Researchreport,n°16. Six-monthly publication – June 2011

added value for luxury brands, the issues ofinnovation and fashion are also very muchto the fore. Taking their lead from the socialand management sciences, some of thecontributions deal with the symbolic spursbehind luxury consumption. Others exa-mine the economic perspectives andtensions that characterise the luxury marketas it is torn between a growing demand forshort-term profit and the more long-termissues of tradition, skills, durability and sustainable development.

Editorial

This issue of Mode de recherche on the subject of luxury follows on from the international conference organised by theIFM in April 2011 (Fashion betweenHeritage and Innovation), in addition to the recent publication by IFM-Regard of acollective social sciences book on the themeof luxury, Le luxe. Essais sur la fabrique del’ostentation.While this issue essentially attempts to gainperspective on the problems linked to outli-ning and managing heritage, a source of

The IFM Research Center is supported by theCercle IFM that brings together the patrons of theInstitut Français de la Mode:

ARMAND THIERYCHANEL

CHLOÉ INTERNATIONALCHRISTIAN DIOR COUTUREDISNEYLAND PARIS

FONDATION PIERRE BERGÉ-YVES SAINT LAURENTFONDATION D’ENTREPRISE HERMÈS

GALERIES LAFAYETTEGROUPE ETAM

KENZOL’ORÉAL DIVISION PRODUITS DE LUXE

VIVARTEYVES SAINT LAURENT

On Luxury

Heritage and Innovation: Charles Frederick Worth, John Redfern,

and the Dawn of Modern FashionDaniel James Cole

Using a Professional Organization to Enhance its Reputation.

The Case of the Parisian Haute Couture. A Longitudinal Study (1973-2008)

David Zajtmann

Vertical Integration in the Luxury Sector:Objectives, Methods, Effects

Franck Delpal

Luxury: An Industry Between Heritage and Modernity

Dominique Jacomet, Franck Delpal

The Made-to-Measure Approach: The Example of Rome Today

Pascal Gautrand

Luxury, the Accursed Share and the Capital Gain

Nicolas Liucci-Goutnikov

Responsibility and Profits: What Temple ofLuxury has Taken on the Role of Guardian?

Selvane Mohandas du Ménil

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but despite his efforts to simplify women’sdaytime clothes the usual effect was heavilydraped and fringed, and as stuffily claustro-phobic as the gewgaw-cluttered interiorsassociated with Victorian English taste”. The Kyoto Costume Institutes 2002 publi-cation of fashions from the 18th through the20th Centuries includes a short, partiallyaccurate biography Redfern but with erro-neous life dates that would have himopening his business around the age of 5. Recent scholarship creates a different pic-ture of both Worth and Redfern. Pivotal tothe history of clothing, Redfern’s story isonly recently being rediscovered, and onlyin the past few years has a proper explo-ration and assessment begun (primarily bythe work of Susan North). North (2008)puts forward the thesis that in the late 19th

century, Redfern and Sons was of equalimportance to the House of Worth. It iseven possible to assert that Redfern, and hislegacy, were actually of greater importanceas shapers of 20th Century styles. An exam-ination of Redfern and Redfern Ltd., incomparison to their contemporaries, callsinto question not only the preeminence ofWorth, but also aspects of the careers of PaulPoiret and Gabrielle Chanel. The following explores how Worth andRedfern, in different ways, shaped the tastesand fashion system of the 20th Century –themselves, and through the businesses thatbore their names after their deaths. Theirare intertwined with the major styles of thesecond half of the Nineteenth Century, andtheir stories are interwoven with importantfashion icons of the time, and demonstratethe power of celebrity clientele to the suc-cess of a design house. Both Englishmen,Worth and Redfern founded family busi-nesses; both men died in 1895 and both leftthere business in the control of sons andjunior partners. But in addition to their similarities, their stories emphasize theirdifferences.

Charles Frederick Worth’s story has beentold often and is familiar to fashion schol-ars. But while Worth has enjoyed a place ofsignificance in fashion history, the story ofhis contemporary, John Redfern has beenignored, or at best reduced to mere footnotestatus. Nearly all well-known fashion history survey texts give coverage of Worth,but scant – if any – mention of Redfern.Contini, Payne, Laver, and Tortora andEubank, all ignore Redfern. MillbankRennolds, in Couture, the Great Designersomits Redfern while including somemarkedly less important designers. Boucherincludes John Redfern, but distills his careerto a brief, mostly accurate, paragraph. InFashion, The Mirror of History, theBatterberrys interpret a Redfern plate as:“Another Englishman, working in Paris, thetailor Redfern, had devised a neat “tailor-made” suit with a short jacket for women,

Heritage and Innovation:Charles Frederick Worth,John Redfern, and theDawn of Modern FashionDaniel James Cole

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Charles Frederick Worth, and Worth &Bobergh

Charles Frederick Worth is acknowledgedas the father of couture, rising from theranks of a notable fabric and dress businessin Paris, to leading his own house. As thestory goes, Worth was catapulted to successby the court of the Second Empire. Thestory of Worth’s rise to fame, and his associ-ations with Princess Pauline Metternichand Empress Eugenie, is a familiar tale butone that has been embellished, even twistedover time, beginning with the rather mythicmemoirs of Metternich herself (1922), andof Worth’s son, Jean-Philippe (1928). Born in 1825, Charles Frederick Worthbegan his career at a London drapery house.Moving to Paris in 1846, he found employ atGagelin-Opigez & Cie, a retailer of fabricsand accessories, and a dressmaker. While intheir employ, Worth probably began design-ing in the dressmaking department. Worthmarried a Gagelin-Opigez employee, MarieVernet, a model at the store. Leaving in1857, Worth began his own business in part-nership with Otto Gustave Bobergh, with“Worth et Bobergh” on the label, and MmeMarie Worth working at the business.Records indicate that Worth and Boberghwas an emporium, much in the model ofGagelin-Opigez, and sold fabrics, and avariety of shawls and outerwear, with readymade garments as well as made-to-measurecouture (Hume, 2003, p.7).Eugénie de Montijo, the Spanish-born wifeof Emperor Napoleon III, was the mostimportant female style setter of Europe dur-ing the years of the Second Empire and isassociated with many fashions of the time.She encouraged glamour at the Frenchcourt that contrasted with the reserve ofQueen Victoria’s Court of Saint James.According to some accounts, Worth beganhis association with Princess Metternich,the wife of the Austrian Ambassador to

France, in 1859. Worth set his sights on theprincess’s business; Mme. Worth paid a callto Princess Metternich, and extraordinarily,was received. Mme Worth presented theprincess a folio of designs and the Princessordered two dresses, wearing one to court atthe Tuileries Palace. “I wore my Worthdress, and can say… that I have never seen amore beautiful gown... it was made of whitetulle strewn with tiny silver discs andtrimmed with crimson-hearted daisies…Hardly had the Empress entered thethrone-room…than she immediatelynoticed my dress, recognizing at a glancethat a master-hand had been at work.”(Metternich, 1922) Eugenie’s admiration of the dress led to her own commissions from Worth andBobergh, catapulting Charles FrederickWorth to success as other ladies of the courtpatronized the business.This well-known story of Worth’s meteoricrise to stardom has recently provoked doubt.Worth scholar Sara Hume questions thisaccount on the basis that it is derived fromloving, but unreliable secondary accounts.“The legend that has grown up around hisname was built up in large part by memoirsby his son and famous clients written wellafter his death. After Worth had achievedfame, his clients such as the PrincessMetternich, nostalgically wrote of hisprominence under the Second Empire”.(2003, p.80) Hume also questions that the custom ofEugenie and Princess Metternich came asearly in the decade as 1860, or that he held a place of significant importance in theFrench fashion system prior to mid-decade.She notes that he did not receive mention inFrench fashion magazines until 1863, andpress coverage for the remainder of thedecade was not plentiful. In addition, Worthand Bobergh did not use the designation“Breveté de S. M. l’Impératrice” until 1865.Moreover, the number of existing Worth

and Bobergh pieces in museum collectionsfrom this time is less than what such successwould indicate (Hume, 2003). Worth’s status during these years has beeninflated retrospectively, and many otherdressmaking establishments were successfulat the time. In these years, several were wellestablished. Mlle Palmyre, Mme Vignon,Mme Laferrière, and Mme Roger, all contributed to the trousseau or wardrobe of Empress Eugenie, as did Maison Felix,and it was at this time that La Chambre syn-dicale de la Couture parisienne began. Alsoemerging in these years, was the great cou-turier Emile Pingat, who came to rivalWorth’s importance in late 19th centuryFrench couture. “The frequent sobriquet of ‘inventor ofhaute couture’ gives the misleading impres-sion that…Worth introduced a completelynew method of designing and sellingclothes. In fact haute couture evolved grad-ually over the almost half century ofWorth’s career and represents only a seg-ment of the new fashion industry whichdeveloped through the century”. (Hume2003, p.13) However erroneous the tradi-tional accounts are, it is important to noteWorth’s designs for Eugenie and the courtpromoted French industry and had a favor-able impact on the textile mills of Lyon.Soon the house had an impressive client list,including Queen Louise of Norway,Empress Elisabeth of Austria, along withstage stars and glittering demimondaines ofParis. Although men would dominate thefashion industry in a short time, a man inthe dressmaking business was still novel:Worth earned the moniker “man milliner,”and by transforming dressmaking fromwomen’s work to men’s work, the activity of designing fashions was taken more seri-ously as an applied art.

John Redfern of Cowes

Across the English Channel, in the resorttown of Cowes on the Isle of Wight, theyoung John Redfern was transforming hisdrapery house into dressmaking business.John Redfern began his drapery businessduring the 1850s. Although his businessdeveloped slower than Worth’s, he eventu-ally acquired a no less auspicious clientele,including Queen Victoria, AlexandraPrincess of Wales, and Lillie Langtry.Growing over the course of the decade, thebusiness was established for dressmaking bythe late 1860s, and its subsequent steadygrowth rivaled the importance of TheHouse of Worth for 40 years.In Cowes, Redfern was able to take advan-tage of the presence of Osborne House, oneof Victoria’s official residences; “the wholeisland benefited economically and sociallyfrom the need to supply the Household andthe attending high society (North, 2008, p 146).” His sons John and Stanley joinedthe business during the 1860s. The firstrecorded clothing from John Redfern wasnoted at the 1869 marriage of the daughterof W.C. Hoffmeiter, Surgeon to HM theQueen; Redfern provided the wedding dressand the bridesmaids dresses (North, 2008,p.146). Certainly the aristocracy noticed thehigh-profile commission, and Redfernunderstood the power of celebrity to pro-mote his business in the coming years. At this time a change in dress was under-way: more sport and leisure activities weredeveloping specific clothing, and thosewomen who could afford a diversified, spe-cific wardrobe sought more practical attire;clothing for some activities showed theaffect of the Dress Reform movement.Ensembles emerged, described in the fash-ion press of the day as “walking costume,”“seaside costume, and “promenade cos-tume.” More practical outerwear forwomen was being introduced, even “water-

museum collections. From all over Europeand North America, customers came to hishouse, willing to make the trip to Paris.Worth’s sons, Gaston and Jean-Philippe,joined the business in these years. His repu-tation was now so noteworthy that EmileZola created a fictional version of Worth in1872. He excelled at the ornate draperies ofthe bustle period, and he reveled in inspira-tion from 18th Century modes, especiallypopular in the 1870s with polonaise styledrapery in the manner of MarieAntoinette’s “shepherdess style.” However, Worth’s true creativity in theseyears (and in general) has been questioned,and his Hume reputation viewed asinflated: “Monographs of celebrated fashiondesigners, such as Worth, typically focus onindividual genius as a primary force in initi-ating new fashions. As an individualdesigner, Worth may not have been the cre-ative genius that his reputation maysuggest. The traditional view that Worthwas a great innovator may be brought intoquestion by a comparison between fashionplates and his designs”. (Hume, p.3) In light of such opinion, it is possible to sug-gest that his true gift lay not in creating butinterpreting trends – already present in suchfashion plates – to suit the tastes of his rari-fied clientele. It is in these years that Worthdeveloped his system of mix and matchcomponents of a gown (Coleman, 1989). Aseries prototypes of different sleeves, differ-ent bodices, different skits were available tobe put together in different combinationsand different fabrics to create a toilette,maintaining for the client the impression ofan original creation.By 1878, a new silhouette was developing.The understructure that enhanced the but-tocks went away, and a sleek silhouetteemerged, and princess line construction wasessential to it. Worth was important to thepopularity of this silhouette. Though he isoften credited with inventing the princess

proofs” (Taylor, 1999). At the same time,women’s equestrian clothes were crossingover into town clothes in the form of a “tai-lor made” costume. For years men’s tailorswere producing women’s riding habits, withjacket bodices made in masculine forms. Asmen’s tailoring standards developed,women’s riding clothes developed similarly,and woolen cloth associated with men’ssuiting began to cross over into the generalfemale wardrobe (Taylor, 1999). British tai-loring establishment Creed enjoyed thecustom of both Queen Victoria andEmpress Eugenie for riding habits; openinga Paris store in 1850, The House of Creedcontributed significantly to this trend. Astailor made ensembles emerged, lighterweight versions developed for summeractivities outdoors.John Redfern continued with success intothe coming years as a very fine ladies dress-maker. However, both of these trends –sport clothing and the tailor made – figuredprominently in Redfern’s career as the 1870sbegan and his business expanded. Whileneither activewear nor the tailor made werenecessarily his “invention,” Redfern woulddo more to promote these styles than anyother designer.

Worth After Bobergh

Worth and Bobergh closed during theFranco Prussian War. Bobergh retired, andWorth reopened as Maison Worth. TheThird Republic left Worth without anempress to showcase his work, but otherEuropean royals continued to give himbusiness. However the backbone of hisfinancial success now came from the wivesand daughters of American nouveau richetycoons, who sought the overt prestige of aWorth wardrobe over the work of their localdressmakers. His popularity with theAmerican wealthy is attested to by the largeamount of Worth dresses in American

return of the bustle in 1883, suited Worth’saesthetic perfectly. Extant examples of hiswork in museums from this time indicate asynchronicity of the prevailing modes of theday with his taste for flamboyant theatrical-ity – the “man milliner” cum artiste at hisfinest. Although Worth was now at the top of Parisfashion, many elite and moneyed customerssought other designers. Emile Pingat’ssmaller business attracted the discerningwho appreciated the quiet elegance of hiswork over Worth’s less subtle output(Coleman, p.177). Also in these years,Doucet, a decades old emporium of shirtsand accessories, launched a couture divisionheaded by third generation Jacques Doucet,and soon rivaled Worth’s importance.

Redfern and Sons

As the Third Republic left France (and thefashionable world) without an empress tobe a fashion icon, more attention focused onBritain’s royals. Alexandra of Denmarkbecame the Princess of Wales upon her mar-riage to Prince Edward in 1863. Althoughshe was quickly celebrated for her style, herensuing six pregnancies kept her out of thespotlight until she re-emerged in 1871 (welltimed to coincide with Eugenie’s absence.)Alexandra’s style helped define fashion inthe next four decades. Also of importance as a fashion icon was the Prince of Wales’mistress, Emily LeBreton Langtry. “Lillie”Langtry was the most noted of the“Professional Beauties,” society women cel-ebrated in the media simply for their looks,and she was, likely, the first celebrity prod-uct spokes model. Lillie’s hourglassproportions strongly contrasted the litheAlexandra, but both women were widelycelebrated for their beauty, and important tothe style of each were the fashions of JohnRedfern. By the early 1870s, fabrics from Redfern

line (and supposedly naming if forAlexandra the Princess of Wales) verticalseamed dresses went back to the middleages. In the late 1850s and1860s, loosedresses with such vertical seams were wornin the as walking costumes, intended forsome measure of physical activity. In itsapplication to this new silhouette, this newstyle en princesse used the princess lineseams in a smooth, fitted to the bodymethod, and the term was used to describeboth dresses (in one piece from the shoulderto the floor) and with bodices with similarconstruction. A correlation betweenprincess line construction and the increasedpresence of women’s tailor made garmentshas been made (Taylor, 1999): CharlesFrederick Worth, in developing and popu-larizing the en princesse style was applyingprinciples of tailored construction to dress-making, cannily on top of developments inwomen’s fashions. Not only did Charles Frederick Worthdevelop the couture system, he may havetruly invented the mystique of the fashiondesigner as idiosyncratic, exalted artist.Worth needed a personality to suit his fabu-lous clientele – especially to appeal to thenouveau riche Americans – and the “manmilliner” affected the role of great artist. Hecreated an outrageous persona, wearingdressing gowns (sometimes trimmed withfur or even tulle) and a floppy black velvetberet. “Such attire satisfied the illusion of acreative genius at work (Coleman, p.25).“Hollander in Seeing Through Clothes drawsa correlation between Worth’s affected look,and images of Richard Wagner, andRembrandt (1993): such romanticizeddeshabille was a calculated move, and suchaffection may have been borne of a desire tomask a lack of genuine creativity with theimage of a great artist. The 1880s sawremarkable output from the house; the pop-ular garish colors, the continuation of overthistoric inspirations, and the extremes of the

were in the wardrobes of Queen Victoriaand Princess Alexandra, and their customwas included in Redfern’s advertising. Moresignificant was the yachting boom thatcame to Cowes with the Prince and Princessof Wales’ enthusiasm for the sport. BritishAristocrats, American nouveau riche, andother international elite were drawn toCowes for the developing regatta, and par-ticipated in other outdoor activities. Theyachting, the wealthy clientele, and thedevelopment of sport clothing combined toplace Redfern at the right place at the righttime. Redfern became the source for yacht-ing and seaside toilettes, and sailors’uniforms often served as design inspiration.Redfern set the benchmark in this categoryof clothing. Both the Princess and Mrs.Langtry enjoyed sporting activities oftenwearing Redfern; as the widely imitated inanything they wore, they set the styles forthis type of clothing.Genteel activities such as croquet andarchery were still enjoyed, but more vigor-ous sports were becoming more popular.These included hiking, golf, and shooting,and often ankle length skirts (without thefashionable bustles of the time) were worn.Tennis also grew in popularity, with specialtennis ensembles. Redfern designed jerseybodices and dresses for tennis (and othersports) and although Redfern was not theonly house that featured jersey garments, itbecame associated with him. Both Mrs.Langtry and the princess wore them, andthey were documented in The Queen, theleading British fashion periodical. Redferndeveloped a strong relationship with thepublication, realizing that paid advertisingwould lead to more editorial coverage(North).Redfern continued to popularize the tailormade. The style was a favorite of PrincessAlexandra who wore Redfern’s, attracted tothe combination of style and practicality.Riding continued to be a popular sport for

aristocratic women, and the influence fromequestrian wear to the tailor made contin-ued. An avid horsewoman, Elizabeth ofAustria set styles throughout Europe withher riding habits; a favorite detail was mili-tary inspired frogs and braid in the style ofthe Austro-Hungarian military. This styleand other military inspiration quicklyfound their way into women’s tailored cos-tume, including Redfern’s. With royal patronage and coverage in thepress, the business grew and expandedinternationally. A London branch was thenext to be established in 1878, where fash-ionable gowns were available along withsport and tailored clothes. Managing theLondon store was Frederick Mims, whotook the name Redfern. In 1881 a Paris storeopened that took its place in the Frenchfashion scene alongside Worth, Doucet, andPingat. Leading the Paris store was CharlesPoynter, who also took the name Redfern.Under Poynter Redfern’s supervision, otherstores opened in France, notably a store inthe resort town Deauville. By 1884, Redfernand Sons had crossed the Atlantic, andopened a store in New York City managedby Redfen’s son Ernest. While Lucile andPaquin are both given credit for being thefirst transatlantic fashion business, Redfernpreceded both of them by more than 20years. The Paris and New York storesoffered the same variety as the Londonstore. Stores in Newport, Rhode Island, andSaratoga Springs, New York catered to theresort customer. While Redfern directlychallenged Worth at the Paris store, theyalso appealed to a broader segment of themarket, making the business the more sig-nificant. While Maison Worth required itsclientele to come to the Rue de la Paix,Redfern and Sons, with branches inEngland, France, and the United States,brought its product to more of the fashion-able world.

