Has the internet had an effect on the auction business?
Yes, absolutely. I would say that the second key factor in changing the business has been driven by the internet and technology. Technology plays a huge part in everything we do: people can bid in our sales live over the internet, which they certainly weren’t doing 15 years ago, and they also have the ability to communicate globally through our website. So all our catalogues are available online – people can now get into our sales from absolutely anywhere in the world: go through the website, look at the catalogues, flick through, see image after image and learn about the works of art that are selling, and then enter the sales and bid online. The other big consequence of technology has been improved data, and the ability for everyone in the world to get data on the art market, which was effectively closed to them before unless they were an industry insider. With the internet and the creation of art databases, such as Artnet which is the biggest one, there is a much greater level of transparency in pricing, so people can actually compare works of art by artists over time to see what their values are, which gives much more con?dence to many more people about the investment they are going to make. When you buy a car or a house, you want to see comparables – you want to get as comfortable as you can be that you’re buying at the right price and you’re buying something that has lasting value. Before, you couldn’t do this – you couldn’t look up, for example, Fontana and see all the auction records from the last 10 years and all the price points that his paintings have been sold at. But if you can see that they consistently sell at certain levels you can be much more confident about making that purchase, so that’s had a big impact on us. The internet and technology have enabled our business to grow very quickly.

Has ‘new wealth’ altered the face of the art world?
Yes, and this is the third factor in driving change – the huge amount of wealth generated over the last 15 years by the breakdown of the old east/west, the re-emergence of Russia and the growth of the eastern European countries. It’s encouraging that the new wealthy are becoming clients of ours. Russian oligarchs are coming to us in big numbers – they were only just beginning to exist 15 years ago. China also has a huge impact on our sales because there are very wealthy people being created almost every day in China. It also has a rich artistic history – like Russia – that these new wealthy clients of ours are looking at with interest. Wealthy people in China and Russia are not only interested in art, and in the heritage of a country in terms of its art, but they also want to establish themselves as great collectors of art. So changing tastes, technology and new wealth have combined to explain our successful sales figures for the first half of 2010 [see p11] and also to explain such a quick return of scale, confidence and volume in our market.

What do you feel about the increased movement of art around the world?
Broadly speaking, if you look over hundreds of years of art collecting, there have always been massive movements of important works of art away from one country to another, when economic power has moved. You can trace it in Europe: great collections in the UK were put together when it was the most powerful economic force in the world. People were buying works of art out of Spain, Italy and France and you can see the economic power being asserted through the creation of these collections. The last really great emigration of works of art occurred at the end of the 19th century and throughout the 20th century, when American economic power established and asserted itself in the art world by pulling great works of art out of Europe and the UK to the US. And now we are witnessing the next big art emigration, which is the Chinese, Russians and the Middle East looking to find these great works of art which started off in Europe, went to the UK, then the US and are now being sourced in American collections. It’s all about economic power and about patronage and this is what’s driving these big shifts in our client base and therefore our sales. The ebb and flow of works of art, along with wealth creation.

How has Christie’s itself changed?
We’ve changed a lot – one of the key aspects of the company is its heritage and tradition and it’s been very important for us to preserve that, but at the same time we have to innovate all the time in order to stay ahead of the game and relevant. So what does that mean in terms of those three factors that have driven our business? It means that now we have to be equipped to deal with a completely different client base from what we had 15 years ago. We have traditionally employed people who can work with our client base and one of the reasons why Christie’s was seen 15/20/50 years ago as quite aristocratic and blue-blooded was because these people were essentially our client base. So people involved in that world were happy to work at Christie’s and we were happy to employ them. Now our client base is Russian, Chinese, Arab – right across the board – and so we, as a company, have slightly changed in character through the people we employ. We have a very large employee base in Asia – in Hong Kong – we have a very successful and powerful business in the US, which is largely American, and at our London base there is a much more cosmopolitan work force, with people dealing directly with the diaspora of Arabs and Russians and increasingly Chinese people in London. So that’s had a pretty profound effect on us – the change in our client base has changed our organisation and how we communicate and work with them.

There have also been changes connected with the change in taste. Our offices now have a very clean, modern feel to them. If you had visited a Christie’s office 15 years ago, there would have been very grand, thick-pile carpet, gilt, wood – everything that spoke of the aristocratic past I was talking about. Now it’s all about modernism, less is more and contemporary design. So all Christie’s offices have a contemporary feel to them, which is very different. The changes have been pretty significant and we are a much more profitable and bigger company than we were 15 years ago as a result of it.

