Online Fakes Are Costing Luxury Brands “Dearly”: The Past Week in Fashion | Vanity Daily

We’ve picked out last week’s most important fashion news for you.

Industry news

Yoox Net-A-Porter delists on June 20

The online luxury retailer Yoox Net-A-Porter will leave the Milan Stock Exchange on June 20. In January, Richemont, the group behind Cartier, bid for YNAP and set out to buy every remaining share; once the deal closes, Richemont’s stake in YNAP rises to 95%.

Global consumer demand for diamond jewelry hit a record $82 billion in 2017

Consumers worldwide bought $82 billion of diamond jewelry in 2017, up 2% on the year and a record, according to a study released last Thursday by De Beers, the diamond company owned by Anglo American. The United States led growth for the fourth year running: strong consumer confidence and a healthy macroeconomic backdrop lifted American demand 4%, to $43 billion — more than half the world total. The study also found that self-purchases account for 30% of all diamond jewelry bought in the US.

Global Industry Analysts puts the world bridal market above $80 billion

Global Industry Analysts estimates that the world bridal-wear market will pass $80 billion by 2020. Margins are fat and shoppers are willing to pay more, but the business is also a tangle: the market is splintering, fast fashion has moved in, and marriage rates are falling. To reach more customers, an industry rooted in tradition has started mixing it up on social media, which makes going digital one of its harder problems.

Burberry reports full-year results; sales up 2%

Burberry published its results for the 2017–2018 financial year, and a year into its internal overhaul the brand looks steady. In the 12 months to March 31, total revenue fell 1.2%, to £2.73 billion. Strip out beauty and sales rose 2%, pulled up by takings at existing stores; operating profit grew 4%, to £410 million, and adjusted operating profit rose 2%, to £467 million. Burberry credited the latter to solid retail performance, nearly £44 million in extra cost savings, and better beauty margins as marketing and inventory costs came down. After Wednesday’s announcement, the shares rose 4%, to £18.75.

Nike, H&M, Gap and Burberry sign up to a sustainable-fashion plan

Nike, H&M, Gap and Burberry have signed an initiative called “Make Fashion Circular.” Francois Souchet, who runs the project, said the point is to turn an economy in which clothing is never treated as waste into “an unstoppable force.” Stella McCartney, long an advocate of sustainability, joined last year.

Richemont launches a new watch brand

Richemont has launched Baume, the first watch brand the luxury group has created itself; its predecessor, Baume & Mercier, was bought by Richemont. Baume is aimed at a new sort of customer — one who wants something luxurious but green, not mass-produced, and priced below the luxury line. Pairing Swiss watchmaking with sustainable materials, it will offer two ranges, The Iconic and The Custom; the first starts at $1,100, the second runs from $560 to $630. Baume has also teamed up with the NGO Waste Free Oceans and will make watches and components from plastic recovered from the sea.

L’Oréal sets up its first employee share plan

On Tuesday, L’Oréal said it would launch its first employee share ownership plan across 52 countries. Staff can buy 500,000 shares at a discount, with subscriptions open from June 4 to June 18 and settlement on July 24. The shares will trade on Euronext Paris. Employees must hold them for at least five years, barring special circumstances.

Pandora’s first-quarter sales fall 1%

The Danish jewelry and accessories brand Pandora reported first-quarter results: sales of $819 million over the three months, down 1%, dragged by slowing growth in China. By region, revenue in Asia-Pacific fell 9% (up 1% in local currencies), the US fell 16% (down 4% in local currencies), and Europe rose 15% (up 16% in local currencies). To lift its China numbers, the group said it is carrying out a business plan to strengthen the operation there. It also said it will add more jewelry beyond bracelets — necklaces, rings and the like — with the aim of selling as much of them as of bracelets by 2022.

Yoox Net-A-Porter’s first-quarter revenue rises

The luxury fashion e-commerce group Yoox Net-A-Porter reported its first quarter. In the three months to March 31, revenue rose 0.5%, to €518 million; at constant exchange rates, sales grew 7.9%. The in-season lines — the combined net revenue of Net-A-Porter and Mr Porter — grew 5.9%, to €282 million, while the off-season lines, Yoox and The Outnet, fell 4.6%. By region, UK sales grew 3.2%, to €68.8 million, with revenue up 5.9%; North American revenue grew 5.1%, to €153 million, with sales up 8.5%; and Asia-Pacific, helped by Hong Kong and Japan, saw revenue rise 2.5%, to €93.4 million. The group plans to invest €170 million to €180 million this year, mostly in technology, and to improve free cash flow against 2017 while expanding the business.

