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Luxury, Fashion and so ............

"Full of juice inside------- " Ram Shanran Dangal [2004 Jan]

Luxury creates approximately $160 billion a year in global industry, encompassing make up, skin and hair care, fragrances, cosmetic surgery, health club and diet pills. Americans spend more each year on beauty than they do on education. Such spending is not mere vanity.

"Good looks are a woman's most fungible asset, exchangeable for social position, money, even love".

Basic instinct keeps the beauty industry powerful. In medieval times, recipes for homemadefashion, luxury, ladies, womens fashion, skin, hair, make up, hair coloring, colouring, skin and hair care, fragrances, cosmetics were kept in the kitchen right beside those used to feed the family. But it was not until the start of the 20th century, when mass production coincided with mass exposure to an idealized standard of beauty (through photography, magazines and movies) that the industry first took off.

In 1909 Eugene Schueller founded the French Harmless Hair Colouring Company, which later became L'Oreal – todays industry leader. Two years later, Paul Beiersdorf, a Hamburg pharmacist, develops the first cream to bind oil and water. Today, it sells in 150 countries as Nieva, the biggest personal –care brand in the world. Around the same time, in Tokyo's upmarket Ginza, Arinobu Fukuhara hit on eudermine lotion, the first Japanese cosmetic based on a scientific formula, and the first product for the Shiseido company.

Elizabeth Arden opened the first modern beauty salon in 1910, followed a few years later by Helena Rubinstein, a Polish immigrant. They combined facials with diets and exercise classes in a holistic approach that the industry is now returning to.
The global beauty industry consisting of skin care worth $24bn; make-up $18bn, $38bn of hair care product; and $15bn of perfumes – is growing at up to 7% a year, more than twice the rate of the develop world's GDP. The sector market leader, L'Oreal, has had compound annual profit growth of 14% for 13 years. Sales of Beiersdorf's Nivea have grown at 14% a year over the same period.
In India sales of anti-ageing creams are growing by 40% a year. While Brazil has more "Avon Ladies" (900,000) than it has men and women in its army and navy.

The juicy returns are attracting new entrants. The house hold goods giants Unilever and Procter & Gamble "P&G", facing maturity in many of their traditional business are devoting more resources to their beauty divisions – as evidence by P&G's current $6.5bn offer for Germany's Wella, a hair care company, to bolster its earlier purchase Clairol, a hair dye business. Simon Clift, marketing head of Unilever's personal-care business (including its big Dove and Sunsilk brands)

Most Luxury goods now have perfume brands, and many (like Dior, Channel and Yves St Laurent) are selling make up and creams too. LVMH, the biggest luxury goods group of all, has moved into retailing with its Bliss spas and Sephora shops (which sells make up).

The focus on the science has led to some genuinely new ideas, such as face cloths impregnated with cleaners that combine surfactant and paper technology. As yet, though, most of it is pseudo-science. Shiseido's recent international lunch of its new body creator skin gel claims that its fat-burning pepper and grapefruit oil can melt 1.1kg of body fat in a month without any need to diet or exercise. At last years lunch in Japan customers bought a bottle every 3.75 seconds.

Beauty firms spend just 2-3% of their sells on research and development- compared with 15% by the pharmaceuticals industry. On the other hand, they spend a whopping 20-25% on advertising and promotion. And new companies like Pout are attracting attention with lipsticks labeled "Lick my lolly" and "Bite my cherry".
Scott Beattie, Elizabeth Arden's boss, says that its marketing budget, which grew by 25% in 02, will rise by another 40% this year. Avon plans to hike its advertising by 50%.

Revlon, once one of the biggest make-up brands, has been tottering on the age of bankruptcy. It's current boss, Jack Stahl, a former president of Coca cola is fighting to get the business back on track. Unilever which is facing slowing growth overall, is stranded in no-man's-land. It sold the great Elizabeth Arden brand and missed out on the boom in hair color.

The only real growth is coming through huge grocery chains such as Wal-Mart that want to deal with just hand food of suppliers. That is good news for P&G and L'Oreal (which already gains two third of its revenues from mass retailers.) But Este'e Lauder and Revelon are more dependent on unfashionable department stores where sells are declining and selling cost are high.

The first is cosmetic surgery, already a $20bn business, which has been growing and innovating by leaps and bounds. The number of cosmetic procedures have increased in America by over 220% since 1997. Old favourities, such as liposuction, breast implant and nose jobs, are being overtaken by botox injections to freeze the facial muscles that cause wrinkless, with the number of these up by more than 2,400% since 1997, botox injection have become the most common procedure of all. Cosmetic dentistry is also a booming business. Jeff Gloub, Manhattan dentist to stars like Kim Catrall of "Sex and City", dubs himself a "smile designer". Tooth whitening is the botox of the cosmetic dentistry business.

