Eight Conjectures Of Changes In Fashion Industry After The Death Of Karl Lagerfeld

Over the past 20 years, the structure of the fashion industry has maintained relative stability.

But few people realize that the fashion that people are accustomed to is the concept and habit built by industry authority for decades, but fashion is not necessarily the case.

In recent years, there has been dramatic upheaval in the industry. People see the fall of traditional authority and the phenomenon of "Black Swans" that breaks the law from time to time. Therefore, we must re-examine the fashion that has been taken for granted and the future direction of this fashion.

The death of Karl Lagerfeld undoubtedly brought this issue to an earlier discussion. As a person who has always been active in the fashion industry and has the most experienced qualifications, Karl Lagerfeld has built up a kind of common sense in half a century, and has been copied and copied by a large number of peers.

For example, by selling brand classics by means of innovative packaging, mobilizing large amounts of resources to turn the fashion show into a major marketing campaign, making fashion a landscape rather than clothes, developing brand names for various brands, creating dreams for brand lifestyle, and even "Star" of creative directors.

Karl Lagerfeld started her career as an assistant Pierre Balmain and became a designer of Chlo in 1964.

In 1965, Karl Lagerfeld joined Fendi as creative director, creating double F logo and working in this position for over 50 years.

Since 1983, Karl Lagerfeld has been the artistic director of Chanel, and is the second most important person after the founding of the brand Gabrielle Chanel.

When we first joined the Chanel, the French luxury brand, which had just been acquired by the Wertheimer family, is sinking into a low ebb. Karl Lagerfeld, which has just entered the brand, has also experienced a difficult running in period.

Interestingly, the designer who has become the spiritual pronoun of Chanel has been considered too radical to subvert the founder's style.

With the help of many innovative methods mentioned above, Karl Lagerfeld helps Chanel to reach the top again, becoming one of the most complete luxury attributes in the industry, and one of the most consistent and profitable brands of the classic brand. Its annual sales volume is close to tens of billions of dollars.

However, when the dramatic changes of innovation and consumer groups become a consensus, it also means the coming of a new cycle. Especially when the operator of traditional power system is withdrawn, the chain reaction will trigger a completely different picture of the whole fashion industry.

It is worth noting that unlike Givenchy, Yves Saint Laurent and other design masters, the Karl Lagerfeld still insists on working at the end of life and plays an important role in three brands. Its absence means not only the decline of traditional work style that insisted on sketching fashion sketches in the last century, but also the unpredictable impact on the whole luxury fashion industry.

The turning point has arrived. The question before the fashion industry is that in a post Karl Lagerfeld era, what common sense and pattern of the fashion world will be broken and which new rules will be subverted.

Will 1.Chanel become the next Balenciaga or Saint Laurent?

The long and unsettled successor around Chanel and Karl Lagerfeld was answered on the day of the death of Karl Lagerfeld.

Chanel issued an official statement that it will be replaced by Karl Lagerfeld's former assistant Virginie Viard as creative director.

For Chanel, Virginie Viard is a safety card, but for the Chanel who always loves feather, there is nothing wrong with conservative action.

Compared with other star creative directors, Virginie Viard, who grew up from inside and managed creative studios, is considered the most reliable successor.

After 30 years of getting along, Virginie Viard has established deep trust with the Wertheimer family behind Chanel and Karl Lagerfeld, and she has been familiar with the affairs of the fashion house creative studio.

After Virginie Viard takes office, will it change the style of Chanel like Karl Lagerfeld first? Or, as many new creative directors are cleaning up brand names after taking office, the answer may be No.

For Virginie Viard, which coexists with Chanel craftsmen and working procedures for a long time, she will continue to extend the brand's existing style to a large extent, while Chanel's mature handicraft workshop and design team also guarantee the normal operation of this giant business machine.

With the change of consumers' preferences, innovation and radical change seem to be the trend of the times. No one can guarantee where the brand will go in the new environment. The Saint Laurent and the brand of Balenciaga are typical cases.

Legendary designer Yves Saint Laurent, after leaving the same name brand, was reproduced by Yves Saint Laurent, which was acquired by Gucci group in 1999, after experiencing Tom Tom sexy modeling, Stefano Pilati, smoking suit, hunting jacket and so on, but failed to save the declining sales after the founder died in 2008.

