WWD Accessories Section II Investors: From Bling To Ka-Ching Havaianas Flips Through a Half Century Leather Artisans in Paris Clever techniques and fresh options in skins are making exotic products more affordable for a broader customer base. MODERN EXOTICS PHOTO BY GEORGE CHINSEE; STYLED BY ROXANNE ROBINSON-ESCRIOUT Beirn’s water-snake clutch, $335. ▲ ▲ Dax Gabler’s python clutch, $990. ▲ Kotur’s snakeskin clutch, $560. Khirma Eliazov’s python and stingray clutch, $685. ▲
Transcript
WWDAccessories Section II
Investors: From Bling
To Ka-Ching
Havaianas Flips Through a Half Century
Leather Artisans in Paris
Clever techniques and fresh options in
skins are making exotic products more
affordable for a broader customer base.
MO
DE
RN
EXOTICS
PHOTO BY GEORGE CHINSEE; STYLED BY ROXANNE ROBINSON-ESCRIOUT
Beirn’s water-snake clutch, $335. ▲
▲
Dax Gabler’s python clutch, $990.
▲ Kotur’s snakeskin clutch, $560.
Khi
rma
Elia
zov’
s py
thon
and
sting
ray
clut
ch, $685.
▲
WWD MONDAY, APRIL 30, 2012
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PARTY GIRL THE AVON LADY has some company on the sales trail.
But while Lia Sophia, the fashion jew-elry e-commerce brand, might have a sell-ing model similar to Avon’s door-to-door business, its bold message of rapid expan-sion and growth in global markets via e-commerce sets it apart from rivals in the accessories arena.
The 35-year-old family-run company, which sells trendy baubles through a net-work of 30,000 sales advisers, is expanding to Asia, Latin America and Europe.
Already sold in Germany and Canada, Lia Sophia has gained street cred for its in-novative sales strategy in foreign markets.
Through shopping parties and personalized events, advisers interact with potential shop-pers and provide feedback to Elena Kiam, Lia Sophia’s creative director, who works with her husband, chief executive Tory Kiam, to create a selling strategy for the region.
Tory is the son of the late entrepreneur Victor Kiam, former owner of the New England Patriots and Remington Products, which he bought in 1979. He famously starred in commercials for Remington’s electric razors, saying, “I liked it so much, that I bought the company.’’ The elder Kiam bought a jewelry company, Act II, in 1986, changing the name to Lady Remington. After he died in 2001, Tory took over and rebrand-ed it as Lia Sophia, after his two daughters.
The brand owns factories in Asia and has distribution centers in the Toronto suburb of Richmond Hill, Canada; Schaffhausen, Switzerland, and Chicago, where it is headquartered. It also has a quality control center in Qingdao, China.
Each market has its own characteristics, Elena Kiam said. House parties might work in the U.S., but in Asia, for instance, advis-ers do not go door-to-door.
“You need to understand how they shop,” she said, explaining that typically, houses and apartments in China are smaller than in Europe and the U.S. As a result, advisers in-troduce clients to the product at a common venue, like a meeting hall, instead.
Those advisers will also highlight which celebrities have donned Lia Sophia, as “ce-lebrity culture” is “critical” to Asian shop-pers, Kiam said.
“What’s old is new again. This is old-school social networking,” said Kiam.
Lia Sophia reels in “several hundred million dollars” in sales annually. With a broad jewelry offering priced between $18 and $500, the brand has been able to weath-er the economic recession.
“We’re very nimble,” Kiam said. We have started our expansion in Europe by doing business in Germany, making sure that this market is on very solid ground before we enter any other European markets, includ-ing Switzerland. Since we are family owned and have no outside investors, [we have] the flexibility to be very thoughtful as we build our business. We are very focused on our North American markets, which con-tinue to be strong. In Canada, we are up to 4,000 sales advisers in three years’ time.”
She added that South America and Asia have large potential for both direct sales and jewelry, and “we are evaluating our pros-pects, given the huge scale of those markets.
“If you ask us who would we like to be when we grow up,” she added, “we would like to [have a Starbucks-like following] in the jewelry space.” — ALEXANDRA STEIGRAD
TIME FOR THE WEBTHREE LONG-ESTABLISHED, high-end watch companies are kicking up their online presence.
GIRARD-PERREGAUX The 221-year-old timepiece com-pany relaunched its online home at girard-perregaux.com this month — and besides a modern, clean aesthetic, the site contains editorial content. New lifestyle online journal “Mechanics of Style: A Journal for the Modern Gentleman” is even open to ex-ternal contributors, according to Michele Sofisti, chief executive officer of Sowind Group, parent of Girard-Perregaux. “We reworked our Web site and created a differ-ent area where people can con-nect with us and have an open ex-change of information and ideas,” Sofisti said. “We wanted to create a space where our collectors can interact directly with us.”
