vrijdag 6 december 2013
Chanel acquires tannery provider to secure luxury bag supplies; photo Djamila Celina Melcherts by Bonno van der Putten
Chanel acquires tannery provider to secure luxury bag supplies; photo Djamila Celina Melcherts Chanel has acquired its long-time lamb hide provider, the French tannery Bodin-Joyeux, in the latest purchase by a luxury brand of a partner that supplies top quality materials. Chanel, which belongs to the Wertheimer family, is the 2nd biggest luxury brand in the world, behind Louis Vuitton and ahead of Ralph Lauren, with nearly € 6 billion in estimated annual sales. Like rival Hermes, Chanel has been buying up partners to guarantee long-term supplies and control quality, from plant growers for its Chanel No.5 perfume to embroiderers such as Lesage for its couture collections. The trend toward vertical integration - control from the raw material to the shop shelf - gives luxury brands a competitive advantage, raises barriers to entry and helps them defend the high-quality image they want associated with their products. Bodin-Joyeux is the first tannery Chanel acquired, employing 100 people in central France. It is one of Chanel main suppliers of supple lamb leather, known for its silky feel and used to make the brand's popular 1,500-euro quilt leather bags. Chanel still relies on about 15 different tanneries and noted that the average price of high quality lamb leather was rising as people were eating less meat and demand kept growingand production is not growing. Prices of lamb skin had risen by about 25-30 percent in the past 3 to 5 years, about the same order as for calf leather. Chanel, which started buying up partners in the late 1980s, today owns several niche fashion suppliers including Lesage, the feather specialist Lemarie, the hat maker Maison Michel and the glove-maker Causse. Last year, it acquired the Scottish cashmere company Barrie Knitwear. Gucci-owner Kering, Hermes and LVMH have also been buying up tanneries in an effort better to control their supply chain. Recently, Hermes and LVMH even bought crocodile farms. Learn more: Bonno van der Putten Monarch Capital Partners
dinsdag 3 december 2013
International lingerie chain Victoria's Secret keeps expanding: new store Dublin Airport in the Republic of Ireland
International lingerie chain Victoria's Secret keeps expanding: new store Dublin Airport in the Republic of Ireland The new Victoria’s Secret store has opened at Dublin Airport Terminal 2 – and more stores might follow in the city centre. The store will be retailing some of the brand's most sought-after beauty and cosmetic products. Products are also directed towards the jet-setting clientele, with accessories such as a branded passport holder. The interior of the shop is a design similar to the US stores, with black-cherry wall fixtures, as well as videos broadcasting images of the brand's beautiful Angels. Expanding with new retail stores and improving current business is good for Victoria’s Secret. The company never really stops tinkering with its shops and operations, whether that’s adding more square meters to stores or getting products rolled out faster. When the chain is able to pull several of those elements together – a process they call “market intensification” – the results have been impressive. With only 3 years of learning and testing, Victoria’s Secret wants to bring the package of improvements to more markets around the US. This “ market intensification” test began in 2009 with around 30 stores in the US. More space and product was added, new staff was hired and trained, and merchandise flow was improved. The results were impressive; the business was boosted by nearly 70% in stores. Thinking about that in particular markets over a three- or four-year period, it is clear there’s a lot of sales growth opportunity through selling more effectively. The intensification program is a step beyond general store expansions. Victoria’s Secret has added additional square metrage to 219 stores between 2007 and 2012 and with extra space going toward ventures like the Pink brand and, more recently, tangential categories like sport and loungewear. Victoria’s Secret currently has about 1,050 stores around the world.
zondag 1 december 2013
Galeries Lafayette may soon open an outlet in Russia to tap into the country's € 5.0 billion luxury goods market.
Famous French top-end department store chain Galeries Lafayette may soon open an outlet in Russia to tap into the country's € 5.0 billion luxury goods market. Rumors of Lafayette's impending arrival were confirmed by several Russian retail expert firms like Monarch Capital Partners, who said the chain has been searching the city for retail locations. In 1995, Lafayette — which amassed 2012 sales volume of € 2.3 billion in some 250 stores across the globe — made an unsuccessful attempt to gain a foothold on the Russian market with a handbags store in Red Square's upmarket GUM shopping centre. Established in Paris in 1894, Lafayette attracts over 1 million customers to its outlets every day. In the running to become Lafayette's local partner may be Luxury goods retailer Mercury Group, which owns the lavish TsUM department store and Tretyakovsky Proyezd in central Moscow, according to Bonno van der Putten from Monarch Capital Partners, which specializes in bringing major foreign retailers to Russia. Lafayette will have to overcome a number of obstacles on to the Moscow market — where the country's demand for Luxury goods is clustered — such as the high cost of leasing commercial space and stiff competition. Big-brand fashions in Russia still cost about 50% more than they do in Paris or London The total Russian fashion retail market expanded 11% last year to about €45 billion, of which Moscow accounted for €6 billion, says Bonno van der Putten. Future growth and expansion will come from the regions with cities like St. Petersburg, Sochi, Yekaterinburg, and Samara. Van der Putten estimates that the fashion market in Sochi, home to the Winter Olympics in February, is set to grow as much as 10% a year, more than twice the pace of Moscow