Redfern Ltd.

In 1892, the company incorporated asRedfern Ltd. The death of John Redfern in1895 had little affect on the continued suc-cess of the business; Redfern Ltd. hadtransformed “from the most successfulladies tailoring business to an internationalcouture enterprise equal of Worth” (North,2009). Charles Poynter Redfern at the helmof the Paris store, was the most importantdesigner in the company and was equal of Jean-Philippe Worth, Jacques Doucet,and Jeanne Paquin. Featuring designs byPoynter Redfern, the company participatedin the Exhibition Universal of 1900. Duringthe 1900s, the focus of Redfern Ltd. wasmore on couture, moving away from itsactivewear and tailored roots, although stilloffering selections in those areas.Underscoring that shift was the closure ofthe original Cowes store. Royalty still wentto Redfern’s stores to be dressed, and LesModes joined The Queen in devoting a greatdeal of editorial coverage to the house.North asserts that Redfern Ltd. was thedominant force in Western fashion betweenthe years of 1895 and the 1908 work of Paul Poiret (2009). It is possible to actuallyestablish the pre-imminence of Redferncontinued even further into the next decadeto 1911. Although these are few years, theyare pivotal to fashion history. Many dress historians treat Poiret’s 1908work as a watershed moment that capti-vated the fashionable world. One notedfashion historian (Deslandres, Poiret,Rizzoli, p.96.) wrote “[as] if women had justbeen waiting for it, the Directoire line,revived by Poiret, redefined eleganceovernight.” In light of the fact that PoynterRedfern and Paquin were already doing thisline, the extreme nature of such a pro-nouncement can be easily called intoquestion. Further, the fashion press paidvirtually no attention to Poiret until a few

Maison Worth after Worth

By the early 1890s Charles FrederickWorth’s role in the house had declined, andas both sons were now active in the com-pany, he essentially retired. Worth left themanagement of the business in the hands ofGaston, who had already assumed muchmanagerial responsibility. The creative sidewas left to Jean-Philippe. The exact chain ofevents is unclear, as is also the extent ofWorth senior’s continued role in the house;many Worth dresses from 1889-1895 areunclearly attributed as whether father of sondesigned them. “It is not possible to deter-mine at what point Jean-Philippe becamethe lead designer for the house; howevergarments after 1889 show differences… thatsuggest a different designer” (Hume, 2003,p.11).Nellie Melba, the noted Australian operastar, was a long time Worth customer;Melba was particularly fond of Jean-Philippe saying “Jean himself was a greaterdesigner than his father had ever been”(Coleman, 1989, p.29). The output of thehouse in the 1890s shows a remarkable syn-ergy between fashion and L’Art Nouveauand Japonisme styles developing in the otherapplied arts. Like Redfern, Maison Worthalso showed the affect of the Dress Reformmovement, however, that affect showeditself in the form of ravishing, languid tea-gowns along the rubric of Pre-Raphaeliteand Aesthetic taste. These were “artistic”costume for the artistic aristocratic lady, anddid not show the practical affect that hadmanifested itself at Redfern.The decade of the 1900s saw the house ofWorth maintain continued success withbeautiful gowns, but other designers over-shadowed its innovations and styles. GastonWorth’s attempt to enliven the house with ayoung man named Paul Poiret proved shortlived and unsuccessful. The client base hadgrown old, and now the aging house wasdressing aging women.

years later, making such an “overnight”impact on fashion impossible. Redfern’soutput was well documented in the pages ofThe Queen and Les Modes. Poynter Redfernadvocated soft styles, taking inspirationfrom the 1780s and 1790s. He featured“Romney Frocks” of white mousseline in themanner of Marie Antoinette’s chemise à lareine, and Empire waist à la Grecque stylesof Directoire inspiration – all beginning afew years before Poiret’s 1908 collection(North, 2009). The commonly held, but retrospective, opinion that this was Poiret’s“New Look” in terms of impact on wide-spread fashion and taste is simply notsupportable in this light. On 3 October 1909, The New York Times rana full-page article on Paris fashions, cover-ing the looks for Autumn and Winter 1910.The article celebrates Orientalist styles forthe season, that included Byzantine andEgyptian inspiration, but most importantlyRussian styles. Although many designersare mentioned, Poynter Redfern is given themost significance, and the New York Timesasserts that the Russian style was his cre-ation: “Redfern is a master at these Russianeffects, which he is using very much thisseason for street costumes. He has justreturned from Russia whither he goesalmost every summer.” Maisons Worth,Doucet, and Paquin are all mentionedalong with other houses, but Poiret is notmentioned at all.

The 1910s and Beyond

Paul Poiret became ascendant to Paris fash-ion, finally by around 1911. His knack forpublicity lead to elaborate Arabian themeparties, and the press was hungry for theexotic in the few years prior to the war.Perhaps with Charles Frederick Worth ashis role model, Poiret postured himself asthe eccentric artist, and put forth his cre-ations as great works of art. His designs of

these years, with their ersatz Near-Easternthemes were sensationalist and hype pro-voking, such as his “Minaret” dress and robesultane; while much less elegant that his ele-gant languid Directoire looks of 1908, theygrabbed more publicity. The New York Timesbegan including Poiret in its fashion cover-age in 1910, and the rest of the fashion pressfollowed, so that during the next three yearshe dominated the fashion media and wasprominently featured in the pages ofHarper’s Bazaar, Femina, and The Queen. Poiret was one of the participating designersin the exciting new fashion journal, LaGazette du Bon Ton. In addition to otherhouses, the roster also included Worth andRedfern. The freshness of La Gazette duBon Ton’s style brought life to the twohouses, and their designs as represented inLes Modes were still stylish. Redfern’s rele-vance outlasted Worth’s by a decade, but bynow both houses were starting to declineand the glory days of each house had past.The affect on the aristocratic lifestyle causedby World War I impacted both houses fur-ther, yet each carried on for several moreyears. Also emerging in this decade was the busi-ness of Gabrielle “Coco” Chanel. Startingin millinery, Chanel expanded into sportsclothes and couture during the course of thedecade. A few aspects of her developmentand story are worth considering. Her earlyaffair with the English-educated horsebreeder Etienne Balsam exposed her to anequestrian set that certainly wore Englishriding apparel and sport clothes, likely fromCreed, Burberry and Redfern among others.This certainly contributed to her very leanand tailored aesthetic that stood in sharpcontrast with Poiret’s opulence. But of evenmore importance was Chanel’s choice ofDeauville as the location of her fist sports-wear boutique. Redfern Ltd had a Deauvillestore for sometime, selling the company’ssignature sports clothes; the young Chanel

sportswear and activewear of the 20th

Century, and the gradually growing casualaesthetic. The Redfern aesthetic could betied to such influential fashion designminds as Claire McCardell, Vera Maxwell,Calvin Klein, or Norma Kamali, whosework was not typified by runway spectaclebut rather by real clothes.

Daniel James ColeProfessor, FIT New York

Special Thanks Karen Cannell, Fashion Institute of TechnologyNancy Deihl, New York University Susan North, Victoria and Albert Museum

Bibliography Arnold, Janet: “Dashing Amazons: The Developmentof Women’s Riding Dress,” Define Dress: Dress asObject, Meaning, and Identity, ed. De la Haye, Amy andWilson, Elizabeth, University of Manchester Press,Manchester, 1999. Barwick, Sandra: A Century of Style, George, Allen,and Unwin, London, 1984.Batterberry, Michael & Batterberry, Ariane: Fashion TheMirror of History, Holt, Rhinehart & Winston, Boston,1979.Boucher, François & Deslandres, Yvonne: TwentyThousand Years of Fashion, Abrams, New York, 1987.Blum, Stella: Victorian Fashions and Costumes fromHarper’s Bazaar, 1867-1898, Dover Books, New York,1979. Calloway, Stephen & Jones, Stephen: Royal Style: FiveCenturies of Influence and Fashion, Little Brown andCompany, Boston, 1991.Cole, Daniel James and Deihl, Nancy: Fashion Since1850, Laurence King Ltd., London, 2012.Coleman, Ann: The Opulent Era: Fashions of Worth,Doucet, and Pingat, New York, Brooklyn Museum,1989. Cunnington, C.Willet: English Women’s Clothing in theNineteenth Century, Farber and Farber, London, 1937.Cunnington, Phillis Emily: English Costume for Sportsand Outdoor Recreation, Barnes and Noble, New York,1970.DeLaHaye, Amy & Tobin, Shelley: Chanel, TheCouturiere at Work, The Overlook Press, Woodstock,1996.DeMarty, Diane: Worth, the Father of Modern Couture,New York, Holmes and Meier, 1990. Deslandres, Yvonne: Poiret, Rizzoli, New York, 1987. Fukai, Akiko, et. al.: The Collection of the Kyoto

would have unquestionably been familiarwith Redfern’s product and sport clothesbusiness model. An examination of Redferndesigns from the decade underscores thesimilarity to the Chanel aesthetic. A tailormade costume from Redfern illustrated inLa Gazette du Bon Ton from 1914, and asport ensemble from in the collection of theKyoto Costume Institute, dated c. 1915,both show a marked similarity to Chaneldesigns that came a short time later. Manyof Chanel signature styles, while stronglyassociated with her today, were actually pio-neered long before by Redfern, including,most notably, the use of jersey for sports-wear.As for Worth, he left a legacy into the 20thcentury was of lavish couture gowns andensembles that have always been a majorfeature of the French fashion industry.Edward Molyneux earned the nickname“the New Worth,” as an Englishman whoconquered Paris, and he showed greatprowess for frosting his sleek elegant flapperdresses with glitter. Perhaps his most signif-icant contribution to the fashion industry ofthe 20th Century was his invention of thepersona of fashion designer as flamboyantgreat artist; and the persona took on evenmore outrageous form in some of his suc-cessors. This can be exemplified in recentyears with the personalities and manner ofKarl Lagerfeld, Jean Paul Gaultier,Alexander McQueen, and John Galliano,among others. The legacy of John Redfern may actuallydefine clothing in the 20th Century. Theintellectual lineage of Redfern is monumen-tal and exemplary of the entire history of20th century clothing: John Redfern men-tored Charles Poynter Redfern, who in turnmentored Robert Piguet, who mentoredChristian Dior, who lead the line to YvesSaint Laurent. Redfern (and his companies)focus on the emerging market of sportsclothes lead the way to the categories of

Costume Institute: Fashion - A History from the 18th to20 the Century, Taschen, Köln, 2002.Ginsburg, Madeleine; Hart, Avril; Mendes, Valerie &Rothstein, Natalie: Four Hundred Years of Fashion,Victoria & Albert Museum, London, 1993.Goldthorpe, Caroline: From Queen to Empress:Victorian Dress 1837-1870, Metropolitan Museum ofArt/Abrams, New York, 1989.Hollander, Anne: Seeing Through Clothes, Berkeley,University of California Press, 1993. Hollander, Anne: “When Mr. Worth was King,”Connoisseur, December 1982, 114-120. Hume, Sara Elisabeth: Charles Frederick Worth: AStudy in the Relationship the Parisian Fashion Industryand the Lyonnais Silk Industry 1858-1889 (MA Thesis),SUNY Fashion Institute of Technology, New York,2003. Kjellberg, Anne & North, Susan: Style & Splendor: TheWardrobe of Queen Maude of Norway, Victoria & AlbertMuseum, London, 2005.Lambert, Miles: Fashion in Photographs 1860-1880,B.T.Batsford, London, 1991. Laver, James: A Concise History of Costume and Fashion,Thames and Hudson, New York 1988.Lees, Frederick: “The Evolution of Paris Fashions: AnEnquiry,” Pall Mall Magazine, 1903, 113-122.Millbank, Caroline Rennolds: Couture: The GreatDesigners, Stewart, Tabori, and Chang, New York,1985.Metternich-Winnenberg, Pauline Von: My Years inParis, London, Nash, 1922. North, Susan: “John Redfern and Sons, 1847 to 1892,”Costume, vol. 42, 2008. North, Susan: “Redfern Ltd. & Sons, 1892 to 1940,”Costume, vol. 43, 2009. Payne, Blanche: History of Costume from the AncientEgyptians to the Twentieth Century, Harper and Row,New York, 1965.Perrot, Philippe: Fashion the Bourgeois: A History ofClothing in the 19th Century, Princeton UniversityPress, Princeton, 1996.Poiret, Paul: King of Fashion, translated by StephenHaiden Guest, J. B. Lippincott, Philadelphia/London,1931. Reeder, Jan Glier: The Touch of Paquin: 1891-1920 (MAThesis), SUNY Fashion Institute of Technology, NewYork, 1990.Ribeiro, Aileen: “Fashion in the Work of Winterhalter,”Franz Xaver Winterhalter and the Courts of Europe, ed.Ormond, Richard and Blackett-Ord, Carol. NationalPortrait Gallery, London/Harry Abrams, New York,1992. Steele, Valerie: Paris Fashion: A Cultural History,Oxford University Press, New York/Oxford, 1988.Taylor, Lou: “Wool Cloth, Gender, and Women’sDress,” Define Dress: Dress as Object, Meaning, andIdentity, ed. De la Haye, Amy and Wilson, Elizabeth,University of Manchester Press, Manchester, 1999.

Tortora, Phyllis & Eubank, Kenneth: Survey of HistoricCostume, Fairchild, 2005. Troy, Nancy: Couture Culture: A Study in Modern Artand Fashion, Cambridge, MIT Press, 2004.Worth, Gaston: La Couture et la Confection des vête-ments de femme, Paris, Chaix, 1895. Worth, Jean-Philippe: A Century of Fashion, translatedby Ruth Scott Miller, Boston, Little Brown and Co,1928.

Periodicals: L’Art de la Mode (aka L’Art et la Mode) Harper’s BazaarLes ModesLa Mode IllustréeThe Queen

ferent logic because he estimates that theembeddedness of economics into society hasnot disappeared. He opposes to the view offirms as isolated units and points to the factthat firms develop cooperative relationshipswith other firms. Uzzi (1997) pointed outthe fact that critical transactions aredependent on firms that are embedded intosocial relationship networks.It has been highlighted that social move-ments can have a strong effect on theinstitutional change of an industry(Durand, Monin and Rao 2003). The factthat particular industries offer products thatcannot be interchangeable has also beenshown (Karpik 2007). However, accordingto our knowledge, little attention has beendrawn to the way a professional networkcan be used in order to enhance the reputa-tion of its members. In our opinion, weneed to go further than this holisticapproach.Therefore, the research gap that is the fol-lowing: which kind of benefits does a firmsearch for when joining a collective organi-zation?A longitudinal study of couturiers and fash-ion designers operating in Paris between1973 and 2008 has been conducted. Twotypes of sources have been utilized: annualreports from the Fédération française de lacouture, du prêt-à-porter des couturiers etdes créateurs de mode between 1973 and2008 and interviews of past and presentmembers of this Federation.This work has enabled us to identify threedifferent themes explaining the reasons forjoining and participating in a professionalorganization:

– The members of a professional organiza-tion seek to preserve their reputation.We believe that when the members of a professional organization seek protectionagainst counterfeiting the main motivation of this action is a protection of their reputa-tion.

It has been shown (Selznick 1949) that anorganization’s objectives can be diverted bythe action of an ideologically homogeneousminority. The membership collective organ-ization may result from the presence ofselective incentives (Olson 1965), and mayalso be characterized by the possibility ofquitting or publicly criticizing (Hirschman1970). It can also result from the fact (Meyerand Rowan (1977) institutions tend toresemble each other. Moe (1980) considersthat Olson relies on hypotheses as regardsindividuals which are too restrictive, Olsonconsidering individuals as rational, per-fectly informed and economically selfish.Olson, on his view, thinks that member-ships with a political finding have a strongrole. Moreover, he introduces a leadershipdimension, the “political entrepreneur”enabling participants like the personnel oforganizations or the outsiders to exist. Weaccept from this view the accountancy of theplurality of interest but also the recognitionof the role of third parties.Granovetter (1973 and 1975) takes fromPolanyi (1944 and 1957) the concept of“embeddedness” but considers it with a dif-

Using a ProfessionalOrganization to Enhanceits Reputation. The Caseof the Parisian HauteCouture. A LongitudinalStudy (1973-2008)David Zajtmann

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– The members of a professional organiza-tion seek financial incentives.

– The members of a professional organiza-tion seek for a privileged position towardstheir national and international competi-tors.It appears that the first theme is the first inimportance.This research enhances the fact that a label(in this case the “haute couture” name) pos-sessed by a professional organizationconstitutes a strong attachment of the mem-bers to the network. The reputation hasbeen thus externalized by the adhesion to acollective organization.In 1868 the Chambre syndicale de la cou-ture et de la confection pour dames etfillettes was created. In 1910, this organiza-tion (with a slightly different name :Chambre syndicale de la couture, des con-fectionneurs et des tailleurs pour dames )was dissolved. In 1911, the « couturiers »estimating they should have their own bodycreated the Chambre syndicale de la cou-ture parisienne. The last institutionalchange took place in 1973 when two otherbodies were created : Chambre syndicale dela mode masculine and Chambre syndicaledu prêt-à-porter des couturiers et des créa-teurs de mode. These three groups createdthe Fédération de la couture, du prêt-à-porter des couturiers et des créateurs demode .It has been shown that couturiers can usetwo strategies to enhance their position:conservation strategies or subversion strate-gies (Bourdieu 1975). Therefore, it is logicalthat newcomers using subversion strategiesquestion the current institutional frame.What is original in the case of the Parisianhigh-end fashion is that the professionalorganization has dealt with this contesta-tion by creating a new umbrellaorganization which comprises both its his-torical body and a new body which acceptsthe newcomers.