What difference has being under the ownership of François Pinault made to Christie’s?
The obvious answer is that François Pinault is passionate about art – particularly contemporary art and living artists – so his vision for the company was very much to see us expand into that area, which was perfect as it came at exactly the same time as the world’s tastes were changing – he was at the forefront of that. So he’s been instrumental in giving us the confidence to understand and accept that change was taking place, and to adapt the organisation. He’s been very influential in terms of the guidance of our look and feel and what we should be aspiring to. He’s also one of the world’s most successful businessmen and you don’t achieve that without looking at the bottom line, so he’s introduced disciplines to us as a company that have been helpful in terms of being more efficiently managed and creating more profit. So there are two sides to François Pinault: the very successful businessman and the art collector and connoisseur.

Do you consider your customers to be mainly collectors or mainly investors – and what is the extent of crossover between the two?
It’s unwise to think that they are mutually incompatible and anyone who has put great collections together in the past would always hope that it would retain some value. But there has been change over recent times for people who are putting together a collection of art – they have a little bit more of an eye to the value as it’s such big money now. In real terms, the investments they are making in great works of art are much greater than they were before. So it is important to most of our clients now that there’s some store of value in the purchase they’re making. At the same time, the thing that fundamentally drives their purchasing – and what we would always hope drives their purchasing – is the emotional engagement with the work of art, that they really wanted to own that work of art, that they understood it, that it said something to them and that they are driven by all the things that have driven people over the years who are putting collection of art together. But they would always have an eye on the potential value. There are very few people now – although I’m not sure there ever were – who would happily spend a couple of million pounds on something that would be of no real value. If you make that sort of purchase, you hope it will retain value over time.

There has been quite a lot of work done on art market indexes now and reports have been done that give some comfort and show over time that art retains value and I think that has also helped in giving people confidence when putting collections together – they can come, buy things they love and put great collections together but, at the same time, potentially have a little investment there that might show big returns over time.

Do you think that some people are now viewing the acquisition of art or antiques as safer than other ways of investing?
No one sees it as safer. I think people who want safety go to gold or government bonds, but I do think people think art is an interesting addition to their investment portfolio. Certainly when the market was at its peak, two or three years ago, we saw a lot of people who had very successful investment portfolios running to hundreds of millions of
dollars, and they would look at a small portion of that and say, well, I could have £20 million in works of art that I love and could use to decorate my house, but also, interestingly, they could form a bit of a hedge in my investment portfolio against some of the other assets I hold because they are tangible. So I think people certainly were looking at it as an interesting addition, or as an alternative investment with a little bit more risk involved – but it had the added value of beautiful things you could decorate your house with. And that has bedded in as a concept in people’s minds over the last three to five years and that’s been beneficial to us. Quite a few people have made extraordinary returns on investments they’ve made – if you were lucky enough to have bought Chinese works of art four or five years ago because you had the foresight to predict this extra growth of the Chinese economy, you would have made an absolute fortune. If you were lucky enough to buy the works of Jeff Koons, Damien Hirst and others 10 years ago, you were sitting on big gains. I think, broadly speaking, there’s an awful lot more investment going on in our world than there was before by people who understand that it’s fairly high risk.

How are prices looking compared to a few years ago?
What we mustn’t assume is that all categories are responding in the same way. We’ve seen an expo in certain categories, Chinese works of art, contemporary works of art, classic post-war works of art, 20th century decorative arts and of course jewellery & watches have been extraordinary performers – some areas haven’t ridden that taste wave change and some of our more traditional areas we’ve seen a much flatter pricing in recent times. The most obvious change is that the exceptional works of art are making even more money in real terms than they were a few years ago because more and more people are coming in and competing with more money for the same works of art, so we’re seeing the top end beginning to move much further away from the general price rise, so the great Picasso we sold in New York in May along with the Giacometti sculpture made very significant sums of money. We will continue to see that happen. The very, very, very best things we sell, we’ll continue to see sharp price rises over the next few years.

Why do you think jewellery & watches have done so well in particular?
Jewellery, and particularly diamonds, have always been seen as a good store of value. They are very appealing to people who want to make a glamorous, beautiful purchase, but at the same time, have something that is quite easily changed back into cash. The Chinese buying in this category has been very, very strong. Watches are massively benefitting from this greater amount of wealth in more people’s hands. There are more and more people in the world who are able and willing to spend $150,000 or even half a million dollars on a watch, and that’s a consequence of the general levels of wealth. A Patek Philippe watch sold for over five million dollars in Geneva two months ago – a world record for a watch – and I think this is symptomatic of how strong luxury generally is performing even in these austere times – there are still people with lots of money who are spending it on themselves and enjoying it.

Is it possible for collectors to pick up bargains at present?
There are many areas of the market at the moment that are probably a bit undervalued and now is a pretty good time to put a great collection together of 19th-century pictures, 18th-century English furniture, 18th-century French furniture, Victorian watercolours. There are all sorts of really good and interesting categories that we know have lasting value, because people have been collecting them for 150 years, which are relatively underpriced because they are under the radar of the new emerging markets. The Chinese or Russians don’t necessarily want to collect them, and they are slightly out of the taste cycle, but they will return. If you are interested in putting together a collection of great art, you can come along to Christie’s King Street and Christie’s South Kensington and buy amazing things for less because they are slightly out of fashion. We have people who become addicted to auctions because they are so interesting. I think it’s absolutely the right time. The stellar results we’ve released are largely driven by the top, top end of the market, but in other parts of the market, there are some very reasonably priced things to be found.

