Michael Tonello's Blog, page 30

Last French Beret Maker Fighting for Survival

By Helene Fouquet, Bloomberg News Bloomberg 11:20 p.m. CST, February 22, 2014
PARIS — Laulhere, a 174-year-old beret- maker, is fighting to keep the quintessential French headgear French.
Laulhere became the country's sole maker of traditional berets after it recently bought Blancq-Olibet, its only French competitor, which was almost 200 years old. Cheaper knockoffs from China, India and the Czech Republic made survival hard for local makers of berets, which have been as much a symbol of France as baguettes and Gauloises cigarettes.
Based in the foothills of the French Pyrenees, where the round and flat woolen hat was invented by shepherds to protect themselves from the Basque region's damp, Laulhere has joined the frontlines of the battle for the "Made in France" label as foreign-made berets steal an increasing share of a shrinking market. On its website, Laulhere says: "To us 'Made in France' still means something."
"There are berets and there are berets," said Mark Saunders, the head of sales at Laulhere and an Irishman who has lived in France for over two decades. "If you don't want to smell like a sock wearing a wet beret, only our traditional French beret doesn't retain odors. Small details like that make a difference."
The fight for survival by Laulhere — rescued in a purchase by French military-garment maker Cargo-Promodis with a 500,000 euro ($686,000) injection in late 2012 — tells the tale of President Francois Hollande's competitiveness challenge. French companies struggling to compete and retain market share have contributed to the nation's slumping economy, which barely grew after 2012 and left unemployment at a 16-year high.
Although the government expects the economy to grow 0.9 percent in 2014 and France's trade deficit shrank in 2013 for the second year after a record of 70 billion euros in 2011, the country's performance falls short of neighboring Spain, which is generating record exports thanks to lower labor costs.
On Feb. 16, Prime Minister Jean-Marc Ayrault hosted a dinner for dozens of foreign entrepreneurs and investors to create what he dubbed "The Brand France."
Hollande continued France's new business-friendly efforts by hosting a meeting with the visitors last week at the Elysee Palace in Paris. Part of his plan to make France more competitive includes a pledge to slash state spending and a 30 billion-euro reduction in charges paid by companies — measures that have yet to be put in place.
"We've never been afraid of opening ourselves up to the world," he told executives of companies including Nestle, General Electric and Samsung Electronics.
While Hollande has promoted broader themes, Arnaud Montebourg, his industry minister, has focused on iconic French products and the "Made in France" label to create local jobs.
In October 2012, he posed on the cover of Le Parisien Magazine before the French flag in a sailor's jersey, wearing a Michel Herbelin watch and holding a Moulinex blender — all made in France — to defend the country's industry.
In April, he participated in a ''Made in France'' fair in Paris, touring booths wearing a Laulhere beret.
Laulhere's Saunders, married to a French woman whose family has been in the beret business for generations, says the company is banking on demand from the high end of the market to revive its fortunes after its bankruptcy in 2012.
Laulhere, which had 1.7 million euros in sales last year and didn't make a profit, expects "to break even this year," he said.
The company plans to produce 200,000 hats this year, up from 160,000 in 2013. Half of its beret production goes to armies around the world. The rest goes to the fashion industry and to traditional wearers of the headgear.
Men's berets from Laulhere can cost anywhere from 40 euros to 75 euros, while women's are priced between 20 euros and 95 euros. Imports can cost as little as two euros.
Global competition has come from berets manufacturers in China, Pakistan, India and the Czech Republic, where the company Tonak a.s. produces fashion berets for women.
Until the late 1980s, France produced several million berets each year. Sales slid for decades, with cheaper products made in Asia. The nail in the coffin came in 2001 when the French military ended conscriptions, eliminating hundreds of thousands of army orders.
The number of factories in Oloron Sainte-Marie, the town in the Bearn region where most French berets were made, fell from almost 30 to two: Laulhere and Blancq-Olibet.
The traditional French beret is made with a half mile (800 meters) of merino wool and has a ring of leather inside to help it fit snuggly on the head, Saunders said. It's waterproof and resistant to ultraviolet light. It keeps its shape even after it's been rolled.
While factories started making them industrially in the early 19th century, the "beret Basque" was at first a cottage industry, with the headwear made in the homes of shepherds.
It became fashionable for women in the 1930s and turned into a symbol of the French resistance during the German occupation in World War II. It also started being used by armies in France and the rest of the world in the 20th century.
"Cote d'Ivoire, Kuwait, Saudi Arabia and other countries used to have Chinese, Pakistani or Indian berets, but they switched," Saunders said. "They became aware that it's a technical product and it's useless to get a cheap version."
He expects to increase sales in West Africa and the Mideast in the coming years.
The French army, the United Nations and NATO are among Laulhere's biggest customers. The beret maker is seeking to make greater inroads into the fashion market as armies cut spending. The U.S. army stopped using wool berets in 2011, replacing them with patrol caps.
Saunders says that after the Madrid hat fair, the Paris farm fair and the Moscow fashion fair, where he promotes the hat, he may look into ways to sell the wool-only, waterproof and non-smelly beret to the U.S. army. He's also seeking coveted partnerships with France's luxury houses, including Hermes International SCA.
"We have a crazy plan for our berets," he said. "They're an icon of France but we want to sell them everywhere."