Americas leading plastic surgeons, says "Ten years ago you could reconstruct a womens breast for $12000 – now it can be done for $600. sexy breast, women breast

In "Branded", a book on marketing to teenagers, Alisa Quart notes that in America the number of teen age brest implants and liposuctions rose by 562% between 1994 and 2001. There is a cynical marketing phrase for all this: helping "kids look older younger". A number of new books have have begun to question the ethics of marketing beauty products and services to adults too.
The fashion industry's exposure to this spring's three big economic shocks: SARS, the war in Iraq and the rise of the euro against the dollar. Revenues from exports are mostly in dollar and Yen, and thus sharply down into euro turns: while cost remains primarily in euros, as luxury goods are mostly manufactured in Europe.

"Fashion really is dependent on tourism, particularly by rich Asians coming to Europe."

In the past decade thanks not least to the stock market bubble, Gucci sunglasses, Prada handbags and Louis Vuitton suitcase became must have items for many thousands of middle class buyers. Despite their huge stable of Luxury names, LVMH, Prada and Gucci are still heavily dependent on just one label.
Philippa Ilincic, manager at Gucci Luxury timepieces seems ambivalent about a "popcorn" barcelet that her group sells for $105 to attract new customers.
Prada, which remains family owned and is run by Patrizio Bertelli, the husband of its designer Miucci Prada, has failed to complete the IPO of its shares it desperately needs to reduce its burden of debt, said to be $27.5mio. There are rumours that it may follow the sale of its stakes in Churchs, a shoe maker, and in Fendi by also selling its Jil Sander and HelmutLang brands.
Yet Prada is being the boldest, splashing out $87m on a sci-fi-style store in Tokyo, said to be the biggest investment by an Italian company in Japan since the Second World War.



Sales $ bn in F03 Ch% Op margin  
Louis Vuitton 3.80 16 45 50% business from Japan
Prada 1.95 0 13.0  
Gucci 1.85 -1.0 27.0  
Herm's 1.57 7.7 25.4  
Coach 1.20 34.0 29.9  

As it is ….

Fashion is the third largest employer in New York after health care and finance. It keeps much of the advertising industry going; it plays a vital part in the retail trade; and, in a world of trade disputes and cotton subsidies, it is politically sensitive. Fashion industry today have only three centres of powers; Paris, Milan and New York. Paris represents the traditional of haute couture ("high sewing", ie custom dressmaking) and its pret-a-porter (ready to wear) offspring; Milan reflects generations of northern Italian craftsman-ship, especially in textiles, shoes and leatherwear; and New York represents casual smartness and a century of powerful retailers such as Saks Fifth Avenue, Barneys and Bergdorf Goodman. With due defence to Giorgio Armani in Milan or Ralph Lauren in New York, the true capital of fashion is undoubtedly Paris. It is home to the most famous brands, such as Chanel, Dior and Hermes. It is the headquarters of the biggest conglomerate, LVMH, controlled by Bernard Arnault, and the home of his rival, Francois Pinault, who controls the third biggest conglomerate the Gucci Group.

The reason is both history and design. In 1858 Nepoleon III, wanting nothing but the best for his wife, Empress Euginie, asked Charles Frederick Worth, and English dressmaker who had become a big hit in Paris, to design her wardrobe. One royal commission led to many others, right across Europe, and then to cheaper copies of Worth's creations. To protect would now be called his intellectual property, worth in 1868 founded the Chambre Syndicale de la Haute Couture to promote and market Parisian tailoring.

Today France's fashion and luxury goods industry, as defined by government statisticians, represents some 2000 firms, 200000 jobs and 5% of total industrial production. Include the textile industry, with 60000 employees, plus packaging and buttling firms, and the share of individual activity rise to 8%. Then count in things like advertising, graphic design, showroom management, video production and media coverage, and it all begins to add up to real economic weight.

And thus "Up growing Metro sexuality"

"Metrosexual", a term coined a few years ago to identity straight urban male who enjoy such things as shopping and using beauty products. It is sometime described in lad mags as being "just gay enough" to get the babes. Mr Beckham says Ms Salzman(Euro RSCG Worldwide, a leading advertising agency), is a classic metrosexual. Ms Salzman has tested the market and concludes that 30-35% of young men in America have metrosexual tendencies: tell-tale signs including buying skin care cream and fragrances. This matters: the grooming market for young males in NA was worth around $ 8bn last year, and is growing fast. Some big firms are cottoning on to this, which suggest that metrosexuality – or something it- may actually exist. Last year, when Unilever launched Sexy Breast, Women BreastAxe in America (Lynx in some markets) as a fragrant all over body spry, it said: "Personal care and grooming, traditionally the provinces of women, are in increasing in importance to young man, and this trend is expected to increase".
The relationship became strained when David Beckham met his wife Victoria, a British pop singer known as Posh Spice, and developed this "fashion thing".
David Beckham is the third most valuable sporting personality in the world after America's basketball legen, Michael Jordan, and top golfer, Tiger Woods. He has re-branded as Vodafone the firms Japanese subsidiary J-Phone, and in Britain he helped to launched Vodafone live!, a new service with features such as picture-messaging.

David Beckham as his performance in euro 2004 tournament registered as poor identify the next metro sexual man your self. It's trend and would suppose to be continued in our society........."Lick my lolly" and "Bite my cherry" up..up...up!

This much for this time.
Source: The Economist and Business Week magazines of different published dates.

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