Month: January 2012

Rant on How Your Crazy Ideas Define You

As we end the first month of 2012, thoughts of the progress I have made with blog and my other luxe pursuits baffle me. Here’s my summary of it all…

Sometimes you never know what will come of your crazy ideas. Before you know it, you have a brand. The brand isn’t really yours. It belongs to those who identify and personalize it in their hearts and minds.

Your brand is the befitting proxy for your beliefs, tastes, vision, and passions, whether or not you are physically present in the many conversations, transactions, and encounters people have with it.

Beyond all material success, the pursuit of an identity is the single most indomitable challenge some of us will ever undertake.

Here’s to pursuing the weird ideas that make us who we are. The worst that can happen is that you fail. Failures are necessary transit points to success. Even if you fail at something, you are closer to finding out just who you are.

Keep thinking, stay hungry, and embrace the beautiful struggle.

– Edmund Amoye Continue reading →

Perfume Giants Fined $53M for Price Fixing

In Paris, major perfume giants have been fined for colluding to keep prices high. This is an update to a 2006 case prosecuted by French agencies monitoring competition in the luxe capital. A total of 13 companies are named in the decision, which concerns collusion practices that took place from 1997 till 2000.

For details on the developing story, click here.

Take part in a poll on my recent post: Christian Louboutin vs. YSL: A Battle of Trademarks.

Update: Swiss Watch Industry Shakeout

In Dec. 2011, I wrote a post about how Swatch Group was “Creating a Shakeout in the Swiss Watch Industry“. Today I just read an update to that event. The Reuters article gives a clearer picture of Swatch’s overall strategy to make things more difficult for strong rivals such as LVMH.

Christian Louboutin vs. YSL: A Battle of Trademarks

Today in my class on Customer Experience Management (the name makes it sound contrived but it’s a great class) we had some discussion on this article about the trademark battles between Christian Louboutin and Yves Saint Laurent (owned by PPR). If you would rather watch a video than read the backstory, here is a video.

From a business standpoint, it makes perfect sense for Louboutin to go after other manufacturers that could “cramp its style” – but does it honestly matter in the business of fashion where imitation is rampant and normal? Moreover, if Louboutin is successful, will it hinder the creative process that drives fashion? My answers are “no” and “yes” in that order, but I’d love to hear what some of our fashionista readers think. I’ll even give you the opportunity to write your own post on this topic if you have more than four lines of thoughts on the issue.  Continue reading →

Luxe Value: Interbrand’s Best Global Brands

If I have not said “thank you” to my many readers, I’ll say it now:

THANK YOU FOR READING MY BLOG.

My comrades at W&M and WordPress.com have been phenomenal in spreading my posts all over the internet. I wake up a lot of mornings surprised to see the array of readers I have from all over the world, looking in on my scribbled thoughts. I’ve gone from having only one reader – my wife – to getting as many as 100 unique views on days when I do my job right. For me, the metrics don’t really matter as a marketing strength, but as a reflection of interest. So thanks for your interest. I really appreciate it. Let’s grow together in 2012.

Ok, on to today’s rant…

Last year, in October to be exact, Interbrand published a list of the top brands in the world. It’s no different from what they do every year. Take a look at the list here.

Continue reading →

China’s Jewelry Rush

Sometimes, finding good topics for this blog can prove quite challenging. So, I’m always thankful for the readers who send in great material – some of which I am using in today’s post.

First, you should know that the luxury goods and services market in China is growing at an astronomical rate. Forecasts indicate that Chinese luxe will grow at a rate of 20% CAGR by 2015, at which time it will be the second largest market in the world.

One sector of luxury in China that is doing very well is jewelry. Estimated at a worth of $39 billion, the Chinese jewelry market is growing at around 15% per year. Growth has been fueled by a couple of factors:

  • A growing middle class living outside of the tier one cities are spending more on gems and gold.
  • Rising inflation concerns in the region are making gold more attractive as a hedging instrument; and
  • Lastly, the wealthiest segment of the Chinese population are been getting richer.

What is most surprising is the fact in spite of the availability of world renowned jewelry manufacturers and retailers such as Swarovski and Cartier, Chinese consumers are paying increasing attention to homegrown brands – specifically Chow Tai Fook (CTF). The company, owned by billionaire Cheng Yu-tung recently went public. With 1500 outlets and 2010 sales of $4.5 billion, CTF is twice the size of Tiffany & Co.

I’ll leave you with a graphic from The Economist, developed by George Washington University and L2 (a think-tank). It asserts that CTF, as a brand, outperforms well-known international brands in the hearts and minds of Chinese consumers.

