Beyond Fast fashion, where high- and low-cost coexist - International Herald Tribune Beyond Fast fashion, where high- and low-cost coexist To fight fast fashion, designers are contemplating third lines. By Suzy Menkes Published: February 26, 2007 PARIS: A pair of colorful rubber boots carries a sugar-sweet price tag: Just £19. Two steps away, in the new Marc Jacobs London boutique, is a dress that costs nearly £2,000 — or 100 times as much. Both were sold on the first day. Jacobs does not see this super-high/super-low idea as a one-off to entice customers. He and his partner, Robert Duffy, are mulling the idea of following their blow- out-of-the-stores second line — Marc by Marc Jacobs — with a third category. And they are not the only ones to believe that to face-off fast fashion, designers could create a new category at an even lower selling point. Giorgio Armani, who pioneered the second line when he started Emporio Armani in 1981, is re-configuring his Armani Exchange label. Originally aimed at the American market, and mostly jeans, this accessible line is being refurbished to capture the essence of Armani but is aimed at people on a budget, with prices at the level of French Connection, where dresses sell for a maximum of $298 and jackets for as little as $148. Designers are divided, the head honchos are skeptical and the retailers are nervous at the ideas of prices that swoop from highest to lowest. But the concern that secondary lines might cannibalize designer brands has long since evaporated with the stellar success of labels like D&G from Dolce and Gabanna and Moschino's Cheap & Chic. Jacobs, who says that he sees his designs knocked off around the world, believes that this is the moment for Marc3. "Robert and I have gone on about this for ages and ages," the designer says. "We see how we have influenced everyone from Anne Taylor to Nine West. We have some of the spirit in Marc by Marc Jacobs, but it is still quite expensive. All American designers used to have a first and second lines — and licenses. There is a bigger audience that just can't afford designer prices. We have always felt that we would like to provide it." Marc Jacobs is part of LVMH (Moët Hennessy Louis Vuitton), the Paris-based luxury group that has prided itself on its purity and integrity since it finally unraveled the tangle of licenses that had been built up during the 1970s. And second lines are rare, although it has worked for John Galliano's own label. "We've had discussions with Bernard Arnault," says Jacobs, admitting that his boss was doubtful even about the Marc line — until sales started to fly. "But we might have to incorporate a third partner who is in that business." (Jacobs was referring to a manufacturer with experience in fast fashion.) Whatever happens for Jacobs, Dior will not be changing tack, according to its president, Sidney Toledano. "We have often talked about it — but not for a brand like Dior — we try to keep it pure," says Toledano. "In general, second lines are for people who do a lot of wholesale and 80 percent of our business is through our own stores." Dior has played on its rejuvenation with John Galliano by offering a wide range of prices, from accessible to stratospheric, within its stores. According to Pierre Yves Roussel, director of the fashion division and the strategist appointed to evaluate the LVMH group of brands, Dior and Louis Vuitton are untouchable but there is more room to maneuver among the ancillary brands. "There has been a certain 'snobbisme' about secondary lines, as a bit shameful," says Roussel. "It came from all those licenses in Japan in the 1980s. But we are looking at projects. Italians have a lot of second lines and historically we have had them, at Kenzo, for example. Vuitton is global and we cover all segments. But at Givenchy and Kenzo, it would be possible to have second lines." The success of Marc by Marc Jacobs has stirred the LVMH pot. But what has really changed the equation is the arrival of MiuMiu, which Miuccia Prada brought to Paris three seasons ago, as part of a policy to take it slightly upscale as a stand-alone brand. "I have always thought of MiuMiu as a separate line — it's a laboratory," says Ken Downing, fashion director at Neiman Marcus. He says that his luxury store group does not focus on designer secondary lines "because we are not in that arena" and because there is a problem of "real estate" — the amount of available floor space. Yet MiuMiu already has invented a category and proved to be far more of a growth area that the brands that Patrizio Bertelli bought in the 1990s to expand Prada's franchise. At PPR, the strategy of its chief executive, François-Henri Pinault is to go higher — to stop the banalization of luxury by pushing for quality and workmanship (and price.) "We are going up!" says Robert Polet, chief executive of Gucci Group, referring to Gucci's push for intense luxury. "But every brand has its position and some are in a state of evolution. "In the Gucci family, we are the higher end of luxury. But because we have whole portfolio, it can be very different," he said. Thus Alexander McQueen has his McQ second line, which Polet says is performing extremely well and is designing high-profile sneakers for Puma. It could even be argued that Stella McCartney, with her out-of- group designing for Adidas, Target in Australia and H&M, is nudging main street. Karl Lagerfeld's embrace of H&M has been another catalyst for change. Although Duffy says that he and Jacobs backed off from collaborating with a fast fashion chain, to avoid giving it publicity, other designers are eager participants. They have included Proenza Schouler's recent collaboration with Target in America, bringing a niche, high-end label right down to third-line prices. Michael Fink, women's fashion director for Saks Fifth Avenue, is one of the rare retailers who believes that designers might be able to work to the power of three. "The whole H&M thing has proved you can take a designer house and mass it," Fink says. "Although of course, that is a limited edition in a specific time frame, which creates a feeding frenzy." Fink says that Saks does big business in second lines, citing Armani Collezioni, Akris Punto, Dolce & Gabbana, Roberto Cavalli and Valentino Roma. "Second lines are an entry point," says Fink. "Aspirational customers who spend a large proportion on shoes and handbags." But for those houses who make the desirable accessories, it is not so easy to bring out a second line — not to mention a third. Michele Norsa, chief executive of Ferragamo, is in charge of expanding a brand that already has a global reach, including, in China, 25 stores and six duty-free sales points. "For future, for emerging markets, we will probably need product that is more accessible," admits Norsa, who has just returned from Korea and says a company has to start "looking with Asian eyes." "You go to a second line when you are very strong in ready-to-wear and we are strong in accessories," Norsa says. "Ferragamo has always been consistent in focusing on one name. It takes time to take in an image and logo. It could be diluting to have a second name." Norsa also emphasizes that a country with its own language characters looks at logos in a different way, hence Ferragamo's decision to reinstate "Savatore Ferragamo" in all its branding. "They are used to seeing it as an image, an ideogram," Norsa says. "We need simple ways — we can be too sophisticated." He feels that when a second brand is given another name, it could look like a counterfeit. But the truth is that the one thing that many consumers read first is the price tag. And if luxury brands — especially those with demanding stockholders — want to keep up the last decade's massive growth, there may have to be not just second lines but a third way to bring in new customers. "I think we can go that step further," says Jacobs. "But not with old thinking about a designer brand with a $30 T-shirt. I think it can have the integrity of what we do."