This week, a French court approved a restructuring plan for bankrupt label Christian Lacroix that will reduce the house to a licensing operation. Only about a dozen of the roughly 100 employees will keep their jobs. The label's problems culminated with the parties that expressed interest in buying the label but failed to produce financial guarantees in time to rescue it. But where did they begin? Experts say Lacroix focused too much on haute couture collections. Successful labels use couture nowadays as marketing efforts. No label sells enough couture clothes to justify it. But buzz surrounding couture shows can be harnessed to sell things the general public can afford, such as handbags, scarves, fragrances, etc.
Lacroix co-founder Jean-Jacques Picart, who is now a consultant to places like LVMH, notes, "Even if in 2009 Lacroix sold around 70 bridal dresses — an enormous number for couture — at an average of 35,000 euros a throw, it is obvious that it is not enough to run a couture house."
An outdated concept? Not at all, [Erwan Rambourg, a financial analyst on luxury goods at HSBC,] believes. "In the same way that high tech businesses invest in research and development without any likelihood of instant returns for their money, luxury houses invest in haute couture to nourish creativity. You have to think in terms of adding value, rather than making a profit."
Lacroix was notoriously insistent on maintaining its high-end approach to clothing. Under LVMH's ownership, Lacroix made lower-priced Canal and Jeans lines. When the Falic group bought the label in 2005, they were quick to do away with those. Lacroix was happy because he didn't want to be bothered with the more affordable things. But still, where were the Lacroix sunglasses? Perfumes? "It" bags? Sales of items like those account for the bulk of profits for luxury labels. Lacroix's C'est La Vie fragrance never even took off.
"Who can still remember Thierry Mugler? No consumer today knows the label, only the perfumes," Rambourg commented of the French designer who found himself in a similar fix.
We can remember Thierry Mugler pretty easily, and it's not because of his fragrances, it's because of Beyoncé, who had him design the costumes for her world tour. Fragrances are powerful profit drivers, but Rambourg shouldn't forget fashion's other highly potent force: divas. Look at Lady Gaga. You can't go two feet in this industry without hearing about how she was a waitress this one time or likes hats, or how maybe her heels didn't have enough traction in Montreal, which is why she fell on her ass onstage there. She's in Vogue, she was the first non-model to wear Alexander McQueen's spring 2010 Alien shoes, and she was the highlight of New York Fashion Week and plenty of other things. And she used to wear pretty bad latex skirts.
Though Gaga eschews labels onstage for works curated by her own Haus, Beyoncé's Mugler affections made the designer so much more relevant. And now there's talk of reviving the Mugler ready-to-wear label, which would be amazing.
There is a diva out there for Lacroix to dress. Gaga, Beyoncé, Britney, Ciara, and even Lily Allen may be attached to certain designers already, but we're pretty sure Keri Hilson isn't! And she had that one song that became catchy after we listened to it twenty times this summer.
Where Lacroix went wrong [Telegraph UK]