To marry or not to marry?
Meghan just became the Duchess of Sussex. And if you are a woman in your early 20s, you are probably asking yourself when you will meet your Prince Charming. This is definitely a legitimate question that many women of this age have. Though statistics tell us that there are fewer and fewer brides who walk down the aisle in their 20s, for economic reasons, for the pursuit of one’s studies or career. Nowadays the average age of marriage is actually 32.
Whichever age group you might belong to, it’s useful to keep in mind that there are certain phases in life that are more suitable to find that special someone than others. Before you say yes, or go shopping for that perfect dress, “the rule of 37%” comes in handy.
This rule can help you save a lot of time (and money and heartache) in your search for your life-long partner, according to journalist Brian Christian. In fact, the perfect moment to make any major decision in life seems to be when you will have considered 37% of all the options, within the limited amount of time available to you. At this given point in the process, you will have gathered enough information to make an informed decision about your selection. But you should not waste too much time evaluating an excessive amount of information than is necessary. Again, 37% is considered the magic number when the odds of making the best choice are at their optimum.
So, as also the great journalist Chris Weller perfectly concluded in a recent article “if you are looking for true love from the age of 18 to 40, you should know that the optimal age to seriously consider settling down is soon after you turn 26 (37% in a span of 22 years). Before then, you could let a few great ones get away, but after that, good choices start to run low, reducing your odds of finding ‘love’.”
Having said that, once you find your Prince Charming, the second-most intimidating obstacle for every young bride to overcome is not the reception, not the place where she is going to live, but the wedding dress.
The wedding business makes 300 billion euro worldwide and witnesses annual increases of anywhere between 7% to 10%. The investment in wedding dresses – above all, the time which a person takes to find the perfect one – is reaching exorbitant levels. In fact, even if the flowers wilted, the food was not great at the reception, or if it rained, none of the invited guests would even remember anymore after a while. But if the wedding dress were ugly, unfortunately, everyone, above all the spouse, will remember it for many years to come. Even if she re-marries a second time. This phenomenon is what drives the 17% annual increase in the sale of wedding dresses – for ‘new’ brides who re-marries at the average age of 46, with a divorce behind them, or 56 years old if widowed, celebrating their second marriage in the traditional way like they did their first.
So why are women allocating so much resources to the one dress that they will only wear once in their lifetime? No matter where they live in the world, the answer is the Internet. Today, many brides are millennials who have digitalized spending behavior. According to Abn Metrics, 99% of new brides prefer online research to trade shows (43%), the advice of sales assistants at boutiques (19%) and wedding planners (14%). While they concentrate on the style of the dress (65%) or its designer (50%) while browsing online, the real purchase is made in store.
In Spain, the European country which is a leader in wedding dresses, millennial brides try 5 to 14 dresses before choosing the right one and spend an average of 1400 euro. It is not surprising then that some of the most important players in ceremonial apparel today come from Spain. The brand Pronovias, which will be celebrating its 97th anniversary in 2019, was founded in Barcelona in 1922 as a family business. Today, it has 164 boutiques and more than 4000 points of sale in over 100 countries around the world. With a consolidated turnover of over 200 million euro and an EBITDA of almost 18%, this wedding dress giant expects to invest 80 million euro in global expansion over the next three years: at the moment, Europe represents 60% of its total turnover, followed by Italy.
China, Brazil and Russian have witnessed major growth as well, at 129%, 54% and 13%, respectively – not only as buyers of wedding gowns, but also as producers. For example, China has become an important player in wedding gown making. Since 2017, its bridalwear production is estimated to be worth 1.3 billion euro: 760 million euro of domestic turnover, plus 510 million euro of export. 24% of the wedding gowns sold are over 3,000 euro, while only 16% are less than 1000 euro, which means the garment is widely recognized and purchased as a luxury item in China. On the other hand, the US which produces more than 1.8 million wedding dresses per year has become the world’s third largest manufacturer, with an annual turnover of nearly 2.8 billion dollar. An average of 1,500 US dollar is spent on a wedding gown.
