Map of brands in luxury fashion, LVMH (pt. 3)

Fashion, News and commentaries

For the 3rd in this series of posts regarding brands ownership in luxury fashion, I’m dedicating the whole page for the behemoth conglomerate Louis Vuitton Moet Hennesy (LVMH) Group. As usual, I organized the brands based on how the parent company treats them. In this case, LVMH organizes the business groups as the following (percentages refer to revenue share based on 2013 Annual Report):

  • Fashion & Leather Goods – 34%
  • Selective Retailing and Other Activities –  29% combined
  • Wines & Spirits – 14%
  • Perfumes & Cosmetics – 13%
  • Watches & Jewelry – 10%

LVMH has a 23.1% stake in Hermés and the company does not expressly include more information than that in its annual report. Furthermore, the group also has a private equity arm that is not mentioned in the annual report. L Capital Asia, as the name implies, is focused on brands in Asia and the Pacific – China, India, Taiwan, Singapore, Australia.

brands_map_lvmh

In most of the brands in each business group, LVMH has a 100% ownership and almost always a majority stake. The following are some notable exceptions and also interesting facts on LVMH acquisitions:

What I found the most interesting is how Dior is incorporated into the brand. LVMH includes Dior Parfums and Dior Watches within its portfolio but not the Dior ready-to-wear and couture. Technically, Christian Dior owns a minority stake in LVMH and this is quite an oversimplification of the labyrinthine ownership of Dior and LVMH shares by the Arnault family. See below for a visual representation culled from different sources. There’s a lot of history to how this structure came to be and I will devote a completely different post on it because it will require a lot more research, some of them involves public documents in French. Even Forbes is struggling to make sense of it.

Screen Shot 2014-08-21 at 2.52.03 PM

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The List: Button downs

Fashion, Trends, Wishlist

As we sail into mid-August (already?), I’m starting to look more into transitional dressing and button down shirts are perfect for this. This classic can add polish to this summer’s (and beyond) denim trend and can also dress down an outfit. Need proof? Recall Sharon Stone pairing a Gap white shirt from her husband’s closet with a Vera Wang evening skirt during the 1998 Oscar’s – that look is unforgettable and has been replicated more than a few times. The button down – it’s your new closet hero.

The List: Button downs

DKNY sleeveless top
net-a-porter.com

Rails shirts top
shopthetrendboutique.com

Pleated top
cosstores.com

Zara red top
zara.com

Topshop short sleeve shirt
$60 – topshop.com

Madewell clothing
madewell.com

The hottest handbag brands and confirmation bias

Fashion, News and commentaries, Trends

There are times when reports from respected institutions and backed by numbers confirm my gut feel for certain trends whether it’s a down or uptrend. But then, there is the Credit Suisse report abut the hottest handbag brands which goes against so many of my perceptions that I just had to share.

First I have to ask, have you ever heard of anyone waxing poetic about their Ralph Lauren bag? In all of my readings/observations – from blogs, newspaper lifestyle sections, fashion insiders at Instagram and Polyvore – I have *never* encountered a Ralph Lauren bag. But apparently, it is *the* hottest handbag at the moment. Vanessa Friedman (formerly of Financial Times, who I mentioned in this post before) of The New York Times reports that the hottest handbag brands are Ralph Lauren, Louis Vuitton, Fendi and Michael Kors. Furthermore, “Calvin Klein is up 129% since January 2014 and up 166% year over year.” Meanwhile, Marc Jacobs, Kate Spade and Hermes are on the downtrend.

The report is a result of a partnership between Credit Suisse and social-media analytics platform NetBase. The study was conducted over a period of 27 months and analyzing over 200-million Internet pages.  According to Friedman, the report not only looked at mentions but also intensity of feeling – “love”, “like” – and also for negative comments.

I would be very interested to see how the report looked at context. For example, tagging a picture or a post can be optimized for search engine results rather than a representation of the message. For example, a picture on Instagram can be tagged several ways: #ootd (outfit of the day), #badass, #KateSpade, #shoes, #handbag. Would an analytics platform then classify this as negative and consider it as a mention of a Kate Spade handbag? I would love to see the original report and better yet, the raw data. More importantly, as Friedman points out, do these mentions translate into actual purchases?

In any case, the numbers are very interesting especially if I’m to embrace confirmation bias such as my belief that Coach is on the up-trend with the appointment of Stuart Vevers as new creative director. Incidentally, Coach stock is up since its earnings call yesterday, if only because the battering of Coach sales is not as bad as analysts have feared.