VACHERON CONSTANTINVacheron Constantin launched “The Hour Club” on its Web site vacheron-constantin.com — a discussion platform for fans to
share opinions and information. Exclusively reserved for owners of the 257-year-old brand, the forum gives members access to special events and personalized servic-es. There’s also “The American Heritage of Vacheron Constantin,” a portion of the site that invites collectors to share the personal stories behind their timepieces.
TOURNEAUFocusing on Tourneau’s Certified Pre-Owned service, the retailer unveiled a digital “Every Watch Has a Story” cam-paign at the beginning of April. The multiplatform initiative — still taking place on Facebook, Twitter, Pinterest, Instagram and on its Web site at tourneau.com — educates consumers on how to become a certified, pre-owned watch owner and encourages watch owners to share “stories.” So far, the 112-year-old brand has tripled Facebook engagement with fans, accumulated more than 10,000 Pinterest follow-ers and Facebook and Pinterest have become the top referrals to Tourneau.com’s e-commerce business. — RACHEL STRUGATZ
IN THE MIXPROPS FOR FLORIDAWATCH BRANDS are opting for a second home in Florida.
In recent years, the Sunshine State has become a strategic jumping-off point for a grow-ing number of European and American watch houses, looking for easy access to markets in the Caribbean, South and Central America and Mexico.
Brands including Brera Orologi, TechnoMarine, Invicta, Philip Stein, Glamrock and Corum all have footholds in South Florida. Some have even relocated.
“Our business is doing amazingly in Mexico, Guatemala and Brazil,” said Brera founder Maurizio Pasi, adding that having a headquarters in Florida is “cost-efficient” for labor and real estate. Miami, where the brand is based, has inspired Brera’s design, as the city is a “melt-ing pot” of international cultures.
Will Stein, president of Philip Stein, agreed. “By pairing our Miami office with our international headquarters in Switzerland and our sales office in New York, we combine our quality and craftsman-ship with the cultural diversity and great fashion influence of a trend-setting American city to run our operations from.”
He added that since launch-ing in 2003, the brand has grown “exponentially.”
With an aggressive South American and Caribbean market-ing strategy, Swiss brand Corum took the plunge in December and moved its U.S. office from California to Florida. This move fa-cilitated Corum’s North American and Caribbean expansion strategy, which was put into motion in 2009, said Antonio Calce, chief executive officer of Corum USA.
“This new location allows Corum to be closer to the Caribbean and the East Coast to offer better service to its retailers and develop the grow-ing Florida market,” he said.
— A.S.
Corum USA relocated to Florida.
Girard-Perregaux’s “Mechanics of Style: A Journal for the Modern Gentleman.”
Lia Sophia jewelry.
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13.6% Gold plummeted from its high of $1,928.30 on Sept. 9 to $1,664.80 on Friday.
36.4% Silver dropped from its high of $49.32 on April 28, 2011, to Friday’s close of $31.35.
17.4% Platinum fell from its high of $1,907.80 on Aug. 22 to $1,575.70 on Friday.
PRICE PLUNGEA spot check on the performance of precious metals since reaching their last high.
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By ALEXANDRA STEIGRAD
IN THE FACE OF TIGHT CREDIT, a cautious con-sumer and an economy that is still clawing its way back from recession, headline-making investments have been hard to come by — until recently.
With piles of cash stored up, private equity firms are furiously jumping back in the game, and they are flocking to invest in full-fledged accessories brands or fashion companies with sizable accessories busi-nesses. Indeed, 2011 and 2012 have seen a flurry of mergers and acquisition activity in the sector, starting with a slew of initial public offerings.
Last year alone, Ferragamo went public in Milan and Prada SpA and Samsonite went public in Hong Kong. In New York, Michael Kors, whose accessories business accounted for more than 60 percent of sales in 2011, filed its massive IPO in December, and Tumi Holdings Inc., the accessories pure-play, went public just two weeks ago. Sky-high valuations for Kors at $8.97 billion, Tumi at $1.79 billion and Nixon, which is valued at up-ward of eight times its profits, gives context to how the market views the category’s growth potential.
Big investments in 2012 have included Fossil Inc.’s acquisition of watchmaker Skagen Designs for $236.8 million in January, which preceded headline-making private equity deals with Alexis Bittar, Rebecca Minkoff and Nixon Watches. More recently, fashion jewelry brand Eddie Borgo said it was in the process of inking a deal with an investor.
The combined value of deals made public so far this year in sectors including apparel and footwear retail, textile and ap-parel manufacturing, and cos-metics and toiletries is up 35.5 percent over last year, to $2.66 billion, after a 44.3 percent drop in 2011 to $13.49 billion from 2010 figures, according to Dealogic.
