Good morning.
‘Tis the season for luxury retail but giants like LVMH and Kering have been struggling while brands like The Row and Hermès continue to do well. I recently spoke with Holt Renfrew CEO Sebastian Picardo, who leads Canada’s leading luxury retailer and has unique insight on how these trends are playing out.
He credits brands like Hermès with managing for the long term. “They didn’t go up as much as other brands during the post-pandemic time,” he says, while they also stoked demand by limiting supply. As the late designer Virgil Abloh once said, luxury is what people covet. “What’s working are brands that deliver value: the quality is extremely high, the design and the and the esthetic is on trend.”
So how is he navigating this tough environment? “The overarching principle is, if it's working, add gas to it,” he says. That means doubling down on digital sales, as well as space and promotions. That could be for The Row, created in 2006 by Ashley Olsen and Mary-Kate Olsen, as well as more accessible brands. “Coach, for example, is doing well and it’s a more affordable price.” (Click here for my recent podcast interview with Tapestry CEO Joanne Crevoiserat.)
Adds Picardo: “We are also doubling down on relationships, in particular with customers who have spent a significant amount of money with us. They have a huge amount of loyalty and trust.” That means giving associates better tools to personalize service, as well as more bespoke events, experiences and collaborations. “We basically focus on the things that are working.”
“Brands are changing, too. In the last three months, there's been a huge amount of change in designers and creative director roles [such as Chanel’s appointment of Matthieu Blazy as its new artistic director],” notes Picardo, adding that there’s now an opportunity to engage with consumers in more bespoke and creative ways. “What is luxury? Diane, for us, I don't know. Maybe a luxury is to go to Shake Shack.”
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Diane Brady
diane.brady@fortune.com
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