The global luxury market is galloping ahead at a pace which is faster than was expected by experts and analysts. Bain & Company has recently revised its growth estimates for the luxury industry, upwards to 8%. The outlook for the industry is very positive and now the analysts believe that the momentum would be sustained for a longer period of time as Brazil is now poised to become another engine of growth after China. The pace of growth and new emerging markets pose a challenge for the marketers of luxury products and Reuters Global Luxury Summit 2011 provides the ideal platform for the senior executives of these companies to exchange and share ideas to complement and help each other. The Summit is being held at practically all the luxury capitals of the world simultaneously.
We have scanned eight of the top stories and bring you the top honchos of global luxury brands unveiling their plans for the year at the Reuters Global Luxury Summit 2011.
1) Trinity shopping for more European fashion brands
REPRESENTATIVE: Group Managing Director Sunny Wong told the Reuters
Action Plan: Trinity wants to grow with the growing China market by acquiring European heritage brands.
Trinity, the Hong Kong based luxury menswear store operator, bought Italian fashion house Cerruti for $70 million last December. Mr. Sunny Wong told the Reuters Global Luxury Summit that the strategy of the company is to acquire more heritage brands in Europe for its expansion in China. They would obviously be focusing on brands they believe the Chinese customers like. China is on track to become the largest luxury products market and it is estimated to be worth 74 billion euros by 2020. Trinity wants to be well placed and prepared to have a significant share of that market.
2) Chow Tai Fook plans IPO, China expansion
BRAND: Chow Tai Fook
REPRESENTATIVE: Alan Chan, Global Branding Director
Action Plan: Hong Kong listing to raise funds for expansion in the Chinese market.
Chow Tai Fook, the Hong Kong jewelry retailer is negotiating with the Banks for its Hong Kong listing. The IPO by luxury brands have been very successful in Hong Kong. The strong investor demand in luxury goods and related stocks is boosting the price of the stocks. Alan Chan told the Reuters Global Luxury Summit in Hong Kong that the process will be long as they are still awaiting Bank’s proposal.
3) Roberto Cavalli keeps suitors waiting
BRAND: Roberto Cavalli
REPRESENTATIVE: Gianluca Brozzetti, CEO
What’s the plan: Take the turnaround plan to its logical conclusion and then look at floatation.
Roberto Cavalli, the Italian fashion house is looking forward to a good year with expected growth in the range of 30% driven by strong demand from China. Gianluca Brozzetti, their CEO told Reuters Global Luxury and Fashion Summit in London that they would complete the turnaround story with a comprehensive revamp of stores over the next 12-18 months and deliver on the licensing deal before talking to any of the long line of suitors.
4) Lamborghini to launch new “everyday” model
REPRESENTATIVE: Stephan Winkelmann
Action Plan: The new model from Lamborghini to be an “everyday” car.
Stephan Winkelmann, the CEO of Lamborghini told the Reuters Global Luxury and Fashion Summit that the supercar maker is contemplating adding a third model to its offerings. Strong demand from China and Russia is pushing the sales back to record levels of 2007 and Lamborghini would like to offer a car that can be used on a daily basis. It will take about four years to get the car on the road.
5) Rent the Runway gets $15 million funding from KPCB
BRAND: Rent the Runway
REPRESENTATIVE: Jennifer Hyman and Jenny Fleiss, Founders
Outlook: Silicon Valley VC firm puts $15 million in Rent the Runway.
The company, that lets members rent a dress from top name designers at one tenth its retail cost, is on the fast track of growth and will be using the funding to upgrade its inventory and reservation system. Jennifer Hyman and Jenny Fleiss the Harvard University classmates who founded Rent the Runway in 2009 said at the Reuters Global Luxury and Fashion Summit in New York, that their company will be tripling its turnover to $20 million this year and maintain the same momentum next year.
6) Hua Nan Fund to keep core holdings in LVMH, PPR
BRAND: Hua Nan Fund
REPRESENTATIVE: Tsai Peiyi, Fund Manager
On the mind: The fund to maintain its core holdings in industry leaders like LVMH and PPR.
The emerging markets like China, Russia and Brazil will keep driving the luxury goods demand. Some of the industry leaders have concentrated their focus on these markets through acquisitions and reaped considerable benefits. These companies and groups will be the focus of the fund. Tsai Peiyi was being interviewed at the Reuters Summit at Taipei. She said that the luxury market is very competitive and the companies that are unable to tap this trend will be left behind.
7) L’Oreal luxury to outpace market in 2011
REPRESENTATIVE: Nicolas Hieronimus, Managing Director
What’s the outlook: L’Oreal’s luxury cosmetics division should outpace the growth of the global market.
Nicolas Hieronimus is confident about his division’s performance this year. He told the Reuters Global Luxury and Fashion Summit at Paris that the economic indicators in Europe are better than expected. The worries about high debt levels coming in the way of consumer spending are unfounded. The division that includes Yves Saint Laurent perfume and make-up, Lancome and Biotherm creams, Shu Uemura make-up, and Giorgio Armani, Cacharel and Ralph Lauren perfumes contributes almost 25% of L’Oreal group sales.
8) Saks Fifth Avenue may carry more Asian labels
BRAND: Saks Fifth Avenue
REPRESENTATIVE: Eric Jennings, Vice President
What’s the plan: Saks to add more Asian labels to its portfolio.
Eric Jennings, Vice President and fashion director of men’s wear, home, gift and goods at Saks Fifth Avenue, while participating at a Reuters Summit said that he was inspired by the new emerging Asian designers and would be looking for opportunities to bring them in. Asian-inspired designs and brands are gaining in popularity in the West and more Asian designers are seeking to expand into the American and European luxury fashion markets.