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  • Luxury Places and Spaces Flagships & the internationalisation of

    luxury fashion retailing

    Christopher M Moore

    Glasgow Caledonian University

  • What luxury retailing is about

    Our concern is no longer whether our products will be accepted what matters

    is whether our entertainment will be CEO Salvatore Ferragamo

    Entertainment, Entertainment, Entertainment

  • Judgement of |Flagships

    Our assessment is based upon the extent to which the flagship delivers emotional satisfaction to our customers


  • Lest we forget that

    Fashion particularly luxury brands are the most prolific / longest established of the international retailers Hollander (1970)

    Gucci Chanel Dior Louis Vuitton = 50+ years with stores in foreign markets

    Early internationalists usually within two decades of their establishment by necessity

    New generation D&G within 2 years of trading

  • Luxury Flagship Stores

    New extravagance scale, design and costhuge debt such as at Prada

    New impact media coverage, consumer response, competitor action, wider influence upon urban architecture

    Luxury machismo expression of conglomerate power & status / management aggrandisement

  • Louis Vuitton, World Flagship

  • Like a Luxury Principality

  • Prada Guggenheim, New York

  • Research Focus

    Assemble a review of the characteristics of the luxury fashion flagship store

    Interpret the function(s) of the luxury flagship

    Case studies with 8 luxury fashion retailers

  • Flagships in the Literature

    Pine and Gilmore (1999) places of brand performance staff & customers as actors

    Kozinets et al., (2002) definition:-

    Carry a single brand of product

    Company owned

    Operate with the intention of building brand image rather than solely to generate profit

  • Flagships in the Literature

    Carry a single brand of product er, no

    Company owned - er, no not always

    Operate with the intention of building brand image rather than solely to generate profit

  • Flagship Features

    Scale between 8 - 12 times the size of the standard format

    We go for an historic building always too big for our needs. So we need to develop more product to fill the flagship space

    Cost development costs bear no relationship to our income levels but we can because we are a private company

  • Chanel Tokyo- 240m

    Flagships at 15m Euro

    from a 105m Euro

    turnover would not get

    you top marks in the

    business planning class

    55% of our cap.ex. went

    to one flagship last year

  • Flagship Features

    Number fewer than youd think and only within the markets that matter

    For Burberry 4 London, New York, Barcelona and Tokyo (owned by Licensee)

    Established markets based upon sales income and / or market status and now

    Emergent markets China, Russia and S. America

  • Micro-Locations

    precision placement in 2 streets per city

    Access to tourists, rich women, celebrities, media in that order

    Inadequate spaces in the fashionable places

  • New Patrons of Architecture

    Claudio Silvistrin for Armani Pawson for

    Calvin KleinRem Kolhass for Prada

  • New Patrons of Architecture

    Enhances brand reputation and status

    Provides a blueprint for the development of roll-out formula

    Cultural and artistic contribution to markets

  • Flagship Vernacular Language of Minimalism

  • The international luxury flagships are the new reference points in international architecture

  • Standard v AdaptiveClaudo Silvestrin for Giorgio Armani

    International Minimalism

    Monastic experience cream stone

    Purity of the GA brand

    Opulent use of empty and commercially inactive space

    Space defining luxury

    Replication across all flagship stores

  • Burberry Rejecting the Global

    We have learned that the formulaic brand footprint is no loner appropriate for a discerning, anti-standardisation consumer

    DNA comes from Bond Street materials, pallet and patterns

  • Prada Epicentre Stores

    Aim is to challenge the formulaic and standardised approach to international flagships

    Each flagship experience is unique and a response to the local environment

    Cutting-edge image for Prada

    Common flagship features celebrated architect, best location, expensive, large scale

    Near bankrupted Prada

  • Prada Epicentre Tokyo

    "to reshape both the concept and function of shopping, pleasure and communication, to encourage the meshing of consumption and culture."

    Store as a large display case or more a string vest?

  • Prada Los Angeles

  • Prada Guggenheim, New York

  • Motivations -That something other than profit

    Generate income not so good for profit

    Market Entry first direct investment aimed to generate and maintain demand

    Demonstration of our long-term commitment to this fast growing market in which we will develop comprehensive distribution and retail channels Armani in Shanghai

  • Motivations -That something other profit

    Market re-entry Tommy Hilfigers Regent Street flagship : then 2-3 company owned stores each year for the next 5 years as a re-positioned, luxury business

    Market Stimulant attempt to re-position, develop and / or extend business within a foreign market

  • Case : Hugo Boss

    4 franchise partners operate 19 stand-alone stores and 26 shop-in-shops in the UK

    May 2006 - 10,ooosg ft flagship in Sloane Square

    Londons prominence as a fashion centre means the Sloane Sq. store has significance for the worldwide business as well as UK trading. It in one of our key flagship locations, along with Berlin, New York, Paris, Tokyo and LA

    Hans Schmitt, UK MD

  • Case : Hugo Boss

    The franchisees were nervous about competition from the company-owned flagship, which will carry all of the Boss brands, but they were reassured by the marketing and brand-awareness benefits

    The flagship isnt just about driving sales Its about supporting the market for franchisees and stockists by presenting Boss as a lifestyle. None of the franchise partners would have been able to do such a big retail project and the UK represents 14% of worldwide sales

    Hans Schmitt, UK MD

  • Flagship Functions- Brand Communications

    Flagship as a core branding device

    Flagship as a brand billboard and urban entertainment

    Flagships appear under marketing communications in our

    accounts that is their principal function. To communicate.

    And to build relationships Brian Duffy, CEO Ralph Lauren Europe

  • Flagship Functions

    Reinforces and enhances the brands provision of entertainment

    Space to develop and adapt new business propositions

    Stimulate, strengthen, and support

    relationships with distribution partners, the fashion media and customers

  • Flagship Functions- Distribution Partner Relations

    Gain important selection criteria for wholesale stockists / franchise partners

    Retain experimentation and business development

    Entertain flagships as a brand venue

  • Flagship Functions- Distribution Partner Relations

    Education brand presentation, systems & service

    Luxury fashion retailing is about implementing a formula. The flagship store is the brand manual and the partners visit the flagship to read the manual

  • Flagship Functions- Media Relations

    There is a direct relationship between flagship presence and media coverage. Close a flagship and you are dead in the press. Our Bond Street opening gave us a 3000% increase in UK press coverage

    Cristiano Quieti, MD, Diesel UK

  • Flagship Functions- Media Relations

    Party Venue - average of 16 media events per year

    Celebrity Venue watching Paris Hilton shop is a national pass-time

    Memory prompt a store near press land helps stop journalists brand amnesia

  • Flagship Functions- Customer Relations

    Recruitment esp. high spending customers who tend not to stray onto Cheap Street

    Loyalty Venue any lady who spends more than 14k with us can have a free coffee or her make-up done in the Chanel flagship store

  • Flagship Functions- Customer Relations

    Brand Laboratory NPD, customer service, IT, brand presentation

    Absolutely nothing happens within this business without it having gone through the flagships first. Its market testing in the most important markets

  • Trickle Down Effect

    Appropriation of features of luxury flagships within the mass market

    Re-shaping environments and trading-up in terms of international positioning as entertainment venues

  • H&M New York

  • ZaraParis

  • Final Thoughts

    Flagships are critical to our international development. For relationships and all that stuff. For developing an international property portfolio that is not worth that much because we dont own the building, just the design concept. Total madness really

  • Final, Final Thoughts

    Flagships are marvellous. In London we had one customer who had negotiated with her husband that she would spend 10k with us every time England scored a goal!


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