Sunday, October 24, 2010

C-Suite Retail Spotlight

“Unwrapping the Business of Brand” was the theme of this year’s Annual Luxury & Retail Conference organized at the NYU Stern School of Business last Friday, October 22, 2010 (Chandra Chantim & Jalaine Johnson, Vice Presidents of Conference; Becky Hyman & Jennifer Smalheiser, Co-Presidents). In its fourth year, Friday’s conference focused on how companies differentiate themselves from the competition, how they use digital initiatives to engage the client, and how they develop strategies for long-term growth.
While the welcome remarks and keynotes by Paul James, Global Brand Leader, St. Regis & The Luxury Collection and Brendan Hoffman, President and CEO, Lord & Taylor as well as the closing keynote by Mike Indursky, President, Bliss imparted valuable knowledge on how these companies have been reinventing themselves in the last 10 years and through two consecutive economic recessions, I would like to review the C-Suite Panel Discussion, moderated by Jennifer Hyman, CEO, Rent the Runway. The panelists:  Andrew Oshrin, CEO, Milly; Heather Pech, CEO, Nanette Lepore; and Susan Sokol, President and COO, J. Mendel share an industry and a passion but they also share the fact that they work for private companies that have been operating in a very competitive market within which they have maintained their independence and marked success.
Each company has a unique history and fashion approach. J. Mendel was founded in 1870 by Joseph Breitman, furrier to the Russian aristocracy and remains family-owned today with Gill Mendel, of its sixth generation, at the helm. Nanette Lepore was launched in 1992 and maintains a prominent place within the luxury sector with witty and colorful designs.  The company, headquartered in Manhattan’s garment district, has also branched out into shoes and fragrance.  The youngest of the three, Milly, entered the market in 2000, when designer Michelle Smith decided to turn her experience from her career with Parisian luxury powerhouses Hermès and Dior into a feminine label with a New York point of view. Three distinctly different companies in terms of size, longevity, and country of origin, these independent houses have become major players in the business of luxury. Their executives confirmed that this place was achieved by understanding what luxury really means. I have summarized here my insights on the discussion and I hope they are illuminating to the players or those who would like to enter the field.
a.                    Luxury is about service: The higher up the company at the higher end of the spectrum within luxury, the greater the customer expectations for unrivaled service, attention to detail, and openness. Young designers often confuse the monetary value of their product (the cost of furs, gems, or rare textiles and handwork) with what truly creates value in luxury, which is service.
b.                    Luxury is about agility: While we tend to identify the most prominent of luxury brands with stability, perseverance, and continuity of tradition, luxury brands maintain their spot when they are able to incorporate customer feedback quickly. The product may not reflect any immediate changes but the process of producing it and delivering to the customer will.
c.                    Luxury is about authenticity: What is the story that differentiates one luxury brand from the other? The product will not stand the market’s ups and downs and the customers’ capricious and at times erratic behavior unless the story behind the brand is consistent and whole.
“Unwrapping” the business of brand is an important chapter in business practice and education and pertains both to the financial analysis of what each brand means (in terms of product value and brand value) and to the strategic analysis that needs to take place periodically to assess and evaluate each brand’s trajectory within the specific segment of the market. When entrepreneurs wish to add something to the market, they need to determine first whether there is a space in the marketplace for this product and if there is indeed, whether the market place will support the product. This last piece of advice came from all three panelists, all very accomplished within their field and truly inspired in leading their companies through recessions, technological and generational changes. The spotlight is on Andrew Oshrin, Heather Pech, Susan Sokol, and Jennifer Hyman for having enriched the audience’s experience of the Annual Luxury & Retail Conference.

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