Hedi Slimane, after taking over the power of the creative director, has a very controversial subversion to the brand, including renaming the brand to Saint Laurent and changing Logo, inject into the spirit of rock rebellion.

After the Anthony Vaccarello began to take the helm in 2016, the brand continued the strong performance of the Hedi Slimane era.

Balenciaga founder Cristobal Balenciaga closed the fashion house in 1968 and died in 1972.

After several ups and downs in the last century, Nicolas Ghesqui re became creative director in 1997. She inherited the futuristic elements on the basis of Cristobal Balenciaga's exploration of the fashion profile.

But Nicolas Ghesquiere failed to help brands achieve substantial business returns.

The brand continued to be confused in the period of Alexander Wang, and finally turned the direction under the direction of Vetements founder Demna Gvasalia, and became completely commercially successful.

For Virginie Viard, the challenge she faces is unprecedented.

In the first 20 years, Chanel can sit back and relax, but today's world is changing so fast that sticking to rules is not an option at all. The traditional rules of the fashion industry are still being broken.

Will 2.Chanel's products continue to rise in price?

The case of the founder's death that led to a surge in resale prices is not uncommon.

Last year, after the suicide of Kate Spade, the loyal consumers chose to buy their brand name handbags to express their feelings of remembrance, so that the price of Kate Spade handbag products increased by 6 times in a short span of three days. Among them, the price of an old bag of Kate Spade rose from $80 to 300 dollars, which is the same as that of the brand new product.

Kamini Lane, chief marketing officer of Tradesy, an online fashion business platform, says that whenever a master designer dies, their demand for products will surge in the short term and the price will double as well. This is a very common thing.

For the Chanel, which is quite popular in the resale market, the death of the soul Karl Lagerfeld will undoubtedly make the price fluctuate under the influence of topic and scarcity.

According to the latest data from social shopping platform Depop, after the death of Karl Lagerfeld, the search volume for designers themselves increased by 1351%, and consumers' desire for Chanel was also rising.

Manhattan James Veloria co founder Brandon Veloria revealed that the sales of Chanel products increased in recent days, especially the design of the brand in 90s. The luxury resale platform The RealReal said that this week, consumers began to increase the search volume of Chanel classic tweed jackets and dresses and handbags.

What's more, in recent years, the Chanel price commodities have been maintaining a steady pace of raising prices, making their classic handbag products an investment target.

Last year, Chanel adjusted the price of some products in May, July and November respectively. In the past 5-8 years, some of the handbags of Chanel have increased by 70%. The prices of Chanel are mostly classic. The new sales volume is very good, such as the latest star bag Gabrielle bag.

At present, Chanel has undoubtedly become the most valuable luxury brand with the most frequent price adjustment and the largest price adjustment.

Will 3.LVMH buy Chanel?

At the end of 2017, French media reported that LVMH boss Bernard Arnault was meeting with the Chanel family Wertheimer family to try to acquire Chanel.

Although Bernard Arnault says the group has never contacted Chanel, it still can not stop the industry from worrying about whether Chanel can remain independent.

Chanel has repeatedly stated that the group will never sell or seek IPO, which will not change.

The original brand founder Gabrielle Chanel relies on Pierre Wertheimer to invest in the establishment of the brand. The former only accounts for 10% of the shares. This share is also acquired by the Wertheimer family in the future. Today, the Chanel group is held by the Alain Wertheimer and Gerard Gerard of the Pierre Wertheimer. According to Bloomberg, the dividend of the two brothers in 2016 is as high as 3 billion 400 million dollars, and their total wealth is now about 46 billion dollars.

In the first half of last year, Chanel took the initiative to disclose detailed financial data for the first time since its establishment 108 years ago. Its total sales in fiscal 2017 rose 11% to 9 billion 620 million dollars, or 8 billion 300 million euros, with a profit of 2 billion 690 million US dollars.

Net profit was recorded at US $1 billion 800 million.

Chanel has no debts at present and has 1 billion 600 million dollars in cash.

Some analysts said that Chanel's announcement of the earnings report not only made the takeover rumours unfounded, but also showed that the brand still has an unshakable position in the luxury industry.

But just in the past month, Kai Yun group's latest financial report disclosed that in 2017, it surpassed Hermes's new Gucci record and entered the 8 billion euro club for the first time. Bernard Arnault also disclosed the core brand Louis Vuitton performance for the first time. Last year, its sales volume was 10 billion euros, and the difference between the two was only 2 billion euros.