Hermes Collier de Chien Bracelets

No, this is not a drawer at an Hermès store. This is someone's (Jamie Chua) private collection of bracelets.

Hermes and Coutts Bank - Who Hoodwinked Who?

A date with Roger Federer: the key to winning business from the richLast month, I conducted client interviews with investors who have more than $US500 million in assets. I spoke to an Englishman – living in America and in the hotel business – about how he was choosing his service providers. At the time he had seven hotel projects on the go, mostly in China and America, and including one in Europe. He listed the banks he was using for the debt element of his $1-billion-plus building portfolio – and in each of the syndicates, he listed Credit Suisse as the lead. It wasn’t the point of the interview, but I asked him why he was using Credit Suisse.“Do you want the honest answer or the business answer?” he asked. I told him to give me both.
“Well,” he said, “they are pretty good; I’ve worked with them since the 70s; and the other answer is that my wife is absolutely bonkers about Roger Federer and I know if I do enough business with them we will get an invitation to the tennis, she will meet Federer and that will be a good day.”
For this investor, the utility in a $1 billion loan portfolio wasn’t just relationship and price, it was coffee with a tennis great.
For the past decade in Australia, CoreData has been researching the investment behaviours, satisfaction drivers and intentions of rich clients in Australia, Asia, Europe and America, giving us an unparalleled view of what they want, and what makes them happy.
When it comes to servicing the rich, Australia is different from the rest of the world. For a start, we just don’t have as many rich people as the rest of the world. (Here’s a fun fact: There are more $US millionaires in both China and India than there are people in Australia.) We don’t have any real intergenerational wealth and our rich just aren’t as rich as their rich.
A few years ago we started writing an annual report called Handbag Economics, looking at what is driving the satisfaction of the wealthy around the world. The report’s name came from the fact that one of the banks in the UK (Coutts – banker to the Queen) was providing a service to its newly rich Russian clients, helping them to jump the queue to get a Hermes Birkin handbag.
The point to this is that a Birkin handbag – the tall loop-topped, medium-sized and actually very practical bag, sold by Hermes – costs anywhere from $7400 (the cheapest model) to $150,000; and at the time of writing, there was reportedly a waiting time of 14 weeks. Coutts’ ability to jump the queue was providing them real utility as they built their business of newly rich Russian oligarchs and their wives.
Wealth is defined very differently in Australia. All of the big four banks and financial planning businesses have high-net-worth (HNW) teams, but most of them define HNW as “having more than $1 million”, while in the USA, the UK and Asia, many banks will not even start talking to clients until they have more than $US50 million in assets.
This means that in real terms it is almost impossible for Australian firms to compete for the attention of the truly very wealthy. UBS, for example, provides art banking for people who cannot keep control of their burgeoning art collections.
For $58,000, Amex will organise everything for their clients, from a haircut to a new hand basin. One of CoreData’s HNW clients absolutely swears this service is terrific value. He claims that it means that when he flies he is always upgraded from business to first class, and that he is able to track all of his wife’s activity, as she uses the service to do everything from buying soap to booking nightclubs.
That’s not all that is available for the international rich. Private health advisory firm PinnacleCare provides the interesting service of ensuring clients get instant access to the world’s best medical specialists.
The hidden truth in all of this is that the rich focus hard on “utility”, asking the question of every investment that they make: how much does it cost, and what does it do? And it’s important to know that the metrics of time (how much of my time does this take?) and money (how much will this save me, or how much will this make me?) are the only metrics that are applied.
That means that every interaction that a financial planner or a banker has with the rich is viewed through this prism. And in a lot of ways, Australia does both well and poorly on these metrics.
CoreData’s global HNW efficiency research shows that Australian service providers tend to spend about 27 hours a week servicing their customers – about the same as in the UK, but much less than the Americans and Europeans – but that the range of services that they provide is much more limited.
The customers also state that the “benefits of belonging” – the soft rewards that they get for membership – are not as great as those in Europe, America or Asia.
One of the critical benefits that a HNW service provider can provide is essentially a bank concierge service: an individual within the bank who helps the client navigate the services and takes away the mundaneness of banking. Providing this service well drives up satisfaction scores and makes clients sticky.
Australia tends to do that poorly, because in Australia, this role is not a career – it’s a transition to somewhere else in the organisation.
A terrific indicator of this is the recent HNWI research we did at CoreData, showing that Australian HNWIs using one of the Big Four banks had a relationship manager for, on average, 28 months. And one of their biggest disappointments was that they were constantly having to build new relationships, explaining who they were and what they were trying to achieve.
The corollary to that is that in Europe, Asia and America those roles seem to be much stickier, with an average relationship tenure of 48 months across the three regions.
The other core driver is price. The rich are notoriously cheap. In a recent poll of lending for the rich in Australia, CBA came last in satisfaction – not because they had poor service (they didn’t; in fact they were ranked number two in service), not because they were slow (they weren’t; in fact they were the fastest processor of loans), but because they refused to discount their interest rate at a time when their customers knew that CBA’s competitors were competing hard for lending.


