American fashion brands are coming for the luxury market | Daily News Byte

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Although the US has contributed to the lexicon of global fashion with casual pieces like blue jeans, baseball caps, and polo shirts, the top echelon of fashion remains the domain of Europe.

However, Estée Lauder’s purchase in November by Tom Ford—an American company with super-premium pricing—could signal a shift in how the world sees American brands. After getting the appreciation of $2.8 billion, the company has earned a seat at luxury’s power table.

That is because Ford products are considered expensive even compared to other global luxury brands. A 30 ml bottle of Tom Ford Lost Cherry fragrance costs $240, a huge markup compared to the same size bottle of Hermès D’orange Verte ($132) or Miss Dior fragrance ($72). A Tom Ford suit starts at around $5,000, not as high as a Kiton, which can run five figures, but are more expensive than a suit from Dior or Zegna, which starts around $3,000.

That’s not the typical positioning of a typical American fashion or beauty firm, which tends to aim for accessible prices like those of Coach or Kate Spade.

Europe dominates the leading edge of fashion

While France and Italy boast the bulk of the world’s leading luxury brands, American fashion and beauty fortunes have historically been made in mass and sports apparel, such as Gap or Nike, or in categories such as affordable luxury—think Ralph Lauren, Tommy Hilfiger, and Calvin Klein.

Although there are some outstanding US gown designers, Oscar de la Renta and Vera Wang among them, those brands have never reached the size or influence of business juggernauts like Chanel or Dior.

That’s partly because as a nation, the US was formed without a formal aristocratic class. European monarchies are the birthplace of luxury, explains Karla Martin, Deloitte’s head of fashion apparel and footwear.

“If you think about Burberry in London, they started with a commission to the queen. There’s a strict apprenticeship model and, for couture, it’s something where every single element has to be sewn by hand. It’s it takes a long time to learn,” Martin said. He said the business was nationalistic and exclusionary. “There were people who weren’t allowed into the business and we were a younger nation of immigrants.”

There is also a certain timelessness involved. Chanel and Louis Vuitton do not dramatically change their look from season to season, but instead reinterpret the house’s familiar codes. That’s part of the reason why Kering in November broke up with Alessandro Michele after keeping the designer in its top creative post for seven years. Michele’s magpie eclecticism reinvigorated the brand in 2015, but sales and her designs slowed felt too trendy and fadlike.

Martin points out that a true test of a luxury brand is whether it can stand alone apart from its founding designer. Japan gave birth to acclaimed avant garde designers like Yohji Yamamoto, Issey Miyake, and Rei Kawakubo but, while not cheap, their creations fell flat. more under designer fashion, not a grand maison.

“It’s very much an aesthetic of that designer, and it’s hard to continue when that designer is gone. Whereas if you think about Dior, it has managed to be successful with many designers who are not Christian Dior. This is the house of Chanel against a Japanese designer, or Tom Ford or Ralph Lauren. 100 years of extra history is important,” Martin said.

Americans are especially good at beauty and underwear

But Americans have proven themselves in sectors such as high-end cosmetics. Tom Ford, for example, is known more for its fragrance and beauty than for its fashion line.

Even at expensive prices, beauty remains relatively affordable, and in many ways better suited to American innovation. Seven of the top ten American billionaires in the fashion and cosmetics sector comes from a single destiny: Estee Lauder. After the sale of Tom Ford, its founding designer was in debt his billionaire status in that company too.

Another category Americans have a firm grip on: underwear. Les Wexner built his fortune on the back of Victoria’s Secret, once a major star at L Brands. Sarah Blakely has become the youngest self-made billionaire with her shapewear company Spanx. Kim Kardashian has also found a profitable niche with her Skims line.

The gradual maturation of American fashion

Tom Ford isn’t the only one climbing the luxury ladder. Capri Holdings, the parent company of American outfits Michael Kors and Jimmy Choo, is looking for another European luxury brand to buy after it successfully acquired Versace in 2017.

At the time of the Versace deal, there was concern that there would be a culture clash between an American group and a European label. But Capri raises prices in all its brands to lift the positioning, and the Integration of Versace have went well Capri is targeting $2 billion in sales for the Italian label and analysts have became more positive on the group’s overall prospects.

Meanwhile, China has also produced some aspirational firms, but Fung Group, Shandong Ruyi and more recently, Lanvin Group, all yielded disappointing results. The latter listed by SPAC recently, but most investors in the special purpose acquisition company backed out of the merger. Lanvin Group’s stock is hovering at about half its debut price of $10 a share.

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