But how did a simple dress become such an important item? How did the frenzy all begin? One of the first documented white wedding dresses appeared in 1840, when Queen Victoria wedded in a white lace gown, which made fashion history. Up until that time, women simply took the best dress that they could find in their wardrobe, put it on and said ‘yes’ at the altar.
Besides wedding gowns, bridal outfits, bridesmaids and mother-of-the-bride dresses were offered in the seasonal collections by couturiers such as Lanvin and Vionnet starting the early 1900s, after Consuelo Vanderbilt married the Duke of Marlborough in a cream-colored dress. In the 1960s, Balmain and Yves Saint Laurent added romantic drama to a bride’s dream by concluding their fashion show with a breathtaking bridal look. Inspired by Russian nestling dolls, Yves Saint Lauren’s now-iconic cocoon bridal dress made its debut on the runway in 1965, and ever since, modern fashion designers have put their own twist on bridalwear. Some have even become exclusively specialized in bridal couture, setting a standard for the market.
With thousands of offerings online and in stores, just how does one choose the perfect dress for the happiest day in life? And what does this mean for the bridalwear business? Ironically, the shopper’s choice has become more daunting than ever, faced with endless styles posted on social media before one leaves the house. Following extensive research, I’ve come up with two golden rules for getting started on choosing the “I do” dress:
1) You cannot try every single wedding dress in the world. Instead, pick two to three boutiques and try not more than three or six dresses at each one. You cannot possibly try every single style and variation that ever existed, so don’t overwhelm yourself. Once you’ve committed to one dress, stop looking around, and don’t browse online anymore.
2) Do try a style that you normally wouldn’t and venture out. Think of it as a one-in-a-lifetime dressup session, have fun with it and be adventurous! You will only be surprised at how amazing you will look. The style that makes you feel most like a bride is the one to go for.
In conclusion, if by chance the wedding guests start throwing walnuts at you coming out of the church, instead of the usual rice, it’s not because your dress is ugly, it’s because since the Ancient Roman times, throwing walnuts at the newly weds brings good luck and symbolises fertility. You might possibly end up with bruises, but without doubt, you will live happily ever after.
The mystery of franchising in luxury
It is said that italian franchising began in 1970, and over the past five decades, our country has witnessed the evolution of a business that has changed a lot throughout history.
But let’s start from the basis of franchising: the initiative to expand, the lack of capital to expand, and overcoming distance have always been the three key factors that drive growth.
Franchising is a business relationship, and though the earliest references in American history might not correspond with today’s textbook definition, peddlers selling something from town to town or when a store had a license to sell goods at a military base and the sale of livestock or other goods for which exclusive territorial rights were granted to the franchisees by the holder of rights, these are all examples of the first franchise/licensing relationships.
The origins of franchising date even farther back. Some records indicate the beginnings of franchising in the Roman Empire, or perhaps even earlier, when large territories had to be served, without well-developed transportation nor communication. It is believed that in the Middle Ages, franchising became an approach to central government control during the expansion of the church.
Historically, land ownership formed a feudal system in England and throughout Europe. The royalty granted the rights to own land to noblemen, who protected their territories with tolls, taxes – partly paid to the king – even an entire army, and became powerful individuals in an agrarian society. For a simple analogy, as I recently learned from a very smart journalist, just think of the Robin Hood scenario: the franchiser is King Richard, the master franchisee Prince John, the franchisee the Lockslie family.
And as Robin Hoods shows us, franchising was a challenge at that time and is still a challenge today.
It is not easy to delegate the management of your possession of something and let alone the important characteristics that make up your corporate identity, such as image and more. No one understands this better than luxury brands. During the rise of monobrand boutiques in the 1990s, luxury brands were suddenly faced with problems like shop concept, circulation, staff training, brand experience and clienteling. The solution? Franchising. The brand provides the product, the image and storytelling, and then the franchisee invests in capex, logistics, distribution and promotion. All this allows a luxury brand to open standalone stores around the globe by turning to experienced local retailers.