by Andrew Inwood
http://www.professionalplanner.com.au...

Oops, London's Daily Mail and Jennifer Pearson Don't Know What a Birkin Bag Is

 (Note: The orange handbag in the photos is an Hermès Kelly bag, not a Birkin)


By PUBLISHED: 01:48 GMT, 7 March 2014 | UPDATED: 01:48 GMT, 7 March 2014

"When it comes to looking chic, Lindsay Lohan knows that accessories can go a long way.
And the troubled starlet gave her rather dull outfit some oomph with a dazzlingly orange Hermes Birkin handbag on Thursday.
Starting at a cool $15,000, the collectable bags don't come cheap - Victoria Beckham even boasts a diamond bedazzled Himalayan version, worth more than $100,000.
Prized possession: Lindsay Lohan sported a 15k tote by her favourite designer Hermes Birkin as she headed to an appearance on The Tonight Show With Jimmy Fallon on Thursday
So it was just the thing to brighten up LiLo's white jeans, V-necked jumper and black peacoat.
The 27-year-old perhaps needed a bright boost of confidence as she headed to The Tonight Show With Jimmy Fallon in New York City on Thursday, three days before her new reality show's premiere.
Lindsay was in great spirits and waved to fans as she emerged from her Soho apartment, a smile widening her face behind the large-frame shades.




Lively: The redhead's outfit got a boost thanks to that stylish orange bagShe didn't seem the least bit nervous, even though she would likely be discussing her new show on OWN and the recent criticism leveled at her and network boss Oprah Winfrey.The 60-year-old media mogul recently came under fire for exploiting the troubled actress by signing her up for the reality show that premieres on Saturday.
The show follows Lindsay as she attempts to rebuild her life and career in the wake of her numerous arrests and stints in rehab.


Orange zest: Lindsay's designer bag was the perfect accessory to those white jeans, V-necked sweater and black pea coat
Lindsay maintains the show, aptly called Lindsay, is her 'last shot' at recovering her place on the A-list.
But Janina Kean, President and CEO of High Watch Recovery Center in Connecticut, told FOX411 that 'everyone is exploiting Lohan and she is not well enough to realise this'.


Confident: Lindsay's come under criticism for doing a reality TV show so soon after her rehab release but no doubt that Birkin bag provided a boost of confidence"   http://www.dailymail.co.uk/tvshowbiz/...

