Ekati diamond mine.Photo credit: Jason Pineau, through Wikipedia
Harry Winston is in talks to purchase an important asset of BHP Billiton’s diamond business, according to published reports.
The Toronto-based company, which describes itself as a diamond enterprise with premium assets in the mining and retail segments of the diamond industry, has secured bank financing for a possible deal to buy the Ekati diamond mine in Northwest Territories of Canada, according to the Financial Times. However, the deal, which was to be completed by mid year is going slower than expected and could even break down.
Harry Winston, best known as a luxury jewelry and watch retailer, already owns a 40 percent share in the Diavik diamond mine in the same area with Rio Tinto, which owns a 60 percent stake.
Both BHP Billiton and Rio Tinto announced in November 2011 that they are looking to get out of the diamond business to focus on larger, more-profitable assets from their vast mining businesses.
It’s a complicated matter, according to the report, because if Rio Tinto agreed to sell Diavik to Harry Winston, it would make it more difficult for the mining giant to sell the rest of its diamond assets.
This is more of a public service announcement than a story. In my opinion one of the world’s best luxury lifestyle magazines is the Financial Times "How To Spend It." The FT has recently launched a free iPad app as a complement to the color newspaper supplement.
The ipad includes the following:
* A searchable content of more than 60 editions of How To Spend It;
*·Content from new issues posted seven days a week;
* Daily postings, such as blogs, columns, interviews and news from the How To Spend It staff that isn’t in the magazine;
* Content organized by subject rather than by print edition;
* Access to most magazine features and columns before they appear in print; and
* A “Gift Guide” with more than 600 inspired ideas for men and women with a new gift posted every day; and
“When we designed this, our first question was: why adopt a print-style published edition format when we can organize content logically and allow readers to search their favorite subjects, columns and writers?” said How To Spend It editor Gillian de Bono. “With daily postings, the app gives magazine readers a unique sense of discovery.”
Hosted by theFinancial Times, the summit will bring together senior luxury executives, corporate decision makers and financiers from around the world. This exclusive event, now in its seventh year, attracts some 400 attendees and is regarded by the luxury industry as one of the premier thought-leadership forums for business leaders. Speakers will include:
* Jean-Claude Biver, CEO, Hublot SA * Gavyn Davies, chairman, Fulcrum Asset Management * Isabelle Guichot, president & CEO, Balenciaga * Frederick Lukoff, president & CEO, Stella McCartney * Marigay McKee, Fashion & Beauty director, Harrods Ltd * Marc Puig, chairman & CEO, Puig * Martin Wolf, CBE, chief economics commentator, Financial Times
The 2011 Summit will focus on the key economic issues facing the luxury industry today, including managing currency movements, costs, pricing and anti-counterfeiting—plus an assessment of the revival of mergers and acquisitions.
Attendees will have an opportunity to gain incisive market intelligence from industry peers, join debates and hear the results of specially commissioned consumer spending research.
For more information and to register, visit www.ftbusinessofluxury.com. There’s a discount of €300 for registrations received before March 11.
An advertisement using the bruised and beaten face of Formula 1 head Bernie Ecclestone with the statement, “See what people will do for a Hublot,” has created a bit a controversy. Ecclestone was mugged in London and his Hublot watch was one of the items stolen. He sent the picture, taken right after the mugging, with the statement used in the ad to Jean-Claude Biver, CEO of Hublot. The ad was attempt at humor and a way to draw focus to a serious issue, according to Biver, who said he created the ad at the insistence of Ecclestone. It appeared last week in the Financial Times and the International Herald Tribune as a one-off. But there are rumors that it may become a full-blown campaign. A story about the ad appeared in the Jewelry News Network Tuesday.
In the Wednesday edition of the Financial Times in its “Judgment Call” section (subscription required), the U.K.-based newspaper asked an executive, brand specialist and academic about their advice when trying to tackle this type of an issue and using humor to do it. Responses ranged from Barbara Stocking, chief executive of Oxfam, who cautioned about the long-term goal of such ads, to Rita Clifton, chairman of Interbrand London, who said that using topical events “can be a good route. But it depends who is doing it and how.” Meanwhile, Rohit Deshpande, professor of marketing at Harvard Business School, said the ad “is in poor taste, is bad marketing, and creates the wrong kind of long-term consumer impression.” What do you think?