“Coach’s overall index score for June is below average at 4.36, but the brand has seen rapid growth in recent months, up 21% since January and up 69% year-over-year.” (Credit Suisse)

Map of brands in luxury fashion, pt. 2

Fashion, News and commentaries

For the 2nd in this series of posts on mapping some brands, I’m mapping a mix of private and public companies. It was more difficult finding the exact information such as how the brands are grouped under the parent companies and their revenues so I’m grouping them mostly based on a mix of information found on the company websites as well as news features. The MaxMara maps is pretty much self-explanatory but OTB, Fast Retailing and JAB Holdings need more context

Brands map, pt.2

  1. OTB stands for Only The Brave and is a holding company chaired by Renzo Rosso, the founder of Diesel. What I find especially interesting is Staff International and Brave Kid which are production and distribution companies for brands within and outside the OTB Group. For Staff International, other than Viktor&Rolf, Maison Martin Margiela and MM6, it also has licenses for Marc Jacobs Men, DSquared2 and Vivienne Westwood Red Label. Meanwhile, Brave Kid has licenses for Diesel Kids, DSquared Kids and John Galliano Kids.
  2. Fast Retailing is based out of Japan and most well-known for the Uniqlo brand. The company was recently in the news for its rumored bid for J. Crew, which I wrote about here. The company acquired Link Theory Holdings which owns Theory and Helmut Lang brands.
  3. JAB Holdings, a private German conglomerate, is probably the  most interesting of these companies because of its seemingly small reach in fashion, having acquired brands such as Jimmy Choo; unless we examine its beauty products manufacturer, Coty. It is actually so far-reaching that I will have to devote a completely different map for it on my next post. Incidentally, the luxury brands used to be under the Labelux holding company but has since been fully integrated into JAB Holdings. JAB, which stands for Joh. A. Benckiser also owns Reckitt Benckiser, a consumer goods company that owns a range of products from Clearasil to French’s Mustard. The conglomerate also acquired Peet’s Coffee & Tea in October 2012 for $1B.

The List: Little Black Dress

Fashion, Wishlist

In my past life, I used to alternate between Miami in the winter and New York in the summer. So even though you would equate Miami with bold, bright colors and white, I used to have a predominantly black and white wardrobe with a few reds thrown in. After all, Miami in the winter only means a lot of New Yorkers acting like locals. But after living in the northeast – Boston and Montreal for more than 3 years, I was in such a mood to embrace lighter colors, which just happens to be a big trend right now and which I also expressed in my post about the little white dress. That is not to say that I forgot my default way of dressing: black and white. So just to round that circle, here’s a list of options for that classic LBD (that’s little black dress for *you*) that you’ve been looking for. And again, a lot of these are heavily discounted so click away.

The List: The Little Black Dress

 


Mini dress
pixiemarket.com

Zara dress
zara.com

Rebecca Taylor lace dress
matchesfashion.com

Topshop mini dress
net-a-porter.com

Sophie Hulme mini dress
$435 – thecorner.com

Carven black dress
farfetch.com

Alexander Wang dress
farfetch.com

TIBI clothing
theoutnet.com

Map of brands in luxury fashion, pt. 1

Fashion, News and commentaries

A recent chart depicting the seeming diversity of food brands actually belonging to a few companies made me think that the same could probably be said of fashion brands, especially in the luxury sector. I decided to map some of the biggest brands to serve as guide, which can be quite helpful when I write posts on the business side of fashion.

As most of you probably know, Moët Hennessy Louis Vuitton (LVMH) is a giant conglomerate with subsidiaries that stretch all the way to China and diversified across several products from alcohol to watches. I realized as I was making the charts that it would be quite difficult to fit it all in one post so I decided to do a series instead and this is the first of that series.

I’m starting the series based on information that is the most readily available which means companies that are publicly traded. As I go through the series, I will also do my best to map brands held by private companies as well.

For this series, I’m starting with Kering, Richemont, and Prada. The brands are grouped according to the way the respective companies organize them as business units. For example, Kering has the Luxury and Sports & Lifestyle divisions. Out of the three, Kering offers the most transparent annual report, offering revenues by division, by region and in some cases, by brand. Kering also states its percentage ownership for each brand here, which I’m also pasting below. Richemont on the other hand offers revenue figures by business area: Jewellery Maisons, Specialist Watchmakers, etc. and by region. Prada, the smallest of the three, have 4 brands – sales from each brand are outlined in the company’s quarterly and annual reports.

brands_map_luxury_pt1

 

Here is Kering Group’s percentage ownership of its brands:

kering_ownership

 

Guide to summer trends

Fashion, Trends

June 21 may be the official start of summer but the Fourth of July weekend for me is a much better marker. And as we all navigate the heat even all the way up to Canada, stay cool and refreshed in this guide to summer dressing.

1. White on white. It’s a bold trend to pull off but the rewards can be… rewarding. I am slowly working my way in to an all white outfit but I have to admit, it’s not as easy as it sounds. Too little contrast in accessories, and you’ll end up like a ghost. Too much contrast and you’ll end up trying too hard. The key is to play with shades and texture. Plus, wear it like you own it.

White on White

Être Cécile print top
$62 – thecorner.com

Cameo short shorts
$120 – eluxe.ca

Mango
mango.com

Melissa Odabash beach hat
net-a-porter.com

 

2. Denim shorts. In the wake of the #iwokeuplikethis trend, denim shorts, the epitome of I-don’t-care attitude are working their way into the summer wardrobe (good old denim in general). The more distressed they are, the better. Again, the key is contrast because you may humble-brag about “waking up like this” but do you really want to look like you just rolled off of bed?