Hermes Autumn Winter 2014 Runway Fashion Show - Christophe Lemaire

Hermès Counts on Axel Dumas to Guard Family Business

Hermès is back under family control, at least when it comes to chief executives. Last month, sixth-generation Axel Dumas took sole command of the luxury house founded in 1837 after eight years under non-family executive Patrick Thomas.Mr Dumas is coming in at a time when the business is experiencing the pressures of unprecedented success – revenue increased 82 per cent between 2009 and 2012 to €3.5bn – including unwelcome interest from outside parties: in 2010, rival French luxury group LVMH bought more than 20 per cent of the shares in a move that Hermès’s then-management likened to rape.

The company is hoping 43-year-old Mr Dumas, a compact figure who favours double-breasted suits and wide lapels, will be their knight in leather-plated armour: he studied philosophy at the Sorbonne, law at the Institut d’Etudes Politiques de Paris and business at Harvard, and worked at French bank BNP Paribas before joining Hermès in 2003. Since then he has been finance director, headed the group’s jewellery department and leather division, served as commercial director of France and, more recently, as chief operating officer. For the past year, he and Mr Thomas were co-chief executives.
The experience will come in handy. On the LVMH issue, Mr Dumas, whose mother headed operations at Hermès and whose grandmother on her deathbed told him he had to protect the company just as a peasant protects his land, is known to feel as strongly as the rest of the family.
Bernard Arnault, the French billionaire who controls LVMH, has said that he does not intend to increase his investment. But the acquisition worried Hermès family members so much that they rushed to protect 51 per cent of the share capital – they hold about 70 per cent in total – in a special vehicle that will ringfence it for at least 20 years.At the same time as trying to guard against any further incursion, Mr Dumas will feel the pressure to maintain – and improve on – Hermès’s current growth rate. Under Mr Thomas, group net profit reached €740m in 2012, up 156 per cent since 2009. “It is remarkable how successful they have been,” says Luca Solca, a luxury sector analyst at Exane BNP Paribas.But analysts say that continuing the strong growth requires expanding production – all done in Europe at present – which raises questions about finding and training new workers. As Mr Dumas told the Financial Times: “Our production is still centred on craftsmanship, which requires important training time.”
It takes about two years to train a craftsman, and each one is supervised during that time by existing craftsmen, which affects capacity further.
Mr Dumas also has the difficult personal task of following in the footsteps of the charismatic Jean-Louis Dumas, his uncle and the Hermès chairman for almost three decades, who transformed the business into a global luxury brand.
Known for his wit, if also for his lack of punctuality, Mr Dumas is intensely private and never speaks publicly about his wife, a US-trained journalist, and two children.
When it comes to business, however, Mr Dumas has offered a faint clue as to what may lie ahead: expanding non-traditional divisions such as ready-to-wear, jewellery and home collections to increase products on offer while maintaining exclusivity. The first test will come today, as the brand’s womenswear show closes Paris Fashion Week – and, perhaps, heralds Hermès’s next chapter.
By Adam Thomsonhttp://www.ft.com/cms/s/2/95a97a22-a3... 

As Hermes is to Handbags So is The Hotel Ritz to Hotels

I can't wait to read this book! The Hotel Ritz holds a special place in my heart. It was, after all, where I delivered my first Hermès Birkin bag to a very special client staying in the Coco Chanel Suite.

The Hotel on Place Vendome: Life, Death, and Betrayal at the Hotel Ritz in Paris Set against the backdrop of the Nazi occupation of World War II, The Hôtel on Place Vendôme is the captivating history of Paris’s world-famous Hôtel Ritz—a breathtaking tale of glamour, opulence, and celebrity; dangerous liaisons, espionage, and resistance—from Tilar J. Mazzeo, the New York Times bestselling author of The Widow Clicquot and The Secret of Chanel No. 5
When France fell to the Germans in June 1940, the legendary Hôtel Ritz on the Place Vendôme—an icon of Paris frequented by film stars and celebrity writers, American heiresses and risqué flappers, playboys, and princes—was the only luxury hotel of its kind allowed in the occupied city by order of Adolf Hitler.
Tilar J. Mazzeo traces the history of this cultural landmark from its opening in fin de siècle Paris. At its center, The Hotel on Place Vendôme is an extraordinary chronicle of life at the Ritz during wartime, when the Hôtel was simultaneously headquarters to the highest-ranking German officers, such as Reichsmarshal Hermann Göring, and home to exclusive patrons, including Coco Chanel. Mazzeo takes us into the grand palace’s suites, bars, dining rooms, and wine cellars, revealing a hotbed of illicit affairs and deadly intrigue, as well as stunning acts of defiance and treachery.
Rich in detail, illustrated with black-and-white photos, The Hotel on Place Vendôme is a remarkable look at this extraordinary crucible where the future of post-war France—and all of post-war Europe—was transformed.