The UK business publication, Financial Times, has launched a blog that deals with the fashion and luxury industries from a corporate and consumer point of view, as well as the subject of dress among those in public eye.
The blog, “Material World,” is edited by FT fashion editor Vanessa Friedman, a position she’s held since 2003. Other FT reporters and editors also will contribute posts.
The blog started on September 1 and so far has included the style of President Barack Obama and former British Prime Minister Tony Blair, insider perspectives of New York Fashion Week and a scoop about Tom Ford that Friedman learned about while in the doctor’s office.
It’s not a new dance or something to do with the movement of dormice. “Doing a Ratner” refers to making a public gaffe that is so big it can alter the value of a company.
Gerald Ratner was the chief executive of Ratners Group, a very successful British jewelry retail chain that he grew from 130 stores with sales of $20 million into a public company with 2,500 stores and sales of more than $1.8 billion. Then on April 23, 1991, during a speech, he said the following:
“We also do cut-glass sherry decanters complete with six glasses on a silver-plated tray that your butler can serve you drinks on, all for £4.95. People say, ‘How can you sell this for such a low price?’ I say, ‘Because it's total crap.’”
He added that some of his earrings were “cheaper than a prawn sandwich.”
The media seized on the comments and it resulted in an estimated loss of $770 million of company value. He resigned in November 1992. A year later the company changed its name to Signet Group.
“Doing a Ratner” is now part of the corporate lexicon when referring to public gaffes by executives.
The Financial Times published a piece on Ratner Friday in its “20 Questions” management column (subscription required). Today, a much more humble Ratner owns the jewelry Web site Geraldonline with 15 employees. When he was head of Ratners, he had 27,000 employees. He also is a paid public speaker, which he finds “cathartic.”
In the interview, Ratner said he was shunned by Buckingham Palace and 10 Downing Street. Among the takeaways from the interview:
“It was a dumb thing to say ... If I talk about Ratner’s successes it’s like discussing the Titanic’s pleasurable cruising aspects. People don’t want to know.”
When asked about the expression, “Doing a Ratner,” his response was: “Someone told me that it would be used 500 years after I died. I had hoped death might give me a rest.”
Today, his former company is doing quite well. It's known as Signet Jewelers Limited with its headquarters in Bermuda and its primary listing on the New York Stock Exchange. It is the world’s largest specialty retail jeweler operating more than 1,900 stores in the U.S. and U.K. Its holdings include Kay Jewelers, Jared, The Galleria Of Jewelry in the U.S.; and H.Samuel, Ernest Jones and Leslie Davis in the U.K.
Caption: Diane von Furstenberg (right) answers a question during a panel discussion at the FT Business of Luxury Summit. From left are Gillian de Bono, editor of the Financial Times How to Spend It section; Deepak Ohri, CEO of Lebuna Hotels & Resorts; Marissa Mayer, VP, Search Products & User Experience, Google Inc; and Edgar Huber, CEO of Juicy Couture.
You could say that fashion icon Diane von Furstenberg was into social media before it was cool. In fact she was into communicating with her customers in an open, honest and organic way before there was an Internet, much less Web 2.0. So while many luxury and fashion companies are struggling to take advantage of social media tools, for von Furstenberg, it was just another way of doing what she has always done. In other words, she gets it, because she always understood the value of open communications with her customers.
“I started when I was very, very young,” the 63-year-old owner of DVF fashion house said during a panel discussion titled, “Communicating Strategies,” at the recently held FT Business of Luxury Summit. “For whatever reason, I established a relationship with women. And it was very caring, it was very real. And people have a personal relationship with me… And the reason why it works is because it’s real, it’s authentic, it’s harmless. My mission in life is to empower women. It’s more important for me that she feels empowered and then I sell her a dress. The dress is afterward. It’s a consequence that if she wears it she will be happy with it.”
Von Furstenberg told the audience of luxury professionals that she loves to use Twitter but she will never use it to tell people to buy DVF products. She spoke about a time when one of her employees tried to use the social media tool to recruit 60,000 followers.
“I got so upset. I don’t want to force people to do that. It has to happen organically. In my work and how I run my business, it’s organic, it’s real. And that is part of having a reputation and that’s how people believe in you,” she said. “So I feel that it can’t be forced. Not everything starts with marketing. For me it’s making the best product for the best price, the best design to make women happy, and therefore the sale is the consequence of a good product, the marketing is a consequence of the demand. But if everything you do is market driven then it’s no longer real and somehow the consumers will know that and they will not believe you anymore.”