Aman Resorts: A Tough Sell for DLF

Amangiri – Utah, USA

Two weeks ago, there was some news that China-based conglomerate, HNA, had sent in a bid to buy Aman Resorts, a collection of unique luxury resorts in some of the most sought-after destinations in the world. Aman Resorts, which is owned by DLF, an Indian development company, represents the company’s biggest non-core asset.

To bring you up to date, DLF currently has a net debt of more than $4 billion and is looking to raise as much as $650 million to shore up its debt levels and put some cash on its balance sheet. In 2007, the company had bought a 97% stake in Aman Resorts based on a $400 million valuation, while the remaining three percent was held by Aman founder Adrian Zecha. Considering that the purchase was made right before the global financial crisis, DLF has been desperately looking for a buyer for this property.

HNA Hotels and Resorts is part of China-based HNA Group. With assets exceeding $30 billion, the group has its tentacles in airlines, hotels, airport management, real estate, retail, financial services, logistics, and tourism. Annual revenues are around $10 billion (as of Dec. 2011). The hospitality segment of the group consists of a total of 43 luxury hotels and resorts in China and Europe (40 in China and three hotel assets in Brussels and Belgium).

Reports are out that HNA is out of the bidding process for Aman Resorts, since it never received any feedback on its undisclosed bid. Reuters reports that “bids came in the $300-$315 million range”, which means that the market feels these luxury assets are overpriced. This is a huge setback for DLF considering the list of companies interested in Aman Resorts. They include:

  • Malaysian sovereign wealth fund, Khazanah
  • LVMH, and
  • Kingdom Holdings, which owns a 47.5% stake in the Four Seasons chain of luxury hotels

It’s looking bleak for DLF, but maybe some other group will step up to take over Aman.

WSJ: Luxuries Flow Into North Korea

Though Western governments have imposed stringent trade sanctions on North Korea, luxury goods still find a way into the country – mainly by way of China. The Chinese policy of support and assistance may not be welcome by the bulk of the international community, but the influx of cell phones, iPads, and much of the latest technologies may do more harm than good for the country’s current regime.

Government workers making as little as $3 a month now make up to $15 by trading in luxury goods. As such, an entrepreneurial class is rising in the country fueled by the black market for electronics, tobacco, cars, and electrical appliances. Will the influx of western technology adversely affect the Kim dynasty in North Korea? My answer is that it will play a considerable role because many more people will have access to the most powerful weapon that ever existed – information.

Click the image to open the article

Adding Value – Train Rides and iPads

Train rides are very enjoyable for me because I get the chance to remain terrestrial. I’m not driving myself, nor am I on a bus going pretty much the same way I would have driven myself. Since train tracks do not always follow “car routes”, I get to take a more scenic view, stumbling upon sights that don’t come into my view on a regular basis. I also like to take trains at times they are sparsely occupied, so that I have a lot of space to myself. The combination of those components makes the ride an enjoyable one. However the real luxury experience can be summed up in one picture from my last trip on Amtrak: Continue reading →

Haute Couture Meets Technology

A long time ago, someone once asked me a question on what kinds of business ideas interest me. I answered “anything that blends technological innovation with emerging lifestyles”. And here’s an example – Wearable Technology: Apple, Google, And The Whimsical World Of Fashion Accessories.

Luxonomics

Today’s post focuses on luxonomics (luxury economics). Since luxury goods embrace the concept of rarity, it would be an obvious deduction to assume that the more scarce a luxury product or service becomes, the more demand it enjoys. Consequently, prices can appreciate – to levels that can be absorbed by few.

Some of the factors affecting supply include:

  • Input Prices
  • Technology or Government Regulations
  • Number of Firms
  • Substitutes in Production
  • Taxes
  • Producer Expectations

Today I want to show you some “scarce” luxury products, whose supply has largely been affected  by government regulations. As the cited MSN Money slideshow states, all the products listed are affected by legal restrictions limiting their production, distribution, and sale in parts of the world. Much of the reasoning behind these bans is aimed at protecting the environment. Continue reading →

Luxury is About Freedom

So, we can obviously say that relativity plays an important part in the way we think about many things – including luxury. What’s that old adage: One man’s meat is another man’s poison? I read an article from WSJ that brought this idea well into focus for me, and I think it also has some adjacent relevance to the concepts of trends and cycles.

When the great fashion designer, Yves Saint-Laurent started his own couturier in 1958, there wasn’t much in the way of pattern machines or industrial cutters for him to achieve his goal of making womenswear more affordable for the masses. In those times, the best clothing cost too much for common folk because of the time, money, and people that were required to make the ravishing clothing he designed. Today’s more affordable technology could certainly have done much for “la mode”. Continue reading →