The industry pattern is quietly changing, and the sales data of Louis Vuitton, Chanel and Gucci are getting closer and closer. The number one luxury brand competition has started.

However, in this case, compared with the high-profile radical LVMH boss Bernard Arnault, and the ambitious family business two generation, Kai Yun group boss Franois-Henri Pinault, Wertheimer family is extremely low-key.

They retire behind the scenes and put Karl Lagerfeld in the center of the stage spotlight to become the sole spokesperson for the brand.

What is puzzling is that although the two brothers are old, they remain mysterious about successors, whether they are taking over the successors of their management or their successors to the creative director at Karl Lagerfeld.

The offspring of the Wertheimer family also did not participate in the group operation, making the outside world more conjectures about its intention to launch the Chanel group.

On the other hand, Bernard Arnault's sons and daughters are holding important positions in the group. Their only daughter, Delphine Arnault, has joined the group board this year. The 43 year old is the youngest member of the board. She is regarded as a successor.

But at the same time, despite the effort to keep a low profile, the Wertheimer family still keeps close control of the group.

In 2016, Chanel's original CEO Maureen Chiquet was sacked for disagreements with the Wertheimer family in terms of strategy. Currently, Chanel Alain Alain Wertheimer is the brand CEO and Bruno Pavlovsky serves as president of the fashion fashion department.

Philippe Blondiaux, chief financial officer of Chanel, said in an interview that Alain Wertheimer, now nearly 70 years old, is still in good shape and almost every 5 minutes will have a new idea.

Philippe Blondiaux admits that there is a long internal debate over whether or not to disclose performance data within the group. However, in the face of increasingly fierce competition, conservatism should not be a stumbling block for the further development of Chanel.

The group realized that it is time to put the data in front of the public to prove that it is a company with a very strong financial position and a value of US $10 billion.

It is a clever method for Chanel to remain mysterious and occasionally swords.

However, the fierce competition in the face of the death of Karl Lagerfeld has undoubtedly exacerbated the turmoil in the group's future.

The luxury industry is a very demanding battle. It is not known whether the Wertheimer family chooses to go ahead or let go.

But there is no doubt that Bernard Arnault, once coveted by Hermes and Gucci, can hardly be moved by Chanel.

4. who will take over the creative power of Fendi?

In fact, despite the group strategy, the most direct impact of the death of Karl Lagerfeld on LVMH is its third largest luxury brand Fendi.

According to foreign media quoted LVMH insiders, after Karl Lagerfeld died, Fendi will not hire designers from outside to replace Karl Lagerfeld's creative director position, but consider the founder of the brand, granddaughter Silvia Venturini Fendi stick.

The Baguette handbag, designed by Silvia Venturini Fendi in 1997, has been re launched in recent years. Last month, the brand also held a special theme event on the handbag.

LVMH spokesman declined to comment on the news and said that it is too early to discuss the successor of Karl Lagerfeld. Fendi will pay tribute to Karl Lagerfeld for some time.

Fendi was founded in 1925 in Rome, Italy, specializing in the production of high quality fur products. After the death of Edoardo Fendi, one of the founders, Fendi was jointly run by its 5 daughters.

In 1962, Fendi appointed German designer Karl Lagerfeld as the chief designer, and Karl Lagerfeld designed Fendi F logo for Fendi, and launched the first ready-made garment series.

The "double F" logo was launched after being promoted by the street youth who liked to show off at that time. The floral jacket, Hoodie, Rockoko sports shoes and Kan I handbags, Peekaboo handbags and Runaway handbags were printed as the standard of street youth in 70 and 80s.

As the market share of the brand in the luxury industry continues to increase, LVMH launched the majority of its stake in Fendi in 2001 and planned a detailed blueprint for global development for the brand. It gradually grew into a luxury brand with an annual income of 1 billion euros, which was two times that of LVMH in 2001.

Behind the rapid success of Fendi is the explosive effect and the younger strategy.

Peekaboo and other popular handbags have promoted the brand to become one of the most competitive and most popular brands among leather products in recent years.

And Fendi is often able to make the explosion free from the "fatality" of the rapid retreat of heat, and then make it a classic.

