The world is at risk.

Some may say that the coronavirus emergency was unpredictable.

Well, this is not the case.

In September 2019, the World Health Organization (a specialized agency of the United Nations dedicated to health) issued a report called “The world is at risk”

The introduction said “While disease has always been part of the human experience, a combination of global trends, including insecurity and extreme weather, has heightened the risk. Disease thrives in disorder and has taken advantage–outbreaks have been on the rise for the past several decades and the spectre of a global health emergency looms large. If it is true to say “what’s past is prologue”, then there is a very real threat of a rapidly moving, highly lethal pandemic of a respiratory pathogen killing 50 to 80 million people and wiping out nearly 5% of the world’s economy.”

“A global pandemic on that scale would be catastrophic, creating widespread havoc, instability and insecurity. The world is not prepared.”

It also stated that ” The world is at acute risk for devastating regional or global disease epidemics or pandemics that not only cause loss of life but upend economies and create social chaos.”

And “The world is not prepared for a fast-moving, virulent respiratory pathogen pandemic. The 1918 global influenza pandemic sickened one third of the world population and killed as many as 50 million people – 2.8% of the total population (16,17). If a similar contagion occurred today with a population four times larger and travel times anywhere in the world less than 36 hours, 50 – 80 million people could perish (18,19). In addition to tragic levels of mortality, such a pandemic could cause panic, destabilize national security and seriously impact the global economy and trade.”

And it also focused on 7 urgent actions to prepare the world for health emergencies:

1. Heads of governments must commit and invest

“Poor” luxury risks to be deeply impacted by the Coronavirus emergency.

It is news of today that the former SIHH, now “Wonder and Watches”, the high-end watchmaking fair in Geneva, has cancelled its 2020 edition.

Unstoppable Luxury

The Coronavirus appeared recently as a totally unexpected emergency in a time of double digit growth for many luxury houses.

Nothing seemed to stop them and the sense of entitlement grew accordingly.

It was like being on a high speed train projected to unstoppable success and rewards.

The Black Swan Effect

Then a Black Swan appeared at the horizon.

“What is a Black Swan?” might ask someone who hasn’t read Taleb bestseller book yet.

“A black swan is a highly improbable event with three principal characteristics:

1. It is unpredictable;
2. It carries a massive impact;
3. And, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was.”

While a recession was in the air, this epidemic has a less controllable psychological impact in the markets.

The luxury industry was not prepared, nor were the big consulting firms, because they were stuck in a honey trap.

The wake up call will be very hard for those ones who just followed the flow of cashing in on Chinese customers and didn’t properly developed a balanced, solid growth.

Is it too late to change direction? It depends on how the companies have been developed to be “antifragile”…

What is “Antifragile”?

As per the book of Nassim Nicholas Taleb, the author of “Black Swan”, the “antifragile” is one step beyond robust, as it benefits from adversity, uncertainty and stressors, just as human bones get stronger when subjected to stress and tension.

“He who is not antifragile will perish” Taleb, a former trader, a NYU professor and a bestseller writer, said.

It’s time to go back to the fundamentals and start playing seriously, again.

 

More to follow…

Luxury Industry Neglects Women 

Take the Deloitte “Global Powers of Luxury Goods 2019” report and give a look at the top 50 best luxury companies. Only 3 of them are headed by women: Tory Burch, Miuccia Prada, Ferragamo CEO Micaela Le Divelec. Two of them are founders. The only one recruited is the latter (kudos to Ferragamo!).

Women are often confined in the least powerful roles in fashion: design, communication and HR.

Despite the fact that most part of the offer of the industry is dedicated to women.

In 2015 the New York Times published an article about “In Luxury, the Female Factor”. It mentioned several women promoted CEO like Isabelle Guichot, Liza Montague, Patricia Barbizet, Sarah Crook.

It said “Female chief executives also have historically been few and far between, despite a recent spate of high-profile appointments.

But there are signs that this is one industry-defining trend that may no longer be in vogue.”

Those who were mentioned have been rapidly replaced by men.