The creator of the wrap dress also told the audience of a revelation she had six months ago when it came to how she views her company’s Web site.
“I always thought that our headquarters was in the (New York) meat packing district,” von Furstenberg said. “We were having a meeting with everybody and I said, ‘You know what? Our headquarters is really on the Web.’ So, we are now in the process of changing our Web site—which is very successful in both editorial and e-commerce—because you forget about it, but anybody who wants to know about anything: whether they want a job with your company, or have to do a paper on you, or they want to buy something, or whatever it is, they go on the Web and therefore the Web site is you image to the universe.”
Under the questioning of Gillian de Bono, editor of the Financial Times How to Spend It luxury magazine, who was the most probing of the FT editors who led panel discussions, von Furstenberg discussed how she views her own boutiques and department stores.
“Boutiques offer a way to control your destiny, a way to control your brand,” she said. “How you sell it, how you show the experience of a woman. My goal in my shops is to make sure that a woman who walks in leaves happier than she was when she came in. It’s not about how much I will sell her. It’s how happier I can make her. And that works for bricks and mortar and it also works for the Net. It’s an environment where I want a woman to come in and I want to make her happier.
On department stores: “Department stores also are a brand and they are larger brand and they do some editing for you, I mean for the consumer. Department stores are like editors, they edit, they buy, they choose, they decide who goes next to whom so I think they are important, too. And if you don’t think they do a good job, you pull out.”
Von Furstenberg even talked about an increased need for editors in this new communications age.
“I think that now we live in a world where everyone has access to everything,” she said. “You can reach everything, reach everyone, know everything. And strangely enough, I think that makes the need for editors even more important. Because we have access to everything, because we can reach everything, I believe that editors should not be afraid. The value of editors will increase. Some of them start are bloggers, they call themselves bloggers, but their dream is to be editors. And the editors now start to blog, so there are all kinds of merges … and therefore you have to respect those editors who say, ‘I like it because.’ I think that editors should absolutely not be afraid of what’s going on in this huge revolution.”
The von Furstenberg brand remains as popular as when she burst onto the fashion scene in the early 1970s, particularly with a younger clientele. She claims to be somewhat mystified with her appeal to young people but, no doubt a part of the reason for this is her ability to talk directly with her customers using modern communications tools.
“I really don’t know how it happens, but the older I am, the younger my consumer base is.”
The FT Business of Luxury Summit, hosted by the Financial Times, was held June 14 and 15 at the Beverly Hills Hotel in Beverly Hills, Calif.
At the podium Vanessa Friedman, FT Fashion Editor. From left: Luca Solca, senior analyst luxury goods and general retail of Sanford C. Bernstein, Fabio d’Angelantonio,. executive vice president and luxury retail and chief marketing officer of Luxottica Group, William Powers, author of Hamlet’s Blackberry; Reggie Bradford, chief executive officer of Vitrue, and Jean-Christophe Bédos, president and CEO of Boucheron.
The Internet was the main topic of conversation during the FT Business of Luxury Summit. It was refreshing to see that the luxury industry was finally waking up to online marketing and e-commerce opportunities. However, the questions raised at the two-day conference show that the industry as a whole is still behind the times when it comes to understanding and using the medium.
The frustration over the questions being raised during the summit at the Beverly Hills Hotel was summed up by a marketing director from Paris who said the following during the black tie gala outside Paramount Studios: “They are asking the questions that were answered two years ago,” he said. “They keep asking whether luxury companies should get on the Internet. That question has been answered. The question they should be asking is how we should do it.”
Indeed, panel after panel, often led by editors of the Financial Times (which hosts the annual event), focused on whether companies, whose main selling point is their exclusivity, should be online promoting and selling their products to the mass market online. The answer, by and large, is yes. That promoting and selling their products and services online doesn’t delude the exclusivity of the brand or cannibalize sales. That if done correctly, this medium can increase awareness, aspiration and sales for a company’s product the same way that advertising and event marketing has done for years. Not that it will work for every company that wants to attract and service wealthy clientele, but for the vast majority, a sophisticated online strategy will be a benefit to the brand.
