27% Sales Plunge Causes Burberry To Cancel Shareholder Dividend Payment.

We wrote about Louis Vuitton seeing a 15% decline in sales on account of the global pandemic requiring the shuttering of all its stores, and today we are reporting that Burberry has seen a soul crushing 27% drop on sales for the same reason.  

Burberry's reaction? after borrowing £300 million via the U.K. business support plan, and still tanking, it has decided to cancel its full-year dividend payment to shareholders, a move which it expects will save £120 million.

As usual, corporate double speak is trying to upset this move motivated purely by greed, and Chief Executive Marco Gobbetti said in a statement. referring to the horrendous drop in sales "we have found new ways to strengthen our connection with consumers drawing on our digital leadership . . . . . It will take time to heal but we are encouraged by our strong rebound in some parts of Asia. and are well-prepared to navigate through this period."

It's unsurprising that Burberry is doing so appallingly, the brand is not making particularly good decisions recently. it drew a considerable amount of negative press when it was found that it was attempting to take its brand image up a peg or two, emulating Hermes practice of destroying unsold clothes at the end of each season. rather than its standard practice of sending them to bargain basement outlets crammed in tighter than clothes on racks at Primark.

While were on the subject of Hermes, our story which mentioned Louis Vuittons 15% drop was about Hermes seeing only a 7.7% drop, and this causing it's share price to increase by 2.6%.  It appears that once again the point we made in that post, that quality is timeless, and flashy one-trick-pony try-hard brands like Burberry are rightfully suffering the effects of the crisis.

We hope this signals a change in attitude towards luxury goods, that luxury and quality will again begin to mean something.  It's pretty unlikely however.

Louis Vuitton Custom Foosball Tables.

Louis Vuitton have never been known for their restraint, the signature brand canvas repeats their initials over and over again, and many times as the thing it is applied to has inches.  There was always however, a certain restraint, which made this less self aggrandising, and more a gentle reminder.  You used to be able to identify the counterfeit pieces easily by the lack of this certain something.   Now however, Louis Vuitton seems to be taking tips from counterfeit mobile phone case makers in terms of their design cues, as this range of table football, or "foosball" tables look straight out of mid 2000's market stall knock off design.

The table is apparently an extension of their made-to-order games selection, and we do see the inherent quality which is a given with LV pieces, however, the vulgarity of these is undeniable.  Whether or not this is a desperate attempt to create flagship "look-at-me" pieces in difficult times, or they really think £65,000 to £90,000 ugly foosball tables are a must have is hard to say.  What ever the case, they exist.  And if you disagree with our opinions, do please indulge yourself.

Hermes Outperforms Other Luxury Brands In Market Downturn.

Anyone within the luxury industry wanting to work the formula out for success during the current uncertain economic climate should look at Hermes. After re-assuring investors in a February announcement by Axel Dumas that normalisation will come quickly, despite shuttered stores, it has gone on to outperform the rest of the luxury goods industry, and seen a comparatively small decline on profits for the first quarter in comparison with other brands.

The reason for this is, colloquially, Birkin bags are virus proof.  This is the general sentiment put out by most, and is pretty close to reality.  Hermes is a band which prides itself, and which has meticulously constructed an image as, a premier luxury goods brand.  It has successfully maintained this throughout two world wars, and a series of global economic downturns.  

In the present difficulties, Birkin and Kelly model handbags have held their price stability, and beyond an initial decline in demand, have regained their position as investment vehicles and Veblen goods of the highest order.

And in comparison with LVMH, which has seen a 15% decline in global sales, Hermes has seen only a 7.7% decline, despite 75% of its brick and mortar stores being closed.  The result of this is a 2.6% increase in shares.

Hermes demonstrates that the timeless values of exceptional quality, combined with fearless elitism and razor sharp marketing can weather almost any storm.

Ermenegildo Zegna Fear Of God Collaboration, Because Money.

So now Ermenegildo Zegna, an Italian fabric maker, and Fear of God, an America streetwear brand, have decided to collaborate and create a menswear range for consumers.  As the title says, "because money".  It's easy to forget when brands champion ideals greater than consumerism that basically, they are businesses designed to make money.  Thank goodness for "inspired" decisions like these to bring us back down to earth, and remind us that basically, they want your money and they are going to do whatever they can to get it.

First lets analyse what makes sense about this collaboration.  They are both expensive brands, that's about it really.  A pair of Fear of God sneakers goes for a good £850, at least, and Zegna suiting has price points around the £3,000 mark, so we have two luxury brands, but that's where all similarities between these two end.  and that's the problem.  Just because two things are expensive, doesn't mean they will work together.  A good example of people failing to follow this principle can be found in upscale restaurants and bars frequented by global new-money types.  They mix Remy Martin Louis XIII Black Pearl with Cristal 1990, in the same glass, as visibly and as dramatically as possible.  Just because you can doesn't mean you should.

