Fashion Makes Business Sense - Cover Story for Qatar Today Sept 2013

7/30/2019 Fashion Makes Business Sense - Cover Story for Qatar Today Sept 2013

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cover story:The Business of fashion

thebusiness

of fashion


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Pg > 43

QAtAr Is rAnKed 11tH In tHe fIrst AnnuAlretAIl InternAtIonAl progrAMMe

expAnsIon (rIpe) Index, provIngfAvourABle for gloBAl retAIlerslooKIng to expAnd InternAtIonAlly,pArtIculArly In tHe luxury segMent.In tHIs scenArIo, wHen retAIlers AreMAKIng A BeelIne for QAtArI sHores, wHydo locAl sHoppers tend to fly out ofQAtAr to fulfIll tHeIr needs? wHere dotHe retAIlers fAIl to Keep tHe sHopperssAtIAted? or does tHe fAult lIe wItH tHesHoppers wHo do not drIve tHe need?deBrInA AlIyAH reports.


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ccording to Euromonitor Internationals

market research, the global apparel market

was valued at QR6.1 trillion ($1.7 trillion) in

2012 with a predicted growth o 5.8% this

year. Marketline Research says that in 2014

the global childrenswear market is expect-

ed to reach beyond QR677 billion ($186 bil-

lion), marking a 15% increase in ve years;

the global bridalwear market is expected

to start moving towards the QR207 billion

($57 billion) mark; the global menswear in-

dustry should exceed QR1.4 trillion ($402

billion) and the biggest segment in the in-

dustry, womenswear market is expected to

pass QR2.2 trillion ($621 billion).

About 80% o the world's population

would say they care about ashion. Fash-

ion, it would seem, is reserved or the well-

heeled, celebrities, and the afuent seg-

ment o the society.

Then what is it that is uelling this insa-

tiable demand or collection ater collec-

tion systematically produced to the strict-

est o deadlines and calendars or ashion

weeks?

The process is one that is so excruciat-

ing that many ashion designers have been

pushed to the brink; some give up while

others are driven to suicide and break down

(as in the case o Alexander McQueen and

John Galliano). As a seasoned ashion star

Alice Temperley tells, You must be pre-

pared to give away certain years o your lie

to make it.

What most people do not see is that it is

the trickling down eect that quietly push-

es the engine in the background. Looks and

styles presented at ashion weeks nd their

way through layers o interpretation and

production through all channels o garment

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A

ter the purchase o

the luxury handbag

maker Le Tanneur

& Cie, QLG is now

extending anoth-

er arm into ashion

with the launch o

the much anticipat-

ed QELA this month.

A ashion label con-

ceptualised and produced in Qatar, QELA

is the states rst global ashion brand and

draws its inspiration rom the Qatari heri-

tage, which is reected in the aesthetics o

its collections. The brand will oer a col-

lection o leather goods, shoes, jewellery

and a couture line that are designed in the

QELA workshops. In an exclusive interview

with Qatar Today, CEO Gregory Couillard

talks about the vision o the company and

how ashion orms an important part o the

business. Couillard believes that ashion

is one o the key markets that needs to be

tapped. Fashion is a global business and

the industry as whole generates over $1 tril-

lion annually, employing millions o people.

At QLG we are creating jobs in Qatar and

abroad, and are investing in the training o

new recruits. We see ourselves at the heart

o the ashion and luxury eco-system that is

growing in the country, he says.

Behind the founding of QLG

Qatar Luxury Group was created to build

and oster luxury brands or an interna-

tional audience in the ashion, hospitality

and liestyle sectors, and was established in

2010.

Our ashion division is built on the belie

that there is an opportunity in the global

luxury market or a Qatari group that is true

to its heritage, open to the world, and cre-

ates timeless products using the best mate-

rials and highest level o cratsmanship.

Through our hospitality division, we are

also active in the world o high end restau-

rants, and together with che Guy Savoy,

Quisine by Guy Savoy was opened on The

Pearl in November 2012. In addition, La

Varenne, a French Brasserie and The An-

vil Rooms, a traditional steakhouse, were

opened in Tornado Tower.

The common strand between all our ini-

tiatives is that they are centered on excel-

lence, quality and creativity.

Tell us more about your fashion and

luxury division.