It’s refreshing to know that a luxury jeweler is one of those taking a leadership position online. Jean-Christophe Bédos, president and CEO of Boucheron, talked about the venerable Paris-based company’s decision to start selling products online in September 2007, before many others and how they use social media sites, such as Facebook, as a marketing tool.
“We realized through surveys that the majority of our clients are affluent people who were buying online already,” he told the audience of luxury professionals. “The studies are still showing that the highest spenders online are the most affluent people. At the same time our objective and our decision was if these people are online we have to meet them where they like to be. They like to come to our stores. They like to have a retail experience. But increasingly affluent people also want to meet wherever they decide. And the internet is one of those places where they like to be. So consequently we like to be there. There were no real metrics behind it. No real sales pitches. We built our site like a service to our clients. And we decided on a learning approach because we are learning as we go.”
So if you go to the Boucheron Web site (which like many luxury Web sites is a bit flash heavy, thus, a little slow for an online medium), you will be able to buy a $10,000 watch, a $9,800 diamond and platinum pendant or a $4,800 diamond and gold ring. And if you go to the company’s official Facebook page you will find the latest product releases and stories written about the company. There are also two Facebook sites that appear to have been started by fans of the company.
Bédos stresses the importance of being on social network sites in order to become part of the online conversation. He says on the Web you do lose control of at least some of your message. However, if you are not part of the discussion about your company, then you have no control over your message online.
This might be old hat for most industries but for many traditional luxury brands it is a sea change in how they do business. Bédos recognizes this but he says it’s more important to a luxury brand’s future to embrace the change rather than fight it.
“At the end of the day, who people trust is very important and I believe that in recent years, increasingly, people trust their friends and their family rather than institutions, rather than media, rather than politicians, rather than brands. So how can brands address people without being mistrusted? I think the issue for me is to see where the people go, where consumers go in order to meet those who they trust and Facebook is a very good example. When something is recommended by a friend it has more value than by the brand that sits in its ivory tower and doesn’t talk to people. By tradition, especially luxury brands, tends to talk at people. There is a very huge shift at the way luxury brands have to market themselves and have to try to meet people because the consumers of today, they don’t want to just be taught. They want to share. They want to give their opinion. And they want to tell us, the brand, what they think about us. Therefore, the Web is definitely a marketing vehicle that will trigger viral marketing. It’s very efficient from that point of view and the question for me is not whether we should be marketing on the Web or not—whether we like it or not. I know the hard luxury goods industry is extremely cautious about the Web. They fear it might destroy their brand image. They fear it might destroy the control they have on their distribution network. But you have to accept today that to a certain extent that you lose a little bit of control.”
Vanessa Friedman, FT Fashion Editor who moderated the panel discussion, asked whether it is a good business or marketing strategy to be reactive to the Web, in the sense that you have to be on it just because everyone else is or because someone will take that space even if it isn’t the right thing to do for a company.
“Sometimes you have to be reactive. Sometimes you have to be proactive if you’re a brand manager,” Bédos said. “One of those preconceived ideas I think is that we consider the Web as being a mass market vehicle. We should question this. It’s not more mass market than the street is mass market. Yet, specialty brands have directly operated stores on streets. The web to me … is like a street. You have the best. You have the worst. You have dirty streets. You have clean streets. You have affluent streets. You have down market streets. And when as much as a street could be, you can find everything. The question is not whether you should be on the street or not. The question is not whether you should be on the Web or not. The question is how you want to be there and how you want to be perceived there. This is still under your control. If you decide not to be there, you are totally losing what can be said about you and therefore I think you’re not facing your responsibilities as a brand manager to monitor what is being said about you on this space.”
In addition to Bédos and Friedman, participants for the panel titled, “Do 600,000 Facebook Friends Equal one Sale,” were Reggie Bradford, chief executive officer of Vitrue, a social media management company; Fabio d’Angelantonio. executive vice president and luxury retail and chief marketing officer of Luxottica Group, a luxury eyewear company, Luca Solca, senior analyst luxury goods and general retail of Sanford C. Bernstein, a wealth management company; and William Powers, author of Hamlet’s Blackberry.
The FT Business of Luxury Summit was held June 14 and 15 at the Beverly Hills Hotel in Beverly Hills, Calif.
This blog is for those who are passionate about jewelry and watches and want to learn more about the industry. It's a place to find the best new products from all over the world and the latest news about the business of jewelry, watches and luxury. Readers gain a backstage pass to the glamour, fun and difficulties of the industry.
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