“Accessories have been a big driver over the last few years,” said Hilldun Corp. co-chief ex-ecutive officer Jeffrey Kapelman, who specializes in investing in smaller brands. “Today, there are a lot of fashion companies mak-ing more accessories lines.”
One reason is that accesso-ries have higher profit margins than apparel, said Kapelman, who spoke on a panel about fashion IPOs at Fordham Law School this month.
In recent years, more brands have laid out plans to build out their accessories lines, hoping to insulate themselves from margin-crushing markdowns. What’s more, accessories are increasingly becoming a way for companies — from teen retailers to misses’ retail-ers — to hike their fashion credibility.
Case in point: Struggling women’s apparel retailer Chico’s Fas Inc. recently pinpointed the category as a way to reinvigorate its lackluster collection.
“I asked everyone one question: What are the three things I need to do to bring this brand back to greatness?” Cynthia Murray, Chico’s brand president said at the company’s analyst day. “Hands down on every list was accessories.”
In the case of Michael Kors, the firm has forged deeply into accessories to leverage its brand — with accessories now generating a majority of revenues.
Kors’ accessories sales have expanded at a 57.6 percent compounded growth rate over the last three years, outperforming industry growth. Sales of the firm’s accessories and related merchandise, including handbags, small leather goods, footwear, watches, jew-elry, eyewear and fragrances, in the retail and whole-sale segments, accounted for about 62.3 percent of its $803.3 million total revenues in fiscal 2011.
According to The NPD Group, overall growth in accessories outpaced growth in apparel from 2010 to 2011. Accessories sales, including jewelry, watches, sunglasses and handbags, rose 4.5 percent last year to $35.07 billion, while apparel sales increased 3.1 per-cent to $110.16 billion for the period.
While it’s clear that apparel is the dominant cat-egory in terms of volume, industry experts pointed to the rate of growth when explaining why investors are
looking to accessories.“My sense of it is that the apparel industry has a lot
of fashion risk, a lot of investment risk. Apparel has be-come a commodity,” said Marie Driscoll, an indepen-dent retail consultant and former director of equity research at Standard & Poor’s.
“Except for last year, apparel has been suffering deflationary trends for years,” she said. “Apparel is a very mature market. It’s not dead, but it’s a market-share game.”
“I think at the end of the day it still comes down to com-pelling product,” said Howard Feller, a partner in investment banking and strategic advi-sory firm Marketing Management Group. “I think accessories have done well in the last few years, and it is in part linked to the econo-my. It’s very easy to update your wardrobe
with accessories.”But it’s not just consumers looking to liven up their
wardrobes with a new necklace. Feller said shoppers are attracted to the jewelry and watches, due partly to their broad pricing spectrum and innovative designs.
Brands in these segments have not only been able to offer value by mixing inexpensive materials such as rose gold into collections with luxe materials such as 18-karat gold and diamonds, but they have also started diffusion lines of lower-priced materials, such as silver.
Conversely, handbag brands not only have more trouble escaping fluctuating raw material costs, but also occupy an “overcrowded” segment, which is only now showing signs of improvement. Feller also noted that jewelry and watch brands have been able to raise prices on their high-end collections to offset the smaller ticket purchases — and their customers don’t seem to mind a bit as the luxury market is rebounding strongly.
According to Hana Ben-Shabat, a partner in A.T. Kearney’s retail practice, smaller, niche brands with a “cult following” such as Alexis Bittar and Rebecca Minkoff are extremely attractive to investment firms looking to make a quick-turnaround profit.
“You can get certain brands at a very good price,” she said, explaining that in a tough economy, smaller companies that might have a following still have trouble drumming up enough cash to fuel broader expansion.
Brian Krumrei, a principal at TSG, the firm that in-vested in Minkoff and Bittar, said his company looks for
brands with customer loyalty and a solid foundation. “Every situation is different, and, therefore, we
don’t have specific sales or profitability thresholds [when looking to invest],” he said. “We focus on the opportunities ahead for the brand and look to invest between $15 million and $20 million during our part-nership.”
TSG, which bought a 50 percent stake in Bittar in January and an undisclosed minority stake
in Minkoff in March, wouldn’t disclose what it plans to bring to those brands, but it did shed some light
on its general strategy.“We typically pro-
vide capital to support growth initiatives, in-cluding investments in stores, e-commerce, geographic markets,
product categories, digital and social media, among oth-
ers,” Krumrei said, explaining that TSG’s involvement is “at least
five years.”For Bittar, its investment will
help the brand launch a collec-tion straddling the bridge and fine jewelry categories, as well as jump into some new areas like watches, eyewear and handbags.