Couture as the Making of a Profession

Before the French Revolution, tailors (menor women) did not have the right to selltheir fabrics and were then only subcontrac-tors, obliged de facto to a public anonymity.Parisian couture was really created underthe reign of Napoleon III. The mixture ofthe renewal of a court life and the appear-ance of “nouveaux riches” gave an idealenvironment to the rise of a selective fash-ion. Worth, who was English, first startedwith the haberdasher (in French: “mercier”)Gagelin, and had an individual clientelewho asked him for advice on their clothes,an attitude which was totally new, the tailorhaving traditionally no word to say.Worth then left Gagelin and opened hisown company on rue de la Paix in Paris. Heestablished all the codes of the Parisian“couturier”: a clientele of celebrities (start-ing with the French emperor’s wifeEugenie), a “bourgeois” style house, thepresentation of the clothes on real people,and most of all, an authoritarian style, mak-ing the “couturier” the one who decides thestyle of clothes.Alongside and after Worth came a cohort ofcouturiers (such as the Callot sisters,Doucet, Paquin or Poiret). All these indi-viduals needed to be clearly distinguishedfrom a lot of couturiers working in Paris inorder to justify their position and prices to anational and international elite clientele.Therefore the Chambre syndicale de la cou-ture et de la confection pour dames etfillettes was created in 1868. The Chambre syndicale de la couture wascreated in 1911. Article 4 of its status indi-cates that no demand for admission shouldbe made without the sponsoring of twomembers of the Executive Committee of theChambre syndicale.Two events brought significant changes tothis industry: the sequels of the 1929 crisisand also the consequences of the SecondWorld War.

The Rise in International Competitors

In the 1950s a growing competition camefrom Italy. An initiative by an Italian busi-nessman, Giorgini, led to the growth offashion shows in Florence, and to the inter-est of American buyers for the Italian offer.Since the 1970s the main fashion shows inItaly have taken place in Milan. However,unlike the Parisian fashion shows, they mixdifferent lines of same brands. A coordina-tion and promotion body, the CameraNazionale della Moda Italiana (TheNational Chamber for Italian Fashion) wasfounded in 1958.In the 1970s, the USA also developed theirown high-end fashion industry. Companiessuch as Calvin Klein, Donna Karan andRalph Lauren thrived without having afashion show in Europe.

The Rise in National Competitors

On a national level, the couture industrywas also challenged by national newcomers.The so-called créateurs de mode (such asKenzo) organized fashion shows outsidethe official calendar and won high approvalfrom left-wing magazines. Some of thenewcomers came from the retail industry,others began their careers as fashion jour-nalists. New couturiers decided also to mixhaute couture and ready to wear. This led toa first initiative: the founding of theGroupement Mode et Création.

The Role of Fashion Journalists or how ExternalActors can have an Influence on InstitutionalChange

In contrast to French gastronomy, where theGuide Michelin has over the years remaineda recognized source of quality approval(Durand, Rao, Monin, 2003), there is noadmitted rating book or guide in the hautecouture. Public approval depends as a con-

Before 1929, the French Parisian coutureindustry was a major exporter. Among thebig clients were department stores in theUnited Kingdom and in North America.The Smoot-Hawley Tariff Act from June17, 1930, by raising United States’ importduties to couture related products (such asembroidery) to high levels reaching 80%,made French couture garments totallyuncompetitive.During the Second World War, theChambre syndicale de la couture parisiennehad to deal with a project of the Germanoccupation authorities who wanted totransfer the Parisian Couture either toBerlin or to Vienna. The authorities of theChambre syndicale managed to make theGermans renounce their project and seizedthis opportunity to be the body, officiallyrecognized by the French Government,which will allow the different quantities offabrics. This position was followed by thenew Government after France’s liberation.Therefore, since then, a list of authorizedCouture houses is published by the FrenchMinistry of Economy.Additionally, since the 1930’s, it is theChambre syndicale de la couture whichorganizes the fashion show calendar. Thisgives this organization a role that cannot beeasily bypassed.In 1946, Christian Dior, leaving LucienLelong couture’s house where he was work-ing, decided to open his own couture house.He signed very fast a lot of licensing agree-ments around the world. This licensingsystem has allowed a lot of couturiers to stayin the couture industry.A stronger source of income was the per-fume and cosmetics activity. The case ofChanel, where the same shareholder con-trols both the couture and perfumeactivities, is the most explicit example of thissituation.

situation, asked to be removed from this cal-endar.As in French gastronomy, where the nou-velle cuisine movement was followed in1969 by a new name of the former Maîtresqueux et cordons bleus de france intoMaîtres cuisiniers de france (Durand, Rao,Monin 2003), the change of the power con-figuration of the French high-end industryhas resulted in a new shape of the profes-sional structures.It seems, although we cannot rely onknowledgeable figures, that couture activityhas, during the 1980s, faced a decrease inthe number of its clients. The main atten-tion of young people, was, as in the 1970s,concentrated on non couture designers, suchas Thierry Mugler, who organized dramaticfashion shows. This situation may have ledto an aging image of haute couture at thebeginning of the 1990s.A dramatic change in the structure of theindustry has also been noticed. A lot ofbrands are now subsidiaries of publiclyowned companies. Therefore, these brandsrely less on a professional organization tohave help on tax or export matters, forexample. The size of the companies has alsochanged dramatically. For exampleChristian Dior couture 2009 turnover was € 717 million.In 2001, Chambre syndicale de la couturechanged its name to become chambre syn-dicale de la haute couture and officialized inthis way the use of the name haute couture.

Reputation

The presence of reputation leads to the useof a premium by firms, premium which alsoa compensation for firms’ investment inreputation (Shapiro, 1983). In activitieswhere status and reputation matter, a firm’scurrent affiliations have an effect on follow-ing affiliations (Benjamin and Podolny,1999) It has also been shown that organiza-

sequence a lot on the fashion journalists.However, in France, a clear distinctionshould be made between the situationbetween before 1945 and after. Before theend of World War II, the magazines forwomen reproduced the models of ParisianCouture, and no other kind of fashion wasconsidered. Two women journalists HélèneLazareff and Maïmé Arnodin changed thissituation, using what they experienced dur-ing and after the war in English-speakingcountries. Back in France, the formerfounded Le Jardin des Modes and the latterElle. These two magazines progressivelyintroduced in their publications ready towear products, sometimes even created incollaboration with producers and depart-ment stores.This produced a marginalization of hautecouture product for the young Parisianworking in the fashion magazine industry.Later, generalist left-wing magazines suchas L’Express, Le Nouvel Observateur orLibération promoted new comers.

How did the Professional Organization Dealwith Activists

This situation had to be addressed by theprofessional body. Two phenomenaoccurred: a leading personality, PierreBergé, understood that the industry shouldchange its structure in order to stay at animportant level. And some of these créateurswere eager to join the official body in orderto benefit from the visibility of a commonParisian ready to wear show. Mr Bergébecame the President of the new Chambresyndicale du prêt-à-porter des couturiers etdes créateurs de mode.It must be noted that before 1973, the readyto wear collections of couturier houses werepresented during a week that was managedby another professional body: theFédération des industries du vêtementféminin. All the couturiers who were in the

tions can enhance their value by the build-ing and the exploitation of a reputation(Shamsie, 2003).When the study was started (2008), onemust notice that the members faced differ-ent situations. Some of them produce bothhaute couture and women ready to wear,some of them also produce menswear, someof them only produce women ready to wear,or only menswear. The designer of thebrand may either be exclusive, or may workfor his/her own brand or even for otherbrands. If we take the case of young design-ers, some of them absolutely need toparticipate in a fashion show in order togain audience. But in this case, some ofthem are attached to a regular participationin either the “haute couture” or the ready towear week, but others will, for cost reasons,ask to skip a season of presentation.As in the cuisine industry, where a Chef-restaurant dyad can be observed (Durand,Rao, Monin, 2003), we can, since the 1980s,observe a designer-house dyad which com-plicates the situation. The objectives ofthese two parties could in fact be differentand sometimes divergent.Direct access to all the reports of the Fédération française de la couture, du prêt-à-porter des couturiers et des créateurs demode between 1973 and 2008 has been pos-sible. The President and Executive Directorof the federation have been interviewed.The Executive Director of the FrenchClothing Industries Federation has alsobeen interviewed. We also met major fash-ion consultants who were in the businessbetween 1955 and 2010. We finally met par-ticipants of the Federation, includingformer CEOs of companies such as Dior,Givenchy and Kenzo and also youngdesigners who have recently joined theFederation. Some managers were the CEOs of bothcouture and ready to wear houses, othersmanaged only ready to wear houses. Some

of them also managed high-end fashion andtextile brands in Europe (Germany andItaly).The themes that were treated were the rea-sons for joining the organization, thebenefits sought, as well the relationshipswith the other members. A thematic analy-sis has been conducted. The use of two different sources (annualreports and face to face interviews) hasallowed us a triangulation of our data.

Results

It appears that the members of theFederation had, since their entry into thisorganization, a clear idea about their aimsand that the reputation given by the mem-bership to this organization, was the mainmotivation of membership.

– The members of a professional organiza-tion seek to preserve their reputationThe reputation of “couture” is used as a wayto allow diversification into other products.For example, one former CEO of a majorready to wear brand of the 1980s explainedto us: “It’s like in the Bible, at the beginningwas the Word, and the Word became flesh.Design is the first level, it’s like in the Bible,and after, classically, we learn that in school,design enhances the product. And the productwill generate a brand. (..) I had this pattern inmind as soon as I joined the company”.Another one hence told us: “I gave mydesigner a total freedom, within the limits of abudget, for the couture collection, but theready to wear collection he had to respect a col-lection plan”.The access to the fashion show calendarseems to be the most important motivation.As one referee told us: “I think that funda-mentally the first motivation of a newcomer isthe calendar”.The annual meeting reports show also thatthe aims of the members were quite clear.Hence, the first annual meeting report from

identity movement. We also think that, inorder to renew old houses, the transgressionlogical has been introduced in these houses,whereby, by staying in the couture scheme,the privileges (as regards the aristocraticimage given by this label) are maintained.The challenge underlined by Bourdieu in1975, attracting young clients and also newmembers of the “dominant” classes, was inour opinion the same in the 1990’s, andtherefore superficially related to the 1968movement. As a conclusion, we think that professionalgroups, in what Karpik (2007) called “sin-gularity economics”, tend to be more a toolfor a public judgment hierarchy than a tra-ditional lobbying body. By incorporatingnew players, they can ensure themselves tobe a strong tool and to face internationalcompetition. What is significant in this caseis that very few defections can be found.We also consider that this study showed thata purely “monetary” approach (by this we mean thinking in direct benefits) shouldbe completed by a view considering thelong-term objectives of the firms where inthis case reputation reveals to be a decisivefactor.

David ZajtmannProfessor, IFM

ReferencesAnimo A., Djelic M.-L. 1999. The Coevolution of NewOrganizational Forms in the Fashion Industry: AHistorical and Comparative Study of France, Italy andthe United States, Organization Science, Vol. 10, 5: 622-637.Benjamin BA, Podolny JM. Status, Quality, SocialOrder in the California Wine Industry, AdministrativeScience Quarterly, 44: 563-589.Bourdieu P., Delsaut Y 1975. Le couturier et sa griffe :contribution à une théorie de la magie. Actes de laRecherche en Sciences Sociales, 1: 7-36.Durand R, Rao H, Monin P. 2003. InstitutionalChange in Toque Ville: Nouvelle Cuisine as anIdentity Movement in French Gastronomy, AmericanJournal of Sociology, 2003, vol. 108, 4: 795-843.

1976 quotes the President saying that: “asconcerns haute couture, the idea was to pre-serve it, to protect a non substitutionablebrand image and to prove it was not dead”.

– The members of a professional organiza-tion seek financial incentivesThe search for financial incentives was alsoa motivation for membership. Two main taxdeductions have thus benefited the mem-bers of this organization: until 1979 a payback of fabrics used for haute couture collec-tions to the condition that they wereproduced in France, and from 2008 a taxdeduction for the expenses related to thedesign of clothing collections (whether theybe haute couture or ready to wear products)

– The members of a professional organiza-tion seek a privileged position towards theirnational and international competitorsMembers from the organization ask to beprotected by the actions from national com-petitors, in particular a protection againstinfringement.They also ask their organization to promotetheir activities at an international level.They also ask the organization to pay atten-tion to the politics of the same industry’sorganization in other countries. This wasthe case with Italy, a country with whom anagreement has been signed by the two pro-fessional bodies representing high-endfashion.

Contribution to the Theory of Collective Action

This study has brought in our opinion somecontributions to the theory of collectiveaction.We do not agree that social changes are thereason for the changes of the professionalstructure. Rather, in accordance withBourdieu (1975), we think that the politicalvocabulary is being used by newcomers tomake themselves a place in the marketstructure. We however agree that we face an

Grumbach D. 2008. Histoires de la Mode. Editions duRegard: Paris.Hirschman A.O. 1970 (2nd Print, 1972). Exit, Voice andLoyalty, Responses to Decline in Firms, Organizations andStates.Harvard University Press : Cambridge, Mass. Kamitsis L. 2004. Dictionnaire International de laMode: Editions du Regard, Paris.Karpik L. 2007. L’économie des singularités. Gallimard:Paris.Lanzmann J.. Ripert P. 1992. Cent ans de prêt-à-porter.Editions P.A.U.: Paris.Meyer, J.W. Rowan B. 1977. InstitutionalizedOrganizations: Formal Structures as Myth andCeremony. American Journal of Sociology 83:340-63.Milza P. 2004. Napoléon III. Perrin: Paris.Moe T. M. 1980. The Organization of Interests.Incentives and the Internal Dynamics of Political InterestGroups. The University of Chicago Press: Chicago.Olson M. 1965. The Logic of Collective Action, HarvardUniversity Press: Cambridge, MA.Polanyi K. 1944. The Great Transformation. ThePolitical and Economic Origins of our Time. BeaconPress: Boston.Polanyi K. 1957 in Polanyi K. and Arensberg C. 1957.Trade and Market in the Early Empires. Economies inHistory and Theory. The Free Press: New York.Shamsie J. 2003. The Context of Dominance: anIndustry-Driven Framework for ExploitingReputation. Strategic Management Journal 24(3): 199-215.Shapiro C. 1983. Premiums for High-Quality Productsas Returns to Reputation. The Quarterly Journal ofEconomics 98(4): 659-680.Selznick P. TVA and the Grass Roots. 1949. A Dtudy ofPolitics and Organization. University of CaliforniaPress: Berkeley and Los Angeles.Veillon D. 2001. La Mode sous l’Occupation (1939-1945), Payot: Paris.Uzzi, B. 1997. Social Structure and Competition inInterfirm Networks: The paradox of embeddedness.Administrative Science Quarterly 42: 35-67.

their economic model– and the consequen-ces it has had on the way the luxury sectorfunctions.A company is considered to be verticallyintegrated when it is present at a number ofsuccessive stages of the production process.However, a number of studies have outlinedthe various methods of integration, that gowell beyond the simple full ownership oftwo successive production phases. Harriganthus defines the different degrees of integra-tion implemented by companies, fromcomplete control to total dis-integration viaintermediary levels that concern only aselection of the production process or formsof control that are alternative to ownership(quasi-integration, vertical restrictions…).This analytical table corresponds more tothe diversity of the practices observed.Schematically, in the case of luxury fashion,we can outline four distinct phases in themaking of a product:

– Design;– The production of intermediary goods(fabrics, leathers…);– Manufacturing the finished product;– Distribution, wholesale then retail.

We are aware that this level of simplificationforces us to set aside numerous essentialdivisions in a company (quality control,advertising…) in order to solely concentrateon the activities that are visibly necessary toactually make the product. While designremains the backbone of all luxury compa-nies, we will highlight the fact that most ofthem are heavily involved in the productionphases, whether this is directly or indirectly,and in distribution. In addition, some of thebigger names have already taken over thesupply of raw materials for the most part inleather tanning.I am basing my findings on a monographicanalysis of French and Italian luxury com-panies that was carried out for my PhD forthe université Paris-Dauphine as well as aseries of studies carried out by the Institut

The luxury market has grown impressivelyover the past three decades. The figuressupplied by Bain & Company testify to thisfact: sales of luxury products went from 72billion Euros in 1994 to 168 billion Euros in2010, which makes an annual growth rateaverage of 5%. Fashion items (ready-to-wear, shoes, leather goods) still retain aconsiderable market share as they representhalf of this figure. In addition to its econo-mic weight, the luxury fashion sector meritsanalysis due to the evolution in its structure(number, size and organisation of compa-nies) over the past few years. Companieswhose main profession is fashion haveexperienced much more structural changethan other companies that began as jewel-lery makers, watchmakers or perfumers.The big players in the market are thus sho-wing a higher level of internationalisationand diversification, as well as much morevertical integration compared to earlierdecades. Vertical integration as a strategicorientation is the subject of this paper. The objective is to outline the causes of theprocess through a series of case studies–whether it results from changes in thebasic market conditions or is a deliberatestrategy on the party of the players to change

Vertical Integration in theLuxury Sector: Objectives,Methods, EffectsFranck Delpal

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Français de la Mode. This approach waschosen as the luxury sector is not like anyother sector as it encompasses a part of othersectors (clothing, accessories…) and doesn’treally exist as an aggregate. The terms thatdefine the content of the statistical data thatis used to scientifically validate economictheory do not take it into account, whichmakes any in-depth statistical analysis ofthe luxury business very complex. Thislimitation is compounded by the availabilityor lack of data in a sector where there is avery high level of secrecy. The main sourcesof these monographs are the available litera-ture about the companies (books, annualreports, case studies, press) in addition to anumber of semi-directive interviews withsome companies who accepted to answermy questions.

Originality in the luxury industry

A number of writers have covered the gro-wing disintegration of companies over thepast few years linking this to a certain num-ber of changes on an individual and globallevel. Taking computers as an example,Quelin thus highlighted five factors thathave pushed companies to outsource a partof their activities. – Focus on strategic activities. Only func-tions that contribute significantly to thecompetitive edge of the company remain in-house.– Economies of scale and cost. Quelin notesthat “in some cases, economies of scale areeasier to reach by the sub-contractor thanthe user”. A sub-contractor that bulks uporders from a number of principals is thusin a position to produce more effectivelythan if each principal owned their own pro-duction outfits.– Reorganisation policies. Companies haveoverall tended to refocus on their funda-mental profession and to get out of activitiesthat are not directly related.

– Technological change. Faced with rapidtechnological advances, companies maychoose to outsource in order to avoid inves-ting heavily in technology that may not last.I should add that on a more manageriallevel, new technologies and informationsystems have enabled the implementationof more complete and more reactive chec-king procedures which reduce the risk ofsuppliers and sub-contractors not respec-ting their commitments.– Market globalisation. This has led to aredistribution of the cards between compa-nies, as they now have to face competitionfrom other countries. Opening borders andmore and more out-sourcing abroad oftengo hand in hand as shown by McLaren.

These decisions rely on strategies devised ina macroeconomic environment in fullupheaval. In the fashion sector, not inclu-ding luxury, the growing opening ofeconomies has considerably upset the valuechain. Now, most companies only retain theactivities that are essential to the creation ofadded value and the perception of thatadded value by the client (design, distribu-tion) and outsource manufacturing stagesto sub-contactors located in countries wherethe cost of labour is lower (North Africa,Asia…).The fact is that the luxury sector has gonethe opposite way. Luxury companies havein fact gone for more integration in the pro-duction phase.My thesis was based on the study of twentycase studies of companies. Here we presentten of those which seem to best representthis mutation. These companies all havedifferent countries of origin, ages, speciali-sations and sizes.

