeccable alignment between the creative leadership and the business leadership. Many creative directors feel like a lot of decision-making and creativity is being dictated to them rather than being in conversation with them. And I think that's what we need to see now.' Key Insights: Excessive price hikes and product ubiquity are causing consumer pushback. Amed says, 'When customers look at a €10,000 bag that used to cost half of that, there's real pressure because the value proposition no longer adds up.' The industry's future success depends on brands' abilities to innovate and excite consumers. Solca stresses, 'If people need to pay these prices, they must be excited; they need to feel they haven't seen these products yet, and that they desire them.' Amed adds, 'Brands need to inject new creative energy to get customers excited again.' In a stagnant market, luxury brands can no longer rely on organic demand and must instead compete aggressively for market share. 'In order to grow now, brands need to actively win market share from competitors,' says Imran Amed. This shift has forced operational changes across the industry. 'Fashion shows are getting smaller, not just for intimacy, but also to cut costs,' he adds. Luca Solca agrees: 'You need to take into account that a lot of the costs in this industry are fixed ... When sales decline by as much as 20 percent, you really need to cut the fixed portion of your costs.' Maintaining exclusivity remains challenging yet essential. As Solca puts it, 'The nature of the industry is that you need to sell exclusivity or perceived exclusivity.' He warns that high visibility can backfire for smaller brands: 'We've seen it a number of times; smaller brands hit gold, but at one point, they succumb to that very success because they become too visible and people move elsewhere. They tend to be a bit of a flash in the pan or face a glass ceiling around €2 to 3 billion, which is very difficult to break through.' Effective luxury strategies hinge on strong creative-business collaboration. As Amed explains, 'Where brands work best is where there is that impeccable alignment between the creative leadership and the business leadership.' He continues, 'Many creative directors feel like a lot of decision making, a lot of creativity is being dictated to them rather than being in conversation with them. And I think that's what we need to see now.' Additional Resources:
Yahoo
07-05-2025
- Business
- Yahoo
Hermès Hikes Prices in the U.S.
PARIS — As the business world adjusts to the Trump administration's tariffs, Hermès International has followed through with the price increases promised during its most recent round of financial results. Bernstein analysts examined prices on the brand's U.S. website across women's bags, jewelry, ready-to-wear, silks and accessories, watches, fragrances, makeup and home, concluding that prices have been bumped up an average of 4 to 5 percent across the board. More from WWD 'These will likely cover for a worst-case scenario of 10 percent tariffs and compensate for the recent weakening of the U.S. dollar against the euro,' Bernstein analyst Luca Solca wrote in a report this week. Hermès' move follows Louis Vuitton raising its prices in the U.S. 3 to 4 percent in April. Hermès can lean on its 'undisputed' pricing power, according to Bernstein. The company has steadily increased prices each year, but it still hasn't dented customers' desire: Sales were up 17 percent for the fourth quarter of 2024 and continued to rise in the first quarter, up 10 percent year-over-year. In fact, the company is trying to increase production capacity for its popular handbags by building four new factories over the next four years after it was hit by tight supply over the holiday period and start of the year in the U.S., despite price increases of about 6 to 7 percent last year. Hermès chief executive officer Axel Dumas believes the company's reputation makes it a steady choice for customers in turbulent times. Speaking at the company's annual shareholders' meeting on April 30, he recalled the 2008 financial crisis as raising the brand's value. 'There was a flight to quality,' he said. 'Hermès is the gold standard in a way.' Hermès is still 'top-of-the-mind for consumers…particularly in China,' the Bernstein report noted. 'I think it pays for a brand like Hermès to sit at the very top of consumer desirability. When consumers are more guarded, when they have second thoughts about spending money, when they cut their budgets — think of the Chinese, for example — Hermès is the very last brand they give up on,' Solca told WWD. 'Almost all' pieces in the core categories of fashion and accessories have increased in price though handbags — including the Birkin, Kelly and Constance ranges — are not sold online. However, 'we expect price increases for these products to fall within a similar range,' Solca said in the report.
