Luxe is more
Gucci boss Francois-Henri Pinault says luxury is going back to basics
WORDS: JOHN ARLIDGE
WHEN MONEY DIED LAST YEAR, THE LORDS OF LUXURY GOODS SAID THEIR BUSINESS WAS “RECESSION PROOF”. When sales dipped, they insisted their baubles were “recession resistant”. It was only when sales fell of a cliff earlier this year that they finally admitted what many had suspected all along: they are in the same leaky boat as ordinary retailers, perhaps leakier.
But hang on: what’s this? A new, upbeat tune? “One of the consequences of the downturn is that it forces us to go back to basics, to the essence of luxury. We went too far, all of us in the luxury world, in the last five years. Now, let’s go back to the product and do it right.” The speaker? François-Henri Pinault – a man who knows a thing or two about luxury. He runs PPR, the world’s second-largest luxury goods firm. It owns Gucci, Yves St Laurent, Bottega Veneta, Alexander McQueen, Stella McCartney and Boucheron, and generates annual revenues of £17bn.
The dark clouds of recession have a 24-carat lining for the £100bn-a-year luxury goods industry, Pinault believes. After years when every teenager could own a double G logo – even if only on a keyring – class can re-assert itself and luxury goods makers can return to crafting beautiful, expensive and unashamedly elitist products the ownership of which is not just a matter of wealth but a sign of refinement and intelligence. “Clients want a return to genuine values, such as sincerity and exemplary standards,” Pinault says, wearing his trademark sober navy suit, blue shirt and sensible black lace-ups on a recent visit to India.
The 47-YEAR-OLD FRENCHMAN, WHO IS AS WELL KNOWN FOR HIS MARRIAGE - on Valentine’s Day this year – to Hollywood actress Salma Hayek as he is for his business dealings, is urging his designers to make even better products, using rarer and more highly prized – and highly priced – materials. At Gucci, the thoroughbred in his stable of brands, the new Joy bags are now available in crocodile and with new leather trim. There will be fewer obvious logos on PPR products. Gucci’s new Pelham and Jackie handbags, for instance, are recognisable by their shape, not by their logo.
Pinault is not alone in trading up. All the big ‘maisons’ are working on high fashion and costly accessories produced in small quantities and tailored for the super-rich elite, while toning down any hint of bling faster than you can say “stealth wealth”. A handbag’s throw across Paris from Pinault’s office, his arch-rival, Bernard Arnault, boss of LVMH, the world’s largest luxury goods group, has just launched Louis Vuitton’s super-upscale, artistic Sprouse collection, which is targeted squarely at those who can spot fake Fendi at 100 paces.
Arnault believes that the return to the traditional values of luxury is so deep that the word luxury itself should be replaced by ‘quality’. He has also introduced a ‘Core Values’ ad campaign that features tennis player Andre Agassi, Rolling Stone Keith Richards and, most recently, astronaut Buzz Aldrin. The ads emphasise LVMH’s support for the Climate Project, and the celebrities appearing in them have donated at least part of their modelling fees to the non-profit group, which was founded by Al Gore, US presidential candidate and the maker of the documentary, An Inconvenient Truth.
Why are the gods of luxury rethinking their business? Pinault believes that a moral as well as a financial correction is underway. The two different strands are converging in luxury in exactly the same way as in other consumer goods industries, notably food: a yearning for lasting value and an urge to know more about the way that products are sourced and made. “Consumers are focusing more sharply on quality for a good price, seeking strong brands that project lasting value,” he says. Key to his vision is sustainability. Earlier this year, he travelled to Delhi and told delegates at the International Herald Tribune Luxury Goods conference that green was the new black. He is championing recycling, green stores, efficient air conditioning, solar power, fair trade suppliers in paper and leather, smaller packaging, sea transport over air freight for clothes and accessories, and has ordered stores to turn off their neon logo signs after 11pm. He and Gucci designer Frida Giannini are working on recyclable leather and suede. Go into Boucheron and you can trace where diamonds have been mined and in what circumstances and where they were cut, polished and set. PPR now ties part of its executives’ bonuses to achieving targets in seven areas – from reducing carbon emissions to promoting diversity.
PINAULT’S COMMITMENT TO GREEN VALUES AND CORPORATE SOCIAL RESPONSIBILITY IS SINCERE. He recently swapped his beloved Aston Martin for a hybrid Lexus. But it’s cash he’s after, too. He wants PPR to enjoy firstmover advantage in responsible luxury and become the green face of fashion, in much the same way that Toyota has become the de facto green car marker, thanks to its early move into hybrid technology with the Prius. “I see sustainable development as a business opportunity,” he says.
Pinault acknowledges that claiming ethics are the new elegance is a tough pitch. “Luxury is associated with pleasure, individualism, unreasonable enjoyment, thoughtlessness and waste, while sustainable development is synonymous with collectivity and restraint,” he concedes. But he believes there are shared values. “Luxury is based on fine materials, respect for the material, and for the craft itself that results in a rare and beautiful object. Just like luxury, sustainable development is founded in essence on respect for natural resources.”
He argues designers should use their trendsetting abilities to change their industry – and the wider world. “People will always want to treat themselves after working hard and doing well. Luxury is part of that. The question is: how will people treat themselves in the future? Luxury is a catalyst, a creator of trends. Luxury should set an example, the best example.”
He might be on to something. Analysts Prince & Associates confirm that true luxury – goods that are rare, expertly made from high-quality raised its proportion of total operating profit to 42% from 40% from a year earlier. Gucci sales rose 8.3 per cent. Sales at Bottega Veneta, known for its woven leather goods, were up, too. Both earnings and sales were better than expected, Citigroup said in a research note.
Launching the results, Pinault said the luxurygoods market had stabilised. “Global luxury sales aren’t deteriorating any more,” he said. His comments sent PPR shares soaring by as much as 10 per cent, to the highest level since September 2008.
Keep it under your fine-feathered hat but the luxury goods business might be on the turn. And Pinault could be the man to turn those green – OK, Gucci beige – shoots into solid gold.
John Arlidge writes for the Sunday Times in London and for Condé Nast in New York
