Remembering Rana Plaza
Ten years ago this Monday, the Rana Plaza building in Dhaka, Bangladesh collapsed, killing over 1,100 people, mostly garment workers. They made clothing for brands that are household names around the globe. In the wake of the disaster, hundreds of brands signed a binding agreement with trade unions to monitor and address safety violations; a smaller group of largely US brands formed a separate, voluntary initiative. The programmes helped substantially improve safety standards in the factories they covered. But advocates for workers say the industry is still rife with other abuses, including low wages and other forms of exploitation. In those areas, there’s been evidence of backsliding, especially since the pandemic. Thousands of factories in Bangladesh weren’t covered by either safety programme, and there’s little change in other manufacturing countries. In addressing one specific humanitarian crisis, the fashion industry has allowed others to fester.
Kering’s Long Slog
The luxury giant is almost certain to see an improvement from its bleak fourth quarter, when Balenciaga was at the nadir of its troubles and Gucci sales sputtered. But the recovery story is still in its early days, and the company’s latest results may not offer much in the way of green shoots. New Gucci designer Sabato De Sarno won’t present his first collection until Milan Fashion Week in September, and while Balenciaga’s toned-down March show may have marked a turning point, its scandals almost certainly weighed on sales earlier this year.
The real question is whether these problems will make it harder for the company’s brands to participate in China’s economic recovery. Kering shares rose along with other luxury shares earlier this month when LVMH reported a faster-than-expected rebound in China. Will it be enough to make up for a slowdown in the US, though? Kering is not the only luxury giant to target America for growth in the last couple of years, but it is a bit more dependent on consumers there. North America made up 27 percent of 2022 revenue, compared with 21 percent for LVMH’s fashion and leather group and 18 percent for both North and South America combined at Hermes.
A Grand Reopening
After four years and two owners, Tiffany’s 5th Avenue flagship will open its doors to the public again on Friday. The epic renovation, begun in 2019 before LVMH acquired the jewellery brand for $15.8 billion in January 2021, is reportedly the most-expensive such project for a luxury store ever. Tiffany’s flagship has an unusual place in the retail landscape, performing double duty as a top New York tourist attraction while at one point driving 10 percent of sales for the brand. LVMH wants to bring back the crowds, and then some, but also more ultra-wealthy shoppers who might drop $1 million-plus on custom pieces in the new private client suite on the 10th floor.
The refreshed store has plenty to offer both the tourists and the big spenders, with design touches throughout that speak to both the old Tiffany and the new: plenty of nods to Audrey Hepburn, Elsa Peretti and Jean Schlumberger’s Bird on a Rock, but it’s the Basquiat featured in last year’s Beyonce campaign that greets visitors when they pass through the revolving doors.
What Else to Watch for This Week
Monday
10th anniversary of the Rana Plaza building collapse
Tuesday
Kering reports first-quarter results
Wednesday
Steven Madden reports results
Thursday
Amazon reports results
US first-quarter GDP reading
Friday
Tiffany’s 5th Avenue flagship reopens
Saturday
Louis Vuitton shows pre-fall collection in Seoul
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