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| Selective fashion, please |
| Archana Jahagirdar / New Delhi Nov 14, 2009, 00:30 IST |
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Steel baron Lakshmi Mittal’s daughter-in-law Megha Mittal buying the luxury label Escada made front-page news. Mittal was quoted as saying that under her stewardship the brief for the label would be to make it more affordable and accessible. Before the recession took the wind out of the sails of the luxury business, “affordable luxury” was the buzzword. Many prominent luxury goods companies shifted production out of Europe to China to produce quickly, cheaply, and in vast quantities to feed the buying frenzy in this segment. But once the recession took hold, and the numbers of these companies started getting impacted, there was, predictably, a lot of soul-searching about which way the luxury business should go.
The answer, according to many experts in the business, is real luxury. Affordable luxury eroded the very USP of the business, which is that its products are made — created, in a way — and priced such that they aren’t for everyday use. If everyone and your uncle (or rather, aunty) is carrying that logo bag, it loses some of its sheen. It also implies that it took less than a nanosecond on a grimy factory floor to make it, making it far less desirable. It’s then no longer luxury, just another consumer item, made in just the way so many other consumer goods are made, in somewhat of a hurry.
Fashion designer Marc Jacobs, who is at Louis Vuitton, has been quoted as saying that if anything people want more, it’s special stuff rather than commonplace goods. For a charity auction, Jacobs has created a special Louis Vuitton dog carrier, really an indulgence if ever there was one. But Jacobs and the marketing geniuses at Vuitton know that the really rich and the really cool people will always have money to spend on expensive treats like a Vuitton dog carrier.
Which brings me back to Mittal’s stated policy at Escada. The moment for cheap/affordable luxury has passed. The moment is now for something exclusive which hopefully your au pair won’t be able to afford. Turning Escada into an affordable brand is a bit like Tata buying Jaguar and turning it into a Nano-making facility. The way forward for Escada would be to do luxury well, work on its core strengths and make it more exciting and spend some time and money understanding its new markets and clientele better.
The problem with several Europe-based luxury labels has been that they have not moved fast enough to address and understand new markets that have emerged. Their style and marketing focus is still too Europe-centric, making them slightly irrelevant in the new markets that they are hoping to conquer.
Mittal should look at setting up offices in the emerging markets and work closely with the teams there if she wants Escada to be profitable again. Within no time she will be able to beat other luxury labels, which flounder in markets like India initially, for they invest nothing here and instead choose to dictate trends and marketing strategies from Paris or Milan.
Luxury isn’t an easy business — but then, neither is steel.
(archana.jahagirdar@bsmail.in)
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