Do auction houses have to work to maintain a sense of glamour?
It’s very important for us as a company to create the right environment for the presentation of great works of art – and there is an element of glamour or magnificence about them. Of course, some things we sell are quite sombre – they aren’t always associated with joy and happiness and glamour – but they are still wonderfully important and awe-inspiring objects. So we need to work extremely hard to create the right environment so that people understand how important what we’re selling is. And so we do work extremely hard to make sure the importance of the works of art to our collecting base and to society generally is reflected in how we present ourselves. So we do try and create the highest level of glamour and presentation. Most of our clients expect that. For example, we now have Masterpiece exhibitions here, and in June we staged an exhibition of the highlights of what we had coming up over the next couple of months. It was called Juxtaposed and we showed the best of the things we had coming up and presented them in challenging ways, so we had a Salvador Dali juxtaposed against a copy of a Salvador Dali by a living artist called Glenn Brown. It was an interesting exhibition and we had parties around it, so we injected some glamour into it.

Interestingly, the Glenn Brown was estimated more highly than the original. When we sell jewellery, in particular, it’s a very glamorous event. There are times when the auction and retail do cross and we have to be conscious of that. And that’s all about staying ahead of the competition and our main competitor in particular. We do that by making sure we have the best of everything in order to stay ahead.

And what about Christie’s future?
The future of Christie’s is very bright. We are owned by a company that is totally committed to luxury as the business to be in in the future, and I think recent events and company profits are showing that that is the right place to be. We are extraordinarily well-placed as a company because it’s almost a perfect storm – we’re in a very powerful, worldwide position which enables us to look after new clients as they come and also source great works of art. I can’t see anything but continued global success in the future. The problem I have as chief executive is not trying to identify opportunities, it’s trying to organise ourselves so we can take advantage of these opportunities, which I think is a very lucky position to be in.

Edward Dolman, CEO, Christie’s

Most recently, Coach announced its European expansion strategy under its partnerships with French department store chain Printemps and British retailer Hackett Limited. Speci?cally, the brand plans to unveil at least 14 shop-in-shop locations at Printemps throughout France over the next three years, as well as stores in the UK, Spain, Portugal and Ireland through Hackett, with the ?rst locations opening in Portugal and Spain this fall. The ?rst 1,700 sq ft shop at the Printemps ?agship in Paris, which opened in June, has witnessed solid initial results, drawing both locals and tourists alike.

Meanwhile, Tiffany continued to bene?t from the robust demand in Europe, where the 1Q10 comp sustained its double-digit momentum at 14% thanks to strength across the continent. While around half of Tiffany’s sales in Europe are derived in the UK, the iconic American jeweler is gaining robust traction in other countries, such as Italy, which attracts a fashion-savvy self-purchaser. Still representing a fairly untapped market, Tiffany plans to double its current base of 27 stores in Europe, including two new boutiques in London and Spain during 2010, while it recently launched an e-commerce site that services Austria, Belgium, France, Germany, Ireland, Italy, the Netherlands and Spain. Additionally, online jeweler Blue Nile has witnessed healthy growth from its expanded European presence over two years ago, which included Belgium, France, Germany, the Netherlands, Spain and Switzerland. Other luxury brands, such as Calvin Klein, David Yurman, Marc Jacobs, Michael Kors, Ralph Lauren and Thom Browne, have also stepped up their European exposure.

As the US brands further penetrate Europe, perhaps we could begin to see the development of more localized lines cut in slimmer shapes and styles.

Supplied by Telsey Advisory Group

However, there is one trend that I seem, inadvertently, to have fallen victim to – the vogue for being niche. It happened like this. One of my friends is Charles Finch. Charles is a lovely man, generous-hearted and optimistic, and also a killer salesman: he is a man capable of selling you your own internal organs and having you believe you’ve made the deal of the century. As he is fond of saying, Charles runs a multi-million pound business which, as far as I can tell, is more or less about being Charles Finch. He makes films. He performs nebulous ‘special services’ for special people. Said special services are sought by huge corporations. He speaks at global conferences. He advises luxury brands. He works closely with Academy Award winners like Kevin Spacey on their creative projects. And he can throw a party like no one else I know.

Plainly put, Charles is so likeable that very few people have it in their hearts to refuse him what he asks for, so when he said he would like to start a publishing company, I agreed to help him and, together with my old friend from Oxford, Tristram Fetherstonhaugh, we have created a thing that is effectively my warped journalistic view of what I would like Charles’s world to be about. The result is the flavoursome literary souflé known to the seven thousand or so people who receive it as Finch’s Quarterly Review. To call this newspaper niche is to describe the Pope as being almost imperceptibly inclined towards Catholicism, or to say that the ursine inhabitants of the wilder parts of the world have, on rare occasions, been known to evacuate their bowels in the woods.