Table 1 – Luxury companies that control the value chain upstream: how and why

COMPANY GROUPRAW MATERIALS

SOURCING POLICYMANUFACTURING CONTROL

EXPLANATIONS PROVI-DED BY THE COMPANY

LOUIS VUITTON LVMH

Bought outside thegroup for the mostpart. The company hasjust recently bought theTanneries de laComète, in Belgium.Fabric manufacturingis outsourced.

12 production sites in France forbags and small leather items.3 workshops in Spain, 2 in the U.S.all for leather products. 4 shoeworkshops in Italy. Clothing manu-facturing is outsourced.

The need to fulfil a growing demand and to maintain quality.

CHRISTIANDIOR COUTURE Christian Dior

Outsourced. The com-pany commits manymonths in advance tofuture purchases inorder to reserve the best qua-lity leather.

5 production sites in leather goodsand shoes all in Italy run by localpartners. The company bought outits licensee for children’s clothing(les Ateliers Modèles).Manufacturing takes place in Franceand Thailand. The haute coutureworkshop is still in existence. Inready-to-wear, the company deve-lops products but outsourcesmanufacturing.

Baby Dior is seen by the company to be ahigh-potential acti-vity in terms of imageand turnover.

HERMÈS HermèsInternational

The company possesses6 production sites fortextiles and 4 tanneries. it also has a minority share-holding in themanufacturers Perrin,who specialise in silk

The company also controls 11 leather goods production sites.Ready-to-wear is outsourced to sub-contractors though the company ensures the design, deve-lopment, pattern cutting, sourcingmaterials and quality control…

The guarantee of thebest possible quality, the need to traincraftspeople for years so that they can work for the company.

YVES SAINTLAURENT

PPR (Gucci Group)

Outsourced.

The Gucci Group bought outMendès in 2000. Mendès was licen-sed to produce YSL’s ready-to-wearline and owned 25 YSL boutiques.

To control all of thedevelopment and distribution process.

ARMANI Armani Outsourced.

The company owns production out-fits for ready-to-wear, shoes, bags,knitwear, denim andchildren’s clothes.

To control quality and skills.

GUCCIPPR

(Gucci Group)

Outsourced. Gucci hasabout 200 main sup-pliers for materials forbags, 267 for elementsfor shoe manufactu-ring.

The company has three workshops(Casellina for leather goods, Bacciofor shoes Novara for women’sready-to-wear) but the employeesfocus on product development andquality control. Production is carried out by a number of sub-contractors: 500 in leather goods, 26 shoe factories, 4 of which arecontrolled by Gucci.

Direct control ofquality, costs, timing,deliveries and stocks.

BOTTEGAVENETA

PPR (Gucci Group) Outsourced.

The company owns production sitesfor accessories (leather goods), andpartially for shoes and ready-to-wear. The latter is manufactured inpart in factories that belong to theGucci group.

Quality, uniqueskills, protection ofcraftsmanship.

Sources: Annual reports, press, interviews.

If we start with upstream control (manufac-turing models or in certain casessemi-finished products such as textiles andleather), it would appear that a number ofluxury companies have a base, howeverlimited, in the production sphere. Weshould however point out that this concernsmainly leather-related activities (luggageand shoes), and that clothing manufactu-ring is outsourced for the most part.Retaking control upstream in the valuechain happens in two ways: the completevertical integration of certain activities andputting a stop to manufacturing licences forothers, going back to a focus on sub-contracting. In the latter, companies havetaken back control of product development,production, and quality control.We should point out that these integrationmeasures are recent, most having takenplace in the nineties. Louis Vuitton realisedthat its original Asnières workshop was nolonger big enough to satisfy the demand forproduct so they opened a second workshopin 1977 and are still opening new produc-tion units to this day. Hermès has invested

hugely in its luggage and leather goods pro-duction site in Pantin that employs quite anumber of skilled craftsmen and they havealso bought certain French manufacturerssuch as the Manufacture de HauteMaroquinerie and the Gordon-Choisy tan-nery. Christian Dior put an end to a numberof licences in the second half of the ninetiesand is currently taking back control of allleather goods. In the same way, Gucci andYves Saint Laurent followed this strategy oftaking back control of production and putan end to a number of licences.The arguments put forward by the compa-nies to justify the integration of certainactivities do throw up some questionshowever. The need for high-quality andconsistent product or the existence of a spe-cific skill that can not be found outside thecompany are pre-requirements in theluxury industry but cases of integrationinvolve in most instances just a part of theproduction and a few segments of products(for the most part leather goods and acces-sories). Are the products made bysub-contractors of inferior quality compa-red to those made by the company itself?The answer is probably no. In addition, if

COMPANY GROUPRAW MATERIALS

SOURCING POLICYMANUFACTURING CONTROL

EXPLANATIONS PROVI-DED BY THE COMPANY

TOD’S Della ValleGroup Outsourced.

The company produces most of itsproducts (shoes and bags) in its ownfactories. Casual garments, jewel-lery, and glasses are outsourced.

To control quality,efficiency and brandprestige.

SALVATOREFERRAGAMO Ferragamo Outsourced to

450 suppliers.

For shoes, bags and clothes, thecompany relies on a network ofsmall workshops, all located in Italy.The company focuses on productdevelopment and checking the finished product.

Flexibility, efficiency.

PRADA Prada Outsourced.

9 company production divisionsproduce knitwear, ready-to-wear,belts, shoes, leather clothing andbags. Certain production outfits areshared with Miu Miu, anotherbrand belonging to the PradaGroup. The company makes mostof its own prototypes, most samplesand a part of the finished products.

Control productionskills, productioncosts, flexibility andquality.

the integration went hand in hand withskills, what can we say about Christian Diorwhich produces its own bags but contractsout its ready-to-wear? By this reasoning,one could be led to believe that the star ofParisian fashion does not have the specificskills to produce clothes outside its hautecouture activities, which is obviously not thecase. So in this paper, using economic litera-ture and publications, we will explore thereasons that push luxury companies to inte-grate one activity over another and to whatextent. We will see that economic issues arenever far away when these choices aremade, as well as the environment in whichthese firms evolve, marked by a weakeningof production sources in Western Europe.

Sources: Annual reports, interviewsn.a: not available

The situation is even clearer in the develop-ment of distribution/retail. All of the luxurycompanies studied have shifted towards ahigh level of integration in distribution overrecent years. The share of sales in retail nowlargely exceeds that of external clients (bou-

tiques, department stores…).These forms of direct control are supple-mented by strategies that are aimed atensuring the correct manufacturing or dis-tribution by third party companies withwhom the luxury companies collaborate(retailers, sub-contractors…). This is refer-red to as “quasi-vertical integration”, wherethe market conditions made the directcontrol of production or distribution unne-cessary as Blois depicted taking the exampleof luxury car manufacturing.Companies claim the reasons for this gro-wing shift to the end of the value chain aremost often the need to have a coherentimage and offer on a worldwide level withdisappearing trade restrictions, the guaran-

tee of a better service during and after salesand better customer knowledge. Again,these explanations do not, to me, seem to betelling the whole story as to why companieswant to control their own distribution/retail. We will also examine the integrationtheory in order to analyse the ramificationsof the movement.

COMPANY GROUP NUMBER OF IN-HOUSESTORES (2003)

NUMBER OF IN-HOUSESTORES(2010)

PERCENTAGE OF RETAIL INTURNOVER (2010)

LOUIS VUITTON LVMH 317 459 > 95

CHRISTIAN DIORCOUTURE Christian Dior 159 237 81

HERMÈS Hermès International 125 193 84

YVES SAINTLAURENT PPR (Gucci Group) 58 78 55

ARMANI Armani 119 130 68

GUCCI PPR (Gucci Group) 198 317 73

BOTTEGA VENETA PPR 59 148 85

TOD’S Della Valle Group 95 159 49

SALVATOREFERRAGAMO Ferragamo n.a. 312 70

PRADA Prada n.a. 319 70 (group)

Table 2 – The growing shift of luxury companies toward the end of the value chain (Forward integration)

Backward integration enabling the substitu-tion of inputs from a firm with a monopolyis also justifiable in order to reduce depen-dence on this supplier. Vertical integrationis, in addition, a means to close access to themarket and prevent other companies fromproducing their products by buying out asupplier. Salop and Sheffman analysed thecase of a dominant company that managedto increase costs for the competitionthrough integration. This can be compoun-ded by adding all types of entrance barriersput into place by established firms to pre-vent or slow down the arrival of newcompetitors. Forward integration has animportant role here as we will see in the caseof the luxury industry.In terms of the search for savings and effi-ciency, a number of themes have beenexamined. Bain, who was one of the firstwriters to show the importance of the verti-cal integration process to the economy,notably put the emphasis on the conditionsof the emergence of integrated companiesfor technological reasons. He thus mentio-ned the case of companies led to carry outtwo production phases conjointly due to theinterdependence of two technologies. Themost frequent example used is that of steelproduction where then heat given off by thetasks upstream means the steel doesn’t needto be reheated for rolling. This particularbenefit of vertical integration gets the leastamount of coverage in the literature.On the other hand, the exploration of themultiple savings that result from integrationand the higher level of efficiency it can leadto take the lion’s share of research on thesubject. The sine qua non of sources for thistype of research is the theory of transactioncosts as defined by Williamson usingCoase’s celebrated work. This theory com-pares the cost of an action carried out insidethe firm with the cost of a transaction withan external company hired to do the samejob. The transaction costs cover the traditio-

The theoretical justifications for vertical integrationThe economic theory behind vertical inte-gration can be outlined in three mainarguments that make integration attractiveto business: growth in market power (1),economies of scale and increased efficiency(2), reduced uncertainty (3).As Harrigan notes, the benefits of verticalintegration are often studied on a microeco-nomic level, based on the behaviour of onesingle firm, frequently in a monopolisticsituation. However, vertical integration alsointervenes in competitive situations as ameans to stand out. It then takes on a strate-gic dimension in as much as it guaranteesthe companies in question a competitiveedge under certain conditions. This is forexample the case for companies that prac-tice double mark-ups. The most writtenabout theoretical case is that of two succes-sive monopolies, with a uniquemanufacturer that sells to one client only.Both add a mark-up maximising theirmonopolistic profit margin and limiting thequantities sold. The existence of only onecompany, present in two stages of manufac-turing and retail should improve thewell-being of the economy by enabling alarger number of individuals to consumethe products at a lower cost and enablingthe company to have a bigger profit margin.Firms may also be tempted to integratetowards the end of the value chain in orderto make sure the right type of effort is beingmade to highlight their products. Visibility,customer advice, the qualitative environ-ment and after-sales service reflectpositively on the manufacturer’s products,which explains why they might wish to takethe place of external retailers that are lesssensitive to this objective. A number ofresearchers have proven a statistical linkbetween the effort a manufacturer puts intopromoting the products and the tendencytowards forward integration.

nal costs (land, work, capital, materials…)to which are added the extra cost of mana-ging the relationship between thecompanies over time (sharing information,legal costs, organisational costs, the cost ofinefficient behaviour…)A number of factors influence transactioncosts that businesses need to pay: uncer-tainty about partner’s possible behaviour,the complexity of the action to be taken, thesize of the specific investment needed andnon refundable costs, the frequency oftransactions…A number of theoretical and empirical stu-dies have tested all of these issues– The results of these tests, based on diffe-rent methods and samples, come up withthe same answers overall. So, the level of integration downstream willbe equal to the extent the company tries tohighlight its products; and symmetricallythe level will be lower when the retailershows it is making a big effort. In mostempirical tests, vertical integration is corre-lated positively with the development ofspecific skills by the service provider(human capital specificity) or by anydemand for specificity on the part of theclient.– According to Williams’ theory, the objec-tive of this integration is to reduce thechances of a « hold-up » by suppliers thathave become indispensable. This theorywas criticised by Coase and Simon.– The complexity of the production processis also one of the recognised reasons behindvertical integration. As for uncertainty, it hasa knock-on effect on integration but onlyupstream.Without going as far as total integrationwhich can be costly and inflexible, verticalrestrictions implemented by companies alsoenable them to establish advantageous rela-tionships with their sub-contractors. Withgreater bargaining power, they can imposetheir views on a great number of points

(keeping of stock by the sub-contractor,delivery deadlines, and access to the pro-duction site, product specifications, thesub-contractor’s marketing policy…).

Why are luxury companies moving more andmore towards vertical integration?

Integration practices in the luxury fashionsector as is evident from the monographsand interviews carried out here, tend to vali-date certain economic theories:– Production efficiency and retaining manu-facturing profit margins. The savingsachieved thanks to integration (the searchfor efficiency, retaining manufacturing pro-fit margins) are very present in the theories.However, this argument is valid only foractivities where the manufacturers make aprofit on their sales which is only the case inleather goods in France. Indeed, as is evi-dent from INSEE documents on garmentmanufacturers, their operating results havebeen in the red for many years (their opera-ting profit margin was - 3,3 % in 2007)which explains along with other elements(complexity, seasonality…) why luxurycompanies do not wish to buy out their sub-contractors. It is important to note that thehigh level of growth in the accessories mar-ket (shoes and bags) compared toready-to-wear has reassured companies onthe low level of risk of their productioncapacity being underused.– Ensuring delivery of inputs. Still upstream,in line with the economic theory of the gua-rantee of the offer, the rarity of leather inEurope has led to tanneries being boughtout by certain luxury companies in order toensure their supply. Adelman’s work hasalready told us that in a market in a biggrowth phase, a firm can be incited to inte-grate upstream out of fear that the suppliersof intermediary goods are unable to fill theirorders.

locally available skills have enabled compa-nies to constitute their own productionoutfits. However, the shoe sector has practi-cally disappeared in France; even for luxuryproducts and the biggest brands were obli-ged to set up their own production outfits inItaly or to work with Italian sub-contractors.Table 3 – Production networks and integrationchoices made by French companies

Source: IFM, Distribution of added value.

– The advantages of integrateddistribution/retail. As for integration in retail(forward integration), the facts comply withthe economic theory that says that integra-tion is more common for companies with astrong brand value (Lafontaine and Slade,p.632). It is clear that this groundswellmovement followed by all luxury compa-nies fulfils the need to make a huge effort invalorising the products of the company in asmuch as its economic viability relies oncumulating profit margins. Richardson alsohighlighted the role of a retail network andits capacity to react to market changes quic-kly. The fact is that luxury companies areincreasingly being run from the end of thevalue chain and that feedback from storesconstitutes information of the highest signi-ficance to ensure the success of thecompany. The domination of retail has alsoresulted in a demand for a more flexibleorganisation. In fact, unlike the wholesaleschema where only the items that are soldare produced, the company that sells

– Aversion to risk and integration for survival.Integration that happens to avoid being runfor all intents and purposes by the sub-contracting company is a case that is morespecific to luxury and can be seen as a riskaversion tactic. If a client controls the lion’sshare of a company’s turnover or if it is dee-ply involved in its management through theorders it gives, the supplier can turn againstit in case of financial difficulty. Certain professionals interviewed evenadmitted that cases where a principal coversover half the turnover of a sub-contractorare not rare, and the percentage is someti-mes even higher. The risk is far fromnegligible in as much as numerous verticalrestrictions and quasi-integration scenariosleave very little room to manœuvre for part-ners of the luxury companies.– Production and integration branches.Following on from Chandler (1962) andArrow (1975), Bolton and Whinsto high-light the need to compare the presence of afirm at the production and distributionlevels with the nature of the relationshipthat already exists within the manufactu-ring and distribution network of the branchunder examination. Taking this as a startingpoint, we examined all of the examples inthe luxury industry in detail. Indeed, theclothing, leather goods and shoe sectorseach have their own specific characteristics.In France, clothing still has its own networkof manufacturers, essentially women’sready-to-wear specialists, on whom theprincipals can rely and which avoids themhaving to integrate. They do however pos-sess a high level of market power in as muchas, after the huge movements of delocalisa-tion in the eighties and nineties, luxurycompanies are the only ones left who stillmanufacture in France. However, theFrench leather producing sector is weak.The leather goods sector is still in one piecewhich has enabled companies to integrate,in France for the most part. In Italy also,

CLOTHINGLEATHERGOODS

SHOES

DIRECTCONTROL

BY BRANDS

Very rare Frequent Frequent

STATE OFFRENCH SUB-CONTRACTING

Exists (inwomen’sready-to-wear)

WeakeningPracticallynon-existent

through retail must stick to market changesto avoid being left with costly left-overstock.– Quasi-integration. Finally, in terms of ver-tical restrictions, those that exist in theluxury universe are numerous. In additionwe should add that even when luxury com-panies fit the model of sales to outsidedistributors (department stores, multi-brand boutiques); they manage to sell ontheir own terms when their market power isstrong enough. A desirable brand can thusimpose a certain number of conditions onretailers in order to ensure the correct sel-ling conditions for its products. What Hatahas to say about the development of LouisVuitton in Japan is edifying on the subject.Conditions of various natures are oftenmentioned by companies: the definition ofthe minimum quantities purchasable, thepredefinition of the purchasable range sothe identity of the collection is respectedregardless of the store…

The consequences of vertical integration inthe luxury market

This stricter vertical integration by someplayers is, as we have seen, partly the resultof strategic considerations: guaranteeingsupplies and possibly hampering the com-petition, preventing or slowing down thearrival of new competitors.In the case of luxury companies, the barriersat the entrance are already quite high: acompany must have a recognised brand, anestablished reputation for quality pro-ducts… However, this point is not alwaysthe most difficult to handle. Recent relaun-ches (Balenciaga, Vionnet…) show that it ispossible to rely on the legacy of a defunctbrand to become competitive. These pre-requirements are compounded by the hugeeconomic constraints that jeopardize theroom to manœuvre a newcomer has upagainst the establishment.

The latter has, as we have seen, taken overthe production end, either through directcontrol or through the favourable marketconditions that result from their huge bar-gaining power (earmarking the best leather,dictating the most advantageous deliverydeadlines…).As for distribution/retail, the shift to the endof the value chain by established firms andtheir high level of internationalisationmakes the “entry ticket” to the market allthe more difficult to obtain. If luxury com-panies are for the most part renting theretail spaces they occupy, their longevitymeans that their rental arrangements aremuch more favourable than thus availableto newcomers. In addition, the fact thatsome belong to big multi-brand groupsgives them more leverage in negotiation asthey have the power of all of the group’sbrands behind them.So the vertical integration process plays therole of what is known as strategic engage-ment in game theory.The established firm makes it known topotential newcomers that it is massively andirreversibly committed to the market. Thenewcomers thus understand that the entryfee is too high for them and they decide notto get into competition.This increase in the number of barriers atthe entrance point explains the ever increa-sing concentration of the structures of theluxury industry and the reasons for whichdespite the high growth levels, few newcompanies have emerged over the pasttwenty years.

Franck DelpalIFM, University of Paris-Dauphine

References:

Adelman M.A (1955) Concept and StatisticalMeasurement of Vertical Integration, in Stigler GJ (ed)Business Concentration and Price Policy, PrincetonUniversity Press.