Our ashion division is composed o our

own, made-in-Qatar ashion brand and Le

Tanneur, which is one o the oldest leather

goods brands in France that QLG acquired

in 2011.

Our own ashion brand, QELA, will be

anotherQatari brandis created

QAtAr luxury group ( Qlg), owned By QAtAr foun dAtIon, wAscreAted to BuIld And foster luxury BrAnds In tHe fAsHIon,HospItAlIty And lIfestyle sectors for An InternAtIonAlAudIence.

fahi i a babi a hi a ha $1ii aa,mi mii . A Qlg a ai jb iQaa a aba,a a ii ih aii i."

GREGORy COUILLARD, CEO

Continued on Pg43


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making. And this is where the real money is.

This ingrained necessity has churned

out an industry so protable that the three

richest men in France (the beating heart o

all things ashion) minted their billions in

the ashion and beauty industry. The 2012

Forbes Rich List puts chairman o LVMH,

Bernard Arnault as the wealthiest person

in France with a net worth o QR149 bil-

lion ($41 billion), ollowed by Liliane Bet-

tencourt o LOreal at QR87 billion ($24

billion) and Francois Pinault and amily o

Kering (ormerly PPR) at QR47 billion ($13

billion). In Italy, another stalwart capital o

ashion, Giorgio Armani, is the th rich-

est man in the country with a net worth o

QR18 billion($5 billion).

These gures are astounding, consid-

ering the industry is one that is oten as-

sumed to be recession sensitive. But while

consumers may purchase less during a

downturn, they would be looking to pur-

chase items o better quality to last a lon-

ger period and this oten translates into

items o higher prices. The Brand Finances

2012 Global 500 study o the worlds top

brands suggests that in times o econom-

ic slowdown, consumers embrace luxury

and indulgent brands instead o tradition-

al household avourites. The report shows

that the global downturn has created the

Alphabrands, brands that consumers turn

to or quality regardless o economic condi-

tions. Some o the worlds top ashion hous-

es, categorised as Alphabrands, including

Louis Vuitton, Hermes and Ralph Lauren

continue to report soaring prots.

Middle East and Qatar market

While the global economy is uctuating,

newly minted millionaires rom new econ-

omies are splurging enough to make up or

the losses in other countries.

In the Middle East, regional retail spend-

ing accounted or 30% o global sales last

year according to a report released by con-

sulting rm Bain & Company. A 2012 report

by Deloitte conrmed that consumers in

this region spent some QR29 billion ($8

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billion) on luxury goods and top ashionretailers experienced a 42% growth in-

crease in the MENA region. I we are not

talking about volume, then we are denite-

ly talking about value as one third o global

haute couture client comes rom this re-

gion.

Qatar ranked 11th in the rst annual Re-

tail International Programme Expansion

(RIPE) Index, proving avourable or global

retailers looking to expand internationally,

particularly in the luxury segment. Qatar-

is are the biggest buyers o luxury goods in

the Middle East region, closely ollowed

by consumers in Bahrain, according to

the American Express Middle East Luxu-

ry Spending Tracker. Consumers in Qatar

spend up to QR18,200 ($5,000) a month

on various luxury items but ashion topped

the list o preerred purchases in 2012,

with 37% o respondents saying they enjoy

shopping or ashion-related items.

Qatars stake in retail

With strong consumer condence and

spending, does it really come as a surprise

that Qatar would want a piece o the cake?

One o the most prolic ashion house take-

overs o 2012 was Valentino's acquisition

by Mayhoola or Investments, a private Qa-

tari-backed investment vehicle. Through

the deal, Mayhoola also acquired the M

Missoni license business, another prot-

able ashion label that is known or its sig-

nature knit print.

Steano Sassi, President and CEO o

Valentino, commented: We are delight-

ed with this development. During the past

ew years, despite swings in the luxury

markets, the company has operated with

launched this month. It has been inspired

by Qatar, its home country, and created

or an international, rened audience. Thelaunch o the brand will be made at our bou-

tique on the Pearl, which will be ollowed

by the opening o boutiques in the leading

ashion capitals o the world.

We have been working very hard creating

this brand. You will nd that it is marked

by excellence and openness, and will draw

rom time honoured traditions. Our prod-

ucts are created by passionate and talented

cratsmen, committed to passing down and

perpetuating their unique know-how. We

are very proud o our multicultural teams,

and ostered an open exchange between the

local Qatari cultures and those rom abroad.

