By David Capece, Managing Partner
In this transformational time, many brands are suffering, while a select few are flourishing. Within the walls of luxury, there is an ongoing debate on whether to develop collections or hero items—opposite poles of the spectrum. While the collections trend is about stylistic consistency for a harmonious lifestyle, the hero item trend explores the highly prized gems that eliminate unnecessary and sometimes unwanted items found in collections. Let me introduce our two panelists, Creo the Creative and Ana the Analyst who will share their insights on this luxury brand debate.
Creo the Creative: Let me start out by saying that I am a big fan of collections. Burberry’s success is a part of a rising collections trend in the luxury industry. They had a surprisingly great first quarter.
Ana the Analyst: Yes, Burberry had an 8% uptick, or $375 million increase, in sales for the first quarter of this year. But before Burberry had a first positive first quarter, the two previous quarters showed a decline in sales. Just because Burberry had one solid quarter does not indicate an upwards trend. Furthermore, even with this uptick, Burberry still forecasts a 25% sales decline for the first half of the year. I am going to take the side of “hero items.”
Creo: Well then what’s your example of a successful hero brand today?
Ana: Hermes has resorted to breeding their own crocodiles to meet the demand of their coveted leather handbags. The challenge of producing 3,000 handbags a year made Hermes croc bags an exclusive luxury item that only a few can afford. And for those clamoring for a Hermes croc bag, there is a year wait list. Nine thousand crocs were used to make the limited quantity of Hermes handbags, which fetch a handsome $48,410.
Creo: Hero items are worn to flaunt an affluent lifestyle. In today’s economic environment, egregious displays of wealth are taboo and the purveyors of hero items are stowing their diamond encrusted, one-of-a-kind, most expensive objects. In fact, shoppers along swanky Bloor Street in Toronto are trading their Tiffany blue and Hermes orange for nondescript brown bags, reports Canada.com. It’s frustrating and disturbing for those affected by the recession to see others flaunt hero items. It’s almost a slap in the face for those struggling to just get by.
Ana: On the other hand, collections just add clutter to our wardrobes and jewelry boxes in a time when we are removing excess from our lives. Across the country, consumers are utilizing less storage as they de-clutter their lives. If you don’t believe me, self-storage stocks have fallen 40% from the beginning of the year to March.
Creo: But those aren’t luxury consumers.
Ana: Maybe, maybe not. But it’s indicative of the overall American psyche. Simplify our lives. If you are going to buy luxury, get one iconic piece to make a statement. Let’s take a look at the Black Mamba. Not the snake, Kobe Bryant’s $285,000 Nubeo watch. The over quarter of a million dollar timepiece is a one-of-a-kind designed specifically for the basketball superstar and named after his on-court personality. Thinking like a collections brand, what if the watchmaker partnered with Nike to make a diamond-studded belt or shoes to match? That would be one outfit with a price tag of around half a million dollars. Why not have the over quarter of a million dollar timepiece that can be worn with any outfit?
Creo: Would you agree that Apple has fared relatively well during this recession?
Ana: Yes, they are still growing revenue and their stock is close to breakeven over the past year.
Creo: While some might consider the iPhone to be a “hero” item, at this point, it is a well designed product that fits in with Apple’s overall collection of creative computing solutions. In many ways, Apple is the ultimate modern luxury collection in America.
Ana: I’ll give you Apple, but they already have a great brand and great products with outstanding function. I think they are an exception today. If you look at the car industry, you see that vehicles per household are on the decline and currently at 2.28. In that environment, why not get the ultimate hero car that is luxurious, sporty and fuel efficient? Nobody’s looking for a collection of autos today, except maybe the junk collectors.
Creo: You make a lot of good points. And when you consider that hero items lend themselves well to PR, that’s another check in the hero item column. I’d like to suggest a middle ground in which companies do consider a hero item and also consider the hero item as a part of a collection. Take example from Dupont’s Prestige Collection. The Ligne 2 Champagne Lighter, priced at $79,000 (making it the worlds most expensive lighter), is a part of a collection that also features a fountain pen with matching rows of diamond studs. Tying together key elements of a high-end brand and lifestyle, enables a collection to show stylistic rhyme and reason. You can have the best of both worlds by creating a collection of accessories to personalize your hero item into your own unique collection.
Ana: Wow. It looks like you can score one in the analyst’s column.
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