That’s it? Not so fast. This “formula of success”, which seemed to have opened up vast possibilities of global expansion, soon boomeranged in the 2000s when the service, experience and the assortment of merchandise – not to mention markdowns and visual merchandising – at franchised stores began to veer away from brand-operated boutiques in three main areas. Firstly, with the excuse of having to shape the offer to serve the needs of individual markets, different assortments led to very different points of sales from one country to another; secondly, pricing of a very different management of margins and the need to offer significant markdowns became essential to get rid of stock; and the last but not least, the consumer’s perception, or “shop experience”, which has become central to every boutique, faced with the e-commerce phenomenon.
On the other hand, as we all know, the success of a commercial enterprise depends largely on the consumer and, above all, on the company’s ability to influence consumer behavior at the sales points. How? Through physical and social factors at play inside a point of sale, it is indeed possible to influence a customer’s sensorial dimension, modifying their purchasing behavior. Luxury brands knows the great importance of the in-store experience. More and more customers are making purchases not because they know what they want, but because of what they experience in store.
This led luxury companies to gradually open branches in many countries (or at least in key markets such as Europe, USA and Japan), in order to directly manage monobrand points of sale which allows them to control the entire chain of value embodied by the product. The problems with markups and margins were partly resolved with the introduction of billing by internal cost between the mother company and the brand, assuring full margins for the HQ (that are almost double compared to a franchised business).
The sell-in quality remains a very centralized topic. To facilitate visual merchandising, local marketing, window display, and promotion of products seen on the runway, it is fundamental for the brand’s core selection to become mandatory for all monobrand merchandisers worldwide. However, the room to offer something more adapted to their local clientele then becomes limited for these merchandisers.
While the mother company rigorously control the layout, design and furnishings of a point of sale through apparent simplification of management so that the message is always coherent with the image of the product, different franchisees who do not always follow the informative materials, window displays, periodical promotions – elements which have in any case always been rigidly defined by old franchising models – sometimes find themselves not having to adhere to company directives in order to safeguard the relationship with end consumers.
All this means that luxury brands are gradually giving up on the concept of franchising – once so dear to a brand like Emporio Armani and Versace in the 1990s – which has since been relegated to lower-level, different product categories (like underwear or kidswear) or completely different sectors (McDonald’s, Hilton, Starbucks, Lego).
The LVMH group is a clear example of this.
Although it has made direct retail its official flag, it does not disdain to manage some brands, such as COVA (a famous Milanese pastry shop founded in 1817), practically opening only franchises around the world: The international development of this brand began twenty years ago with the opening, through franchise agreements, of Cova coffee in Hong Kong, China and Japan and will therefore accelerate in the coming years thanks to the support of LVMH.
But then why is it that franchising still works for a restaurant brand but not a Fendi store? Isn’t an experience at a restaurant even more important than retail for shoes and bags?
To understand this, we have to get to the bottom of the problem and understand the very definition of a point of sale.
Domenico De Sole, who was CEO of Gucci for a decade, would define it as: “The store is the moment of truth, the culminating and supreme moment when the brand strategy comes true. The success of fashion and luxury companies is thanks to the quality of their products, innovation, and attention to details, all consolidated in a consistent and skillful implementation of its store network.”
If we read into this definition, it would seem that the room for error of a luxury brand is so small that a total control of the entire distribution is the only way to go. Of course: fashion companies invest a lot of resources taking care of their image and positioning of their products for the customers, a care which translates to great attention paid to the choice of location for a point of sale, store layout, product selection on the shelves: with increasing competition, all these things that require maximum control become that much more difficult to delegate to franchised stores.
To complicate the picture, there is another very important factor to consider: digital.
On top of being a multi-channel business, in fashion and luxury in general, there is a constant need to interact with both physical and online stores. It is overwhelmingly clear that it has become very complicated already for directly-operated stores of a brand to keep up a dialogue with its own virtual marketplaces about everything from product availability to product handling across the borders between different countries: this lets alone a single franchisee somewhere in the world that on one hand has to protect the local business from the risk that the client ends up buying online instead of in his store, while on the other, having to lose out to the online store over markups or selections.
So does this mean that franchising for real luxury is dead and that only brands like Hilton, Calzedonia, Benetton or Costa Caff’ can thriving on franchising?