Vetements returns to fashion week after a year away

Vetements, which announced last June that it would stop staging traditional runway shows, has decided to come back. It will present its Spring 2019 men’s and women’s collections on the afternoon of July 1; this year’s Fall 2018 Paris fashion week runs from July 1 to 5.

Burberry buys the Italian leather supplier CF&P

The British luxury brand Burberry said it is buying the luxury leather-goods business of CF&P, the Italian supplier it has worked with for years. Marco Gobbetti, Burberry’s CEO, said: “This acquisition will create a center of excellence for Burberry covering everything from creation and product innovation to engineering and coordinated production. It will give us far greater control over the quality, cost, logistics and sustainability of our leather goods.” More luxury houses — Chanel and Hermès among them — have taken direct control of key suppliers in recent years, which is why some see Burberry’s move as no surprise.

LVMH leads a new funding round for the fashion site Lyst

The French luxury giant LVMH has become the largest investor in a new funding round for the fashion site Lyst, Sky News reports. Founded in 2010, Lyst is an aggregator that is both an e-commerce site competing with Farfetch and Net-a-Porter and a fashion information platform, with close to 70 million users a year. The terms are not yet clear, but sources say Lyst is raising between £50 million and £100 million, at a steep premium to its last valuation. Groupe Arnault, one of LVMH’s shareholders, is said to have led the deal — another move, some believe, in LVMH’s push into digital.

Some opinions

A report on luxury counterfeiting says online fakes have cost brands “dearly”

A survey of counterfeiting in luxury goods puts online sales of fakes at $30.3 billion, and the total damage to the high-end consumer goods industry at $98 billion. Across all industries, counterfeiting cost about $1.2 trillion in 2017, a figure expected to reach $1.82 trillion by 2020; of that, online sales of fakes accounted for $323 billion last year.

The survey looked closely at economies where consumers have money to spend: France, Germany, China, Japan, the United Arab Emirates, the UK and the US.

It also examined how counterfeiting works through social media, and found that 3D printing poses a threat of its own.

“The growth of global trade and the development of technology have had a positive effect on markets everywhere, but they have brought harm too,” the report says. “Companies spend enormous amounts of money, time and resources protecting their brands and trademarks. Even so, the market for fakes keeps growing fast.”

Companies everywhere risk boycotts over political missteps. Karl Lagerfeld seems immune. What makes him different?

Karl Lagerfeld has always said whatever he likes in front of the press, sensitive subjects included. He has declared his distaste for the #MeToo movement, snapped that a model who doesn’t want her clothes tugged at should become a nun, and, not long ago, attacked German Chancellor Angela Merkel’s immigration policy with the line “was it really necessary?”

What’s striking is how little any of it seems to touch the brands he runs, Chanel and Fendi; whatever damage there is barely registers. Kanye West, by contrast, was hammered online for his remarks about slavery, and the Yeezy sneakers he has long made with Adidas landed in a full-blown PR crisis. Ivanka Trump’s label was boycotted over Donald Trump’s earlier sexist remarks, with shoppers rallying behind the hashtag #GrabYourWallet.

In an article for The New York Times, Vanessa Friedman argues that Lagerfeld plainly occupies a space of his own in fashion. He shaped the field; he is a legend. That indulgence comes bundled with an indulgence for a certain temperament — people are afraid to criticize a figure of authority, above all the man who runs Chanel, a brand set on the pedestal of fashion power.

Those who were angry, the piece notes, would not say so on the record. “Please don’t quote me — I don’t want to lose my fifth-row seat at Chanel.” That answer explains a lot.

“Lagerfeld has been saying perverse things for so long that everyone has gone numb to it,” Friedman writes. “It is almost expected. He has cast himself as a provocateur, and that is part of his brand.” She adds that before anyone can finish digesting one remark, he is on to the next, and the sheer volume of it sweeps the earlier chatter away — a distraction, in effect.

“We seem to be living in a strange double reality. Just as we have grown more sensitive to the experiences of different social groups, we have also grown more used to the rise of uncivil speech, wherever it comes from.”

Cover image: fashionnetwork