The fashion industry is undergoing a revolution and four companies are rising to the challenges posed by a profound shift in consumer attitudes. So how are top fashion brands MCM, Nina Ricci and Schiaparelli squaring up to the challenge of millennial spending?
The answers came at a panel session titled “The Changing and Challenging Business of Fashion and Design”, held at the Global Summit of Women in Basel, Switzerland.
Sung-Joo Kim, the South Korean entrepreneur who helms MCM Group, has run the business since she acquired the German luxury brand in 2005. She has a team of 2,000 staff from 40 different nationalities, 75% of whom are women.
“I faced many challenges buying a German fashion and being based in South Korea. People thought I was crazy and asked me: why did you do it? I didn’t come from a fashion background – my brothers run a big industrial group established by my father. I was thrown out of the family home when I didn’t want to follow the usual women’s path of marriage to another powerful Korean family. I had no money, so I had to do something and I rang around my friends. I spoke to the head of Bloomingdale’s and he hired me in his New York headquarters.”
Mrs Kim said she had no idea about retailing. “People were using the term MD. I thought it meant doctor, but I learnt it was a term used about merchandising.”
Power shift from West to East
The dynamic philanthropist – or Chief Visionary Officer, to use her MCM title – added that her degree studies in sociology helped her understand how society evolves. And being Asian herself, sensed how the balance of power, including purchasing power, was shifting from West to East. As soon as she acquired MCM, she set about targeting the Asian consumer, and particularly the high-spending young Chinese, who are often cosseted by their family because of the one-child policy. As Mrs Kim foresaw before many others, the Chinese traveller is vital for travel retailers.
MCM has become a cult fashion label, spotted worldwide thanks to its famous hands-free backpacks worn by Chinese tourists in every fashion capital. American rappers love the brand, as well as the K-pop artists like Rain, boasting 100m followers. And not forgetting influential DJ Peggy Gou, who is in demand at every fashion party across the globe.
Mrs Kim believes the younger generation no longer want “princess fashion” but a more comfortable and practical aesthetic. This view seems to contrast with the approach of Nina Ricci, whose new fragrance trio is sold in Dufry stores alongside an ad campaign tagged #princesslife. This well-established French fashion house is headed by Charlotte Tasset as CEO for Fashion and Fragrances. Tasset believes the future of physical retailing is sharing. It’s not the same as online retailing, where the key is convenience. “You use the internet to buy your daughter Nike trainers or something like that. But shopping is about sharing. You go shopping with your friends, so you have to offer in-store experiences they can share,” she said.
Focus on sustainability
As for Schiaparelli, its haute couture legacy and artisanal focus chimes perfectly with today’s focus on sustainability and the shift away from overconsumption, according to Delphine Bellini, CEO, Elsa Schiaparelli SAS.
This fascinating all-female panel also included the leading fashion brand distributor Imex Pan Pacific Group (IPPG) of Vietnam. President Le Hong Thuy Tien revealed that there was such a lack of centrally located retail space for luxury brands that IPPG began building and operating its own shopping malls. IPPG also has a thriving travel retail division at the country’s airports. Its portfolio spans more than 100 luxury brands, such as MCM, whose stores in Ho Chi Minh City and Hanoi will soon be expanded.