Even if a new franchising model allows a franchisee to get closer to the mother company, a direct exchange of best practice and a business relationship based on mutual commitments that can benefit both parties, so that customers will never tell the difference between a franchise store or a directly-operated one, I still don’t think that franchising is viable to luxury brands anymore.
Why insist on Franchising 2.0 when Chanel and Hermès are clear proof that having a brand’s own merchandise sold only at directly-operated stores is the way to go, beating not only franchise, but also department stores and wholesale?
As always, cash is at the heart of the matter: Prada knows a thing or two about this. Having resisted going digital for years, it has also been one of the last brands to enter the Middle East, because, for Patrizio Bertelli, it’s go-direct or bust (this was perhaps due to the blunder which the Prada Group and other brands suffered from Sheikh Majed’s Villa Moda Kuwait – an unsuccessful project in the middle of the barren desert offering 200,000 Kuwaiti a certain standard of consumerism in the form of the most prestigious brands – where, two years after its opening, Dior bags were discounted over 90% and Prada shoes went for 20 USD.)
Despite past hurt and a certain entrepreneurial rigidity, due the complete lack of strategic markets and channels that eventually became important for luxury consumers, Prada Group had to get soon to accept compromises.. Today, not only are there joint-ventured Miu Miu boutiques in Dubai, but Prada’s collections are available also on marketplaces like Net-a-Porter. The same with Gucci, with exactly the same timing and the same result.
All the above tell us something. Although Chanel and Hermès only can afford to have directly-operated boutiques, no wholesale and a very exclusive e-commerce (or none at all, like Chanel) and although franchising for luxury brand is pronounced dead, budgets must be reached, shareholders satisfied and salaries paid: closing an eye on the fact that a franchised Versace store in Jakarta offers sales in full season, or Zegna franchisee in Panama blends merchandise from the previous season with the current one has become a practice. And in the face of all this, Mr. Luciano Benetton who has worldwide 4000 monobrand stores in franchising out of a total number of 5000, is laughing.
The miracle of kidswear business
“Despite sales of children’s clothes are small compared to their adult counterparts, they offer companies a new source of income as parents with kids don’t want to sacrifice their own aesthetic choices for the sake of dressing their children and they want them to look cool, like an extension of themselves.”
Designer Jeremy Scott described with these words the apparently simple childrenswear business: on the contrary, with just few available statistics, tracing the rise of mini-sized fashion – and its geographical origins – seems almost impossible. But there is a real fortune to be made with kid’s apparel. This is a market that thrives on children’s need to continuously change their wardrobe as they grow. Today, it has increased to about 5% worldwide, around 256 billion euro. It is interesting to realize that it is the parents who are moving such a large business, as the need to provide for one’s child is fundamental. While they think about getting the best foods, the best accessories, or the best games, they can sometimes overlook clothings and buy super-industrial products made with who-knows-what, and from who-knows-where. But a child’s clothes should be part of his or her wellbeing and every parent should know where they come from. For health and safety, the label should indicate which country the product comes from, at the very least, as well as the materials used. However, all those t-shirts, jeans and accessories often come from so far away that the most basic information regarding origins ends up being the most obscure for the market that needs the most transparency.
In fact, such unique products should not only provide a certain security – well-performing and functional, but every piece should also fulfill the fundamental role in brand and price perception – aesthetic and psychological.
For many consecutive years, the childrenswear market has been going strong and proven to be lucrative, not just in the luxury sector, but around the world. According to the latest statistics, it made nearly 70 billion euro for Europe alone, of which 10 billion euro in Italy, and 15 in the UK. But as it has become very hard to find out whether the pieces worn by our children are safe or not, consumers are expecting absolute transparency regarding the origins of the clothings. The chemicals being used to produce the textiles in kids’ apparel are often the culprit of contact dermatitis in children who have particularly sensitive skin. The dye, glue, finishing and even highly carcinogenic substances can be absorbed by the skin during perspiration. Although the European Union have imposed restrictions and commissioned RAPEX (“European rapid alert for non food consumer products”), the quantity of competitively-priced childrenswear being imported from countries like China is constantly increasing. Unfortunately, as the first five years of a child’s life require changing sizes at least every two months, consumers with low-medium income often purchase imported apparel to ensure greater savings for the family.