For Rebecca Minkoff, which is trying to achieve lifestyle brand status, TSG will help handle its rapid growth. Minkoff, which still gets about 80 to 85 percent of its sales from accessories, has ex-panded quickly into new catego-ries since it was founded in 2005. The brand began with handbags and jumped into apparel and footwear, and plans to offer jew-elry, eyewear, cold-weather gear and scarves this year.
The company, which has been profitable the last two years, said it grew 546 percent between 2007 and 2010. In 2011, it expanded 86 per-cent from 2010, and is set to grow another 60 percent this year.
Andy Laats, co-founder and ceo of Nixon Watches, said private equity investment is paramount for any brand looking to reach the
next level — and he should know.Nixon, which was acquired by action sports appar-
el retailer The Billabong Group in 2006, was partially sold to Trilantic Capital Partners for $285 million in March. Billabong retained 48.5 percent of Nixon, sell-ing a 48.5 percent stake to TCP and a 3 percent stake back to co-founders Laats and Chad DiNenna.
Valued today at $464 million, Nixon was bought by Billabong for about $55 million and a deferred pay-ment of roughly $76 million in fiscal 2012. According to Laats, Billabong helped develop Nixon, which brings in about $50 million in earnings before inter-est, taxes, depreciation and amortization, but it di-vested its stake to clean up its balance sheet.
“Nixon is not a huge company. The three things that TCP will bring are capital, growth trajectory and geographic expansion,” Laats said, explaining that the uniqueness of the oversize, sporty watch brand kept the beleaguered and debt-saddled Billabong from selling it outright to TCP.
With the investment, Nixon, which is already in 70 countries, will be able to grow its business “significant-ly” in Asia (excluding Japan), and it will have the cash to broaden its collection to include watches priced at the upper end of its $200 to $600 retail range. The brand will also use the new funds to flesh out its audio acces-sories and offering of bags, wallets, belts, hats and jack-ets, Laats said, before expounding on Nixon’s future.
“What we saw in the darkest days of the recession is a flight toward lower prices. We mixed and changed our product as the industry rebounded and returned to higher-priced items. That’s how we attracted pri-vate equity,” he said, pausing. “Will the brand stand the test of time? You have to take it on faith and the subjectivity of fashion brands to quantify the risk. But it’s true, accessories have less seasonal fashion risk than apparel.”
Investors: From Bling to Ka-Ching
I think accessories have done well in the last few years, and it
is in part linked to the economy.— HOWARD FELLER
An image from Nixon’s advertising campaign; jewelry from Alexis Bittar (inset).
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GONE ARE THE DAYS when investing in exotic ac-cessories meant shelling out thousands of dollars.
For the upcoming fall season, designers went to market with an arsenal of more affordably priced ex-otic handbags and shoes — including totes, satchels, clutches, minaudières, platform pumps and sandals — that retail for well under $1,000.
A slew of brands and designers — like Alexandre Birman, Devi Kroell of Dax Gabler, Carlos Falchi, R+Y Augousti, Khirma Eliazov, Beirn, Botkier, Ted Rossi and Kara Ross — are able to deliver luxurious product in exotic skins at lower prices than what’s historically been available in the category for a host of reasons. Among them: controlling production and manufactur-ing costs by owning factories, obtaining raw snakes directly from the source, treating skins with color in-stead of labor-intensive (and expensive) handwork and mixing materials.
Alison Jatlow Levy, a retail strategist at consulting firm Kurt Salmon Associates, calls this crop of acces-sories the new “modern luxury category,” a result of vendors shifting the focus to well-designed, high-qual-ity products available at more accessible prices. She believes this trend emerged as a response to the over-saturation of the $300-to-$500 contemporary handbag market that occurred postrecession.
“The consumer is coming back, and [brands] can shift away from the value proposition and offer something that’s more unique and exciting,” Levy said. “We believe consumers will pay more, and brands can [sell these products] at $800 to $1,000. A lot of designers see this as a white space. People stayed very high or went very low.”
It’s all relative, according to Levy, who describes this customer as someone who is used to paying high-er prices but now finds an influx of products available at more accessible prices. This, she said, is thanks to those designers who can target affluent as well as aspirational, contemporary customers.
“There have been so many eyes on the Michael Kors IPO [initial public offering] lately, and when everyone was ask-ing why the company is so highly valued, it was because Kors was able to move from ready-to-wear and really build a strong, thriving busi-ness around accessories,” Levy said. “There is value in accessories as a piece of the business portfolio. As [these modern designers] look to build up brand equity, accessories are a really compelling part of the story. They have longevity and pose new competition to some really estab-lished luxury brands that may have not seen competition from this segment in the past.”