And that principle is the one that has been ignored here.  There have been a number of theories touted in relation to the movement from streetwear towards tailoring.  Fear of God's Lorenzo said of this collab he "wanted more grown up clothing".  Other suggestions have been made such as "the streetwear crowd is tiring of sweats and hoodies".  We debunked this in our article on A COLD WALL and their announcement to pivot towards tailoring.  As we said there, fashion is a business, the only way to stay in business is to keep the customers buying new "stuff", and this collaboration is nothing more than that, a move to make money from ill fittign overcoats and over branded garments.

It shouldn't come as any surprise to long term consumers of Zegna however, they have re-invented themselves more times than most people can keep track of.  They constantly try to cash in on any trend,  previous attempts have been with "technical" clothing that had iPod controls, a sport range, a Z range which was discontinued and brought back, and don't get us started on their concession stores, they feel like TK Maxx outlets.  

Disagree?  Well, go buy some products consumer.  They're out in a few months.

Bang & Olufsen E8 Third Generation No Active Noise Cancellation.

Bang & Olufsen announced the third generation of their 'truly wireless' E8 earbuds. in the last few weeks  Bad news for anyone who shelled out for the ALYX limited edition model, since that's now old tech, worse news for anyone who bought the third generation E8 earphones.  Why?  Because yet again, while competing brands produce active noise cancelling earbuds, Bang & Olufsen bring us yet another bog standard pair of ear buds with none.

What this does have is excellent sound quality, fine design, Bluetooth 5.1, wireless Qi charging through the case, and improved battery life.  The problem is, so do all the other manufacturers on the market, including Apple with its AirPods Pro, which are receiving rave reviews for having exactly the same as the E8 in terms of features, na noise cancelling also.

And it's not like Bang & Olufsen don't know their lacking in this respect.  take a look at the 'sound' tab on Bang & Olufsen's product page for the E8.  It has a category of 'Noise Isolation" and reads "Passive Noise Cancelling".  Why put this if you don't know your actually lacking in not having "Active Noise Cancelling".  

It's pretty obvious that the costs that Bang & Olufsen sink into he design side of their R&D are so high that they are committed to a design for the long term, and that they cannot fit Active Noise Cancellation into the E8 chassis.  But this is in fact the sunk-cost-fallacy, in that if they produced a newer design with the feature, they would actually sell them.  We doubt anyone is likely to pay £300 for these when the AirPods Pro are only £250, and many other brands are far cheaper, and offer all these features plus Active Noise Cancellation

A-COLD-WALL* Stops Selling Streetwear Because It's "Dead"

The word on the 'street', if that's not too much of a pun, is that street-wear is dead.  Everyone from fashion bloggers to Virgil Abloh has been saying, it, and now Samuel Ross, owner of A-COLD-WALL*, one of the major breakout brands of the last five years, has announced that he is pivoting his brand away from streetwear.  The question has to posed, why, and do we care?

The first part of this question is pretty formulaic.  The fact is that fashion is an ever-changing, ever-evolving beast.  the only way that businesses in that industry stay afloat is by constantly re-inventing themselves over and over.  The reason for this is simple, you don't need any of the things you are buying from fashion, lifestyle, and luxury brands.  Once you have a few items of clothing you can avoid the shame of public nudity, and prevent death from exposure, the fundamental reasons for wearing clothing. And one burlap sack is sufficient to carry all life's essentials.  But brands won't be making a billion dollars, or even close to it, if everyone bought clothing for the purpose of practicality alone.

So we are bombarded with newer and new designs, colours, and variations, to spark our primal desires, to fit in, to have something others don't.  But at some point, there isn't enough variety, and so we will stop consuming.  So when Virgil said "you can only have so many tees and hoodies", he means, "if we don't give consumers something other than tee's and hoodies we won't make money any more because they have enough of them".

That's the why, now, should we care?  That depends.  A-COLD-WALL* say on their site here they are a "maturing menswear brand", and will be "expanding it's reach in the wider luxury menswear sector".  As the risk of indulging in repetition, read this as "we want to keep making money, more if possible".

The new line-up doesn't really look very inspiring though.  We get the feeling Samuel Ross is attempting to stay ahead of the curve, but he doesn't know what is round the corner.  A brand like his was famous for it's avant-garde designs that managed to be both minimalist and daring.  His new collections look safe, and frankly a bit boring.

Head over for yourself and check them out, please consume of you disagree.  They are getting pricier too.  Just saying.

SUNNEI & VALEXTRA EXTRAMILANO Collaborative Range.

Taking inspiration from matryoshka, or Russian nesting dolls, this collaboration between SUNNEI and VALEXTRA, which was teased at January's Milan Fashion week has now had the full collection formally announced.

This range takes VALEXTRA's Passepartout tote and crates it in a number of hues and sizes, with the aforementioned concept of the Russian nesting dolls at the core, and it will be called the EXTRAMILANO range.

Frankly not a particularly inspired selection. but then again. VALEXTRA is not really known for innovation, but rather solidly built, ultra high-end leather goods. 

Expect prices to start from £480, from VALEXTRA boutiques in Japan, and worldwide by mail-order.