Finch’s Quarterly Review first appeared in summer 2008 and, to be frank, I thought it would be so niche that one issue would be more than enough. For reasons that remain opaque, this has not proved to be the case. Every three months or so a new edition makes it into print and winds up everywhere from the Elysée Palace to Mustique. Moreover it breaks even, selling enough advertising to cover the admittedly minimal outgoings on staff, printing and distribution.

Its continued existence is a pleasant surprise to me and, as the owner of 20% of it, I also take the sort of mildly detachedly benevolent proprietorial view that puts one in mind of Mr Casby in Little Dorrit. But, more importantly, it has also provided actual proof to me that, in a world of homogenised and standardised celebrities, focus groups, MBAs, global brands, and all the other voodoo and ju-ju of modern marketing, individuality can still triumph… well if not triumph then at least survive and flourish.

Don’t get me wrong, I love brands when there is a connection with a real person or a guiding principle that stands for something (and perforce against something else). However, travelling here and there as I do, I react badly if asked whether I have seen the Prada store in Tokyo, sampled the Six Senses Spa in the Etihad lounge in Abu Dhabi airport, or visited the new Four Seasons wherever the new Four Seasons happens to have opened… you might as well as ask me if I enjoyed my McDonald’s McFlurry in Rome or my Starbucks in Vienna.

The other day I was talking to John Ceriale, the visionary hotel consultant to the Blackstone Group. Ceriale changed hotels in London when he bought and jazzed up what used to be the Savoy Group, installing fashionable bars, big name restaurants and effectively bringing the concept of franchised fine dining to Europe. He told me that if he were to do something similar again, he would be unlikely to outsource the F&B side of things, but do something ad hominem (or ad hotelem), making the experience a specific one, unavailable elsewhere, in other words niche… and Ceriale is one helluva a smart guy.

In its modest way, what Finch’s Quarterly stands up for is the original, the unusual and the interesting. The autumn issue is out soon and it brings you such unusual treats as Charlie Gladstone (co-founder of Luxury Briefing, incidentally) writing about his less well-known famous ancestor Cecil Beaton (accompanied by a great Bailey portrait) and the third in our cult series ‘Germans in High Heels’.

At the risk of sounding appallingly sycophantic, Finch’s Quarterly Review came into being and survives because of one man’s belief in an idea. And it makes me wish that more people would have the courage of their convictions rather than trusting to overstretched brands and hastily convened focus groups.

Nick Foulkes

Sure, the One & Only has opened opposite them, all the talk of the town – the bling, the celebrities, the Nantucket modern fabrics and a façade that looks like an Egyptian Pharaoh has gone over Cape Town with desert palms and Las Vegas lights – but when the lights go down, those in the know slip over the marina to the Cape Grace library for a glass of port. Here, the bling, the bluster and the suits with labels that cut you like razor blades are all a memory. And it was here that we and a chosen audience considered carefully a few future strands in luxury, and the luxury moment. Trends including rough luxe, destination luxury; even mobile luxury. Luxury with an approach that is more in keeping with the changing needs of consumers today. So here goes.

Rough luxe
As a direct reaction to bling, Rough Luxe continues to be a force in design to be reckoned with. A term coined by Rabih Hage and realised in his hotel of the same name, it has become the new look du jour for twenty- and thirty-something luxurians who want a little edge with their polish. It can be seen in Paris, in L’Eclaireur’s multi-experiential retail space, in Alexa Lixfeld’s perfume packaging, and in Lisbon’s new Museu do Design e da Moda – and it is fabulous. This shift against luxury’s more excessive concerns can also be noted in Moscow, where Magazin Kuznetsky Most 20 recently opened to acclaim among luxury consumers in the know about what is new, next and acceptable.

Destination luxury
Hotels are increasingly hosting visiting luxury stores. In London, Liberty set up shop in The Sanderson’s lobby, while the St Martin’s Lane hotel hosted mini-outlets by fashion brand Comme des Garçons, furniture company Established & Sons and retailer Dover Street Market. In Shanghai, Chanel opened in the Peninsula Hotel. Armani and Prada stores are set to join the company there soon. This is a trend we have called ‘destination shopping’, and for luxury brands looking for new, easy ways to set up venues, it is an idea to consider.

