What’s next for fashion flash-sale sites?


With contributions from Ceci Guicciardi, Brand & Commercial

A recession-proof proposition

The emergence of members-only, online flash-sale discounters in the early 2000’s leveraged the traditional need for luxury and premium brands to discretely dispose of excess stock, by capitalising on the opportunities presented by a fledgling e-commerce landscape. The business model was based on a simple proposition: to make high-end goods available at rock-bottom prices online, in an innovative digital declension of the traditional designer end-of-season sample sale.

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Burberry: from plough horse to thoroughbred?


14 years ago, Burberry was all but put out to pasture, suffering from a dusty image and its logo being pasted on cake tins, doilies and aprons.  Rose-Marie Bravo was put in the saddle and took Burberry for a ride down Chav lane to the gates of the luxury racecourse.  Despite doing a great job in fixing Burberry over her 9-year tenure, setting the foundations for her successor and consistently beating market expectations, the jury was still out as to whether Burberry could ever become a thoroughbred luxury brand.

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Luxury fashion – getting the business model right


Luxury fashion is a very exciting business which can generate substantial returns if you get the formula right. Not only is there the ability to charge up to ten times the cost of manufacturing a garment and the potential to build a global business; apparel can be the beginning of a page-turning blockbuster, accessories and leather goods are the next chapter, fragrances and eyewear licenses the well-oiled plot. The story can have a happy ending with the promise of many sequels to come.

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Key themes of the Noughties


The Noughties saw an unprecedented level of interest by private equity players in the sector. Size definitely mattered: Tommy Hilfiger ($1.5 billion), Barneys, ($942 million), Neiman Marcus ($2.6 billion), Valentino Fashion Group (€2.6 billion) were amongst the biggest deals of the decade and all ended up in private equity portfolios.

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Fragrances – the essence of a good brand?


Luxury brands have long appreciated the potential to capitalise on their brand cachet by marketing fragrances under their name to a wider public than their core customers, thus providing a healthy stream of cash flows and providing a “window into the brand” for new customers.

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Japan falls from grace as brands turn to China

Over the last year or two a barrage of articles have been flooding publications all over the world about the state of the luxury goods market in Japan. In June this year, the Financial Times went as far as to declare, ‘Japanese fall out of love with luxury’.

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Luxury for Hire


Rental is the latest development in temporary ownership of luxury items. Previous temporary ownership models include fractional ownership/timeshare, mainly in connection with property assets although more recently with private jets, yachts and classic cars, and by reselling on the second hand market.

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Experiential luxury – life beyond bling


The last few years have witnessed a veritable boom in expenditure on experiential luxury: whether hiring a personal trainer, learning how to cook with Michelin-rated chefs such as Jean-Christophe Novelli or going on a life-changing adventure trip, the concept of spending on self-enrichment has become a widely accepted feature of our lifestyles.

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India – A Field of Dreams

From the press commentary and the increasing frequency of launch parties in Mumbai and Delhi, it would seem that India cannot get enough of luxury brands. Latest to stake its interest, Hermès has just announced it established a joint venture company to open stores in India, with a first unit expected in New Delhi.

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China’s Luxury Market


China has barely paused for breath this year in its rise to global power. For the third year in a row, its economy is on track to grow by more than 10%. China has spawned a new cast of millionaires and an emerging middle-class centred in large cities on the coast.

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Private Equity and Luxury Goods

The private equity sector is by all accounts the single largest buyer and seller of businesses in the market as a whole today. Some observers credit private equity firms with a good half of the entire M&A market, with almost no limit on deal size due to the ever increasing amounts of capital available to the leading funds.

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Japan – A Maturing Market

While Japan has been a vital market for the luxury goods sector in the past decade (25% of global revenues in 2006), the country has recently shown signs of a fundamental shift in consumption patterns.

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