Antomarchi Ph (1998) Les Barrières à l’entrée en écono-mie industrielle, L’Harmattan, Paris.Arrow K.J (1975) Vertical Integration andCommunication, Rand Journal of Economics.Bain J.S (1956) Barriers to New Competition, HarvardUniversity Press.Blois K.J (1972) Vertical Quasi-Integration, Journal ofIndustrial Economics.Bolton P, Whinston M.D (1993) Incomplete Contracts,Vertical Integration and Supply Assurance, The Reviewof Economic Studies, vol. 60 n°1.Chandler A.D (1962) Strategy and Structure: Chaptersin the History of the American Industrial Enterprise,Cambridge, MIT Press.Coase R.H (1937) The Nature of the Firm, Economica.Dixit A (1982) Recent Developments in OligopolyTheory, American Economic Review, vol. 72, n° 2.Gabrié H (2001) La Théorie williamsonienne de l’in-tégration verticale n’est pas vérifiée empiriquement,Revue économique, vol. 52, n°5.Harrigan K.R (1984) Formulating Vertical integrationstrategies, The Academy of Management Review, vol. 9,n° 4.Hata K (2004) Louis Vuitton Japon, Assouline.Joskow P.L (1985) Vertical Integration and Long-TermContracts: The Case of the Coal-Burning ElectricGenerating Plants, Journal of Law, Economics andOrganization.Lafontaine F, Shaw K.L (2005) Targeting ManagerialControl: Evidence from Franchising, Rand Journal ofEconomics.Lafontaine F, Slade M (2007) Vertical Integration andFirm Boundaries: The Evidence, Journal of EconomicLiterature, vol. 45, n° 3.Mahoney J.T (1992) The Choice of OrganizationalForm: Vertical Financial Ownership Versus OtherMethods of Vertical Integration, Strategic ManagementJournal, vol. 13, n° 8.McLaren J (2000) “Globalization” and VerticalStructure, American Economic Review, vol. 90, n° 5.Quelin B (1997) L’outsourcing : une approche par lathéorie des coûts de transaction, Réseaux, n° 84.Richardson J (1996) Vertical Integration and RapidResponse in Fashion Apparel, Organization science, vol.7, n° 4.Salop S.C, Scheffman D.T (1983) Raising Rivals’Costs, American Economic Review, vol. 73, n° 2.Williamson O.E (1985) The Economic Institutions ofCapitalism, The Free Press.

Olivier Bomsel2 defines a new type of goodsknown as “significant goods” which are inaddition to the goods of research and expe-rience that economists already know. Thesesignificant goods do not specifically serve “astrict demand, but are impulse buys thatsuggest experiences to the purchaser”. Thecentral value of these goods is the messagethey convey thus underlining the impor-tance of the signalling of the products(through advertising, quality labels,brands…). Taking the example of LouisVuitton, he feels that a high level of verticalintegration is necessary for these types ofgoods to succeed. It is interesting to notethat both writers make the connection bet-ween the overall evolution of the economyand the business models necessary to adaptto the economy. Here we wish to show thatluxury companies are mines of informationon today’s economy in terms of the way theyfunction and their organisation. To do so,we will take a micro-economic approach tooutline the main characteristics of the diffe-rent business models in the luxury industry.

The Rebirth of an Industry

In the past, the attitude to the productionand consumption of luxury products wasnot without contrast. The siècle desLumières defended luxury as is evidentfrom reading Montesquieu, Mandeville,Voltaire or Saint-Lambert’s article in theEncyclopédie3. Luxury was considered to bea source of wealth for individuals and forthe state. As such, they were breaking with along tradition that Henri Baudrillart4 refer-red to as “rigoriste” (strict), that had notablybeen supported by the Greek stoics andFrench moralists (Montaigne, Pascal) whothought superfluous spending was to befrowned upon.In his Political Economics Class5, CharlesGide tries to bring both strains together. Heproposes the idea that luxury consumption

The aim of this article is to show that thespecifics of the luxury industry mean that,to a certain extent, it is one of the sectorswhere new business model trends are moreclearly visible. Whether this is a question ofproduct differentiation pushed to the limits,the weight of the representative and theimmaterial, the globalisation of markets orthe need for absolute control over designand distribution in a market where reputa-tion and coherence are cardinal values, thecomponents of the luxury economic modeldisplay a level of modernity that would havebeen difficult to predict twenty years ago.Luxury companies are the main players inthe new age of capitalism referred to bysome writers as cognitive capitalism, byothers as the economics of singularity, andothers still as the economics of the immate-rial. Yann Moulier Boutang outlined themain traits of cognitive capitalism1. He citesthe primacy of the immaterial investmentover the material investment and the end ofthe division of work that holds back innova-tion in favour of organisations that makethe development of quickly-made complexproducts in small quantities possible.

Luxury: An Industry Between Heritage andModernityDominique Jacomet, Franck Delpal

31

should not have to take the blame for therapid change in needs and technology: theluxury of one era is no longer a luxury in thedecades that follow: “ ...At certain times inhistory, a shirt was considered to be an item ofgreat luxury and constituted a royal gift. Athousand other objects can be said to have thesame story […] It is not possible to condemn apurchase from a moral point of view or evenfrom an economic one for the sole reason thatit fulfils a superfluous need, that is to saysuperfluous right now, without being able topredict what will happen in the future”.However, luxury consumption should nottake over too great a part of limited produc-tion elements (earth, work and capital) so asto avoid the reduction of social well-being.In the seventies, the theme of industrialredeployment was in vogue and Francewanted to shift away from traditional indus-try. Georges Pompidou mentioned it in apress conference in 19726: “good cooking…haute couture and good exports […] that’sall over… France has begun and is well intoan industrial revolution”. However, in thenineties, luxury came to the fore again: twoof France’s biggest companies, LVMH andPPR, became world leaders in the sectorand the French luxury business contributedsignificantly to the international develop-ment of the country, through exports andinvestment abroad.We have estimated that the world luxurygoods market is worth 168 billion euros7,and French companies cover a consequen-tial part of this market. The market can bedivided into two segments with a relativeshare that is practically equal: ready-to-wear8 and accessories (just over a quarter)on the one hand; perfumes and watches(around 20%) on the other. France has prideof place in a number of specialities (leathergoods, high-end jewellery and perfumes).

The different luxury markets in 2010

Source: Altagamma

Luxury has become a veritable industry.The supply chain goes from raw materialsto finished products. Luxury companiesmanage complex value chains that combineproduction, logistics and distribution.Finally, its development implies the produc-tion and reproduction of items in quantitiesthat have grown considerably as the markethas grown. However, the exact contours of the industryare difficult to outline. If we define a sectoras all of the companies that have the samemain activity or that fulfil the same consu-mer need by supplying the same market, itis difficult to constitute a coherent statisticalwhole. In terms of activity, the high level ofdifferentiation in the range proposed byluxury companies and the diversity of thebusiness models encountered underminean approach based on the substitutable cha-racter of the available offer9. In marketterms, the notion of identical needs disap-pears faced with the importance ofrepresentation: the immaterial wins outover the functional utility of the luxury pro-duct. Ultimately, the players themselves arethe best placed to define what constitutesluxury: a company belongs to the luxurysector once other luxury companies desi-gnate it as the competition10.

Sector Turnover inbillion euros

Share of market as a whole

Ready-to-wear 45 27 %

Accessories 44 26 %

Perfumes &cosmetics 37 22 %

Watches &jewellery 32 19 %

Tableware 5 3 %

Other products 5 3 %

Total 168 100%

the collective memory and enable compa-nies to claim a certain permanence in theirdesign thus ensuring that they are not asso-ciated with the world of throwaway fashionand can claim their rightful place in thetimeless universe of luxury. In addition, skilland craftsmanship and the artistic profes-sions are some of the aspects most valorisedby these companies in as much as theycreate a connection between the company’shistory and its current activity. Whetherthey come from a saddle-making, hand-made shoes or couture background,companies systematically highlight theirconnection to a noble profession, trumpe-ting the way they have mastered the mostcomplex craftsmanship. Companies with ahigh level of legitimacy in terms of crafts-manship thus feel the need to renew theirestablished skills by collaborating with fas-hion designers.Finally, innovation also enables differentia-tion. This can take on various formswhether it means honing new techniques,such as in high-end jewellery, using newfabrics (new textiles) or adapting productsto the changes in living habits (LouisVuitton replacing their trunks with raisedlids with flat trunks, Chanel’s stark gar-ments or the way Yves Saint Laurentborrowed from menswear to accompanywomen’s liberation…). These three sourcestend to increasingly cross over and play offone another to attract consumers.Haute couture and high quality craftsmans-hip are the two main professions behindcontemporary luxury companies, and theyhave resulted in different business models.The companies who have their origins incraftsmanship have, in general, a profitablecore profession, whether this is leathergoods or jewellery for example. This meanstheir diversification is explained by a newvalorisation of their skills (jewellery andwatch frames, leather work and shoes…).We can also note that certain luxury brands

The Originality of an Extremely DifferentiatedOffer

The first characteristic of luxury companiesis the level of differentiation of their pro-ducts, through branding but also throughmore subtle methods of prompting theimmediate identification of their productsas analysed by Jean-Marie Floch11. Thisbrand “vocabulary” that builds up over timeconstitutes the real, immaterial asset ofthese companies. Commercial success reliesentirely on understanding and respectingthis asset. The three levers of differentiation are crea-tive input or design, the specific crafts andskills acquired by companies and the inno-vations they introduce at any given time.First of all, design is the basic foundation ofany differentiated offer. Investment indesign is seen first of all through the multi-plication of collections: in addition to thetraditional Autumn-Winter and Spring-Summer collections we now havepre-collections which have significantlygrown in size and between season collec-tions (resort, cruise…), to which we canalso add, in some cases, men’s collections orhaute couture. Some fashion houses pro-duce up to eight seasons annually. AsRoland Barthes wrote in the introduction toSystème de la mode12, “to capture the buyer’saccounting conscience, one must create aveil of images, meaning, reasons in front ofthe object, to elaborate a mediate substancearound it, like an aperitif, in short to create asimulacra of the real object, by substitutingthe weighted time of wear and tear with asovereign time that is free to destroy itself byan act of annual potlatch”. Luxury compa-nies incontestably carry out the practices ofthe fashion sector in creating “this uncon-scious that is constituted with desire as itsgoal”. At the same time, it is clear that manyforms, whether it be Christian Dior’s“tailleur bar” or a Hermès bag, are part of

that come from a craftsmanship back-ground remain specialists in their originaltrade: this is the case for most watchmakers.The diversification of leather goods compa-nies into ready-to-wear whether it be recent,(Louis Vuitton in 1997) or well established,(Hermès did so before the Second WorldWar) tends to follow a logic of establishing aglobal brand rather than fulfilling a need foreconomic balance. The brand then becomesan “editor, a studio, a symbolic operator ofthe validation of the meaning associatedwith the product”13. It proposes “editorialchoices” but can only do so “in a field whereit has proven legitimacy”. “Brands are achance to make economies of scale that ena-ble multiple experiences to be categorisedunder one name”. The more financially fragile fashion houseswith their origins in haute couture wentlooking for complementary activities earlyon: in perfume as early as the inter-waryears, then in licensing contracts and todayin accessories. Tomoko Okawa14 notes thatin the seventies, the couture and ready-to-wear activities at Christian Dior were indeficit and were held up by the sales ofaccessories and licences. More recently,licencing has become rarer and is usuallyreserved for activities that involve specificskills (perfumes, glasses…). Leather goods,shoes and accessories have acted as internalgrowth mechanisms that have ensured theirdevelopment. The share of ready-to-wear interms of turnover is often down, and smallerthan that of accessories.

The Originality of Vertical Integration

One of the main changes to have had a hugeeffect on the luxury industry is vertical inte-gration which enables companies to controltheir offer, from the design phase to thepoint of sale. This movement went againstthe disintegration trend of the past thirtyyears with the globalisation of the eco-nomy15. While they were originally

concentrated on the design and productionin short series, companies progressively gai-ned market power over their suppliers anddeveloped direct sales through a network ofself-owned stores. To begin with, in terms ofproduction, a growing number of luxuryfirms got involved in the control of theirsupply chain, both directly and indirectly. InFrance for example, Louis Vuitton, Hermèsand Chanel have invested in productionunits often located in France or have boughtout some of their suppliers. This integrationprocess is particularly obvious in leathergoods where the high growth levels andprofit margins have reassured companies interms of their manufacturing commitments.Certain players have also invested in shoeproduction outfits in Italy, but also inFrance such as J.M. Weston in Limoges. Inaddition, the existence of production bottlenecks such as the one in leather tanning hasled Hermès and Louis Vuitton to buy tan-neries to ensure their supply. In ready-to-wear, integration is less com-mon in France, but quite frequent in Italy.There are a number of reasons for delega-ting this type of manufacturing tosub-contractors. So French companies,unlike a number of Italian ready-to-wearcompanies, are rarely directly involved inthe production end of things. Their historydoes not encourage them to take on this rolein as much as some have built up close,long-term relationships with some of theirsub-contractors even though relationshipbetween brands and sub-contractors are notalways easy. The need to regularly supplythe production outfit while sales of gar-ments are more and more marked byseasonality and are experiencing a low levelof growth compared to accessories has dis-couraged companies from investingupstream in the supply chain.The second change concerns the integra-tion of retail by a number of luxurycompanies. The advantages of direct controlare legion: the accumulation of profit mar-

The Originality of the Significance ofRepresentation and the Immaterial

These objective elements of differentiationare combined with more subjective aspectsthat are essential to the luxury sector. Thevalorisation of their history, meaning theirheritage, the storytelling behind this, theway products are presented in the point ofsale and the location of the stores are someof the levers for added value used by luxurycompanies. Through a series of signals, thatcan be real or implied, companies manufac-ture consent to pay more and consumerscomply. This is linked to the nature of“positional” object of luxury that representsthe psychological or social aspirations of theconsumer. Bernard Catry17 has examined the differentforms of rarity among luxury products.Natural rarity linked to a penury of produc-tion factors is combined with techno-raritycreated by the marketing of an innovativeproduct, different types of limited editionsor when a company itself decides to limitthe distribution of a product and finallysubjective or virtual rarity that is the resultof an overall strategy on the part of the com-pany. The latter in fact has a range ofelements at its disposal: pricing levels, retailmode, and advertising. It is clear that theretail choices for a product influence its visi-bility and as such the idea of rarity itrepresents. The growing level of forwardintegration of companies and the develop-ment of self owned retail networks fulfil thisobjective to create added value as well as theneed to control the spread of the offer.This determination to develop a perceptionof rarity has consequences on the choices interms of the value chain and consequentlyon business models.

gins as manufacturer, wholesaler and retai-ler; more brand image coherence; directcontact with customers and very valuablefeedback.It is important to note that the specialistprofessions of each company do play a part:the leather goods people are mainly retailerswhile those who come from fashion still useexternal wholesalers. Watch companies aremainly wholesalers while jewellers distri-bute most of their products through theirown retail network.However, all companies do not have themeans or the vocation to become retailers.They then tend, if they are going throughexternal clients (department stores, multi-brand boutiques), to implement a certainnumber of vertical restrictions so that theretailer ensures the best possible sale condi-tions for their products. This can take ondifferent forms including a selection ofapproved distributors and predefining therange (in quantity and quality) to ensurethe best level of visibility possible for thebrand at the point of sale. This strategy canbe analysed via the theory of the agency.According to Olivier Bomsel, these restric-tions enable them to avoid opportunisticbehaviour on the part of retailers who mightbe tempted to push the sale of productswhich provide a bigger profit margin forthem or take a lower level of investment toconvince clients.

Source: Annual reports of the companies listed.* branches only

Company Number of stores (2010)

% of retail in turnover

Louis Vuitton 452 over 90 %Gucci 317* 73 %

Hermès 193* 84 %

Bottega Veneta 148* 85 %Prada 207* 71 %Salvarore Ferragamo 312* 69 %

Armani 130 68 %

Burberry 417 64 %

Christian Dior 240 81 %

Yves Saint Laurent 78* 55 %

Until the end of the seventies, the UnitedStates and Europe constituted the maininternational markets for luxury compa-nies. Japan’s economic catch-up after theSecond World War and in particular thetaste of the Japanese for western productsmade the archipelago a key location forgrowth at the end of the seventies up untilthe Asian economic crisis at the end of thenineties. Since then its relative position inworldwide terms has diminished to a greatextent due to the rapid development inother geographical zones. The ex-commu-nist countries (Russia and Eastern Europe),the Asian dragons and other emerging eco-nomies (China, Latin America…) havetaken over a growing share of sales byluxury companies. The progressive openingup of markets as well as the emergence of amiddle class in these countries are the signsof a dynamic that continues to grow.

Geographical zones and turnover share (2010)

Source: Annual reports of companies listed.

In conclusion, the characteristics we havecovered briefly show that the luxury busi-ness displays a rare combination of fiercecompetition and of monopolies of varyinglengths in Edward Chamberlin’s view19.The keys to success come from creativity

The Originality of the Acceleration ofGlobalisation

Globalisation is not new in the luxury busi-ness. On the one hand, the small size of thenational market makes it essential to deve-lop business on a worldwide scale; on theother, while it is very difficult to export pro-ducts that do not stand out as theirequivalent is available in other countries,exceptional products with strong identitiesare attractive to consumers all over theglobe. Patrick Verley18 notes that in the 19th cen-tury, where exports were out of the questiondue to transport costs, only products thatbenefited from a price-elasticity had a posi-tive demand. This was the case for luxuryproducts. He adds that between export andimport countries, the perception of the qua-lity of the products never coincided: animported product that was considered distinguished was only rarely seen to be aluxury product in its own country.Conquering international markets becameone of the major characteristics of luxurycompanies.This development has, of course, taken ondifferent forms according to the periods inquestion. The rise in the standard of livingin the different continents over the past twodecades has profoundly modified the carto-graphy of the luxury market. In addition,the accelerated globalisation process hasworked in favour of the international deve-lopment of luxury firms. In a closedeconomic context, where exports were hin-dered and setting up office abroad wasdifficult, companies tended to delegate tolicence holders for distribution but also forthe manufacture of their products. Newlyopen markets enabled companies to takeback control of their activities in mostregions, by direct investment, thus enablingthe establishment of a coherent brandimage and offer all over the world.

Company/Group

Europe Ame-ricas JapanAsia(butJapan)

Rest of theworld

Total

LVMH – Fashion & leather goods

29 % 18 % 16 % 30 % 7 % 100 %

Hermès 38 % 16 % 19 % 26 % 1 % 100 %

Gucci 30 % 18 % 12 % 36 % 4 % 100 %

BottegaVeneta 26 % 16 % 24 % 31 % 3 % 100 %

Bulgari 35 % 13 % 19 % 27 % 7 % 100 %

Yves SaintLaurent 48 % 22 % 9 % 13 % 8 % 100 %

Prada 40 % 16 % 10 % 33 % 1 % 100 %

Salvatore Ferragamo 23 % 22 % 16 % 34 % 4 % 100 %

and innovation, both of which constitutethe ultimate boosts in firm’s differentiationpolicies that enable them to establish theirmarket position.This situation is all the more favourable assome studies show that coming up to 2025,the luxury market may reach 1000 billiondollars20. This perspective, that is by nomean a forecast, is based on the growth ofemerging markets (as they are responsiblefor two thirds of the anticipated growth),but also a higher level of urbanisation in theworld, not forgetting the growth potential ofa number of product categories (productsfor men, leather goods and shoes…).