In a shift toward the higher stages of the Luxury Lifestyle Matrix we have developed to place brands within a grid that helps them better understand the consumer (more of this in our next column), brands are engaging consumers through more senses in quite subtle, yet poetic ways. At ground level, the new Aesop store in Singapore looks like a normal, slick space. Look up, though, at the ceiling made from coconut husks, and you cannot help but have a visceral reaction to it. Hermès’ recent window displays by Japanese designer Tokujin Yoshioka evoke a fun sense of wind. As a woman on a screen blows, the Hermès scarves in the window ruf?e. At the London Design Festival, Corncraft celebrated the beauty of corn, showing the crop transformed from inexpensive raw material to re?ned, sustainable design.

Mobile luxury
As a response to our changing times (and the vicissitudes of the luxury consumer), many brands are now visiting the consumer. “I was one of the ?rst designers to take the plane and ?y out to the Middle East to my clients to see where they live and what their lives are like,” says French couturier Stéphane Rolland. “The time when a designer could sit in a beautiful ivory tower is ?nished.” Gucci is one brand not sitting in its ivory towers. Its Icon-Temporary store moves from city to city, offering goods unique to each location, based around events such as Design Miami in Florida in December. The moving store concept has also been successful for Belgian fashion retailer, Clemens en August. Rossana Orlandi opens a store in Sardinia’s billionaire playground, Porto Cervo, each summer. The fashion label Guerilla Store Aktion 1 is following a similar, slightly artier version. Once its ?rst store, which opened in Antwerp in December, closed in March, it moved to a new city. It uses former boutiques, launderettes, bakeries and other unique places to house its collection. From Net-a-Porter’s mobile app to the more dynamic, untethered retail concepts of recent months, it is clear that innovative retail increasingly means going to where the consumer is.
Once there, a brand has to use the techniques and technologies hitherto associated with the art, design and alt.culture scene to imbue itself with the magic, theatre, provocation and experiential moments a new generation of luxury customers now expects as standard if they are to be lured away from the all-pervading presence of the keyboard and social networking. Jason Beckley, general manager of Europe, US and Middle East for Dunhill, agrees. “The future is how we take luxury service to our customer,” he says. “How we can serve them to the highest level whether they are in our homes or in theirs.”

True. But over and above all of this comes service, something the Dunhill team excels at, and something we will see more of, as luxury consumers return slowly to the market over the coming year. Service with a smile, yes, but service that uses everything from the internet, to Foursquare, to the growing number of loyalty cards we predict major luxury brands will be issuing in September, to do one very simple thing – offer you more ‘face time’ with the brand, as they say in the US. Face time meaning a sales person in the store, or a manager in the hotel who addresses you by name and knows your form. So it should and must be, if luxury is to embrace the one thing that has been in short supply in those heady years of the long boom. Manners.

www.thefuturelaboratory.com

So far, with over half of our companies having already reported CY2Q10 sales, we continue to see a sustained recovery in the luxury goods sector, driven by (1) easier comparisons; (2) a rebound at the high end; (3) ongoing restocking of perfumes and watches; (4) outperformance of Asia-Pacific ex-Japan and the Americas; (5) higher full-price selling; (6) retail store expansion; and (7) an uptick in wholesale performance. Encouragingly, Bulgari, Coach, LVMH and Tod’s indicated a continuation of healthy trends through July.

By product category, fashion & leathergoods continued to outperform other divisions as consumers flocked to the brands that command the strongest cachet. Specifically, Burberry’s 1Q11 (CY2Q10) constant-currency sales accelerated to 21% (including Spain) from a flat performance in the previous quarter thanks to better-than-expected results across all channels, including retail (up 16%), driven by increased full-price selling, a 10% comp and new space expansion. Additionally, Coach’s 4Q10 (CY2Q10) total sales climbed 13%, up from 12.3% in 3Q10 due to the outperformance of the wholesale channel (up 15%) and the sustained double-digit comp momentum in China.

At the pinnacle of the luxury goods pyramid, Hermès’ leathergoods division outperformed, jumping 23.2% at constant currency during 2Q10 from 22.1% in 1Q10 despite a much tougher comparison of 21% (vs 10.2% in 1Q09) as it benefitted from the launch of new small leather accessories and leather bags as well as the continued popularity of the iconic lines, such as the Birkin and Kelly. Meanwhile, LVMH’s fashion & leathergoods division soared 18.6% at constant currency during 2Q10, accelerating from 10% in 1Q10, helped by an easier comparison of (2%) (vs 4% in 1Q09), sustained double-digit momentum at core Louis Vuitton (benefitting from the opening of the London Bond Street and Shanghai flagships), and continued improvement at the other fashion brands, such as Fendi and Donna Karan. Posting the lowest growth rate, Tod’s 2Q10 constant-currency sales rose 5.6% vs 3.1% in 1Q10 as a result of an easier comparison of (1.5%) (vs 4.9% in 1Q09), strength at DOS, and the outperformance of the core Tod’s brand.

