Fashion Notebook

Week in Review Pt. 1: Louis Vuitton Rocks Out, Kohl's Gets Punked, and More Rumbles for the Luxury Market

OK, so we've kinda been bad lovers the past two weeks. Yeah, we admit it;
we haven't been updating as often as we, or you, would like. But our offline
job got a bit crazed last week and that prevented us from posting. So, in effect, it's not you, it's us.

Also, we were, like, on pins and needles waiting for the finale of Project Runway. And, hopefully you'll agree, we're so, so, so, fiercely happy that Christian Siriano won we can barely contain ourselves. Kid has some serious talent, and we're sure that we'll be hearing from him sometime soon. Is he adoptable  by the way? We might just forego that Boston Terrier we'd been planning on bringing home and swap it for that adorable pocket-gay (though he'll have to sleep in a closet, as we're still living in a New York state of reality folks!).

But let's leave all this relationship drama to the Spitzers! It's time to take a look at what's happened, what it means, and where we see things going... So without further ado...

Louis Vuitton's New Bag
Unless you've been hiding out under a mountain of paperwork (like us), you've probably already heard that Rolling Stones guitarist Keith Richards is the new, wrinkly face of Louis Vuitton (SEE PHOTO, BELOW, LEFT). (Insert "Vuitton's new, iconic wrinkled bag" joke here, hell, everyone else has. For SHAME Saturday Night Live! You, like fashion, were more inventive in the 1980s.) If you haven't seen the spot already, check the photo at right.

We have to say to say that this is an interesting choice, and it's already done its job many times over in terms of exposure (more than we'd imagine placing, say, Katherine Heigl, or some other, safer choice, in front of the camera). But hasn't Vuitton really missed the rebel-rock-me boat by like, say, 40 years? We would prefer to see the ads featuring this Keith.

Also, how does John Varvatos feel about all of this. Certainly, the Stones trump Cheap Trick, not to mention the fact that the campaign pretty much cribs from Varvatos' own advertising mantra: Bring back old rockers and consumers will come. Of  course, Varvatos seems to have more credibility here and we're still not sure what a great cover boy Richards is for the brand. After all, while he's definitely rich beyond words—and amazingly still alive—we're just not sold on him as a real luxury guy. Then again, maybe that's what rehab and old age will do to you. I'm sure that he has a wonderful assortment of organic teas backstage, but is he really throwing those outfits in a Vuitton steamer?

Love to hear your thoughts on this. Drop us a line, here.

Kohls Pumps Up Its Juniors Jam with Avril Lavigne
Yeah, the girl ain't punk kids. Then again, Richards sold his ass to Louis Vuitton, so what does define the legitimate rocker persona? Anyways, Avril Lavigne maybe didn't steal your boyfriend, but she did ink a deal with Kohl's to produce "Abbey Dawn," a collection of apparel (priced $24 to $48) and accessories (read: jewelry, for now) that will hit the mass merchant's doors nationwide in July.

The move obviously means that Lavigne will get some dollars in her coffers—seriously, is she even that hot anymore?—but it also seems to really define her audience in a way that could be limiting for the popstar. Launching just in time for back-to-school shopping, the line is allegedly for the "broad group of shoppers" that Lavigne attracts, according to SVP Don Brennan, but we're calling bullshit. If it's B-T-S, the tricks are for kids, and that's fine, after all, those are the types that will pay retail for her album "The Best Damn Thing," which came out last year and for which the star began touring to support last week.

According to spokeswoman Vicki Shamian, the line shouldn't cannibalize any of the retailer's other exclusive brands, like Candies given Avril (and by proxy, her collection's) "feminine yet rock n' roll attitude." [Side note: Meanwhile, no notes on how the Simply Vera collection is doing. If you've got deets, or reactions, or if you've tried on the products, send a note here]. Advertising, on which details aren't yet available, will be handled by the Kohl's in-house team, in conjunction with lead agency McCann Erickson, New York. Stayed tuned.

 

Financial Desk: Luxury Retail's Mixed Bag
Ok, so we've probably hammered this to death, but there might be trouble with the luxury market.

Saks Fifth Avenue announced last week that it had approached roughly $1 billion in sales for the quarter ended Feb. 2, up almost 5% from the year-earlier period, but with comp store sales increasing by 9%. Meanwhile, net income rose dramatically, some 83% drama, to $39.5 million, or 26 cents a diluted share. However, gross margin slipped about 50 basis points to 37.4% of sales.

But there's trouble ahead. According to a statement by chairman and CEO Steven Sadove, January and February comp store sales grew by only 4.1% and 3.4%, respectively, and "previously high-growth rate businesses such as handbags, footwear and men's have slowed."