Although Alexandre Birman’s exotic skin shoes were originally picked up by Bergdorf Goodman in 2008 as a contemporary line, and because of its price point sold on the retailer’s fifth “5F” floor, the current spring collection was moved to the designer shoe department on the second floor. The brand sits alongside Christian Louboutin and Chanel, despite the fact that Birman’s shoes cost hundreds of dollars less than his designer neighbors.
Because his company imports snakes in their raw, untreated state from Malaysia and owns the tanneries and the majority of the factories where the skins are treated and footwear is manufactured, Birman is able to charge between $500 and $700 for a pair of multicol-ored python skin pumps — significantly less than other high-end footwear collections, whose more labor-inten-sive shoes and boots sometimes go up to $995.
“We have our own factory in Brazil, so 70 percent of our production is there and the other 30 percent is
[done] in Italy. We save costs in the manufac-turing process because we control [that aspect] ourselves,” said the São Paulo-based designer — a trained cobbler who was “born and raised in a shoe factory.” His family owns the publicly traded Arezzo, of which his namesake collection is the highest end of the company’s four footwear brands.
Yiouri Augousti of R+Y Augousti also works direct-ly with snake farmers in Japan, Thailand and South Africa and credits his lower prices to the fact that he and his wife, Ria, can deal with suppliers and “cut out all the middle men.” Mixed-material minaudières made from python, water snake, stingray, eel, ostrich or iguana retail from $400 to $600, while a water snake
tote can go up to $1,100. The husband-and-wife team,
who started their brand as a home company in 1990, own a factory with 300 employees in the Philippines.
“We design it; we buy direct-ly; we produce directly and it’s our own distribution. We con-trol all aspects,” Augousti said.
Over at Carlos Falchi, who launched his namesake label in the Seventies, the entry-level price for exotic handbags is $495 — and almost 20 percent of the exotics in his line retail for less than $1,000. Several styles at the highest end creep up into the $25,000 range.
“I’ve developed a unique method of cutting the skins to emphasize their beauty and maximize their usability,” said Falchi of the python, caiman and Ayers snake present in his pieces. “My team and I have also perfected the rhythm and flow of production and craftsmanship within our own factory.”
His leather and exotic combina-tion totes have also had a good reac-tion from retailers — as have those from newer-to-the-category Khirma Eliazov, whose fall collection was just picked up by Bergdorf Goodman.
The three-year-old company’s prices range from $110 to $2,200, but Eliazov maintains that 75 percent of her bags retail for less than $1,000, including the $925 python and leather Lindsay clutch, the all-python Herzog clutch for $895 and the $495 python
and canvas Jolie (a py-thon and stingray ver-sion is $685).
Devi Kroell — who two years ago left the
namesake brand she founded in 2004 and
launched Dax Gabler, a contemporary ap-
parel and accessories collec-tion — tries to find materials that don’t require as much la-bor-intensive handwork, and instead focuses on obtaining the highest-quality skins and dying them in vibrant metal-lics or mixing several colors to attain a “shaded” quality.
Another option for de-signers who want to get the luxe look of an exotic but keep the prices reasonable is fish skin. It’s also a way
for handbags to go green, as fish skin is a by-product of
the food industry and often treated in an environmen-tally responsible way.
Leonie von Lieres, who founded the handbag line
Seth Sobek with Jas Sehmbi, said the decision to incor-
porate Nile perch skin from Lake Victoria into the first collection, launching this fall, came from a pair of fish-skin sandals he purchased in Brazil a few years ago. He also likes the idea of using sustainable material. The line ranges from $70 to $1,500 and will be available at Hotoveli in New York and Luisa Via Roma SpA in Florence. An oversize black leather with electric blue skin retails for $700 and a leather-and-skin tote costs $1,289.
There’s also eco-conscious brand Sprout Watches, which charges about $65 to $70 for its timepieces with carp and salmon fish leather straps, which hit stores last fall.
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A New Market for Exotics
FOR MORE IMAGES, SEE
WWD.com/fashion-news.
Ted Rossi’s python
bangles, from
$85 to $115.
Sprout’s fish leather watch, $65.
▲ R&Y Augousti’s python and shagreen clutch, $490.
Alexandre Birman’s python shoe, $875.
▲ Botkier’s watersnake
clutch, $695.
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WWDACCESSORIES
Thwap, thwap, thwap.Havaianas’ iconic flip-flop is about to hit the half-
century mark.The brand, which has been available in the U.S.
for less than a decade, marks its birthday as June 14, 1962 — the day the intellectual property patent on its “Original” rubber flip-flop style was filed, when the first pair was designed in São Paulo, Brazil.
The company plans local celebrations all over the world come June. In the U.S., various programs and events with retail partners will take place, along with a slew of online promotions.