Denim shorts

Sophie Hulme white top
$310 – net-a-porter.com

Stuart weitzman shoes
revolveclothing.com

Jade ring
ruegembon.com

3. The shirtdress. You have the option of going to the extreme end of dishevelment and just wear a man’s shirt as a dress or you can look for more refined options. The choice is entirely up to you.

 

Shirtdress

 

4. Nautical dressing. This is probably one of my favorites because you can have nautical elements all over and not look like a fool, though you might want to leave the captain’s hat at home. Trust me, I’m a captain. No, seriously, I do have a captain’s license and even captains leave their hats at home unless it’s a formal occasion.

Nautical style

 

Rag Bone t shirt
rag-bone.com

Vince wedge sandals
$430 – harveynichols.com

Tory Burch leather handbag
bloomingdales.com

Madewell hat
madewell.com

 

5. Summer slides. Started by Phoebe Philo of Celine for the Spring 2013 collection, it’s possible this trend may be played out by the end of summer (people may have too many bad memories of those Adidas slides and Birks?) but if you want to jump on, now is the time. Besides, they are comfortable, right?

 

Summer slides

Zara dress
zara.com

J Crew elbow sleeve sweater
factory.jcrew.com

Birkenstock strap sandals
lordandtaylor.com

Zara sandals
zara.com

Monsoon white sandals
monsoon.co.uk

The List: Summer Sandals

Fashion, Trends, Wishlist

Summer solstice, June 21 was last weekend and we can all lay back and enjoy the official start of summer. Although, for us here in Florida, it has felt like summer for more than 3 months. It always strikes me as funny when I see fashion magazines tout some footwear as summer essentials – ever heard of the summer boots? Yeah, well, if you’re like me who does *not* want to swelter in the heat, then the only way to do it in the summer (summer = 80+ degree weather, summer ≠ 70-75 degree weather) is to wear flat sandals. Here’s the list to get you on that less sweaty summer. And because ’tis the season, some are even on sale.

The list: Summer Sandals

What is going on with J. Crew?

Fashion, News and commentaries

Earlier this year, J. Crew rumors ranged between its supposed IPO and a sale to Japan’s Fast Retailing Co. Neither of these were realized. The company’s rumored sale at a hefty price of $5B likely pushed Fast Retailing away. And with the recent quarter report in May showing a net loss of $30.1M, the chance of an IPO is also out the door. Even worse, the company might be forced to reduce the book value of its assets if operating results continue to fall.

The company’s woes don’t necessarily mean bad things for the current CEO, Mickey Drexler. Since becoming CEO in 2003, Drexler has earned about $380M in option awards, salary and bonus. Drexler, along with the other owners and executive management have “extracted more than $650 million of dividends from the company, according to a Feb. 21 report by Moody’s Investors Service,” and most were funded with debt.

When Drexler started as CEO and Jenna Lyons as Creative Director, the J. Crew brand became cool again and earned a cult following among the fashion set. What has happened since?

The 2014 First Quarter numbers so far:

  • Revenues increased 5% to $592.0 million but comparable store sales decreasing by 2%
  • Gross margin down to 38.7% compared to 44.7% in the 2013 first quarter
  • Increased costs (selling, general and administrative expenses) of $195.2 million, or 33.0% of revenues, compared to $178.4 million, or 31.6% of revenues in the 2013 First Quarter
  • Operating income down to $34.0 million, or 5.7% of revenues, compared to $73.6 million, or 13.1% of revenues, in the 2013 First Quarter
  • Net loss of $30.1 million compared with net income of $29.3 million in the first quarter last year
  • Adjusted EBITDA decreased to $64.8 million from $101.0 million in the first quarter last year
  • Inventories were $396 million compared to $308 million at the end of the first quarter last year. Inventories and inventories per square foot increased 28% and 16%, respectively.
  • Cash and cash equivalents were $59 million compared to $92 million at the end of the first quarter last year

(Decrease in cash levels reflect refinancing costs of $29 million and dividends of $19 million. For a complete report, the J. Crew press release is here.)

In the meantime, J. Crew is betting on Asia & the Pacific for its growth, opening 2 new stores in Hong Kong last May. The company is also considering Australia for new store openings.  In response to customer complaints that their prices are too high, the company might create a budget-friendly brand called J. Crew Mercantile, a name which the company filed a trademark application.

The List: Little White Dresses

Fashion, Wishlist

If you happen to live in a place where you had an infinitesimal period of spring and suddenly found yourself in the blazing heat of summer, then this list is for you. Nothing says summer than an effortless white dress, paired with sandals and statement shades. And if you’re brave enough, wear these beyond Labor day because a great little white dress can do triple duty: beach, city and office.

The List: White Dresses

Mango summer dress
johnlewis.com

TIBI mini dress
net-a-porter.com

SUNO cotton dress
net-a-porter.com

Topshop x Kate Moss dress
net-a-porter.com