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KEEP CALM AND CARRY ON: Gianluca Brozzetti, chief executive of Roberto Cavalli Group, has some simple words of advice for the luxury industry. “Don’t panic,” he told an audience at the World Retail Congress in London on Thursday. During a panel discussion called “Luxury Retailing: A Bubble Waiting to Burst or a Sustainable Wave?” Brozzetti said: “What we are looking at today is a situation of overinflated growth. What we’re moving toward is a more sustainable level of growth in luxury, and we are not in a bubble.”
Brozzetti added that while demand in southern Europe remains soft, the big risk luxury is facing right now depends on “external factors,” such as religious extremism in the Middle East. “That could give a big stop to luxury more than any other factor,” he said, alluding to reports that Israel wants a military strike against Iran.
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Other panelists included Maurizio Borletti, chairman of Borletti Group; Claudio Del Vecchio, chairman and chief executive of Brooks Brothers Group Inc.; Tom Florio, chief executive of Advanstar Fashion Group; and William McComb, chief executive of Fifth & Pacific Companies, Inc.
On a more upbeat international note, McComb said his company sees Brazil “as Russia was five to seven years ago. There’s a pocket of wealth explosion there that you just can’t ignore.” The company now has four Kate Spade stores in the country.
With regard to new technology, McComb added that his company is exploring the possibility of setting up “digital showcases” in airports, where customers can see and touch items, scan what they want to buy, and then have it delivered directly to their homes. “We’re talking about spaces that are 200 square feet, and we see them as vehicles to launch sub-brands,” he said.
Asked by the panel’s moderator, Financo chairman Gilbert Harrison, about the outlook for the Christmas season, the panelists said they were positive, although Del Vecchio said the environment remains “very tough — and I’m concerned that the situation in Europe is still uncertain.”
Later in the day, J. Crew chairman and ceo Millard “Mickey” Drexler, and Arcadia owner Sir Philip Green talked about the joys of running private businesses, and not being distracted by the demands of financial markets.
“What we’ve been seeing is a lot of is growth for growth’s sake. If you keep rushing growth, you end up paying for it,” said Drexler.
He added that J. Crew would take its international expansion — in the U.K. and Hong Kong — slowly, and that no real estate deals have been signed yet in London. “In the next year or so we’ll have a few stores in London,” he said.
He declined to comment on a British press report that he’s ready to take over Burberry’s former premises on Regent Street.
Green, meanwhile, said that the new Topshop units at Nordstrom stores had outperformed their targets in the first week.
“But maybe that means expectations were too low. We’ll have to wait another few weeks to see.” The 14 Topshop departments opened at Nordstrom stores earlier this month.
Green also talked about how important value is to today’s customer who wants a good deal, but who also wants to be excited by a retailer’s offer: “People want to buy steak cheap, but not cheap steak,” he said.