Thursday, October 30, 2008

As Western spending power shrinks, buyers from emerging economies

Meet the new tastemakers
As Western spending power shrinks, buyers from emerging economies - with their love of bold colours and brash ornamentation - are dictating luxury fashion. But for how long?

FASHION is famously unpredictable - yet who would have thought that emerging economies, such as India, would be throwing a lifeline to luxury brands?

Fashion houses are turning their attention away from Western consumers (who may soon have far less ready cash for It bags and other fripperies) and instead focusing on China, Russia, South America and, indeed, India.

This was evident last month in Paris, when John Galliano presented his Autumn/Winter collection for Christian Dior (Carla Bruni's demure suits notwithstanding). Models with voluminous hair-dos and lashings of Valley of the Dolls make-up stalked
the catwalk in acid colours.

There were tangerine cashmere cropped-sleeve jackets and neat skirts that would go down a storm with the Dior-loving luxury consumers of China; loud, swirling, silk print dresses in fuchsia and magenta that could prove a hit with Brazilian partygoers; and full-length sheared mink coats surely destined for the wardrobe of a Russian oligarch's wife.

These weren't clothes aimed at chic women in London, New York or Paris; this was a collection squarely focused on fashion's new markets.

"New-market buyers now have much more power than the Americans, as economically they are so strong," says the designer Graeme Black. "They also have a completely different viewpoint."

He should know, having served seven years as head of design at Giorgio Armani, followed by a four-year stint at Salvatore Ferragamo-two brands well versed in catering for Asian clients, Indeed, last week Ferragamo celebrated its 80th anniversary not in its Tuscan heartland but in Shanghai.

Black showed his own-name collection at London Fashion Week, in February, where his superluxe pieces, such as crocodile jackets and fur-trimmed coats and capes, were a big hit with the Russians.

"They are quite sophisticated and used to buying in fashion capitals," he says. "They want beautiful, intricate pieces and appreciate work manship."

As well as Russia, big brands are nurturing their new client base in the East. Bernard Arnault, the chairman of Christian Dior's holding company LVMH, recently said that he expected global spending on luxury goods to double in the next five years to nearly f220bil (RM1.39tril), thanks to these new markets. Louis Vuitton, also owned by LVMH, has just opened a vast emporium in Hong Kong that includes a "bag bar", the largest watch and jewellery salon in the world, and two private VIP rooms. The brand will have 25 stores in mainland China by the end of the year and up to 35 by the end of 2009.

Days earlier, Versace's CEO, Giancarlo Di Risio, announced an investment of more than f35mil (RM21 Broil) in developing the brand's presence in Asia, including 11 boutiques in Hong Kong, Macau, mainland China, Taiwan and Kuala Lumpur.

Meanwhile, Stella McCartney is launching in India, with two shops opening before the end of the year, and a further four over the next two years, Gucci is also ploughing resources into Asia - six of its 17 new openings this year are planned for China. "Gucci has a lot of resonance with the Chinese," says owner Francois Pinault.

It's a claim backed up by a recent survey of luxury companies by the market research firm AC Nielsen, which found that, globally, Gucci leads the pack of coveted brands.

Christian Dior, closely followed by Versace, is a favourite among young international consumers in the Middle East, Russia and Latin America, while more conservative new-market consumers opt for Armani and Chanel.

But will these wealthy new consumers start to dictate trends? Peter York, the style commentator and author, believes they already have. "New wealth is creating a fabulously, luridly vulgar moment in fashion, design and taste overall," he says.

This new bling culture was especially apparent at Milan Fashion Week last month, where catwalks were awash with fur, brash ornamentation and ultra-luxe pieces.

At Roberto Cavalli, coats came in floral painted leather, leopard print and fur trim, or in heavily embroidered vivid florals with fur borders and plush velvet trims.

Burberry Prorsum introduced Wellington boots trimmed with a python "belt" and the label's latest it bag - the ruched alligator 'Lowry' - which will cost f12,000 (RM76,000) when it retails this autumn.

Meanwhile, at Sergio Rossi's Autumn presentation, there were beaded mink-lined evening shoes and thigh-high purple suede boots, embroidered and bejewelled with folkloric patterns,

Gucci's bohemian-themed Autumn collection may have received a lukewarm reception from critics (based in London and New York), but the label's opulent furs and accessories will be a huge hit with Russia's big spenders. Everything from belts and boots to fur jackets was heavily embellished.

This high-voltage luxury reached its apogee at Fendi, where each item, from a fox fur jacket to a sheared mink miniskirt, had been dipped in 24-carat gold. In the Fendi showroom there were more ultra-luxurious accessories - such as pushchairs lined in mine

British heritage'brands are also noting the changes. "You can be much more flamboyant," says Clare Waight Keller, the creative director of Pringle. "Colour is more important and heavily embroidered, super-luxurious materials, too. We just did a patchwork fur jacket for f8,000 (RM50,000) that Chinese buyers loved."

Alison Loehnis, of Net-a-porter (, says that customers in these new markets are concerned about having the right labels to flash. "They definitely want recngnisable brands - it's much easier to recngnise a Fendi bag than a Fendi dress."

Yet, despite the obvious plays for new markets on the catwalks, these up-and-coming consumers are still lalgely led by Western tastes Peter York suggests, glitzy bling is unlikel to be tolerated for too long. 'q"he very idea of wealth is beingchallenged in the banking crisis, so people may want to start hidiug it again."

And that goes for shoppers in Beijing, too.