Meanwhile, watches & jewelry has so far posted solid results, helped by the sustained rebound in discretionary spending. Specifically, Bulgari’s 2Q10 jewelry sales climbed 10% at constant currency vs 11% in 1Q10 thanks, in part, to the successful launch of new styles in the entry-level B.zero1 collection, while watches fell (8.4%) from (0.4%) in 1Q10 due to the discontinuation of the old Gerald Genta and Daniel Roth lines and the negative impact from the different timing of the Baselworld deliveries, where the new watch collections are expected to be delivered in 2H10 vs 2Q09 LY. However, excluding these factors, sales would have increased 14%
during 1H10.

Meanwhile, LVMH’s watches & jewellery division increased 16% vs 34% in 1Q10 as a result of a tougher comparison of (27%) (vs (41%) in 1Q09), with strength at TAG Heuer, particularly in the US and China, and at Hublot, which benefitted from the successful launch of the King Power line. Swiss watch exports priced CHF 3,000+ (or $2,655+) outperformed during June, increasing nearly 40% vs 14.2% in May, which should bode well for Richemont, where watches represent around 35% of sales.

By region, Hermès’ sales in the Americas accelerated to 27.9% at constant currency, up from 25.2% in 1Q10, helped by the success of the new men’s store in New York. Also posting robust results, Asia-Pacific ex-Japan continued to benefit from broad-based strength across most markets, including China, Hong Kong, Macau, Singapore, and South Korea. Burberry sustained its double-digit comp pace in the region, while Hermès’ Asia-Pacific ex-Japan sales outperformed, as it benefitted from two new store openings in China. Japan’s performance remained lackluster amidst the ongoing economic malaise, which has spurred a growing base of more value-oriented consumers. Bulgari’s 2Q10 constant-currency sales retreated as DOS outperformed the challenging wholesale network, which suffered from weak traffic at the department stores. Europe represented a mixed bag during 2Q10.

At Bulgari, both Italy and Europe ex-Italy treaded in negative territory as softness in local consumption due to the weak macro conditions offset improved tourist spending. At Tod’s, Italy was surprisingly the weakest link: the Fay brand was impacted by the different timing of spring/summer deliveries. On the flipside, Europe ex-Italy climbed 16.7% from (5.5%) in 1Q10 thanks to an easier comparison of (10.4%) (vs (4.7%) in 1Q09) and a solid DOS performance.

Dana Telsey, CEO & Chief Research Officer
Telsey Advisory Group, tel: +212 973 9700

However, this new reality also offers opportunities for forward-thinking luxury brands to unleash the value of sustainability. These brands will look to move beyond mere compliance and begin building upon the work and commitment they are showing internally to create compelling communication initiatives that have an inspiring purpose and genuine relevance in people’s lives. Luxury brands have long traded in aspiration, and now they have an opportunity to use sustainability to inspire and galvanise positive social and environmental change and, in doing so, deliver sustainable business growth and prosperity for themselves.

For too long, brands looking to communicate their sustainability credentials have made the same mistake – they have looked inwards, at their own work, and not outwards to explore the possibilities of collaborative improvement. Sustainability is more than just improving processes and reducing waste (although these are important) and then communicating these changes, because for the average consumer, these issues are simply not engaging or relevant to their day-to-day reality, and they are certainly not luxurious. The key to success for luxury brands lies in providing services and experiences that stem from their core proposition (thereby making them credible) and that bring tangible and positive bene?ts to people’s lives and their communities.

What could this new de?nition of ‘Sustainable Luxury’ look like in reality?
Imagine trailblazing urban design and regeneration projects: shifting traditional advertising budgets towards projects with legacies that stretch beyond campaigns. Think about adding your own touch of mastery to the things that really matter to your customers. Move away from hiding mediocrity in ?awless aesthetics to designing pieces that ?nd the delicate balance between beauty and function. Consider leveraging your brand’s unique presence at some of life’s biggest celebrations. Find ways to spread the happiness of individual celebrations and triumphs amongst a wider community.

And never be afraid to push the agenda. The most iconic and successful brands have always led the way on issues that have mattered personally to them, yet which bene?t their customers too. Vivienne Westwood’s decision to ban plastic water bottles from all of her shows and partner with SIGG, makers of eco-chic reusable bottles, is a great example of this, because by encouraging positive behaviour change amongst key opinion formers and celebrities, the two brands have been able to generate positive repercussions that extend far beyond the end of the catwalk.
Act now. Because whilst this new de?nition of ‘Sustainable Luxury’ offers brands the opportunity to inspire positive change and build upon the attributes of quality and exclusivity that have engendered such loyalty and trust amongst their consumers, like all great exclusives, it won’t be around for long…

Tom Crawford is a Senior Communications Strategist at Clown?sh, a Sustainability Communications Agency, whose premium clients include KENZO, SIGG and Ingle & Rhode

HNW men in London waive prenuptials
Only 8% of London men earning more than £100,000 currently have, or plan on having, a prenuptial agreement (Mishcon de Reya). 56% believe their relationship is solid enough to last without such security. The remaining 36% considered the prenup but decided against it.