This also shows that Karl Lagerfeld is outstanding in both Fendi and Chanel, and is skillful in manipulating "classic".

Last year, thanks to the resurgence of logo worship, Fendi, formerly regarded as a luxury fur brand, has gained popularity among young people.

The classic "double F" logo brand launched by the brand is the first large-scale brand appearance of Logo in the new series after the brand abandoned the big Logo in 2013.

Some people in the industry have pointed out that Fendi will become the next Gucci.

The Chanel of Karl Lagerfeld has a more personal flavor, but Karl Lagerfeld's power Fendi embodies the brand style of LVMH group.

The death of Karl Lagerfeld is undoubtedly an important loss for Fendi, but this has little impact on the future development of the brand.

Where will the 5.Karl Lagerfeld brand of the same name go?

Compared with Chanel and Fendi, the Karl Lagerfeld's namesake brand is more like his playground and its creative ideas are realized.

The brand is famous for its unexpected cross-border cooperation.

Last year, Karl Lagerfeld co operated with the millennial supermodel Kaia Gerber to launch the exclusive 2018 autumn series.

Not long ago, he also announced cooperation with Haper's BAZZAR global fashion director Carine Roitfeld, and Carine Roitfeld will take part in the design of some single products in the Karl Lagerfeld 2019 autumn series.

Karl Lagerfeld's own cat Choupette has also been the inspiration for this brand series.

Karl Lagerfeld the same name brand earlier belonged to Tommy Hilfiger, and later Tommy Hilfiger's company was acquired by Phillips-Van Heusen (the current PVH group), but Karl Lagerfeld was not in the paction.

Then the brand was reintroduced by Apax Partners, the largest private equity firm in Europe in 2011.

In 2016, the brand and G-III set up a joint venture to reintroduce the Karl Lagerfeld Paris in the North American market.

At present, the brand covers leather goods, clothing, watches and perfume, and has KARL.COM in 96 countries.

In the Chinese market, Fujian seven wolves spent 320 million yuan in 2017 to acquire 80% stake in Karl Lagerfeld Greater China Holdings Limited (KLGC) company.

KLGC owns the international light luxury brand Karl Lagerfeld's permanent right of use in trademarks including greater China and Singapore.

However, the brand recorded a decline in revenue from 2014 to 2016, losing 10 million 170 thousand, 5 million 980 thousand and $3 million 590 thousand respectively.

The seven wolves originally planned to combine their localization advantages and the brand design advantages of Karl Lagerfeld after the completion of the paction, so that the two sides could achieve a win-win situation in the Greater China region. However, last year, Karl Lagerfeld continued to lose money and drag on the performance of the seven wolves.

After the death of Karl Lagerfeld, whether the creative direction of the brand of the same name will follow, whether it can catch the attention of the designer's death and stimulate the growth of performance, and whether the Fujian seven wolves who bought the Chinese market operation power can reverse the Karl Lagerfeld brand loss situation, all these questions need to be proved by the performance data.

6. is the age of star designers really over?

As early as last year, New York Times fashion director Vanessa Friedman, in an article entitled "fashion world after Anna Wintour", discussed the change of the industry pattern after the most authoritative Anna Wintour in the fashion industry. It was mentioned that the most stable person in the fashion industry was only Karl Lagerfeld at that time, because she signed a lifelong contract with Chanel.

However, in the current industrial environment, with the increasingly fierce competition, whether brand or designer, once the judgment is wrong, it will be faced with the danger of being eliminated by the market.

Luxury brands no longer focus on the long term. They only care about the immediate response. Creative directors are concerned only with the performance of their tenure.

Chinese designer Yin Yiqing resigned from the old fashion house Poiret after he took office in the two quarter. He launched a series of innovative Raf Simons for Calvin Klein. Due to the imbalance in input and output in creative marketing, he broke the contract ahead of schedule two years later.

Each brand creative director, like a slide show, shows once again that the patience of luxury brands has reached an unprecedented low.

The purpose of frequent replacement of creative director is to bring new impetus to brand, behind which is the anxiety that luxury brands can not dispel.

The pace of fashion industry continues to accelerate, consumers' preferences are unpredictable, and brands can not find a more effective way at a time. It seems that they can only respond to changes in the market by constantly changing their creative directors.

Therefore, the death of Karl Lagerfeld is likely to take away the first and last life-long contract of the fashion designer.