Recently Barbara Calò was promoted at Marni replacing the CEO Stefano Biondo, but she just scored a less powerful job title of Managing Director.

Luxury Brands work on Stereotyped Women

Recently Mary Fellowes, celebrities stylist of Olivia Colman and Scarlett Johansson, said to the Daily Mail online that the fashion industry ignores middle-aged women.

‘They are its biggest users, women with something to say for themselves, with money to spend,’ she cries. But so much of the industry still seems to be designed for tall, thin young women.”

“‘Grown-up women aren’t interested in logos and street sportswear, but the big luxury brands are putting all that out there, for the customers who aspire to be the likes of the Kardashians and the Hadids, who don’t represent their customers at all”.

It’s a pity that such a relevant part of the industry customers are neglected.

And it’s a shame that women do not have space and voice in the sancta sanctorum of the brands.

In its article “When Women are On Board, Men are less Overconfident”, the Harvard Business Review points out that:

“One benefit of having female directors on the board is a greater diversity of viewpoints, which is purported to improve the quality of board deliberations, especially when complex issues are involved, because different perspectives can increase the amount of information available.

At the same time, research has found that female directors tend to be less conformist and more likely to express their independent views than male directors because they do not belong to old-boy networks.

So a board with female directors might be more likely to challenge the CEO and push him to consider a wider range of options, as well as pros and cons, when making strategic firm decisions.

This could then attenuate CEO overconfidence and correct for potentially biased beliefs.”

So, will Women Save Fashion?

Very likely they started a new silent trend: niche brands, excellence, style, elegance and the cool factor.

Brands like The Row, Gabriela Hearst and the upcoming Phoebe Philo project are taking women on a different road compared to the tacky and flashy styles of most of the brands.

It was called timeless elegance once. Now it’s the come back in style.

This Week in Luxury and Fashion is Back!

1. Eraldo Poletto, former Furla and Ferragamo, is out at Stuart Weitzman. Will he re-join Furla for the 3rd time? He still has loyal executives in the company and recently Antonio Burrello, who he recruited at Ferragamo, joined Furla as Chief Marketing Officer…

2. Tom Ford and Ralph Lauren won’t show at NYFW…is game over for the New York week despite being the city of the most powerful insider like Vogue Anna Wintour?

3. Oliviero Toscani ousted at Benetton following his unfortunate comments. Dejà vu of many years ago?

4. Hermès launched its very first make up product: a lipstick. It’s refillable and it costs 62 euros. It’s not a license (higher margins!). Is it a trailblazer in the industry?

5. Will Mayhoola expand its luxury group through new acquisitions? Will Stefano Sassi become the chief of the group leaving to Jacopo Venturini the CEO job at Valentino?

6. Apple alone sold more watches than the whole Swiss Watch industry. Time to move on, Luxury!

7. While Versace amazes by dressing JLo at the SuperBowl Halftime show, Gucci (un)dresses Achille Lauro at Sanremo Festival…à chacun sa spécialité… Winning Soundtrack: JLo “Let’s Get Loud”

Happy Weekend!

Following Jing Daily article today “Chinese shoppers are known as heavy luxury consumers, accounting for 30% of all luxury goods purchased worldwide”.

China, a strategic market, asks for an extra effort to all the brands willing to succeed in such a region.
The must for every brand is to understand how to set up a tailor made approach wisely mixing the Brand history, heritage, DNA and the market needs.
There is no standard recipe that can be sold nor bought.
There is no “Gucci kit” available for this.

The only key is knowledge and vision, keeping also the awareness that what works with the Chinese customers doesn’t necessarily work with French, Japanese or Americans.

The worst mistake a company could do is:

• to only focus on Chinese customers
• to obsess about growth in China only
• to forget to work on a balanced geographical distribution

China growth is slowing down and the Chinese Millennials, following Jing Daily “a survey from HSBC shows that the debt-to-income ratio of China’s post-’90s generation (people born from 1990 and 1995) has reached an incredible 1,850 percent”.

Better to continue to keep an eye also on the rest of the world.