Mass Luxury: The Holly Golightly Effect

The high fashion industry has found that too much of a good thing can be bad for business. Over the top success can be damaging in maintaining a brand image that symbolizes prestige, wealth and exclusivity. Outrageous popularity also prompts knock-offs, thereby reducing profit and eroding selectiveness. Big house labels are in a Catch-22 dilemma. Tiffany's, Dior, and Louis Vuitton have had to realign strategies to maintain their cachet. Sometimes, this has meant walking away from profitable business. Their issue is lower price items attract youth and youthful appeal, giving designer’s street credibility. The Catch-22 is when too much youth appeal backfires, causing wealthy and older clientele to no longer desire the brand. So how does a luxury business profit and grow when there is a limited wealthy clientele known for being fickle? The fashion houses found that they must inch along a particularly unsteady tight rope to avoid cheapening the brand’s image. Robert Frank from the “Wall Street Journal” sums up this predicament, in a recently published article about the problem of mass marketing luxury goods. He states, “The past few years have seen several upscale brands sacrificed on the altar of so-called mass luxury. To my mind, there is no such thing as mass luxury. You can be mass. You can be luxury. You can’t be both.”

Tiffany’s may have been one of the first houses to suffer this Catch-22. They can blame it on Holly Golightly. The character from Breakfast at Tiffany’s. Holly was in love with Tiffany’s. It was the happy place she went when she was sad, even though she could not afford the valuable gems inside. She wanted to own part of Tiffany’s allure, so ultimately, she purchased a Tiffany’s engraving and hallmark stamp on a Cracker Jack’s ring. Tiffany’s didn’t wake up and realize the potential of selling its prestigious brand name to the masses until the 1990’s. They began selling sterling silver jewelry, at relatively reasonable prices to attract young clientele. It may have worked too well. Tourists and young customers flocked to Tiffany’s to buy lower end jewelry rather than luxury jewels. The result was highly profitable, but tarnished Tiffany’s image. Concerned that their name was no longer synonymous with luxury, the company tried to re-establish its name by scaling back or eliminating many entry-level products. This process angered Wall Street and shareholders as revenues fell.

Christian Dior has found themselves in a very similar situation. Their dilemma, as Christina Passariello stated in the article, “Dior’s Latest Makeover Focuses on Grown ups,” reads, “Dior was struggling against one of the biggest challenges facing high-end fashion -- maintaining both a youthful buzz and exclusivity.” In our culture today, we are obsessed with youth, and companies want young consumers’ approval, because it creates a desirable label that leads to profit. The problem is one of statistics; few people buying $5,000 jackets are in their twenties or thirties. It is a very grown up crowd that has the financial ability to spend enormous sums on clothing. Realizing its blunder Dior has back peddled some, trying to limit youthful appeal and design for a more polished grown-up image.

Dior’s CEO Sidney Toledano has found that price affects younger teen shoppers. They will flip flop brands and bypass Dior’s expensive leather bags in favor of small canvas accessories that say “Dior.” This effect had the CEO of Dior up in arms. Two years ago, he noticed that 300 tank tops from their collection which read, ‘j’adore Dior” sold in one day. His fear was that the power of the t-shirt was ruining “Dior’s cachet.” He pulled them from Dior’s line. He also began to worry when his teenage daughter wanted to wear Dior. This was a sign that the company had switched from a sophisticated line to an overly youthful brand that needed to re-balance its appeal. To counter its youth oriented indiscretion, Dior has stepped up production of exotic leather handbags that have a starting price of $2,800 dollars (image to the right). This approach has worked as sales of high-end bags have tripled recently.

The too successful saga has also plagued Louis Vuitton. Vuitton started luxury good branding by placing LV initials on waterproof fabric steamer trunks to identify them from copycats. Technology has allowed the copycats a leg up. The runway success of the Murakami line has caused it to be one of the most knocked off bags in history. Every imitated bag is a stab at Louis Vuitton’s exclusivity. LVMH has responded to the overly successful Murakami bag by producing only 24 of its newest $38,000 crocodile patchwork bags (pictured on the left). They hope that the exclusivity will protect the brand’s image from future tarnish. This effectively limits the coveted bags to the wealthy and privileged as iterated by Nicole Weston who states, “ We (Louis Vuitton) are confident that the bag is utterly exclusive and that it will remain so.”

The world of high fashion has a conundrum. Selling to the masses is financially enticing, but not carefully toeing the snob appeal line destroys the exclusivity necessary to sell to the classes. The search to find the superfine grey area that allows both is on. Holly Golightly found the first elusive sweet spot decades ago. Let’s hope it is corralled in soon, it makes the fashion world more intriguing and to some degree more attainable.