But the biggest initiative comes from the prod-uct perspective, said Afonso Sugiyama, president of Alpargatas USA Inc., the American subsidiary of Alpargatas SA, Havaianas’ parent. In an effort to “give back to the people who helped build the brand,” the company produced 50,000 pairs of flip-flops inspired by the “Original” model. Each limited edition pair, priced at $28, has a white footbed with a contrasting, colorful strap (this was before monochromatic styles arrived in the mid-Nineties), and all proceeds will be donated to UNICEF.
“Havaianas are more popular than Coca-Cola in Brazil. They’re everywhere. We’ve done studies, and the brand awareness is 100 percent, so literally every-one in Brazil knows about the brand.
To give this sweeping statement some scope, the shoes are carried in about 2,000 doors in the U.S., but in nearly 100,000 in its native country, where they’re also manufactured. Brazil-based Alpargatas — the 105-year-old publicly traded company that owns eight brands, including Topper (Sugiyama likens it to Reebok in the U.S.) — is the largest footwear company in South America.
Sugiyama maintains that the company overall has
seen 16 percent year-on-year growth since 2008 and sales for last year reached $1.4 billion. And although he would not give an exact amount for Havaianas’ volume, he said its revenues make up a large percentage of Alpargatas’ overall sales. For the U.S., Havaianas sales for the first quarter of 2012 are up 35 percent from the same time last year. The brand sells more than 200 million pairs a year.
The brand began as a commodity item — a simple, inexpensive shoe that was seen as the first option to not walking barefoot. For 32 years, the product range consisted of just a single style available in five colors, but starting in 1994, the company started expanding its offerings — and changing its image. Now, more than 80 styles exist in more than 400 color options.
“The Original is still sold in Brazil and is one of the top sellers there. The brand didn’t abandon its origin as footwear for the masses, it just layered on top of that with other fashion items,” Sugiyama said, noting that the most popular style today is the Slim, a more contoured, delicate version of the classic style. “In the U.S., people are comfortable wearing Havaianas as casual footwear with their dresses and summer clothing. It’s not something they only wear to the beach.”
At about the same time Havaianas began to in-crease its assortment, a greater focus was placed on advertising and molding it into a global brand. Opening Ceremony started carrying its product in the U.S. in 2003. The company opened its U.S. headquar-ters in New York in 2007, followed by offices in Spain, England, Italy and France a year later.
In the U.S., Sugiyama said product is more con-nected to fashion trends — and special collections adorned with crystals and other embellishments launched in 2008, a response to requests from
American customers that has since seen global suc-cess as well. These styles range from about $40 to $80 — in some cases more than double the retail price of the $26 Slim — and are sold at department stores such as Nordstrom and Bloomingdale’s. For spring, neon straps were incorporated into the collection to mirror current trends.
Havaianas is also communicating differently with American consumers with its reimagined ad cam-paign that hit April magazines last month. Once com-prising bold, colorful illustrations that followed art direction from Brazil, ads now contain photographs shot by David LaChapelle and Miles Aldridge.
“For Brazilians, it’s been around for 50 years, so we don’t need to talk about Brazilian spirits there; they understand it naturally,” Sugiyama said. “But we needed to find the right language to convey this to the U.S. in a way that this consumer can better relate to.
Although the overall strategy is to remain primarily a wholesale business, select freestanding locations in key metro areas will serve as “marketing and brand support so consumers can have a reference point,” according to Sugiyama. Currently, there is one pilot store in Huntington Beach, Calif., that opened in October 2010. A location in Miami is expected to open this year, followed by stores in Los Angeles and New York in 2013.
POWER TO THE PYTHON COLLECTION BY KARLA DERAS EXCLUSIVELY FOR
WWD MONDAY, APRIL 30, 2012
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TALK ABOUT EXCESS BAGGAGE.Samsonite, one of the best-
known luggage brands in the world, went through a rocky stretch a few years back, bur-dened by a giant overhead struc-ture, weak marketing and a one-size-fits-all product plan for a worldwide audience.
But the company, which traces its roots to 1910 in Denver and is listed on the Hong Kong stock exchange, roared back at the hands of Tim Parker, who joined Samsonite as chief executive offi-cer four years ago. Parker credits the introduction of region-specific luggage as instrumental in helping the company’s sales reach a record $1.56 billion last year. Now, it’s Asia where the company is focus-ing its energies. It’s Samsonite’s fastest-growing market, where this year alone, it has opened an addi-tional 300 points of sale.