FTSE 100 directors’ pay on the rise again
Bonuses for directors of FTSE 100 companies rose by 22.5% in the six months to January 2010, bringing the average annual bonus from £456,000 to £558,000 (Income Data Services). Last year, bonuses for FTSE 100 directors fell by 30%. The study, which comprised 237 directors from 180 listed companies, found that basic salaries also rose. The total increase for those in FTSE firms was 23.4%, while directors at AIM-listed companies saw a decline of -0.8%.

Different sources of wealth lead to varying attitudes in US
Self-made US HNWIs with investable assets of more than $500K are more likely to be confident about their future finances (77%) than those who inherited their wealth (67%) (PNC Wealth Management). They also tend to have a greater appetite for risk, and 51% believe that wealth has a positive impact on happiness, compared to 33% of those who inherited it. The latter see it as a responsibility to look after their wealth for the following generation, resulting in a more conservative approach to investments.

Number of UK property millionaires up
The number of homeowners whose properties are worth more than £1m has increased five-fold since 2000 (Santander). Then, fewer than 27,000 people owned houses valued at £1m or above, but that has now risen to 132,000. It is estimated that approx 30 homes pass the £1m mark daily. 80% of properties are in London – Kensington & Chelsea, Mayfair, Knightsbridge. Separately, Knight Frank reports that the majority of properties worth over £5m are sold to overseas buyers, particularly since the decline of sterling over the past two years.

Extracted from Ledbury Research’s High Net Worth, a monthly digest of news, analysis, trends and forcasts about the world’s wealthy. Please contact highnetworth@ledburyresearch.com

2. Since the opening of Raymond Weil’s first boutique in India, in New Delhi during June, a further two have followed in Chennai, in the Express Mall, and Mumbai. The watch brand is also due to open a number of shop-in-shops across the country in Goa, Calcutta, Delhi, Hyderabad, Bangalore, Cochin and Pune.

3. Sales of Mercedes-Benz surged by 69% in India during the first six months of 2010 according to a statement by the company, while BMW said that it had seen a 25% growth in sales, indicating a growing market for luxury car brands in India. “We expect India’s premium segment to grow more rapidly than the market as a whole in the coming years,” said Mercedes-Benz’s Dr Joachim Schmidt. Overall sales are expected to grow by 12 to 13% this year, according to the Society of Indian Automobile Manufacturers.

4. The Maharaja of Jodhpur’s new collection of hotels, Jodhana Heritage Resorts, is unveiling its first property this month – The Ranvas – The Abode of the Queens. The flagship resort is located within the walled Fort of Nagaur in central Rajasthan and offers 10 restored havelis (former residences of the wives of the Maharaja of Jodhpur) each with three bedrooms and private courtyard and furnished with rare artefacts. The Jodhana Heritage Resorts comprises properties and tented camps in the Marwar region of Rajasthan.

5. The summer saw the Taj Mahal Palace – one of the scenes of Mumbai’s terrorist attaches in 2008 – re-open its Palace Wing after extensive renovation. Undertaken by a team of designers from Lissoni Associati, Milan, BAMO, San Francisco, LTW Design Works, Kuala Lumpur and James Park Associates, Singapore, the revived Palace Wing includes the Taj Club rooms, luxury rooms and suites. Commenting on the opening, Raymond Bickson, managing director of Indian Hotels Company, said: “The Palace Wing has been lovingly and painstakingly restored, and we now offer our guests an even more customised experience. It is a fitting tribute to the spirit and resilience that is The Taj Mahal Palace Mumbai, and the beginning of a new chapter in the history of the hotel.”

Palace Merano, however, has set out to make austerity – and self deprivation, even – feel extremely comfortable. Tucked away in the pretty historical town of Merano in the Italian Dolomites, Palace Merano attracts many nationalities (Italians, French, Russians) to its Espace Henri Chenot: at its simplest a very expensive and effective weight loss clinic, but also a spa for those who want to feel really well again. The key to this place is that every single guest must participate in the health programme. So, unlike other hotels with spas, there are no temptations to detract from the goals of wellbeing, weight loss and ?tness. Most of us ?nd it hard to rebalance ourselves without some professional help: how much more motivated are we likely to be if surrounded by tens of others undergoing a similar programme?

There are other well-known clinics with a loyal following, such as the Mayr clinic in Austria, but these traditionally have tough regimes and fewer luxuries, so that staying there can be a challenge in itself. A casual summer visitor might mistake Palace Merano for a large, luxurious European resort hotel, with guests lounging by impressive pools and enjoying drinks on the terrace. Closer inspection reveals that the bar area is only stocked with strange sounding juices and teas, and that there’s a hint of consomme on the air on the day when everyone is of?cially fasting. Behind the scenes, doctors and therapists in white coats wait to get to work on their patients.