http://www.amazon.com/Hotel-Place-Vendome-Death-Betrayal/dp/0061791083  

Hermes Handbags are the Bags of Choice for Federal Fraud Cases

'Real Housewives of NJ' cast members admit guilt on mortgage, bankruptcy fraud chargesNEWARK — Teresa and Joe Guidice, stars of Bravo's "Real Housewives of New Jersey," both pleaded guilty in federal court this morning to several mortgage and bankruptcy fraud charges.
Both Teresa and Joe Guidice, who stood throughout the hearing, softly said, "Yes, your honor," to U.S. District Judge Esther Salas when asked if they admitted their guilt to the charges. They both appeared composed.
The Montville couple will be sentenced at a later date.
Under their plea agreement, and per sentencing guidelines for those charges, Teresa Giudice would spend less than two years in prison, while Joe Giudice would spend a minimum of three years behind bars, The Record reported.
The Record reported last week that the couple has agreed to plead guilty to the charges under a deal that would send them both to prison.
In July, the couple was charged in a 39-count indictment that accused them of conspiring to fraudulently obtain millions of dollars in mortgages and other loans and of hiding assets and income during their past bankruptcy proceedings Two additional counts were added later.
Prosecutors also accused Joe Giudice of not filing federal tax returns between 2004 to 2008 despite the fact that he earned $1 million over that time period.
The Montville couple previously requested separate trials, but prosecutors required both of them to plead guilty to take the deal, The Record reported.


Teresa Giudice with her Hermès Garden Party handbag



Martha Stewart with an Hermès Birkin bag and an Hermès Garden Party bag, going to Court back in 2004.

 

