Bloomberg News

Kenzo Aiming to get Hip Again under New Leadership

June 28, 2012

For years, Mylene Kerjean watched with dismay as fashion house Kenzo slipped from cutting edge to what she called “too loud, too unwearable, not relevant.” Then last month, the mesh-print dresses in a Kenzo shop in Paris caught her eye.

“They were more modern and correspond to clothing that I want to wear now,” said Kerjean, 33, who works in the beauty industry. The 430-euro ($534) dresses, she said, had “that extra twist that Kenzo is known for.”

Kenzo can thank Humberto Leon and Carol Lim for its ride from has-been to must-have for shoppers like Kerjean. The brand’s owner, LMVH Louis Vuitton Moet Hennessy SA, last year hired the pair as creative directors to rejuvenate Kenzo. The brand had become better known for its Flower perfume--sold in a transparent bottle with a red poppy--than the ethnic print mishmashs pioneered by founder Kenzo Takada, who left in 1999.

Leon and Lim were asked to position the Parisian fashion house for an ”ambitious,” expansion, Pierre-Yves Roussel, head of LVMH’s fashion division, said when they were hired.

The duo, who will show their second men’s collection in Paris tomorrow, have splashed the same mesh print that caught Kerjean’s eye -- think painted chicken wire -- over accessories like iPad covers. And they have formed partnerships with hipster brands to attract a younger audience.

Now, Kenzo is re-entering the U.S. market after abandoning it for almost a decade. The brand, with 149 outlets in more than 20 countries, this year is adding shop-in-shop boutiques in department stores Barneys, Nordstrom and Saks Fifth Avenue.

Curators of Cool

Leon and Lim developed a reputation as curators of cool at Opening Ceremony, a New York retailer they founded in 2002. At the small chain--which they still run--the pair introduced Americans to little-known brands such as Havaianas, the Brazilian flip-flops. After picking up devotees such as “Boys Don’t Cry” actress Chloe Sevigny, the pair are attracting a new generation of hipsters to Kenzo with everyday items such as 90- euro sneakers (a collaboration with Vans Inc. (VFC:US)) and 40-euro baseball caps made in conjunction with New Era.

The goal is to steer Kenzo’s image into the territory occupied by Marc Jacobs, an LVMH brand that courts younger customers with lower prices. That will help Kenzo evoke what founder Takada called the brand’s “anti-couture” spirit. Key to the strategy is refocusing prices and products so consumers can better understand what Kenzo stands for. Before, Kenzo sold dresses for as much as 4,000 euros, now most cost between 300 euros and 600 euros.

LVMH did not make Leon, Lim, or Kenzo Chief Executive Officer Eric Marechalle available for this story.

Affordable Luxury

More affordable prices, to which the luxury industry owes much of its growth over the past five years, allow brands to target younger and less wealthy clients that they hope will migrate to higher-value goods over time, said Fflur Roberts, global head of luxury research at Euromonitor International.

That’s “probably a better place to start” if you’re rebooting a brand in the current economic climate, she said.

Spending on personal luxury goods will slow this year with growth reaching between 6 percent and 7 percent, or about half 2011’s rate, according to Bain & Co. Kenzo has annual sales of about 150 million euros and is profitable, estimates brokerage CA Cheuvreux in Paris. LVMH doesn’t disclose revenue by brand.

Strategic Review

The revival validates LVMH Chief Executive Officer Bernard Arnault’s decision to grant the Kenzo brand a stay of execution. In 2010, LVMH, the world’s biggest luxury company with labels such as Donna Karen and Celine, conducted a review of Kenzo and other brands as analysts urged the company to focus on flagship Louis Vuitton and other key businesses like alcohol, people familiar with the matter said.

Louis Vuitton accounts for 75 percent of sales and 90 percent of profit at LVMH’s fashion and leather division, according to Barclays Capital. Kenzo, by contrast, represents less than 2 percent of the division’s sales, according to CA Cheuvreux. LVMH posted sales in the first quarter that beat analysts’ estimates in defiance of the slowdown in the European economy.

‘Jungle Jap’

Kenzo Takada was declared the next big thing in boutique fashion by Vogue in the 1970s as designs like smocked tent dresses and oversized dungarees at his boutique, called Jungle Jap, caught critics’ eyes.

Since Takada’s departure six years after LVMH bought the label, Kenzo lost its appeal because it didn’t move with the times, said Jane Kellock, acting managing editor of product and design at consultant Stylus in London.

“It was resting on its laurels and didn’t have any resonance” and at times even looked more suited to costume parties than daily life, she said.

Continual reinvention and redefining products “is the nature of fashion,” Kellock said. “If you’re not doing that, then you’re not interesting.”

To contact the reporter on this story: Andrew Roberts in Paris at aroberts36@bloomberg.net

To contact the editor on this story: Celeste Perri in Amsterdam at cperri@bloomberg.net


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