In fact, the lifelong contract is the brand's extreme recognition of the influence of the target audience.

Even in the most brilliant era of star creative director, signing a life contract is not a fashion convention.

Karl Lagerfeld is one of the few designers who can have strong personal appeal without relying on any platform. He is a star, not just a creative director of stars.

His death is social news, not just industry news.

Therefore, when the creative director really becomes a star, he also has the conditions to sign a lifelong contract.

But with Raf Simons, Alber Elbaz, Christopher Bailey and other creative directors mostly in the awkward position, the golden age of the star creative director seems to have turned over, but we have to ask again, whether or not the Virgil Abloh, which is closer to the star "human", has the ability to continue to steer the luxury brand for 50 years.

Is the 7.Chanel headquarters moving to London as a new starting point?

The Chanel show is held annually at The Grand Palace in Paris, but at the same time, the French luxury brand quietly shifted its management focus from New York headquarters to London, which is spreading in Europe.

Last year, Chanel announced a major restructuring plan to regulate all its businesses to the same department to enhance operational efficiency.

Chanel's new headquarters is in London, where all 20 thousand employees will work together.

According to Evening Standard, Chanel has rented 20 thousand square feet of office to accommodate a large number of employees from New York.

The official announcement of Chanel shows that this change is an attempt by the company to simplify and optimize the organizational structure of the enterprise. As Britain occupies the core position of Chanel global market, with the most widely used English as the first language and strict corporate governance standard, Britain becomes the most suitable city for Chanel to develop international business.

Chanel biographer Justine Picardie said that building international offices in London means choosing one of the world's richest cities with the highest rate of growth. The growth rate of London's richest is second only to Hongkong.

Another analysis suggests that choosing London also means that the brand hopes to dig out creative and managerial talents in turbulent times.

After all, the position of Chanel CEO is still running by Alain Wertheimer, chairman of the board, and the brand innovation in the future still needs young managers to join.

However, with the continuous closing of the European date, is the French luxury brand really ready to face many uncertainties, and whether Europe's influence on the communication between brand management and Paris creative team is still unknown.

But in any case, Chanel has bet on a road that is not easy.

8., can we wake up the industry's vigilance against street trend?

Few brands can do the same as Chanel, and tell the founder of Gabrielle Chanel the brand core "story" for 108 years without going out of fashion.

This is based on Chanel's ability to constantly give core stories new interpretation, and also the style stability brought by Karl Lagerfeld, which has signed lifelong contracts.

Of course, in today's rapidly changing fashion industry, Chanel is also not able to keep it safe. It also faces the core issue of maintaining brand freshness.

But in the past year, some of the luxury brands' radicalization and trend pformation have made consumers' original novelty start to fade, and return to Chanel and Hermes, which are relatively cautious in maintaining luxury attributes, seeking classic but not outdated luxury goods.

People who buy Chanel handbags know that they do not want practical products but pursue social distance and values.

According to the annual ranking of the 500 most valuable brands in the world released by Brand Finance, the Chanel brand value has surged 95.1% in the past year, ranking from 299th in the previous year to 149.

It is certain that the death of Karl Lagerfeld will add a new brand legacy to Chanel outside Gabrielle Chanel, and continue to increase brand value for Chanel.

In the future, Chanel products may also take Karl Lagerfeld as the inspiration source, making the story more abundant by the brand.

The foundation of luxury brands is based on "dream making", and has an instinctive chase for the prosperity of the landscape.

If we regard the luxury industry as an independent society, each brand is the currency of circulation.

Money is a virtual concept. Luxury or brand is also a virtual concept. The exchange value of the two is higher than the value of use.

In this independent society, every brand must persuade consumers to use their own currencies. In order to avoid bad money from banning good money, each brand has to work harder in this competition, forcing the creative director to learn to fight and design.

But in a luxury industry's collective fever, we need to be careful not only to convince consumers with enough gimmicks, but also to consider the brand value in the long run. We should also distinguish the difference between the real innovation core and the gimmick.

A radical and superficial subversion may be at the expense of long term brand value.

At this point, the style of Chanel and Karl Lagerfeld will again alarm the industry.

As Karl Lagerfeld puts it, "I am open to everything.

When you start criticizing your age, your era is over.

In the fashion industry, the most important thing is to wake up, if you want to stick to it. "