Can A Brand Cut Itself Off Its Own Deck?

According to the world clothing shoes and hats net, Marc Jacobs is still 2017 autumn winter New York.

One of the most popular and most anticipated releases.

But when designers display their autumn and winter series on the Lexington Avenue Armory in Lexington street, Manhattan on Thursday, someone may look at it in another way, especially because of the recent development of the Armory.

Bernard Arnault, chairman and chief executive of LVMH, a parent company, said.

"Compared to President Trump, I am more concerned about Marc Jacobs," Arnault said in a late January earnings call conference.

Despite some irony, Arnault immediately made an honest assessment of the brand's current health.

"Marc Jacobs is facing challenges."

These statements are in sharp contrast to the comments made by Arnault two years ago, when Marc Jacobs was considered to be preparing an IPO to become an independent company.

"When we invested, Marc Jacobs was not even a $10 million company. Now we earn 1 billion euros a year, and we invest in other companies.

The brand has not been able to behave like this. Maybe they are not that talented, "Arnault said in April 2014." Marc Jacobs is the best representative of the United States.

IPO may mean that in the next 5 to 10 years, this company can be worth 1/3 of the whole group. You can see all these commitments with your own eyes.

But since 2014, Marc Jacobs has changed a lot.

Including the pformation of business models, the Marc x Marc Jacob, which is widely sold and distributed, is integrated into the main line, offering products under the same main line brand with high and low price.

"In a fashion company like Marc, luxury has nothing to do with price, but is related to experience, quality and design," Marc Jacobs CEO Sebastian Suhl told BoF in January 2016. "If we do things right, then time will prove everything. Success will prove everything.

But I am pretty sure that we are heading in the right direction, because it is natural for the company to develop.

It's not a fantasy, ready-made strategy.

Suhl could not comment further on this article, but his earlier comments highlighted the broader industry's shift to brand integration.

"In 1990s, distribution was more focused on wholesale rather than retail.

Under the umbrella of the same brand, you need to operate different product lines, "explains Mario Ortelli, a luxury industry analyst at Sanford C. Bernstein, global Asset Management Co." now the market is turning to more direct retail instead of wholesale, and the most difficult ones are the most diversified companies on the line of products. "Sanford, C.

In fact, the power of brand integration is not hard to understand: Nowadays, consumers are more educated, have more channels to get products with different prices, and more people are shopping in high-end and popular stores.

As department stores and other retailers have reduced orders, franchising has been less popular, and brands are working hard to build stronger and more direct relationships with the end consumers.

A unified brand vision can further achieve this.

Today, the market turns more direct retail instead of wholesale, so the most difficult ones are those with the most diversified product lines.

Marc Jacobs is just one of several well-known brands that have been integrated into the sub line brands in recent seasons.

Dolce & Gabbana and Burberry have also implemented a similar strategy.

It is not surprising that the other super brands will join the camp. After all, retailers who sell sub lines, especially those department stores like Messi Macy (s), are integrating themselves.

But will it help?

Now, none of this explains anything.

Arnault's frank statements about Marc Jacobs may also be prompted by a series of challenges within the group.

But Burberry also failed to provide any evidence that the three sub brands of Prorsum, London and Brit returned to Burberry at the end of last year, which is indeed conducive to sales.

Burberry declined to comment on this article, but the source familiar with the company said its top management was satisfied with the move. Many sub brands that integrated Burberry also aim to establish a more direct relationship with consumers and adapt to their habit of combining high and low end brand shopping.

In the 3 months ended December 31, 2016, Burberry retail sales amounted to about $917 million, and sales of stores rose more than 3% a year or more.

In 2011, Dolce & Gabbana put its low price D&G brand revenue main line, providing us with the most clear and definite index of brand integration strategy.

In April 2015, the private Fashion House announced that its 2014/2015 fiscal year earned more than $1 billion, an increase of 7.1% over the same period last year.

This increase is at least partly due to the opening of new retail outlets and direct outlets.

"Over the years, Dolce and Gabbana have huge expenses," Ortelli said. "Now the brand is growing again.

They made short-term sacrifices, but they are useful for brand positioning. "

Of course, Dolce & Gabbana may suffer financial damage in the short term, but because of its Private Companies, there is no need to disclose publicly to shareholders.

In addition, like Marc Jacobs and Burberry, the new Dolce & Gabbana brand still benefits from royalties arising from US cosmetics and other non core franchise pactions.

But is the integration of a single brand applicable to all brands? For example, Prada has developed a new way to develop Miu Miu, once considered a main line brand of Prada, and become a brand with independent aesthetics and followers.

Hilldun Capital Corp chief executive officer and Interluxe Holdings chairman Gary Wasser said, "it depends on what message you want to convey, and depends on who your customers are." the company provides support for New York designer brand Jason Wu, while Jason Wu just launched a medium price product line named "Wu" in 2016. Especially in the company, we are talking about two different consumer groups and different economic foundation.

This is the so-called "sister series", "he continued." we are not going to take the Jason products to the end, but to create another series for the younger generation.

But no matter how to choose the strategy, these two methods are undoubtedly not a quick way to solve the challenges of the retail environment today.

"Maintaining a single brand can be difficult," Ortelli said. "But if you change your business structure in a meaningful way to your company, there may be a turning point."

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