"As expected, the more challenging promotional and overall macroeconomic environment that we began to experience in the third quarter continued throughout the fourth quarter and put pressure on our merchandise margins," Sadove continued. "Our outsized comparable store sales growth indicates that we significantly improved our competitive positioning by market, driven by our merchandise, service marketing and capital investments."

And then  came the wahn-wahn moment.

"Nothwithstanding our improved performance and the longer-term outlook for the luxury channel, we expect to continue to face an increasingly challenging macroeconomic and promotional environment in 2008, and are taking a more conservative approach to planning the business this year," Sadove said, adding that the company expects to see comp store sales growth in the mid-single digits for 2008, with low-to-mid single digit growth in the first half of the year.

Meanwhile, at Neiman Marcus, positive earnings were also overcast by ominous notes. Revenues at the luxury department store grew almost 6% to $1.37 billion in the second quarter ended Jan. 26, while net earnings grew 8% to $44.3 million. However, February comp stores sales posted a 7.3% decrease.

In a conference call, Neiman Marcus chairman and CEO Burt Tansky seemed to feel, well, pretty much like every other luxury retailer these days. He's playing a cautious game as the news of a buckling economy and decreased consumer spending prophecies an even rougher year.

"As we all know, the entire U.S. retail sector has seen sales growth diminish somewhat, and this slowdown has affected some parts of the luxury market," he said in the call. "Our sense is that the aspirational customer has pulled back somewhat in response to concerns about the U.S. economy in stock and housing markets. However, this aspirational customer appreciates quality and can be expected to buy more as the economy improves. Nevertheless, we feel confident that the pure luxury customer, the affluent to the very affluent, will continue to demand only the finest."

Seems plausible, of course, except that we're not getting at raw numbers here. What's the proportion of aspirational consumers to pure luxury consumers? Wethinks it be disproportionate and that Neiman's might have a few, hopefully not too many, pricey dresses that are staying on the racks as Sex and the City fangirls start closing up their upper-middle class purses.

Marketing Ethics in The Valley of the Stardolls

  Stardoll.com, a social-play Web site for 9 to 17 year-old girls, announced this week that it has inked a deal with supermodel/auf'er Heidi Klum to promote her latest jewelry collection.

Essentially, the deal shakes out in a Second Life kind of way. Heidi gets her own store, located in Stardoll's "Star Plaza" shopping center, where the girls can look through her collection, buy "virtual versions" of the product that they can use to bedeck their avatars, and talk shop about fashion. They can even look through Heidi's "closet" of favorite handbags, shoes, clothes and awards show outfits. Oh and she gets this avatar (see right) that doesn't really do graphic justice to Klum's on-screen beauty.

“I don’t just think about it as selling jewelry, [but] I try to make it about who I am,” Klum told me over the phone. “I think it’s great to be in connection with young girls who are interested in fashion . . . It allows [the girls] to interact with those celebrities they are fans of and get an insight into what that person’s favorite clothes are.”

Klum isn't the first to go this way with Stardoll. A partnership with LVMH in December landed DKNY (see store format below) and Sephora in the space, and before that young starlets like Hillary Duff, the Olsens, and Avril Lavigne had also set up shop on the site. And there are more to come! The site, which claims to have 12 million visitors, is seeking other high-end partnerships with brands including Stella McCartney, Vivienne Tam, Liz Claiborne and Henri Bendel.

No doubt, digi-deals like these are already popping up everywhere, but the fact that they're luxury players that are effectively marketing to kids—essentially recruiting future shoppers while their brand loyalties aren't yet set in stone, not to mention further glamorizing a materialist marketplace—seemed just a little bizarre to me.

So I rang up Susan Linn over at the Campaign for a Commercial-Free Childhood to  get her thoughts. Picking a fight, I know, but I thought she might be able to shed some light on this trend.

“The real purpose of social networking sites for young kids like Stardoll, BarbieGirl and even Webkinz and Club Penguin, is to train kids to shop,” she told me. “It’s a good thing for the corporations to make a lot of bucks, but it’s not a good thing for kids. What these companies want to do it get children in the habit of consumption . . . and instill the idea that they deserve luxury products."

But is that Stardoll's fault, really? If we're supposed to stop instilling kids with the idea that they deserve expensive things, why don't we just cancel any number of reality and "scripted reality" shows, not to mention MTV shows like "Cribs" or VH1's "The Fabulous Life Of" series? Certainly those shows glamorize opulent wealth and rampant consumerism.

To whit, Paul Kurnit, president of Kid Shop and a marketing professor at Pace University, told me that the children using sites like Stardoll are already exposed to hyper-consumer culture via television shows like those mentioned above.

“Luxury is aspiration and a lot of those brands and those celebrities are fashion and lifestyle brand badges that today's teen and tween girls want a piece of,” he said, adding that he feels Stardoll does a good job of delivering for both its users and brands.

So, dear reader, what's the verdict? Is Stardoll out of line, or is it merely keeping with the times?