The Drapers WGSN Fashion Summit last week brought together individuals from all industry sectors to share ideas on surviving the recession and growing their businesses. Here are the highlights of the two-day event.
Luxury bosses warn next year will be tougher
Luxury retail chiefs at the fashion leaders’ panel said that despite 2009 proving to be a better year for the retail industry than was forecast a year ago, tough times lie ahead in 2010.
Harvey Nichols chief executive Joseph forecast that the total pool of consumption in the luxury market will not return to its former levels for at least five years, said that the retail industry was benefiting from better inventory control and autumnal weather compared with last year, when Lehman Brothers collapsed and footfall dropped off. “Things are much calmer now,” he said.
Suleyman, who owns shirt specialist Hawes & Curtis and womenswear label Ghost, said: “This time last year we were in a black tunnel. Most retailers have come out with results that were not as bad as anticipated.” However, he echoed Wan’s warning by saying that unemployment fears, higher business rates and political and economic instability would make 2010 more difficult.
Suleyman said: “I think that worse is to come. If you look back on a year ago, the saviour was interest rates. We have survived quite well but I think next year will be harder.”
‘Promiscuous’ shoppers shifting from big names
- Marigay McKee, fashion and beauty director, Harrods
- Bridget Cosgrave, fashion and buying director, Matches
- Peter Ruis, buying director for fashion, John Lewis
Premium buyers are backing strong product items for spring 10, as consumers continue to be promiscuous spenders driven by items not brand. John Lewis buying director for fashion Peter Ruis said at the buyer and merchandiser’s panel that shoppers were less loyal, with brands such as Whistles and Ted Baker performing particularly well because of strong collections.
“They are doing well on the back of really strong product. Shoppers are not that bothered about one particular name – they are shopping across different labels,” he said, adding John Lewis’s Mulberry sales were up 100% on the year.
Matches fashion and buying director Bridget Cosgrave agreed, adding that “laid-back luxe” will be a key look for next season. “My customers are moving away from big names and being driven by items,” she said.
But Marigay McKee said Harrods’ shoppers continue to back the top names, with growth still coming from Louis Vuitton, Prada and Chanel. “But while five years ago it was all about the big Italian power houses, today the French brands like Balmain, Lanvin and Givenchy are doing well too.”
Innovation and business nous key for designers
- Lulu Guinness, founder, Lulu Guinness
- Betty Jackson, designer
- Anne Tyrell, designer and chair of BFC Colleges Council
Established British designers at the creative panel urged emerging labels to seek different routes to market and exploit the recession by bringing new ideas and concepts to the UK fashion industry.
“It’s important to do other things, like licensing deals and collaborations – look at Matthew Williamson and H&M, for example,” said Anne Tyrell. “This doesn’t damage the brand, it gives it the financing to grow their business. And think about sunglasses and perfume – areas you can add to your label.”
Betty Jackson said the designer/high street collaboration was a “blueprint” to be followed by others. “Creativity is the key, otherwise nothing else happens, so it’s something to be celebrated here in the UK. But these days, you’re expected to be all things to all men – you also have to sell it, to be a PR, to do a spreadsheet.”
Lulu Guinness added that the recession should be giving new designers the opportunity to innovate. “Buyers are looking for the next big thing,” she said. “We need new ideas. Yes, designers need staying power; you have to be open to change. With our colleges, design students have never had it so good.”
Collaborations vital to Matthew Williamson
- Joseph Velosa, chief executive, Matthew Williamson
Keynote interview speaker Matthew Williamson chief executive Joseph Velosa said the business is looking into launching a diffusion line under a licensing agreement. He said the start-up costs for a diffusion line are too high to launch direct but he has been in touch with potential partners. He added that a capsule mainline menswear collection will launch in Harrods for spring 10.
“Initially, we said to Marigay [McKee, Harrods’ fashion and beauty director] that it was too expensive but she suggested a small, colourful cashmere collection – the support from Harrods has been great,” said Velosa.
He added that while some stockists, which continued to rely on discounting, were “frustrating”, he praised department store Debenhams’ support of the Matthew Williamson business. “It’s a partnership,” he said. “When we first collaborated with Debenhams they paid us in advance so we could finance the opening of our store. If the mainline does well, then so does the Debenhams’ line. They understand that, and they were happy for us to tie up with H&M too – they saw the benefit.”
Velosa admitted wholesale has been hit by the recession, but this has been partly offset by healthy retail sales. Sales at the London store on Bruton Street are up 94% on last year.
‘I would rather burn £100m than discount’
- Derrick Campbell, managing director, Lyle & Scott
- Jonny Hewlett, managing director, Diesel
- Roger Wade, chief executive, Brands Incorporated
- Andy Rogers, brand director, Reiss
- Gillian Berkmen, group brand and commercial director, Mothercare
Lyle & Scott managing director Derrick Campbell shocked fellow panellists and the audience members at the Brandwatch session by saying he would rather “burn £100m worth of stock than discount it online”. He said discounting scared him “to death” and that by keeping Lyle & Scott’s distribution tight – to 100 stockists – he had managed to avoid discounting.
Brands Incorporated chief executive Roger Wade said a non-discount strategy was difficult to maintain with scale, while Diesel managing director Jonny Hewlett said online discounting would inevitably have to be incorporated in Lyle & Scott’s strategy at some point. “Discounting is here to stay – it’s about how it’s managed,” he said. “The first pair of Diesel jeans I bought was from an outlet store when I couldn’t afford the brand and now I’m running the UK business – outlets reach out to a different customer.”
Campbell agreed that he may be forced to build discounting into his strategy at some point but he is yet to find a partner he trusts.
Rose insists M&S doesn’t need a fashion leader
- Sir Stuart Rose, executive chairman, M&S
Marks & Spencer executive chairman Sir Stuart Rose said Morrisons chief executive Marc Bolland, the newly announced chief executive of M&S, was selected for his ability to accelerate growth at the UK’s largest clothing retailer.
Rose, the closing keynote speaker at the Drapers Fashion Summit, said that M&S had completed its turnaround since he took over in 2004, and that now the retailer needed a “driver – and one who can drive fast”. He added: “M&S is a brand with huge potential and we need to translate this to the international arena. Marc understands brands, has international experience and turnaround experience.”
Rose said Bolland’s lack of fashion experience was not a problem. “If he had joined in 2004 he would have needed to get his hands into the nitty-gritty of merchandising. In 2009 we have a strong team. He doesn’t need to say we need a pretty pink frock; he needs to accelerate intern-ational growth, which represents £165m [of profit].”
“He was the unanimous choice,” Rose said.
Rose added that the process of finding a new chairman would start next spring.“We need someone who is compatible with Marc and who understands M&S’s brand values.”
Speaking about his own future, Rose said he didn’t believe in retirement but vowed never to do a role at this level again.