Dominique Jacomet, Director GeneralIFM, Franck Delpal, IFM, University ofParis-Dauphine

1. Y. Moulier Boutang, Le Capitalisme cognitif. La nou-velle grande transformation, Paris, Éditions Amsterdam,coll. Multitudes/Idées, 2007.2. O. Bomsel, L’Économie immatérielle. Industries etmarchés d’expériences, Paris, Gallimard, 2010.3. Montesquieu in Lettres Persanes ; Mandeville in LaFable des abeilles ; Voltaire in Lettres philosophiques (ontrade) ; Saint-Lambert, in “luxe”, an article for theEncyclopédie.4. H. Baudrillart, Histoire du luxe privé et public, depuisl’Antiquité jusqu’à nos jours, Paris, Hachette, 1880.5. Ch. Gide, Cours d’économie politique, t. 2, livre IV,Paris, Librairie de la Société du Recueil Sirey, 1919.6. 7th press conference from the Président de laRépublique (September 21st 1972), source: INA.7. Source: Altagamma 2010 Worldwide MarketsMonitor. This study covers fashion accessories (leathergoods, shoes, watches, jewellery) perfumes and cosme-tics and tableware.8. A number of writers use the term fashion: ready-to-wear is more appropriate as leather goods andespecially shoes are also subject to fashion.9. In economic theory, two companies that belong tothe same sector of activity have either a high level ofcrossover in their offer, which means that their produc-tion techniques are similar, or a high level of crossoverin their demand, which means that their products areinterchangeable in the eyes of the consumer.10. This is the approach chosen by O. Bomsel, E.Fieffé-Prévost et P. N. Giraud, L’Industrie du luxe dansl’économie française, CERNA-Ecole nationale supé-rieure des Mines de Paris, 1995.

11. J. M. Floch, L’Indémodable total look de Chanel,Paris, IFM-Regard, 2004 ; Identités visuelles, Paris,PUF, 2010 (réed.).12. R. Barthes, Système de la mode, Paris, Seuil, 1967.13. This and following quotes from O. Bomsel, op. cit.,2010.14. T. Okawa, « La maison Christian Dior, modèle deréférence pour les années 1960 », in La Mode des sixties,Paris, Éditions Autrement, 2007.15. On the subject of the links between globalisationand the vertical disintegration of companies see J.McLaren, “Globalization and Vertical Structure”,American Economic Review, vol. 90, n° 5, December2000.16. For a more in-depth analysis on brand discourseand in particular an analysis of Chanel, Christian Diorand Yves Saint Laurent, see Bruno Remaury, Brandsand Narratives. Brands and the Cultural CollectiveUnconscious, Paris, IFM-Regard, 2004.17. B. Catry, « Le luxe peut être cher, mais est-il tou-jours rare ? », Revue Française de Gestion, n° 171,Lavoisier, 2007.18. P. Verley, « Marchés des produits de luxe et divisioninternationale du travail (XIXe-XXe siècles) », Revuede synthèse, 2006/2.19. E. Chamberlin, Theory of Monopolistic Competition,1933. 20. Goldman Sachs, A Trillion Dollar Global Industryby 2025?, June 2010. This study includes the wines andspirits market.

How can fashion design renew itself insidethis relatively restrictive Roman frame-work?On a historical level, when we observe thecontemporary western fashion system, ittends to mainly valorise the aesthetic andthe creative. Throughout the 19th century,the fashion system relied on a direct rela-tionship between the client and themanufacturer: local seamstresses aboundedalong with women who knew how to sewand made garments for the whole family.The number of locations and the omnipres-ence of the producers of the work made theactivity and a certain culture of manufactur-ing extremely visible in society at large.During the 20th century, the huge industrialand marketing progress that occurred in theclothing sector brought the idea of designand the figure of the designer to the fore as the main values of a brand. As a result,fashion moved from being manufacturing-based to being image-based, from theproduction of objects to the production ofbrands, from the real to signs. In Europe,the movement of production overseas hasmade the stages involved in productionpractically invisible to the consumer.Design and aesthetics have become themain components in the fashion system,leaving little space for the values linked tomanufacturing and the techniques involvedin producing garments.On the other hand, one of the interestingpoints that comes from the examination ofthe particular case of “work clothes” is thebasic primordial issue of their functionalnature. The importance of this notion leadsto the design, trend or style aspects of thework garment finding themselves relegatedto a supporting role. So this notion of per-manence in the work garment means wecan observe and isolate certain issues thatare also true for fashion garments. Style anddesign include just as many issues linked tothe oscillations between the unique and the

It so happens that local, regional or nationalparticularities are generally linked to thehistorical and contemporary way of produc-ing and acquiring garments. As such, aparticular point in space, such as a city, canproduce a diachronic series. So my studywill concentrate on the city of Rome –where I was resident at the Villa Médicis infashion design for a year – on the political,legal and diplomatic heart of Italy with ahigh population of politicians, governmentemployees, lawyers and diplomats. Intoday’s world, these professions requiresuits and shirts that correspond to very pre-cise codes and are worn by a multitude ofworking men. So Rome has developed alocal system of made-to-measure men’sshirts and suits in addition to the interna-tional ready-to-wear system. In 2010 over230 such places were listed1 which means alarge swathe of the male population haveretained a taste for bespoke garments. Farfrom carrying out a complete analysis of alocal fashion micro system, this paper willcover the point of view of one particular wayof approaching fashion and clothes withregard to heritage-based particularities.

The Made-to-MeasureApproach: The Exampleof Rome TodayPascal Gautrand

38

collective, between the individual and thegroup, between the exception and the norm,between the one-off piece and the mass-produced, between craftsmanship andindustry. However, to a certain extent, her-itage seems to be well placed to re-injectsome uniqueness to a system that is largelydominated by mass-production.During my time as resident in the “fashiondesign” section at the Villa Médicis inRome, in 2008-2009, I took a keen interestin what is behind this huge trend for uniquegarments. In order to illustrate this I willbase my analysis on an experiment devel-oped in collaboration with the localhand-made fabric manufacturers, whichproduced a sort of map of skills that in turnbecame the exhibition “When in Rome, do asRomans do” that was presented at theValentina Moncada gallery in January 2009as part of Rome’s fashion week.With the aim of establishing a parallelbetween the local system –based on themanufacturing of unique pieces– and theinternational retail distribution system, Icame up with an exhibition project thatentailed having thirty Roman tailors ofbespoke shirts “copy” a mass-produced shirtfrom Zara the most standardized productavailable –both in terms of the product butalso in terms of the stores that sell them. Itwas a cotton blue and white striped men’sshirt, a traditional, relatively timeless modelthat has been around for over fifty years andwill probably be still around in fifty year’stime! It is an industrially produced shirt thatis sold all over the world in huge quantitiesin a chain of stores that even standardisetheir points of sale: the perfect example of the current fashion system, based on low production costs and a maximum retailcapacity on an international scale. The highlevel of internationalisation in fashionleaves little room these days for the idea of local particularities or a culture of manu-facturing.

On the contrary, the system of the Romantailors relies on the direct retail relationshipbetween manufacturer and client; I wasinterested in highlighting those particularvalues by inviting thirty Roman tailors to“re-make” the same shirt. So thirty uniquepieces were made each characterising eachtailor’s own culture, not to promote theirown design skills or creativity as it was aquestion of “copying” a precise model, butmore to display the particularity that theskills of each tailor imprinted on the shirtthat made each product unique. As a result,the same object, made by thirty differentpeople, is still a different object, even if theaesthetics are the same. In addition, theinstallation of the thirty shirts was accompa-nied by a series of video portraits of men,each of whom told a story about a shirt.This set up, besides the invisible valueslinked to the manufacturing of the garment,underlined the idea of the appropriation ofthe garment by each client-consumer. Theidea was to show how a standard shirt canbecome a good-luck charm or an object thatprojects values that go beyond the aesthetic,values that are invisible to others but that –for those of us who create that particularlink and the projections on to the garment –change the meaning and value of the object.Rome may not be a fashion capital – in thesame way as Paris, Milan, New York orLondon –but it is unquestionably the polit-ical capital of Italy. It is the country’s legal,diplomatic and aristocratic centre that at thesame time includes many professional congregations that are obliged to dressthemselves in a classic, even traditionalmanner. Why then, in the eyes of the client,would a bespoke shirt be more singular thana ready to wear shirt? There are doubtless anumber of reasons. The very act of having ashirt made to measure supposes an arbitragebetween personal choice and the obligationto belong to a group when the time comes tochoose one’s tailor. The share of personal

client’s personality on the shirt must imper-atively be the result of the most “human”part of the manufacturing process.In addition to the degree of representationand self-valorisation, for the client, having ashirt made to measure also represents thenotion of belonging to a group. First of allthe very product in question, the shirt, is averitable archetype of male clothing, in asmuch as it expresses the passage to adult-hood and the representation of masculinity.As such, when a young man turns eighteen,he is often given the gift of a made to meas-ure shirt by his loved ones. So having agarment made is almost a ritual or a rite ofpassage. As for the representation of mas-culinity, I can quote a story told to me byone of the tailors. It was about a policewoman who came to have her work shirtsmade to measure as her male colleagues hadtheirs done at the same tailor. And whilesalaries in general are not very high inRome, she insisted on only wearing made tomeasure shirts at 100 or 120 euros eachunder her uniform… Having her shirtsmade to measure was also doubtless ameans for the policewoman to competewith her male colleagues on an even playingfield by joining the “club who wear made tomeasure shirts, made by this tailor”. Inother cases, the colours and choice of fabric,types of stripes are often also used to showone’s membership of a particular politicalparty. In the same way that a tie of a certaincolour can also make a political reference,these extremely traditional garments usenumerous symbols that are not writtendown but that nonetheless exist and projectthe idea of belonging to a group. I should point out that word of mouth isessential in this system as it doesn’t rely onmarketing or advertising. When one knowsa good tailor, one passes on the informationonly to colleagues or people one likes. As aresult a system has developed that is notunlike that of private clubs, to the extent

expression relies first of all on the choice offabric, colour, motif and details such as thetype of collar, its rigidity, the shape of thecuffs or the different types of buttons andbuttoning options. Through the choice andenumeration of his own taste, the level ofimplication on the part of the client in thecreation of the garment is obvious. The factthat the client is ordering a product thatdoesn’t exist yet confers a greater responsi-bility on the client in terms of design, unlikethe ready to wear system where the onus ison the brand, the designer or the couturierand his team. Involvement on this levelinevitably changes the client’s perception ofhis own shirt. In fact, in Italy the concept ofthe Latin term ad personam2 is very present.The term is often used in everyday lan-guage or in the press, not merely to define apolitical stance; it is also frequently found inpresentation brochures or on the Internetsites of Italian tailors who provide a made tomeasure service.Beyond personal aesthetic preferences, thepersonalisation of the made to measureshirt also occurs through the application ofthe client’s initials. According to a frequentcustom in Rome, men have their initialsstitched on the left side of the shirt. Theycan be placed elsewhere, on the cuffs or onthe collar. Choice is expressed through thethread used, its level of contrast with thefabric of the shirt, and the type of charactersused: capitals, lower case, straight or in ital-ics. This factor is crucial in terms ofself-presentation but also in terms of theposition one adopts relative to the groupone belongs to, or, on the contrary, thegroup one wishes to be differentiated from.In Milan in the eighties for example, ambi-tious young men had their initials stitchedvery obviously on the collars of their shirts.Their symbolic importance is such that tai-lors offer to stitch them by hand even if therest of the shirt is entirely machine-sewn. Itis as if the most obvious reflection of the

that certain tailors I approached to make ashirt and take part in this exhibition did notwish to participate and above all preferrednot to have any kind of publicity or even toavoid any confusion with the thirty othertailors. Their usual clients are often madeup of politicians and international business-men whose custom enables the tailor to fillhis orders and leaves no room for newclients. These boutiques are often invisiblefrom the street and are not in either the yel-low pages or on the Internet, they representthe marketing antithesis of the averageready to wear chain that searches for thebest sales zone with the most footfall and the highest possible level of visibilitythrough advertising.The manufacturing process is invisible inthe contemporary fashion system. Whenthe client walks in to a ready-to-wear storethe product is already there, most often theresult of overseas production. One doesn’tknow where it has been made, some “madein” labels indicate the origin of the productin a very vague manner –and at times arecompletely false. For all of these reasons, itis quite difficult to get a real idea of themanufacturing and work involved. Both themanufacturing and the human input to thatmanufacturing are major components ofthe design of these garments, most oftenignored by current brands. In fact, this localmicro-system relies on the handing down ofskills, on heritage and the notion of familyto which Romans and Italians in general aremuch attached. Until now, all of thesepoints work in favour of the continuation ofa system that has almost disappeared every-where else in Europe. Most of the tailors Imet in Rome are tailors from father to sonfor many generations often in the samelocation with the same skills and a clientelethat is also passed down from one genera-tion to another. This entails an emotionalattachment to the work that can be felt, it issymbolically very important for tailors to

practice and maintain the profession oftheir ancestors. This is becoming an issuetoday in as much as the younger generationdo not have the same emotional ties to thejob and sometimes finding someone to takeover the business is not easy.The idea of manufacturing is also extremelyimportant for tailors as it is handed downorally from father to son, from master to stu-dent. For example, when his parents died,one of the tailors I met inherited a ground-floor shop and a basement workshop. Hisfirst reaction was to break with tradition andto modernise everything. He went to Ikea tobuy office furniture: a mixture of “fake blackwood” melamine panels with smoky glassand brushed aluminium. Once the storewas refurbished, he soon found it impossi-ble to be both in the workshop and the storeas he took care of both the shirt cutting andthe customers. So to solve the problem heset up a big plank of chipboard on a table inthe centre of the store, totally out of keepingwith the sparse Ikea look of the furnitureand that is where he now cuts the shirts forhis clients. In doing so and in a completelyinvoluntary and unthinking manner, heshifted manufacturing right into the centreof the point of sale, by pure necessity. Hisinitial wish to have a fashionable, modernstore meant the type of furniture he chosehad a certain neutrality to it, but at the sametime, his almost emotional attachment toboth manufac-turing and customer rela-tions (the two mainstays of his profession)meant he had to make some awkward mod-ifications to his space, thereby proving theimportance of the visibility of manufactur-ing in this system.The idea of handmade garment and specif-ically things that are “made in Italy”, are aquestion of national pride in Italy, muchmore than in France. When one lives inItaly, it is common to hear the expression“made in Italy” every day. This subject is inthe news at the moment as a law3 has just

3. The “Reguzzoni-Versace” n.55 law of April 8th 2010,unanimously voted by the Italian parliament, forbidsthe use of the label “Made in Italy” on textiles, shoesand leather goods whose different production stageshave not occurred for the most part in Italy. At least twoof the following must take place in Italy: thread-milling, weaving, dye-finishing and manufacturing.

been gone through to control fake labelsand to give a real value to the term “made inItaly”, as it has been tarnished by the scan-dals of the clandestine Chinese workshopsin the Prato and Naples regions andimported Asian products with fake “madein Italy” labels.

To conclude, it is easy to believe that all ofthe elements that make up the linksbetween the client and his garment,between the tailor and the garment hemakes and between the client and the tailor,contribute to the “design” of the garmentand the choice of tailor. Whether they comefrom one’s own personality or narcissism,from one’s relationship with the social envi-ronment or the local manufacturingculture, these elements are added on as anextra layer to the garment, not a visible layer–the aesthetic is untouched– but symboli-cally to the extent that they transform theperception the client has of the garment.The translation of these elements into thecontemporary fashion field would doubtlessbe an efficient means to bring some mean-ing back to the international fashion systemand to ready to wear brands who only veryrarely take these values into account. Buthow is it possible to introduce non indus-trial, truly singular actions to a milieu that iscompletely industrialised from manufactur-ing to advertising?

Pascal GautrandIndependent Fashion Designer

1. Un guide sur mesure. Rome, 239 lieux de la Capitale oùl’homme peut se faire réaliser vêtements et accessoires surmesure (A made to measure Guide. Rome, 239 places inthe Capital where a man can have clothes and accessoriesmade to measure), by Andrea Spezzigu and PascalGautrand, introduction by Silvia Venturini Fendi,Palombi Editori, 2010 (The Italian and English ver-sions have already been published.2. Latin term: that which addresses the private individ-ual, that which comes from his private life.

The confiscated excess. “Luxus” is excess anddebauchery1. It is the excess inevitably pro-duced by all human society, the surplusreferred to by Georges Bataille as the “partmaudite”2 (the accursed share) and whichhas but two uses: to be spent by all in anextension of the democratic process, or to beused, excessively, meaning in debauchery,by a certain minority who appropriate themonopoly of the excess. As the economicalmechanics of managing excess, luxury cor-responds to the latter. It entails theconfiscation of the accursed share for thebenefit of a minority. Once this confiscationtakes place, a monopoly on the enjoymentof this accursed share is established. Whenthis happens, luxury comes into being3.

A quality of possession. Luxury thus onlyrepresents the monopolistic quality of theuse of a certain surplus of energy, crystalli-sed in the form of certain objects or events4.It is the term that signals the appropriationof a more or less long-lasting but alwaysexclusive object by a minority. To sum up, we must go with Sartre whosaid: “luxury does not designate the qualityof the object possessed, but the quality ofthe possession”5. Let’s reiterate: a quality ofpossession that is monopolistic. As such,luxury is necessarily subsumed by the category of quantity; the exclusive appro-priation of a flow demands the possibility ofquantification.

Enumeration and authenticity. That whichthrough its nature cannot be quantified, cannot be termed a luxury. This is the case foreverything that is related to Ideas, as inconcrete terms, it is not possible to confis-cate ideas. Of course, one can wish toappropriate the physical manifestation ofthose ideas (a book, a sheet of music, etc.),meaning objects and events where their dif-ferent notations are written or expressed.But this appropriation is always doomed tofail as another notation, as perfectly identi-cal to the idea as the first can always bereproduced. This is why literary or musicalworks can not be deemed luxury objects,unlike some of their physical manifestations(and in a perfectly contingent manner):books with pages made of 18 carat gold, pla-tinum compact discs, five-star concert halls,etc. As Nelson Goodman6 showed us, forthese types of works – allographic works ofart – the notion of counterfeiting doesn’tapply: “Haydn’s own manuscript is nomore authentic a version of the music thana copy that was printed this morning”7.There can not be a fake version of the Eroicaor Le Bateau Ivre: the terms used would beplagiarism, pastiche or parody.Luxury refers only to objects that can beenumerated. Objects that, unlike allogra-phic works, are nothing more than theirown physical manifestation (this object Iam holding, this object I see, etc.). In otherterms, as Gérard Genette8 showed us, auto-graphic objects. And the autographicregime relies essentially on the notion ofauthenticity. A work of art is autographic “ ifand only if the distinction between the ori-ginal and a fake has a meaning ; or evenbetter, if and only if it’s exact reproductiondoes not have, de facto, the status of authen-ticity”9. As such, there can be no luxury ifthe exact reproduction of a luxury objectmakes it authentic also. This is why, likepaintings, luxury objects are often signed10.