Sad That Anyone Thinks "The Beauty of Life" is Found in Inanimate Objects

Soaring Luxury-Goods Prices Test Wealthy's Will to Pay

You will notice that Hermès is not mentioned in the following Wall Street Journal article. This is because Hermès continues to show double-digit sales increases. Perhaps the WSJ headline should have read: Soaring Luxury-Goods Prices Test Moderately Wealthy's Will to Pay. After all, the moderately wealthy who buy brands such as Chanel, Louis Vuitton, and Jimmy Choo aspire to buy Hermès. Hermès is for the wealthy, or those that are not but don't mind maxing out their credit cards for a few years for the "privilege" of carrying the Hermès logo.
Soaring Luxury-Goods Prices Test Wealthy's Will to PaySales Growth Slows as Competition Heats Up; 'Prices Have Gotten Really Crazy'   A crackdown by China on giving gifts to officials has slowed sales. Above, a Cartier store in Shanghai. Bloomberg News  Despite expanding into new markets, the luxury-retail business has been relying on price increases to drive sales. Now, even the very wealthy are nearing the limits of what they are willing to spend.In the past five years, the price of a Chanel quilted handbag has increased 70% to $4,900. Cartier's Trinity gold bracelet now sells for $16,300, 48% more than in 2009. And the price of Piaget's ultrathin Altiplano watch is now $19,000, up $6,000 from 2011.Such increases for some of the world's most expensive indulgences far outpace inflation and contrast with the middle and lower end of the retail market, where even small increases can turn off shoppers.At the high end of the market, a higher price can add to a product's allure, according to one economic theory. But the practice is seen by critics as a flimsy platform on which to build sales growth, one that already could be reaching its limit and might prove precarious if the economy sours.Spending on luxury apparel, leather goods, watches, jewelry and cosmetics reached $390 billion last year, according to Boston Consulting Group. But growth is starting to slow from its postrecession pace. Sales of such items rose 7% last year, down from the 11% annual rate in 2010 through 2012, according to the firm. BCG forecast that sales growth would hover around 6% for the next few years.A crackdown by China on giving gifts to officials has caused much of the slowdown. But there are also signs that price increases are starting to wear thin with Western customers amid heightened competition from more-affordable brands."Luxury brands are at risk of losing customers who cannot or do not want to pay more," said Claudio D'Arpizio, a partner with consulting firm Bain & Co.Connie Oclassen of Mill Valley, Calif., said she couldn't buy as many pairs of Jimmy Choo flats as she used to, since prices climbed to $650 a pair from $495. In the past she would buy four or five pair a year. This year, the retired marketing executive will limit herself to three."Prices have gotten really crazy," she said as she browsed at New York's Henri Bendel recently.Sales at Gucci, which is owned by France's Kering SA, KER.FR +2.09% fell 2.1% last year. And British handbag maker Mulberry Group MUL.LN +0.26% PLC said that lower-than-expected sales last year would decrease profit substantially. Mulberry's chief executive said more-affordable brands, such as those from Hong Kong's Michael Kors Holdings Ltd. KORS -0.05% , had siphoned off customers. LVMH Moët Hennessy Louis Vuitton SA MC.FR +0.84% said sales growth for fashion and leather goods slowed to 5% last year from 7% the year before, excluding the effects of acquisitions and currency movements. But the French company said it increased prices on its Vuitton products around 3% to 4.5% last year without an impact on its business. "The client base is used to that type of price increase," Chief Financial Officer Jean-Jacques Guiony said. Vuitton raised the price of a monogrammed Speedy bag in the U.S. by 15% last year to $910. That made it 32% more expensive than in 2009.The higher prices are masking weaker growth in volume. "Companies are selling fewer units," said Luca Solca, an analyst with Exane BNP Paribas.An economic theory holds that for certain goods, higher prices increase desirability and drive sales, rather than suppress demand as they would for ordinary products. Economists refer to such luxury products as Veblen goods, named for American economist Thorstein Veblen, who described the phenomenon.Higher prices didn't dissuade Brooke Palmer, a public-relations director from Tampa, Fla., who shopped for shoes on a recent afternoon at Saks Fifth Avenue in Manhattan. Footwear is an investment, she said. And she raved about her first pair of Christian Louboutin shoes—red strappy sandals she bought 10 years ago and still wears."I could buy cheaper shoes, but they wouldn't last," Ms. Palmer said. "And they wouldn't make my feet happy."The high-price strategy carries risks. Luxury brands pushed through steep increases before the recession only to have sales plunge when the crisis hit and the stock market tumbled, prompting even well-heeled consumers to slash spending.One reason ultraluxury brands are raising prices is to distinguish their products from entry-level luxury goods that are fast picking up market share."The more Tory Burches and Michael Kors there are, the more the Chanels and Louis Vuittons will try to price up," said Milton Pedraza, the chief executive of the Luxury Institute, a research and consulting firm.The unintended consequence could be that the luxury brands drive even more customers toward less-expensive rivals.High-end brands said the price increases are necessary to maintain quality and offset the rising costs of production."We are no different from other luxury brands in regularly adjusting our prices as our models, production costs, raw materials and exchange rates change," a Chanel spokeswoman said.Wage and material costs have increased. Wages in China have risen 62% since 2007. And the price of native steer hides, a benchmark for leather, has increased about 17% over that period, while the price of gold has more than doubled, according to FactSet and SIX Financial Information.But rising costs don't account for all of the increases, industry executives said. The U.S. price of a basket of luxury goods tracked by market-research firm Euromonitor International rose 13% last year, while the consumer-price index increased just 1.5%. Andrea Ciccoli, the founder of Level Group, which operates e-commerce sites for brands such as Stuart Weitzman and Galliano, said higher leather and gold prices should translate into price increases of no more than a few percentage points.In Europe and the U.S., brands have pushed prices higher in part to capture more money from Chinese tourists who buy luxury goods abroad to avoid tariffs that can add 40% to prices at home.The brands also have a rising supply of wealthy people to cater to. Credit Suisse estimated 1.8 million people joined the ranks of the world's millionaires last year.But even for those who can afford it, higher prices are starting to bite.Jamie Moore, a homemaker in Cleveland, Tenn., said that on her annual shopping sojourn to New York, she usually splurged on a Prada handbag, for which even a basic nylon model can cost $1,230. Not this year."The prices have gotten so expensive that I'm not buying one," she said.
By Suzanne Kapner and Christina Passariello
March 2, 2014 6:42 p.m. ET
http://online.wsj.com/news/articles/S...