This openness, reected in the brand that

we are launching, is very exciting.

How do you feel the business of the fash-

ion industry is doing in Qatar?

All o the elements required or the business

o ashion to thrive are here, and this is an

exciting time or the industry. There is lots

o creativity, the emergence o designers,

growing number o industry players, good

retail space and a savvy and high-end mar-

ket.

It is oten pointed out that Qatar is a sig-

nifcant consumer o ashion and luxury

goods and services. Qataris have a sophisti-

cated sense o ashion, and are knowledge-

able about industry trends. I think, however,

the most interesting aspect o the industry

here is the creativity and passion o young

designers. Qatar is at the crossroads o the

East and West and hence is a melting pot

o cultures and nationalities. This provides

QLG with a very unique opportunity that

can be leveraged in several ways; by recruit-

ing the best talents in the world to our studio

and workshops and exploiting our knowl-

edge o the region and emerging markets in

Asia.

What do you think must be done to sup-

port the growth of the retail fashion in-

dustry in Qatar?

I believe that there are ample retail spaces

in Qatar, ranging rom the high street to the

high-end. Retail is always driven by the mar-

ket, and in that sense I dont see there being

a case or specifc support or intervention.

Can you tell us a little bit more about Le

Tanneur?

We acquired a majority stake in Le Tanneur

in 2011, one o the oldest leather goods com-

pany in France. The acquisition allowed us

to share creativity and know-how and gives

our new brand access to one o and most re-

spected leather goods workshop and most

talented artisans in the world. This ensures

that leather pieces rom our ashion brand

will be o the very highest standards in the

world.

Tell us about QLG's Unique Selling Point

We expect our ashion to have a big impact,

as it is rooted in art, culture and heritage.

In this sense, or QLG, the industry goes

urther than just business. We are passion-

ate about our role in preserving traditional

ashion cratsmanship - Metiers-dArt as

we say in French - which takes so many years

to build and is an increasingly rare commod-

ity in the ashion industry today. This crats-

manship consists o skills and know-how

that are passed rom generation to genera-

tion and take decades to master. This is why

at QLG we have a long term approach to our

business philosophy and place art and cul-

ture at the centre o everything we do

consuMers In QAtArspend up to Qr18,200($5,000) A MontH onvArIous luxury IteMsBut fAsHIon toppedtHe lIst of preferredpurcHAses In 2012, wItH

37% of respondentssAyIng tHey enJoysHoppIng for fAsHIon-relAted IteMs.

Continued from Pg41


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great intensity and remained ocused on

maximising the potential o the Valentino

brand. This eort should drive a 60% in-

crease in revenues rom 2009 to 2012. Our

new shareholder will help us reach our ull

potential.

More than just a glamourous acquisition

or trophy asset, as many critics may term it

as, it actually makes perect sense as Valen-

tino is one o the very ew private couture

houses let, and a signicant proportion o

its clientele are now rom the Middle East.

As or Qatar Holding (QH), the investment

vehicle or the states Qatar Investment

Authority, their 2010 purchase o Harrods

has proved to be a strategic and smart in-

vestment with the luxury department store

chalking record prots despite economic

woes. QH picked up a dividend o QR547

million ($150 million) ater the very rst

year o the acquisition.

Continuing the ashion retail conquest,

QH has also amassed a small stake o slight-

ly more than 1% in LVMH and 11% in lux-

ury jeweller Tiany. The jeweller will be

opening its new agship store in Paris at 52,

Champs Elysee in 2014, a building acquired

by QH earlier last year. Through Qatar Lux-

ury Group, the state has also bought a con-

trolling stake in French handbag maker Le

Tanneur & Cie.

Other than just buying into luxury ash-

ion brands, QH is set to launch several

projects that will position ashion retail as

its main oering. Qatars Deluxe Village is

a retail project in the pipeline planned in

the Italian summer resort town o Porto

Cervo on Costa Smeralda. QH had acquired

several properties including hotels in the

Italian island in 2012. Commenting on the

transaction, Ahmad Mohamed Al-Sayed,

Managing Director and Chie Executive O-

cer o Qatar Holding, said: We are happy

to have agreed terms or the acquisition o

this established portolio o luxury assets

in Sardinia. We intend to continue support-

ing the on-going development programme

which will see Costa Smeralda strengthen

its position as a top luxury resort destina-

tion. The Deluxe Village will include a pop-

up Harrods store and boutiques o major

international luxury brands. The state has

also agreed to invest in a joint venture, IQ

Made In Italy Venture, with Italian compa-

nies that will ocus on the sector including

ashion and luxury goods.