Luxury, the Accursed Shareand the Capital GainNicolas Liucci-Goutnikov

43

embroideries, wines from certain cepages,etc. These same beliefs enable a subject torecognise and call objects endowed withcertain substantial characteristics at firstglance “luxury objects”. Their origin residesin the confusion that leads people to see thecause of luxury in that which is but the pro-visional consequence of a monopolisticsituation. As a quality of monopolistic pos-session, luxury necessarily presents itself incertain particular forms that depend on thevery nature of the monopoly in operation.One can, at any point, establish a synchro-nic list of objects whose use has beenmonopolised, and manage, by reduction, towork out the properties (which is exactlywhat Bourdieu does in La Distinction).However, these properties are as fleeting asthe monopolies. As monopolies fall, theluxury object loses its label and demeansitself; inevitably, degradingly, its propertiesappear out of date. This has been the fate of a whole range of objects, from the auto-mobile to cotton clothes, from enamel toperfume.Let us note that the clues to the unnameablequality of luxury popped up at the start ofthis article. The only quality of the accursedshare is that it is an excess, unformed, thatcan also be spent by all in an extension ofthe democratic process. Luxury merely cor-responds to the complementary occurrence,exclusive to the first, the confiscation by andfor a minority.

Prior confiscation of means of production.Luxury is the confiscation by a minority ofthe excess produced by the collective thatexists virtually for the collective. For theconfiscation of the accursed share to takeplace, there has to be an imbalance of powerwithin the society. A certain dominant rela-tionship must exist for the excess to be takenfrom the collective by a minority; and thisminority must possess the necessary powerto deprive the collective. However, power isthe ability to produce effects. Being power-

Rarities. More than any others, objects thatexist in limited quantities are ripe for confis-cation – this explains why we often establisha correlation between luxury and rarity.Whether or not it is necessary, this raritydoes not have to be natural in any case. Itmatters little that it is an actual fact or anartificial construct. The rarity that is mono-polised in luxury is a rarity that is identifiedin nature or one that is man-made with theaim of confiscating the usage thereof. Thisalmost mechanical rapport with rarity high-lights luxury’s most admirable dimension,whose producers seem to be urged, as if by anatural vocation, to protect the most fragileof skills. In the world of artefacts, the mostimmediate rarity is that of exceptional skillswhich today means craftsmanship andskilled techniques.

An unnameable quality. Luxury concernsonly objects that can be enumerated andthat exist preferably in limitedquantities. Nevertheless is it possible toestablish a typology? Apparently not. Anykind of object can be a luxury object oncondition that its use, within a group, a col-lective, a human society, is monopolised bya minority. So the idea of luxury must beremoved from taste systems, which deemthat the use of goods is relatively evenly dis-tributed throughout the different regions ofthe social space. Thus, the concept of luxurycan not find its place within the schema ofLa Distinction, according to which one canonly love what one is used to; the proletariatget red meat and open legs, the bourgeoisfish and stiff backs. Indeed, red meat andfish constitute luxury objects here and nowif and only if their use is monopolised hereand now by a minority. Corollary: seeing asmonopolies can be broken and usage demo-cratised, there is no type of object thatremains a luxury object permanently.However, there are solid beliefs according towhich certain types of objects are necessarilyluxury objects: precious stones, hand-sewn

ful is being in possession of the means toproduce effects, to possess the means of pro-duction. A minority that has the capacity toconfiscate the accursed share is a minoritythat “already” owns the means necessary toproduce such a confiscation. In other words,luxury is based on the partial or total alwaysmajor, prior confiscation of the means ofproduction of effects.In feudal societies, the means of producingthe confiscation were traditional and legal:certain fabrics, certain colours, certainaccessories were restricted by law to the aris-tocracy. The sumptuary laws of the latemiddle ages and the Renaissance made surethe monopolies were respected had the needarisen. But in the particular conditions ofthe capitalist democracy that consecratesequality in the law, no privilege can be givento a minority for the sole reason of the indi-vidual qualities of its members (inheritance,physical strength, etc.). The confiscation ofthe excess is thus based on other founda-tions: the inequality of means thataccompanies the equality in law. To be moreprecise, in a democratic and capitalistregime, the objects that can be confiscatedare in the form of merchandise and theirconfiscation occurs through the exchange ofmoney. The means to produce the confisca-tion are, as such, fundamentally financial.They are subject to the prior accumulationof economic capital. The object, now aluxury merchandise, has thus become apiece of merchandise of universal virtualuse that is expensive enough to produceconfiscation.

The signals and symbols of luxury. Moneyconstitutes the universal equivalent11 as itcan be exchanged for any merchandise. It isa sort of floating signal that can express alltypes of signs. In this regime of equivalence,the price does nothing but call the moneytowards the merchandise. As a result, apiece of luxury merchandise, as it can onlybe defined by its price, high enough to pro-

duce confiscation, can, like money itself,adopt infinitely diverse forms. It owes thiscontingency to the essential tautology thatforms it and makes it, like wordplay inwhich “une marchandise de luxe est chèreparce qu’elle chère” (a piece of luxury mer-chandise is dear, because it is dear). In otherwords, the only constraint to its appearanceis to signal its economic confiscation, inother words it has to look expensive.Evidently, the signs that display a crystalli-sation of a high level of social work in a piece of merchandise can be listed: diamonds, pearls, gold, platinum, silk,embroidery, ribbons, stitching, overstit-ching, hand stitching, saddle stitching,sophisticated cuts, etc. Each of these signsattests to the superior exchange value of themerchandise, and as a consequence, itsprice. These signs are what EmileBenveniste12 refers to as signals, as they arelinked to that which they signify “natu-rally”: it is clear that diamonds, pearls orplatinum signal a natural rarity, meaning ahigh level of crystallised work, as it is parti-cularly difficult to extract these preciousmaterials. This also goes for any kind ofcomplex work (embroidery, sophisticatedcuts, etc.). All of these things are expensive,so all “naturally” signal a higher price tag.Because signs are not linked to what theysignify in a “natural” manner, symbols canalso signify a higher price tag. Symbols(logos, signatures and other autographs) arefor example what enables a simple cotton t-shirt to be transmuted into a piece of luxurymerchandise. It would appear that what Roland Barthes considered to be arbitrarysemi-logical systems, systems in which thesigns are “based not on contract but on uni-lateral decisions”13; Barthes had identifiedthe fashion system as such. Fashion, appa-rently demands significations: “Blue is inthis year”, “We love, we hate”, and so on.The symbols that refer to luxury appear toimpose themselves in the same way. They

behaves like the nobility in feudal times,“impatient to devour more than their due,parading their luxury, their numerous andlazy domesticity”18.

Nicolas Liucci-GoutnikovResearcher and Curator

1. Cf. Gaffiot, article “luxus”, Paris, 1934.2. Georges Bataille, La Part maudite, Paris, Editions deMinuit, 1967.3. Luxury as a complementary and exclusive occur-rence of the “democratic use of the excess” is logicallythe opposite. There can therefore be no such thing asthe “democratisation of luxury”. To democratiseluxury would mean the end of luxury.4. Gérard Genette, quoting Wittgenstein, reminds usthat things are merely “relatively stable conglomeratesof events” (L’Œuvre de l’art, Paris, Seuil, 1994, p. 39).We will use the term “object” for its ease of use.5. Jean-Paul Sartre, L’Etre et le néant, Paris, Gallimard,1943, p. 666.6. Nelson Goodman, Langages de l’art, Nîmes,Jacqueline Chambon, 1990.7. Ibid. p. 146.8. Cf. Gérard Genette, L’Œuvre de l’art, Paris, Seuil,1994.9. Nelson Goodman, op. cit., p. 14710. This is why luxury brands fight counterfeiting sointensively.11. Cf. Karl Marx, Das Kapital, Book 1, Section 1.12. Cf. Emile Benveniste, Problèmes de linguistiquegénérale, Paris, Gallimard, 1966.13. Cf. Roland Barthes, “Eléments de sémiologie”,Communications, n°4, 1964, p. 111.14. The value of symbols must as such be placed in theperspective of a belief system of a magical type. On thissubject, the writer refers you to his own article “L’œuvred’art, idéal-type de l’objet de luxe ? Michael Jackson andBubbles et la Maison Jeff Koons”, in Le Luxe. Essais surla fabrique de l’ostentation, Olivier Assouly (ed.), Paris,IFM-Regard, 2011.15. Cultural capital is thus independent of the system.It is certain that the accumulation of cultural capital bya fraction of the minority with the means to producethe confiscation enables it to stand out from the lessendowed fractions. But that the merchandise confisca-ted by the cultivated fraction making it “refinedluxury” and the merchandise confiscated by the lesscultivated fraction make it “vulgar luxury”, is of noimportance. The cultural leap, which is qualitative,from vulgar to refined, remains outside the realm ofluxury. Luxury is not a distinction. It is, for better or forworse, a confiscation.16. Cf. Karl Marx, Das Kapital, Book 1, Section 3.17. Ibid, p. 600.18. Ibid, p. 601.

signify economic confiscation, findingthemselves, according to methods that wewill not develop here14, invested with a mys-terious power to make things expensive.

The ideal. In a democratic and capitalistregime, economic confiscation is the neces-sary and sufficient condition for luxury toexist. This implies that the minority that iscapable to confiscate luxury objects is alsothat which has accumulated the economiccapital prior to this. In other words, theaccumulation of capital is the differentialfunction of luxury. It is easy to determinethe optimum of such a function: it cor-responds to the total confiscation of themeans of production that means the confis-cation of the capital itself. The ideal set-upof for luxury is then the ideal individualwho possesses the means of productionexclusively, in other words, the capitalist.This explains why the topics of luxury neverfail to signify the monopolisation of themeans of production; meaning non-work orotium; which refers to work that is accumu-lated and crystallised and accomplished byothers; meaning everything that follows,including, but as a sideline, the cultural refinement that goes with a life of contemplation15.

From the accursed share to the capital gain. Asthe confiscation of the accursed share by aminority, luxury now reveals itself to cor-respond to the exploitation of over-work –meaning, in Marxist terminology16, workaccomplished by the worker and not paidfor by the capitalist. As such, like the accur-sed share, over-work is itself an excess: it isthat which, during a day’s work, is added onto the necessary time for the reproduction ofwork. The capitalist extracts the addedvalue from the overwork. When the addedvalue is converted into merchandise and it“dissipates (…) like revenue, instead of (…)growing like capital”17, then the luxurymerchandise appears. And the capitalist

A New Situation

“Faire du ciel le plus bel endroit de la terre”(Making the sky the best place on earth):the Air France slogan first used in 1999illustrated the extent of the ambition of theFrench national airline’s company mission.From then on, the issue was no longer asimple means of transport with clear, fixedpromises –“La ponctualité est notremeilleure publicité1” (Punctuality is ourbest advertisement)–, or even simpler, evo-king just movement –“L’Art du Voyage2”(The art of travel), “Demandez-nous lemonde3” (Ask us for the world)–, it becamea way of approaching the universe from anew angle, even considering another way oflife. The brand itself was no longer enoughto attract clients, despite the fact that it wasabsolutely evocative of its offer. Another big name, the EDF (French electri-city company), that even had the advantageof a monopoly until 2007, illustrated thispoint to an even greater extent: “Nous vousdevons plus que la lumière” (We owe youmore than just light), thus evoking an emo-tional connection with the client-partnerrather than the client-payer, and even“Donner au monde l’énergie d’être

meilleur” (Giving the world the energy tobe better), positioning itself as the meansthrough which the world could be made abetter place, as simple as that. Their mostrecent slogan, “Changer l’énergie ensem-bleiv” (Changing energy together)4, reflectsboth the idea of a partnership and a quasi-messianic ambition for a different,transformed and better world thanks to theefforts of the company and the moral andfinancial support of the end client.In both cases we are dealing with brandswhose role and function are clear and evenmentioned in the company name, but whoare no longer just selling a product or a ser-vice –“Air France transporte tout, partout5”(Air France transports everything, every-where)– like they did in the fifties, orproposing a getaway to a client in search ofself-affirmation and success and undersocial pressure like in the eighties, or evenattempting to re-enchant a client who is sickof the consumer system as was the credo ofworried brands not so long ago. If we takethings literally, it has now become a simplequestion of proposing a new vision of theworld rather than an attempt to re-enchant:the individual is no longer a client; he or shehas become a partner, the centre of the com-pany’s preoccupations, and co-author of theefforts that the brand is making to changethe world. In exchange the brand requireshis or her total submission as is evident fromthe obligations forced on Flying Blue6 pas-sengers to retain their status or by simplyreading the EDF’s Terms and Conditions.The brand becomes an artificially createdinterest group, and makes the means availa-ble, in particular in the form of rights andduties, that enable the new client-actor forchange to become responsible for the muta-tion of his or her own consumption, of hisor her own life. In a globalised world thatmakes national differences obsolete, it istempting to talk of a quasi “brand citizens-hip” that shapes the identity of the client. It

Responsibility andProfits: What Temple ofLuxury has Taken on theRole of Guardian?Selvane Mohandas du Ménil

hion with our favourite brands (whether weare actual clients or not is practically irrele-vant). Burberry is a case in point. It hit thethree million fans mark on Facebook inNovember 20108 and was redefined by thevice President of Facebook EMEA–“Through the creation of original content,Burberry is no longer just a fashion com-pany –today it is a thriving media business”illustrating the brand’s capacity for genera-ting content to make the clients faithful asthey become both spectator and actorthanks to the tools available throughFacebook9.Luxury is a dream for most people andnumerous sacrifices are possible in order toacquire a product. But beyond hedonism,individual pleasure, aesthetics and enjoy-ment, is it possible to detect a political anglein this “dream brand citizenship”? Andtaking things further than simply the pro-duct, are luxury brands ready to adopt apublic political stance that goes beyond thequest for profit? What are the issues atstake? Is this fundamental for the future ofthe industry? What are the consequencesfor Europe?The notion of “brand citizenship” which isnot unknown to luxury brands is evidenttoday in the Luxury Lifestyle, which repre-sents the latest evolution in the sector. Theconspicuous consumption of luxury pro-ducts was traditionally meant to reflectsocial status, to transmit a veritable messageto the spectators of this ostentation10. Bybuying a luxury car, the buyer was affirmingto a family car owner that they didn’t needto restrict their consumption according totheir needs. However, this repetitiveconsumption of luxury, associated with thecontinuous increase in buying power sincethe Second World War, has distorted therepresentation we have of the world.Luxury went from exceptional to normaland became a way of life rather than a mereornament of life. Patrick Bateman11 turned

is edifying to see the virulence of theexchanges between the pro-PC gang andthe pro-Mac gang on discussion threads, oreven to listen to the treasure trove of argu-ments put forward by loyalty-card holdersto prove the superiority of the airline theyuse. We find ourselves emotionally defen-ding a project that is dear to our heartsinstead of rationally comparing the pros andcons of a simple brand. In retrospect, it is enticing to see here thepremise for a 2.0 world where the clientcontributes to his or her own consumption,which is then theorised and improvedthough social networking sites (Facebook,Twitter, and Google). But beyond thisvision, in a jaded world with no belief sys-tem and where trust in institutions isflaking away, is it not possible to extrapolatethe notion of “brand citizenship” to also seea political angle? After all, nothing is stop-ping brands from injecting a bit of ideologyto the mix. If we read the brands’ “masterplans” –making the sky the best place onearth, giving the world the energy to be bet-ter– they start sounding like an ambitiousand poetic pseudo-political programme, towhich we latch on willingly, becoming defacto members of the brand’s community7.

Luxury in Context

Now, let’s look at the luxury industry, anindustry that by definition possesses all ofthe components necessary to gather a groupof clients together around the same vision,whether it be historical, qualitative or emo-tional, and who, in return, activelyparticipate in its mission and legend, fiftyyears ago by wearing haute couture, tenyears ago by placing a special order andtoday interacting with the brand online.The notion of “brand citizenship” is notnew: twenty years ago one “was” either aLamborghini person or a Ferrari person;today we interact in an almost intimate fas-

his existence from the initial, hedonistic lifedecorated with rare and costly objects, into ahell controlled by possessions and never-ending lists of the luxury brands that madeup his universe, the sine qua non conditionfor his happiness, independent of the natureof the products in question.That this luxury has now become a “lifes-tyle” is obviously good news for brands, assales have multiplied exponentially: theindustry is set to make stupendous profitsthis year12 and is seen as the goose with thegolden egg, not only recession-proof butbenefiting from the recession, given theimpressive growth rates of the companiesinvolved, and totally unaffected by themacroeconomic environment. These profitsare the result of unbridled expansion, whe-ther it be through the products–, byexpanding ranges–, through the clientele –by attracting a client base that gets broaderevery day and is more sensitive to the branditself than the intrinsic quality of the pro-duct–, or through geographical expansion –which today enables relatively easy access tobrands, regardless of the location–. Thepriority of the big groups is to make themost profit possible and they don’t makeany attempt to hide this, as their growthrates soar while the brands themselvesbecome banal. The have gone from beingthe ambassadors of a certain “European artde vivre”, to becoming simple logos or labelsto be collected, or to be replaced as quicklyas possible according to the seasons andtrends instigated by the system itself to keepup the rate of constant trend renewal13. All of the big players are increasingly com-mitted to this route, aided and abetted byhigh sales and total commitment from anaspirational clientele looking for materialhappiness. This however means a brandcitizenship totally empty of meaning:luxury federates, but federates aroundnothing, luxury is convincing, but ofnothing. Indeed, it can not be reduced to a

hollow “Luxury lifestyle”, the simple pos-session of rare and costly goods. Accordingto Vincent Bastien and Jean-Noël Kapferer,“luxury is based on hedonism and aestheti-cism, and not on an overconsumption thatleads to saturation and disgust; the world ofluxury is to be, for oneself and others, andnot to have”14. To sum luxury up by themere overconsumption of expensive pro-ducts removes everything that makes itspecific and its differences relative to anyother type of product15. We should also ask ourselves what thefuture holds for brands that are, in the end,relatively similar except through their his-tory, accessible to all and everywhere, whoseunique characteristic is now merely of highcost “market positioning” and not a mes-sage whatever it may be16. The sales resultsare undeniable, so is it really important toworry about this lack of commitment orstand? It is perhaps useful at this stage toremind ourselves that historically, luxurypossesses an important political componentthrough the power it displays and confers.It began to materialise in the shape of theexpression of brute force and the financialor temporal capacity to focus huge resourcestoward a non military or strategic aim. The statue of Athena in Phidias, inaugura-ted at the Parthenon in 438, twelve metreshigh and entirely covered in marble andover 100 kilos of gold, is a perfect example:such expense merely went to prove the city’scapacity to mobilise precious resources, itwas a demonstration of unused power. Inaddition, the statue was really a safe; thegold could be removed at any moment. Thisunused power did not just have geostrategicinterests; it also played a role of internalregulation. The Chinese showed this asearly as 1364 with the introduction of signedceramics, for imperial use only, on pain ofdeath. The inaccessibility of luxury – todaythrough the cost of the products but thenthrough the accreditation system of the dif-

understand the cost, be aware of its specificnature. These elements are all communica-ble and all belong, obviously, to Europeanculture. So today we can see a component ofEuropean “soft power” in luxury, and assuch imagine that it is possible to injectcontent. The Hollywood dream machine,on another register, is the best example inthe U.S. At a time when Europe’s decline is ackno-wledged, visible and tangible, as Europeloses confidence in itself as Asia rises andthe U.S., even when under pressure, has nointention of resigning itself to the inevitable,luxury may enable the European politicalblock to transmit a cultural and voluntaristmessage, that goes beyond the simple pro-motion of a way of life that is nothing but anillustration of the “museumisation” of thecontinent, of Italy and Paris in any case, thatis out of touch with most of its citizens. Ofcourse, luxury should not be seen as anoffensive diplomatic weapon, but at least asa rampart that protects European specificsin terms of culture and skills.Are such positions financially feasible? Is aclear commitment to national and conti-nental skills compatible with financialresults given the profits the sector is cur-rently making?