Espace Henri Chenot is the creation of Henri Chenot, 67, who combines western scienti?c training, including a master’s degree and doctorate in psychology, with expertise in Chinese medicine and 40 years’ experience. He created the ?rst laboratory of Phytocosmetics in 1970 and, as president and founder of the International Phytocosmetics Association, began to travel Europe to illustrate his own idea of preventive health care. Chenot opened the ?rst Espace Henri Chenot at the Cannes Polyclinic in 1974 and in the early 1980s he transferred to Italy, where he inaugurated the Merano Espace Henri Chenot. In 1999 he created Biontology, a new concept for studying the evolution of psycho-physical ageing, founding the Academy of Biontology in 2004 and the Biontology Laboratory in 2008.

“Health,” he says, “is the balance of our genetic code, lifestyle, age and surrounding environment, which in?uences our physical appearance and psychological state. You need to live in harmony with yourself to be in good health. Illness occurs when this balance is broken and is manifested both physically and mentally. When the body detects such an imbalance, it tries to cure it ‘naturally’ if it has the time and means to do so. Detox treatment allows it to recover.”

Every guest is under constant medical supervision (delivered in different languages) and has regular massage and hydrotherapy sessions. The standard programme features drainage and energy treatments which aim to eliminate toxins whilst promoting harmony of body and mind. Diet, however, is everything. Under Dominique Chenot, the hotel serves delicious food – in minute helpings, naturally – and the charming Italian waiters manage to make a decorative display of salad leaves feel like a course from a Michelin-starred chef.

Most guests stay for a minimum of a week and soon start to enjoy the routine of medical appointments, bio-energetic check-ups, mud wraps, jet washes, massages, cookery lessons, ?tness lessons and other treatments. White dressing gowns are the only day dress and everyone carries his or her own well-organised personal ?le reminding them of appointments and containing the exciting weight loss chart that gives a sense of purpose for the week. Not every guest has to do the full detox diet (there is an alternative ‘healthy’ option), but most do, and it de?nitely leaves you hungry. Detoxing can affect people in different ways, and occasionally leave you feeling very unwell. But at least the 5-star environment helps to counteract this: it’s considerably more comfortable than some establishments in France and Austria where it really is a case of “Lights out!”

As more and more stressed out people need their annual detox, so the hotel has been adding more rooms. Thirty-three of the 98 are suites. The more contemporary top ?oor suites have balconies with inspirational views of the mountains, and are luxurious, with marble bathrooms, LCD TVs, wi? and comfortable sofas. More traditional, elegant, high-ceilinged rooms below are a little more austere but no less comfortable. The mini bar contains only water. In effect, apart from the treatments, what’s special about Espace Henri Chenot is the Tyrolean setting – it has a micro-climate which allows palm trees to grow next to snow-capped peaks. Alpine walks are very much part of the Henri Chenot wellbeing experience (they don’t say whether retail therapy amongst the town’s lovely boutiques is as bene?cial).

The Palace Merano/Espace Henri Chenot recipe has been described by one critic as “disarmingly perfect”. At its heart, though, are practitioners with experience who are really passionate about improving the health and wellbeing of others – and it may be that, with this place, they have got it just right.

www.palace.it; www.henrichenot.com JULIA?OGILVY

On Fifth Avenue, Godiva comes to no 781 in the Sherry Netherland, and Rockefeller Center welcomes Lego to no 620. On the Upper East Side, Urban Outfitters goes to East 86th Street for its seventh city location. Olive & Bette’s moves to 1249 Third Avenue.

In Midtown, the four-level Forever 21 opened in Times Square, 1540 Broadway, to much fanfare. In SoHo, custom bespoke Miller’s Oath goes to 510 Greenwich Street. Touring Company will be opening on Broadway between Grand and Howard. François Payard, talk of the town, opens at 116 West Houston. Moncler goes to 90 Prince Street.The newly renovated Coach store features the Poppy Collection, at 143 Prince Street. Valeria Smith, a designer hailing from Buenos Aires, opens at 85 Mercer Street. England-based Ruia will open at 65 Mercer Street.

In the Meatpacking District, menswear brand LimoLand opens its first American branch at 829 Washington Street.
In Flatiron, Michael Kors goes to 133 Fifth Avenue. Lillian August took the 19th Street corner. Trader Joe’s, at long last, opens at 675 6th Avenue. In the West Village, another Michael Kors is set to open shop at the corner of Bleecker and Perry.

Trend-tracking from the streets of gold: flagships on Fifth Guess opens up at 575 Fifth Avenue, at the south-east corner of 48th Street, while Urban Outfitters opens a few blocks south at 521 Fifth Avenue. Both superstores will be on two levels.

Happy fall!

Faith Hope Consolo, Chairman, Retail Leasing & Sales, Prudential Douglas Elliman 001 212 418 2000 fconsolo@elliman.com