Tradition out of fashion?
This also speaks to merging fashion with tradition. The Cultural Revolution stripped away national Chinese dress from quotidian life, and created some pent-up demand for colours and style in the process, but in the Middle East, the abaya is still very much in evidence and can sometimes cover up thousands of dollars worth of Dior.
“The German philosopher Friedrich Nietzsche said ‘You have fashion when tradition disappears and perhaps in China this is true, but in other places you have a mix of tradition and modernity,” Godart explains. “In the Middle East you have the distinction between public space and private space.
Fashion will be expressed in the private space, with family and close friends. That’s also why accessories are very important in the Middle East: they are ‘external’. Handbags and sunglasses, for example, can be a public statement without interfering with tradition.”
It’s not just the individual consumer in these markets who are buying luxury goods. The economic crisis – which has cut into the number of Western customers able to spend 5,000 euros on a Birkin bag – has meant the valuation of the luxury companies themselves has dropped. That’s led to consolidation and acquisitions.
China’s largest heavy industry group, Shandong, bought 75 percent of the world’s largest builder of luxury yachts earlier this year for 178 million euros. Ferretti had gone bankrupt in 2008 when its sales plunged during the financial crisis.
A Chinese and Hong Kong investment group bought 80 percent of France’s Sonia Rykiel fashion house. Hermès, while fending off market moves by LVMH, entered a joint venture with the Chinese designer behind the Shang Xia brand that creates an old-fashioned pre-Maoist lifestyle and is set to open its first shop in Paris soon.
Revivals and the future
“The Chinese are in a position to revive old names that were around in the luxury world a hundred years ago,” opines Godart. “They could also create new brands, such as Shang Xia, but it takes time for a brand to mature into real luxury – maybe 25 years, though everything is moving faster these days.”
At least in China, the domestic market is so big and vibrant that even local luxury start-ups are likely to succeed…even more so if they are produced in Italy or France. This consolidation is at the root of Prada’s decision to list in Hong Kong rather than in Europe, after years of wavering about the timing, location and pricing of an IPO. Industry analysts say the European debt crisis could mean more luxury brands go to Chinese buyers seeking direct foreign investment in Europe at attractive prices.
But the driving force behind all this is something more profound, Godart believes. “The fact that societies outside the West want these products is a sign that these societies are becoming more equal,” he explains. “Ironically, today when you think ‘luxury,’ you think ‘equality’.”
Category : Cultural Revolution