The increased responsibility of a few fas-hion houses doesn’t seem to have had anadverse effect on their profits, as they them-selves are experiencing the same boom asbrands with an exclusively economic real-politik. Hermès and Chanel are the bestexamples, through their exclusively Frenchmanufacturing units for the products inquestion, including ready-to-wear and lea-ther items, but also for their defence ofspecific skills through financial participa-tion in structures that are not necessarilyprofitable but illustrate and preserve thetechnologies necessary to product luxurygoods.

ferent powers that were –thus also had apolitical function, something that LouisXIII understood perfectly when he tamedthe French nobility by creating the Courtand its refined but ruinous and addictivepastimes. Colbert, by developing manufac-turing and luxury fabriques, added a newcomponent: luxury was no longer a passivepolitical element (an affirmation but withno precise action), it could also serve the bigpicture, in this case financing the armies ofFrance and its foreign policy. In addition, this political component wassomething Napoleon, and more recently deGaulle, understood fully. The ocean linerFrance and the Concorde aircraft, with theirluxury finishes and services (a great numberof craftsmen and suppliers were involved,beyond the simple cost of the service), wereglossy proof that France was capable ofincarnating a third way, an alternative to theUnited States and the USSR, in addition todisplaying its economic independence.

Luxury and Responsibility

Today, we are forced to admit that the bignames in the sector are obviously takinggreat care not to take a stand, to avoid anypossible misunderstanding, and their invol-vement in the social fabric is becoming lessand less obvious or visible. This strategy iscertainly lucrative in the extreme, but it isfar from safe in terms of the very future ofthe luxury sector. By appealing to a clientelethat with each purchase is less convinced asto the specific nature of the purchase, sellinga product that is more and more accessibleand less and less exceptional, the industry isgambling with what has always made itunique. Indeed, what does luxury really mean today,as an idea and not as an industry? Quality,skills, but also values of generosity, huma-nity, hedonism and real knowledge on thepart of the client to appreciate the object,

Bruno Pavlovsky, the CEO of fashion atChanel, is clear about his intentions: “Wewanted to make sure that the skills and pro-fessions that are essential to the luxuryindustry stayed in France. With no invest-ment and a lack of successors, they wererunning the risk of disappearing altoge-ther”17. Hermès is a stockholder in, amongothers, Puiforcat, the Cristalleries de SaintLouis, Perrin & Fils, Bucol, and announcedin its first quarterly financial report for2011, that “the long term strategy, based onmastering skills (…) remains a priority. Thetheme of the year 2011 (…) focuses on theexcellence and authenticity of the crafts andskills that constitute the base on which thishouse has built its success and its future”.The message is clear, for Hermès andChanel: European skills are non negotiable.This is also true for Van Cleef & Arpels whohave kept manufacturing in France for skillsthat mean that 80% of their turnover is onspecial orders rather than on mass produceditems thus going against the trend ofmodern economic logic. In addition, thehouse is constantly investing in researchand development to retain their technologi-cal edge over the competition and thus keepproducing exceptional products. So here weare dealing with the preservation of skills,with probably lower profit margins thanwith those manufactured externally, even ifthis information is obviously impossible toverify.What about the necessary education, theculture required? Luxury is not only aquestion of skills; it must also be somethingone deserves, either in terms of understan-ding or product accessibility. At a time whenpractically all brands are available in storesin the most remote cities of Eastern Europeor Asia, not to mention online, certain hou-ses have gone down the inaccessible route.Hermès, Chanel, yet again are very goodexamples, as they have no wholesale18 set-up or do not produce enough to fulfil the

demand. Goyard is another good example:the house chose to wait for many yearsbefore opening its Mount Street store inLondon in 2009, rather than giving in toHarrods demands, even though Harrods iscourted by all luxury brands, and a presencethere would probably have enabled thesmall house to expand more rapidly. Butrather than go for growth at any cost, thefamily that owns Goyard decided to chooseits own store location and wait patiently. Inthis case, the limits it put on sales despitethe natural need for growth, displays analmost ideological and antithetic vision ofthe current dominant thinking: luxury isnot for everyone.

A Crisis in the European Monopoly?

Does this mean that taking a stand in favourof local skills and high quality is a swansong or a nostalgic vision of a glorious past?After all, as Christian Blanckaert readilyadmits19, “The theory that luxury is the pre-serve of the French and the Italians is nowlosing credibility (…). The world of luxuryis starting to lose its borders”. So why stickto a position that is inherited from the past?The few houses mentioned above such asHermès, Chanel, Van Cleef & Arpels,Goyard, do not seem to be resting on thelaurels of their past, on the contrary: theircompetitiveness and innovative edge arevery real.But business is business, and that applies tothe luxury industry also: reducing produc-tion costs means more profits. This preceptis in part responsible for the complete disap-pearance of the luxury shoe sector inFrance, after having been the leadingmanufacturer up until the seventies. As theCEO of Oscar de la Renta, Alex Bolen, saidin 2010: “Ultimately we have to sell stuff,this is not an art project”20. The changes inluxury detailed above, led by the big groups,goes against the idea of cultural preserva-

vated by status26? Luxury products are nowbought for the most part by the middle clas-ses rather than by the “super-rich”27.Luxury is now run by business and not bybrand and is losing itself in the massive pro-liferation of objects when the industry reallyshould be trying to create bonding, despitethe risk of rejection, instead of spreading allover the place. It is, in fact, the only legiti-mate industry that can adopt this kind ofbehaviour, if only it would remain faithfulto its own values.We could also object to the position adoptedby the Comité Colbert when productionoutsourcing is dismissed in the name ofbrand power. In addition to the fact that abanalised brand (or to attempt a neologism“commoditised”) will necessarily be weakerand less powerful, pure design is in no waya competitive advantage. On the one hand itwould be incorrect to believe that emergingpowers will never be in a position to com-pete with western designers, and it would beirresponsible to think that this will not hap-pen in the future. In addition, design usedas a creative advantage is completely at themercy of the threat of counterfeiting. Onlyskills and technique provide true protectionagainst pure copying. How can this advan-tage be preserved if it evaporates from thecontinent due to lack of orders or due to theconstant pressure from fashion houses onsuppliers to reduce their prices in the hopesof getting down to costs closer to those avai-lable from outsourcing, while benefitingfrom the magic “Made in”? The parallelthat can be drawn with the Chinese brandShang Xia is edifying: Hermès created acompletely new brand from the ground up,based on Chinese craftsmanship and aimedat the Chinese market28. It seems clear thatthe anchorage of skills and technique arebasic, so why is production constantly beingtransferred abroad by European brandsenabling them to produce for less but dilu-ting their message and their very essence?

tion or the affirmation of one of the lasttechnological superiorities of the continentof Europe21. This would involve the housestaking responsibility, and not all are prepa-red to do so, like Prada or Burberry whooutsource for cost reasons only, respectivelyin Turkey for Prada’s leather goods andChina for the British brand’s shorts22. Inaddition, the profits made ensure Frenchluxury the support of specialist institutionslike the Comité Colbert: when, questionedon the painful subject of outsourcing inluxury, they reply that no one asks Renaultwhere their cars are made, and claim tobelieve more readily in “made in Dior”rather than “made in France”23.

However, the Stakes are High

The increasing banality of the big nameluxury brands and the loss of their distincti-veness in the mind of the client – or at least,as it is envisaged in France – as the conse-quence of the spread of the Luxury lifestyleis disturbing. We should remember thatluxury brands are brands of image ratherthan brands of accounting columns24 proofbeing the total volume of sales in the sector,164 billion Euros in 2008, or the equivalentof Toyota’s sales25. The banalisation processis already happening in emerging markets,where we can see that the perception ofbrands is often the complete opposite to thereality. Should we also note that luxurydoesn’t have a slogan? In the absence of anycultural content and clear strategy besidesthat of making profits, there is a huge risk ofconfusing consumers forever. Of course, weare constantly hearing that luxury has sur-vived its own moral crisis without a scratch,that it is no longer a question of flashy,consumer-based luxury. How are we tobelieve this at a time when growth is beingled by emerging markets with different andstatus-based logics of consumption, andwith spending by luxury tourists, also moti-

It would appear, as if proof were needed,that luxury is one of the elements ofEuropean “soft power” that as such shouldproject the values that the continentdefends29. Other sectors are trying to federate theircommunities of “brand citizens” throughslogans or an ambitious vision of the world,like the Dyson group, that promotes healthyand sustainable growth by looking to indivi-dual responsibility and collective efficiencymore than profitability and planned obs-olescence30. But luxury is going down apath that is diametrically opposed to thisone, evacuating all disruptive elements incase they affect sales, and in doing so nolonger inspires any kind of elevation or aspi-ration other than the material kind31. It isthus decisive and curious that neitherHermès nor Chanel really advertise theirinitiatives in safe-guarding European skills.We could reasonably hope that Europeanluxury companies would take more collec-tive responsibility both in terms of thevalues they promote that could be moreoffensive and supportive of their regions oforigin, and their direct economic impact intheir own social fabric32.Of course, this is a big ask. Should it notcome to pass, which seems to be the waythings are going, the luxury industry willlose what makes it unique, it will becomelike any other common or garden activity, afirst in the history of luxury. This wouldopen the way for emerging countries torecreate new legendary brands after havingexhausted existing brands33, causingEurope to lose yet more of its soul and itspower. European luxury will then have become anindustry like any other.

Selvane Mohandas du Ménil Graduate from HEC and IFM

1. Air France Slogan, 1985.2. Air France Slogan, 1988.3. Air France Slogan, 1992.4. EDF slogan, 2009. EDF slogans have long had thesame educational, responsible and emotional bent:“L’avenir est un choix de tous les jours” (The future is achoice made every day), “Nous sommes l’énergie de cemonde, nous sommes fiers d’être la votre” (We are theenergy of this world, we are proud to be yours), “Notreénergie sera toujours à vos côtés” (Our energy willalways be with you).5. Air France Slogan, 1952.6. Air France’s frequent flyer programme.7. Of course, this is merely an ambitious and deman-ding extrapolation, the marketing departments of thebig name brands always take great care to remove anyhidden references from their intellectual productions,as they are a potential threat to the brand’s reputation.They erase any position-taking that could be interpre-ted as compromising by any social group, to the extentthat the message becomes absurd and bland. The onlything that remains is the poetic dimension, free fromany real or serious commitment on the part of thebrand which is probably damaging from an economicand philosophical point of view at a time when faith inall existing value systems is waning. The maths aresimple: it is better to sell a lot of products with no com-mitment and no hidden agenda to the multitudes,rather than trying to convince or even conscript trulycommitted and as such faithful consumers but withresulting lower sales. All this despite the fact that in thelong term, the latter is the more rational choice (butrequires more courage).8. http://www.enmodeluxe.com/burberry-premiere-marque-de-luxe-a-reunir-3-millions-de-fans-facebook/9. The full quote from Joanna Shields, VP FacebookEMEA, goes into detail: “Through the creation of ori-ginal content, Burberry is no longer just a fashioncompany –today it is a thriving media business.Burberry is now the most widely followed fashionbrand on Facebook. It works because not only doesBurberry make beautiful clothes, but as a brand itunderstands the importance of taking a real interest inthe community and it knows how to use social mediato create fidelity and entertain customers. Whether it isrelating to consumers by promoting indie bands ontheir Facebook Page or celebrating the ideas of themost stylish customers, The Art of the Trench,Burberry is building its brand not simply by broadcas-ting and advertising to them, but by creating newmedia experiences for them.”10. Thorstein Veblen, Theory of the Leisure Class, 1899.11. The emblematic hero of Bret Easton Ellis’American Psycho, 1991.12. Hermès announced profits that were up 49.5% onAugust 31st 2011, for Salvatore Ferragamo the increaseis +32.4%, and +25% for LVMH.13. The book Deluxe, How Luxury lost its luster, byDana Thomas, Penguin Books, 2007, casts a particu-larly harsh light on the way in which luxury brandshave established a never-ending system to maintain

ont liquidé leur capital crédibilité”, in L’Expansion,September 2011, are merciless: “do not hesitate to dowhat the Chinese and American do totally withoutcomplex: defend one’s strategic industries and demandsymmetry in newly opened markets. Europe is, forexample, the only continent in the world where thetelecoms sector, the pillar of new technology, is totallyopen to the competition, with no reciprocal obliga-tion”.22. Les géants du luxe assument leurs délocalisations,Le Monde, Nicole Vulser, October 15th 2009.23. Ibid.24. Les marques françaises sauvées par le luxe, LaTribune, September 21st 2009.25. Les codes secrets des griffes du luxe, Capital horssérie, October 2009.26. Le salut du luxe est dans ses réseaux, SophieBouhier, Journal du Textile.27. Les codes secrets des griffes du luxe, Capital horssérie, October 2009.28. Comment le luxe fait recette, Rita Mazzoli, LaTribune, May 31st 2010.29. Which, it is true, remains to be seen.30. Le design durable : pour une croissance saine etdurable, James Dyson, Le Monde, September 1st 2011.31. This is probably why we have seen more and moreone-off initiatives not aimed at consumers but at “ama-teurs” (lovers), like the well-known perfumer FrancisKurdjian’s current solo project, or Pagani Zonda, thatonly produce 30 vehicles a year.32. Some brands are trumpeting the fact that they’vecreated 250 jobs in France (Le luxe repart de nouveau,Sid-Ali Chikh, News Fashion Daily, 2010) when all oftheir shoe soles are produced in India (Le haut degamme européen toujours dans la course, SophieBouhier, La Tribune, November 22nd 2010).33. The goldrush has already started: the Chinese havebought Omas pens, vineyards in Bordeaux, theKoreans are financing the leather goods brand LouisXIV. « Demain, le luxe 100% chinois ? » SophieLecluse, La Tribune, July 7th 2010.

demand. The system has destroyed creativity in brands,as they are constantly under pressure to fulfil the needfor more collections to keep profitability levels up inorder to justify the investments made.14. Luxe Oblige, Vincent Bastien et Jean-NoëlKapferer, Eyrolles, 2010.15. For those who doubt the absolute uniqueness ofthis industry, the book by Vincent Bastien and Jean-Noël Kapferer, Luxe Oblige, Eyrolles, 2010, focuses onthe particularity of luxury brands and how it is impos-sible to compare them to other sectors, even harder torun them using techniques from other industries.16. The example of the perfume industry is edifying inthis case: in 20 years, under pressure from producersthat have become more and more concentratedthrough a system of licences given to groups whoseinterchangeable decision-makers have applied marke-ting techniques that work but that ignore the naturalspecifics of luxury brands, and the distributors, whohave established a mass retail strategy to take advan-tage of economies of scale in supplies and runningcosts, perfume as a product has entirely lost its dreamdimension and has become just another commodity++, an object that smells nice rather than an aspiratio-nal element aimed at an educated, however slightly,client who is looking for a little difference or an instantcrush, and not a calibrated product. The omnipresenceand globalisation of perfumes have removed their inac-cessibility and in doing so, their specific nature. And itdoesn’t seem to matter that this is the very essence ofperfume. This goes a long way to explain the upsurgein luxury perfumes today from Serge Lutens, l’ArtisanParfumeur, Frédéric Malle, Histoires de Parfums, to JoMalone. 17. “Chanel : l’art du beau geste”, Paris Match, January17th 2011: Since 2002, the brand has bought out sevenspecialist workshops, from the hat maker Michel to thefloral accessories maker Guillet, the embroidererLesage to the feather-maker Lemarié.18. A form of distribution that entails selling the mer-chandise to wholesalers. This strategy enables thenetwork to grow and make money without making anyserious investment, counterbalanced by a loss ofcontrol in the retail process.19. Le luxe bouleversé… et bouleversant, RanaAndraos, Economie (Lebanon), July 8th 2010.20. Luxury sector to see niche deals, Reuters, June 3rd2010.21. Is it necessary to mention that the military, rail ornuclear development of many emerging countries hasbeen encouraged by transfers of technology agreed toin the hopes of an immediate and huge profit, whileignoring the fact that the approach creates new compe-titors? We can refer to an interesting documentconcerning Areva and China on this page:http://www.medefparis.fr/areva_chine.php . How canwe ignore the nuclear power megacontracts signed bythe Koreans in 2009 with Abu Dhabi, when France isone of the most advanced countries in terms of civilnuclear technology? In fact, Yves-Michel Riols andNicolas Reynaud, in their article “Comment les Etats

Research Report, n°9. January 2008 (Fashion and Modernity)

Research Report, n°10. June 2008 (Management of Design)

Research Report, n°11. January 2009 (Perfume)

Research Report, n°12. No English version available

Research Report, n°13. No English version available

Research Report, n°14. June 2010 (Defining Design: Between Use,Aesthetics and Consumption)

Research Report, n°15. No English version available

Research Report, n°16. June 2011 (On Luxury)

Research Report, n°17. January 2012 (Open Innovation)

Six-monthly publication in French and English: IFM Research ReportThe publication is an informative research tool in the areas of fashion and design on an international level.

Research Report, n°1. February 2004 (The Immaterial)

Research Report, n°2. June 2004 (Luxury and Heritage)

Research Report, n°3. January 2005 (Brands and Society)

Research Report, n°4. June 2005 (Sustainable Development in theTextile Industry)

Research Report, n°5. January 2006 (Intellectual Property)

Research Report, n°6. June 2006 (Fashion as a Topic for AcademicResearch)

Research Report, n°7. January 2007 (Customisation: Fashion between Personalisation and Normalisation)

Research Report, n°8. June 2007 (Fashion as an Economic Model)

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Research Reportn°16.June 2011, Six-monthly publication

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Contributors: Daniel James Cole, Franck Delpal, PascalGautrand, Dominique Jacomet, NicolasLiucci-Goutnikov, Selvane Mohandas duMénil, David Zajtmann

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