Trendsetting brands combat knock
To get a handle on the state of fashion, sweep past the street vendors hawking $25 “pashmina” shawls and $20 “Prada” backpacks at the corner of Fifth Avenue and 52nd Street and walk into the new H store.
Inside, the racks are jammed with copies of Gucci and Prada looks from the last runway shows all priced in the neighborhood of $30. On a summer evening, the store is more crowded with tourists than St. Patrick’s Cathedral across the street or the Gucci and Prada stores a few blocks away.
Until the last decade, the life cycle of apparel was simple: the trendsetters took a trend on, then it trickled down to the masses and the trendsetters moved on to the next one. Today, copies are churned out as soon as the items appear on the catwalks, which can turn luxury brands into victims of their own success.
THE POWERBEAD STORY
“I’ve been a case study for these knockoffs,” said Zoe Metro, founder of New York jewelry designer Stella Pace. Last summer, she launched a nationwide craze with Powerbeads, the bead bracelets that became a must have accessory. While the real thing, made from semi precious stones, retailed for around $35, plastic knockoffs sold on the street for less than $5 each. Ms. Metro said he recalled going to a jewelry show last year where an executive from a maker of Powerbeads knockoffs thanked her for giving his business such a boost.
“In the beginning, imitation is flattering, but a part of me wanted to punch him,” she said. consumer has developed an appetite for fashion, even if he or she doesn’t have the wallet for it, leaving plenty of room for retailers such as Sweden’s H which has been doing land office business on Fifth Avenue since it opened in March.
“The fakes get better and better,” said Jim Conte, VP marketing at e luxury, the new e tailing venture from LVMH Moet Hennessy Louis Vuitton, parent of Louis Vuitton leather goods and Givenchy apparel, among other luxury brands.
But the knockoff craze hasn’t cheapened the luxury brands. A recent survey by consultant Interbrand found the value of the top global luxury apparel brands has increased even more sharply that well known mass names.
JOINING THE CLUB
Interbrand’s research found Louis Vuitton’s brand value shot up 69% and Chanel’s 32% from 1999, while The Gap rose 18% and Nike dropped 2%. It quantified brand value through a proprietary methodology that measures the profits a brand generates for its marketer.
“People really do respond to badges. . . . There are people who will say, I want to be a member of the club,’ ” said Peter Levine, president of d/g Consulting, New York, a brand image consultant that has worked with apparel brands such as Ann Taylor, Guess? and Victoria’s Secret.
Gucci and Prada are not hurting, but the crowd at H begs the question: How do you maintain a luxury brand when imitations appear in stores at the same time at a fraction of the price?
The answer: Join the club. Make the brand itself, not the object, the thing consumers covet, observers said. That requires more than an investment in advertising, but also public relations, merchandising and product placement.”There’s a three dimensionality that builds these brands. It’s not just advertising,” Mr. Levine said. “Everything builds [the brand], from the advertising, to the store experience, to the Web site.”
He noted, for example, that Hermes destroys surplus inventory rather than liquidate it through discount channels to maintain the exclusive image of its brand.
“It’s a top to bottom brand concept. PR is very important on helping these brands establish themselves,” Mr. Conte said. “People are always trying to place their products in the right programs and [with] the right people because it adds validity to the brand.”
Word of mouth is key, Ms. Metro agreed. She credited celebrity plugs and coverage in fashion media with turning Powerbeads into a fashion trend.
Successful luxury brands build a community with their customers that makes them feel they are part of something, said Heather Mee, strategic director of Frierson Mee Kraft, New York. For example, she noted Jeffrey, an upscale boutique with stores in New York and Atlanta, sends personalized thank you notes to shoppers after their purchases and alerts shoppers when similar items arrive.
“People who are buying and paying for Gucci want to feel they’re indulging in that brand,” Ms. Mee said. “If you just want the style, it’s just a transaction. If you want to be a part of a brand experience, that’s what the brand is about.”
As another example, she noted how Burberry’s and Hermes, two venerable luxury brands, have injected whimsy and modernity into their advertising to attract younger, hip consumers.
“You want something that is not just a status symbol but that connects with a story,” Ms. Mee said. “It’s not just about status and cachet. It’s about feeling you share a wink’ with the brand.”
But sometimes, the only answer to an overexposed trend is to move on, Ms. Metro added. Fashion trends, after all, are supposed to change, she said. She has now moved from Powerbeads to new designs in jewelry and handbags, such as the Power Prescription line crystal and stone bracelets packaged in medicine bottles. But just in case, she now engraves the Stella Pace name on all her designs to separate them from the copies.
Regardless of the knockoffs, Powerbeads made her company famous, she admits. “Prada had the nylon backpack. Did they ever have something [else] that successful? No, but they’re still doing very well. Andy Warhol had the soup cans. Did he ever have anything [else] so big? No, but it put him on the map.”