Parker talked strategy on a re-cent trip to New York. WWD: What is the biggest change Samsonite has undergone since you joined the company in 2008?Tim Parker: First, we had to bring our break-even point down quick-ly because we simply weren’t making any money. We restruc-tured our headquarters and re-duced costs in all departments. We also put our American retail business into Chapter 11, which allowed us to restore that busi-ness so today we have the right type of stores — principally the outlets. A couple of months after I joined, [it] was virtually mak-ing no money at all on a monthly basis. [Now] sales are up. Sales were up 34.4 percent [year-over-year] to $1.65 billion for all brands in 2011 — and 2010 was a record year. We went from being in dire straits in 2008 to achieving the best results the company has ever achieved [just] two years later. WWD: What do you attribute that to?T.P.: Several things. Besides cut-ting costs, we reinvested a large portion of the savings into mar-keting. The company marketing budget went from 4 percent to 8.5 percent, which made a major difference. The other big change is that we focused on developing products that were commercial in our marketplace. It’s important to recognize that before I came, the company was trying to execute a global product strategy so we sold the same products in each market — when the truth is that American tastes in luggage are different from European tastes. WWD: How is it different? How are you tailoring product for different markets?T.P.: I encouraged each region — Asia, Europe and the U.S. — to de-velop its own products. That had a major impact because instead of trying to sell centrally imposed product design, suddenly we were developing designs that were ap-propriate for their markets.
Generally speaking, the European product is quite design-conscious and tends to be driven by stylistic trends. In America, the taste is for rugged luggage with big zippers. Asians want a more refined product that has a lot
more smaller details than you would find in Europe.
One thing everyone wants is lightness. Europe and Asia were really focused on lightness but that’s now big in America, too. This is another area we devel-oped — a range called Lift that’s been successful. It’s superlight, and launched a little over 18 months ago. WWD: What’s your fastest-grow-ing market?
T.P.: The Asian market is grow-ing rapidly. The Chinese are traveling a lot more. [But] it’s not just China — [there’s] huge business in Korea and India as well. Those markets have dis-tinct characteristics. Our entry-level American Tourister brand is working well there. We can make our products accessible to people who have more dis-posable income, but can’t quite step up to buy Samsonite. So we operate two brands there.
[In 2011, the Asian market grew 48.1 percent from 2010.]
WWD: You’ve considerably in-creased POS in Asia. How so?T.P.: In Asia, we have a sub-stantial distribution network, [consisting of] primarily our own stores, concessions in department stores or fran-chises. So most commonly, to buy luggage in China, you go to a department store and on the luggage floor you’ll find a shop-in-shop that has all the Samsonite pieces. That’s our main channel of distribution. We have American Tourister shop-in-shops as well and quite a large number of our own stores in Asia.
— R.S.
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WWD MONDAY, APRIL 30, 2012
SECTION II
10
LUXE LEATHER CRAFTING might be a vanishing spe-cialty, but several young independent designers are seek-ing out these artisans to help produce their luxury lines, using venerable techniques but with a modern aesthetic. Here are three of them, all based in Paris and all with an-nual volumes of less than 500,000 euros ($660,000).
Isaac ReinaSpanish designer Isaac Reina, former longtime design assistant to Hermès’ artistic director for men’s wear, Véronique Nichanian, launched his namesake men’s and women’s leather goods label in 2005. His leather acces-sories collections are produced by three local ateliers.
“Before, Paris was a city full of leather artisans,
and now you can count them on two hands; their tech-niques are amazing,” observed Reina’s design assis-tant, Jerome Schmidt. “It’s about playing with ancient codes and making them look modern. You learn with them as much as you push them to do something new.”
Case in point, the brand’s minimalist black box calf-skin clutch, which literally resembles a box, featuring ac-cordion gusset sides. The piece is made from one piece of leather, with a single line of stitching along the side.
Reina melds a modern minimalist look with vintage forms. An example is a purse-frame bag on which the bag’s leather also coats the metal purse closure, a tech-nically complex feat that was achieved by a local arti-san using know-how passed down through his family.
“Just the look of a purse frame screams vintage, so it was a real challenge to reinterpret it,” said Schmidt. Among the designs are a range of flat, square or rectan-gular clutches and wallets in matte black and metallic calfskin, or leather toiletry bags that zip open and snap together at the back to form an open container. The brand works mainly with untreated vegetal leathers, with the idea of allowing them to age and develop a patina.
Prices go from 95 euros ($125 at current exchange)for a signature elasticated leather folder to 1,160 euros (about $1,500) for a leather-lined weekend bag.
Isaac Reina is sold in about 75 stores internationally, including Project No. 8 in New York, Le Bon Marché in Paris and LN-CC, a by-appointment London-retailer.
laContriePop into laContrie’s shop on Rue de la Sourdière and chances are the brand’s owner, Edwina de Charette de la Contrie, will be downstairs in the workshop run-ning up a leather metro ticket holder on one of the ate-lier’s old industrial sewing machines or cutting leather strips for a line of belts.
