The corporate truth of high fashion

 

 

An art at its purest, fashion is a means to interpret the world we live in through what we wear; designers and artists often share a view of the world entirely alien to the wider public. So the ‘fashion as art’ story goes. A business at its purest, fashion uniquely has the ability to take what you bought six months ago and make it irrelevant. It’s a good business too – the myriad of brands and designers make the marketplace feel very competitive, but producing new collections year after year is not cheap. This part of the artistic struggle rings true. A helping hand therefore appears from companies that you may not have heard of, but who between them control a large portion of the fashion market.

Take Alexander McQueen whose graduation collection was bought in its entirety by Isabella Blow. Not a bad start. Neither was his appointment to Givenchy by Bernard Arnault of Louis Vuitton Moet Hennessy in 1996 (more on both later). But in 2001 Gucci Group acquired a 51% stake in the brand: Gucci is in turn owned by retail behemoth PPR. So then came the inevitable ‘Guccification’ of the brand. Not a technical term, Guccification transforms a brand from a loss making high-fashion house into a money-making brand that many levels of consumers can access. McQueen was essentially unheard of outside fashion circles; the brand had no shops, no menswear and until only this year had no press advertising budget. To extend the brand, the iconic skull scarves and accessories became much more prominent, and a menswear collection was added for 2005. Does entering into one of the big holding companies compromise creative freedom? Certainly, McQueen had remained largely independent creatively until his death, but shortly after this, the range of scarves and jewellery available grew enormously. Furthermore, did McQueen sell out to make money, or was it necessary to succumb to the management of PPR and the extension of the brand in order to maintain the high-end money losing shows and dresses that give the brand its exclusiveness?

This is the essential tension to fashion both as a business and a creative enterprise. Burberry, British readers will note, is a brand that has wandered from luxury, to chav, and back again. Control over ‘the brand’ is paramount to fashion companies – Christopher Bailey revealed to Vogue that he oversees everything (down to when and to what window displays change) in order to ensure a consistent image to customers. It was he who dragged Burberry out of its pariah status as a football hooligan uniform by banishing its famous check from the exteriors of garments. Superdry– of Market St – is another stock market wonder that had more than tripled in value at its peak from a flotation in March 2010 before fears about brand overstretch (amongst others) were reported on Bloomberg after a disastrous few months for the share price.

The undoubted masters of brand management (and acquisition) are LVMH whose tentacles cover every area of luxury, from fashion to wines. Louis Vuitton is everywhere, not least in St Andrews. Despite the hoard of fakes, the true originals are still seen as exclusive – even with the ubiquitous LV on key rings and monogram belts available to the masses. LVMH has another acquisition in the pipeline that has turned ugly, and proves that not all brands are willing partners to the holding company paradigm. It may be family owned, but Hermès has grown beyond the concept of a nobleman’s saddle maker; the company is publicly listed, and closely guarded by three branches of the founding family. The shock, then, of discovering that 20% of the 173 year old business had been acquired on the quiet by LVMH caused Hermès CEO Patrick Thomas to proclaim ‘If you want to seduce a beautiful woman, you don’t start by raping her from behind’. The takeover attempt is not inexplicable – Hermès places itself beyond luxury in terms of pricing, but has still seen sales growth throughout the financial crisis and LVMH relies heavily on the LV part of the group. The war of luxury words continues, with LVMH insisting their shareholding is not only legitimate but also friendly.

Fashion then is not quite as competitive as it first appears and the leviathans of the industry LVMH and PPR, not forgetting Topshop parent Arcadia, are unlikely to relinquish control. Fashion as art may have been the initial proposition, but the business of fashion is too large to be left to the artistes. For a designer to sell a stake to a holding company is perhaps not selling out, but definitely a prudent, business, decision. The tension arises only when the brand under attack is already powerful enough to support itself; perhaps this is one trophy Bernard will lose.

 

Alastair Irvine


Photography – Alastair Irvine