Despite all this, luxury childrenswear has truly flourished as virtually every fashion brand has invested in it recently. Strategically, launching a boy’s or girl’s line of clothings is definitely an interesting move. Product-stretching neither dilutes the exclusivity of a brand nor its positioning. In fact, it can strike a very sensible chord with adults and children, increasing the potential for sales.
And this is where the psychological aspect comes in. It’s not enough for our children to just play and go to school. They should also reflect their family’s economic status and lifestyle in the way they dress. Parents want to bask in the glory cast by the logos and brands on their children’s apparel, which is proof that they can maintain a standard of dressing that is higher than the average adult.
It’s not uncommon for moms to dress their daughters like ‘mini-me’ wearing matching outfits for the world to see. The same thing happens with fathers and their sons. The swimsuit suit brand Vilebrequin has based its entire business model on the fact that every dad can buy for his boy an identical but smaller version of his bathing shorts to show off at the beach. Purchasing designer clothes for children used to be considered a wasteful practice, because they’d be outgrown so quickly. But now, buying expensive items with an imminent expiration date has become a new way to boast one’s financial wellbeing.
French company Children Worldwide Fashion (CWF) knows this for a fact. With a global presence of 2300 shops in 72 countries, CWF designs, produces and distributes childrenswear collection by Burberry Kids, Chloé Girl, Little Marc Jacobs and Timberland. This is just the tip of the iceberg, because many Chinese companies (like the giant Li Fung) that purchased production sites in the U.S. have swaggered into the childrenswear business as a game changer. In fact, kids apparel plays a strategic role in distribution too: while boutiques that sell luxury brands for adults have almost all been transformed into direct retail, childrenswear has actually given rise to franchising, and can be distributed through an extensive franchising network. Starting out with a licensing contract, the licensee can make profit, even though he or she is not the brand owner, without investing directly.
In all this, we must not forget the impact which childrenswear has on all social media networks. Its media and marketing appeal has made it a serious business. Mothers, famous or not, love to post photos online of their kids dressed in the latest fashion, and for many celebrities, designing kids apparel has become a trend. This has created two extremes in the market, with Dior at one end, and Zara at the other. The little ones are catching on quickly. From the tenderest age, they have learned how to look right on Instagram and promote their youthful image – a phenomenon unknown to – or worse, encouraged by – their parents. Luxury brands are banking on the dangerous habit of kids and adolescents, from age 8 to 14 posting photos of themselves that veer on borderline appropriateness, seeing the potential profits of childrenswear overshadowing adultswear.
While Dior has been designing a kids’ line since 1967, and Gucci, Fendi as well as Dolce & Gabbana since the 1990s, it is only in the past couple of years that luxury brands – over 30 of them – decided to launch a collection for the little ones (of which Numero 21, Ermanno Scervino and the comeback of Miss Blumarine). Ninety percent of these do so through licensing to the sector’s experts, such as Brave kids (Dsquared2, John Galliano, Trussardi, Marni), Simonetta (Roberto Cavalli, Fendi, Lanvin and Pucci) and la Sabor (Inter, Milan, Disney, etc). They invest heavily in on and offline marketing, as well as some of the most important trade shows in childrenswear, such as Pitti Bimbo. At the last edition of Pitti Bimbo in Florence, Raffaello Napoleone, the organization’s deux ex machina, announced that there were 460 exhibiting companies in the kidswear department, 47% of which were from abroad, and attracted over 8000 buyers. These numbers are not just record figures, but also indicate the major players who are quickly changing the fashion system. Baby style icons know that this is their moment to shine. With thousands of followers on Instagram, they are not even 10 years old, but are already affecting the spending of millions of euro. They are @coco_pinkprincess, @stellaandblaise, @miasaidno, @ministylehacker e @___zuri – the miniature Chiara Ferragnis who will very soon have the most historical brands wrapped around their little fingers and call the shots.
Alessandro Maria Ferreri is the CEO of The Style Gate
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