It’s a bold career change for the gutsy designer, who worked in music and TV production before switching to pursue a personal dream: opening an atelier boutique specializing in semi-bespoke handmade leather goods.
The designer, who was motivated when she couldn’t find such a service, spent two years researching the market and training with a leather artisan before launching. Her small collection of bags includes an elegant kidskin or canvas-lined calfskin tote; a shoul-der bag inspired by vintage cartridge bags and a retro bull calf and crocodile travel bag that clients can cus-tomize with materials, linings, hardware and pockets. They can also have their initials stamped or embossed on the design. A few men’s styles have just been added.
A stickler for quality and finishing, la Contrie does all of the design and sourcing. One craftsman oversees the entire production of each bag from start to finish.
“I wanted to be as autonomous as possible,” she said, adding that she likes the idea of offering the kind of service that existed in the “good old days,” when there was a real exchange with the customer.
With a staff of two resident artisans, orders take on average six to eight weeks to complete.
Seems Like Old Times
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WWD MONDAY, APRIL 30, 2012
WWD.COM
11
THERE ARE PLENTY OF MOTIFS in artist James Jean’s obsessively intricate paintings that lend themselves to fashion — Miuccia Prada, for example, was so inspired that she commissioned Jean to create the prints for her 2007 “Fairy” collection.
“I have male and female fans, but people always tell me that my work has a very feminine quality,” said Jean, padding around his light-filled Santa Monica, Calif., home-studio.
So it’s no surprise that last season, Jean decided to get into the game himself and transform his colorful paintings into a line of silk scarves and jewelry called OVM (pronounced ovum, like its egg-shaped logo) priced from $400 to $3,600.
“A lot of my contemporaries are doing toys and plastic figures, but that’s not challenging. Jewelry has definitely been an interesting challenge,” he said.
His first collection, “Butterflies,” was made from brass, epoxy and resin, pieced together to create colorful 3-D pieces. Next was the “Drip” group,
made from sterling-plated brass accented with tiny diamonds.
In keeping with his “short attention span,” the fall 2012 collection, “Bones,” represents an entirely different medium: painted porcelain necklaces, bracelets and rings. While it’s also a motif he visits in several paintings, Jean said it was a new challenge to suspend the skull- and pelvic bone-shaped pieces on chains so they balance evenly against the collarbone.
He hopes to expand into other media such as small-scale sculptures, but he’s not planning to adhere to a seasonal schedule to appease retailers. His pieces sell only at his Web site, ovmlove.com, and his forthcoming collections will be timed to his art shows, at Ivory and Black Gallery in London this summer and Jack Tilton Gallery in New York next year.
“For me, the art is the main thing,” he said. “If I can keep it sincere then hopefully the rest of the collateral will fall in line.”
— MARCY MEDINA
Prices for bags go from 1,290 euros ($1,700) for an evening clutch up to 30,000 euros ($39,600) for models in exotic skins. Besides in its own shop, the brand’s small leather range is also sold at Colette.
Ragazze Ornamentali“The idea is to go back to stuff made with lots of emotion,” said Isabelle Bois, co-founder of Ragazze Ornamentali, an esoteric luxury lifestyle label offer-ing unique artisanal design objects based on the con-cept of the “contemporary boudoir.”
The company was launched in 2009 with a col-lection of leather accessories. Items including jew-elry, perfume containers, handmade writing paper and home objects will be added over time, made in collaboration with a pool of skilled artisans from a range of creative domains.
“[Ragazze Ornamentali] was conceived as a meet-ing of the arts, luxury and artisanal traditions,” said Bois, who met the brand’s co-artistic director, Valentina Tortorella, at Louis Vuitton, where they had worked as designers. “We shared this strong desire to create our vision of luxury and femininity. We both felt passionate about a number of the same things, notably the poetry of artisanal workmanship.”
Equipped with an interior envelope pocket and compartments designed to hold lipsticks, sunglasses, photographs and the like, Bois described the hand-bags as “portable boudoirs,” designed to accompany their owner through life, carrying the intimate ob-jects she likes to surround her.
Four handbag styles in various sizes, feature pure lines and modern details, such as chain handles made from graphic metal links evoking large industrial paper clips. There’s also a tote and a range of small leather goods. Customers can head to the brand’s cre-ative workshop in Paris to choose handles in various leather, grosgrain ribbon and metal finishes, interior compartments and materials, from canvas to colored Mackintosh fabrics to exotic skins.
Bags start at 500 euros ($660) and all carry a mir-ror that can be engraved with the owner’s name. The brand is carried in 15 doors, including Le Bon Marché in Paris, Cara & Co. in Sydney and Estnation in Tokyo.