And while these are the deals that have

been disclosed, Qatars key investment

players, whether state-unded or privately

operated, still maintain a relatively low pro-

le and are believed to have stakes in other

major ashion houses including British ac-

cessories label Anya Hindmarch.

677Qr BIllIon gloBAl

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The impressive spend-

ing gures o Qatar

may seem quite mis-

leading, as the num-

bers represent the

total spending by

consumers based in

Qatar, and need not

necessarily translate

into expenditure ac-

tually made in the country. A quick surveyamong Qataris and expats reveal that they

are more likely to purchase ashion and lux-

ury items when they are travelling, while

shopping locally is usually driven more

by necessity than by need. Dubai, the bus-

tling tourist destination, is one such Middle

Eastern city that is driving up the spending

gures luring shoppers rom all over the re-

gion including Qatar.

The one grudge that most local shoppers

put orth is about the inventory carried by

retailers in Qatar. With the growth o online

retailers like Net-A-Porter and Matches

Fashion, it is easy or shoppers to keep up

with latest releases and compare prices on

an international level. And this is where

Qatar lags behind; shoppers nd that local

stores are much more expensive than the

price online as well as lack the latest oer-

ings. There is always a delay in stocking

new collections. It arrives in Doha a ew

months too late, and they are oten over-

priced, usually about 30% more which I

am assuming is an indirect tax since this is

a tax-ree country, says shopper Aisha Al-

Thani.

For ashion designer Abdulla Al-Abdulla,

shopping in Doha has its pros and cons. Be-

cause there are less people shopping locally,

chances o you landing the hottest ashion

item o the season are higher. However, re-

tailers really have to up their game by not

stocking old collections rom past seasons

which is something that is really rampant

here. They also have to pay attention to vi-

sual merchandising to attract more shop-

pers. The window display at the stores here

are really unattractive, he says.

Consumers also eel that ashion buyers

have to be bold and experiment with di-

erent inventory rotations as the current

stocking trend in Qatar seems dated and

zeroes in too much on market stereotyping.

We have a lot more brands in Qatar today

than we had ve years ago, but I still rath-

er shop abroad because the ashion buyers

just dont seem to understand the changing

market. They tend to stick to a stereotype

which they are amiliar with but we are

just like the rest o the world, craving or

something new and trendy. It is not about

catering to one style but about creating new

trends! says shopper Fahad Al-Turky.

Inventory problems topped o with the

lack o knowledgeable sales representa-

tives have driven many shoppers to turn to

online shopping, shopping abroad during

summer holidays where discounted items

are in abundance, as well as shopping in

the neighbouring Dubai. They never have

enough sizes in stock. I like to get the opin-

ion o sales people when I am shopping and

I am always shocked when I know more

about their brands than them. I usually do

my research online beore purchasing and

go directly to that item instead o looking

at what is available because I cant be both-

ered to be harassed by annoying sales peo-

ple who know nothing about their brand or

ashion in general. It would be really good

i these shopping malls oer personal shop-

per services by people who are really good

stylists, Al-Turky added.

On the other hand, there are a growing

number o consumers who eel that shop-

ping more locally can help solve these prob-

lems. Interior designer Caroline Chiang,

who has lived in Doha or our years, is ex-

cited to see new multi-brand boutiques like

DNA and The Vanity Room nding oot in

the country. The important aspect is in

creating demand. When these big brands

see local demand increase, they will be

more willing to give into the ashion buyers

requests or bigger inventory rotation and

collections, she says. You need more than

one person to buy a Mary Katrantzou dress

rom The Closet; you need 10 people, and

then the brand will respond to give local

buyers a better deal.

whatQatar's

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cover story:the business oF Fashion

T

he afuent spending

patterns o the market

in Qatar and the Mid-

dle East has put this re-

gion on the map o thebiggest luxury buyers

in the world. Through

the tracking o luxury

spends by Mastercard,

several key ndings rom the tracker con-

rms the powerul spending habits o the

market here in Qatar. The latest Master-

Card Index o Consumer Condence has

indicated that Consumer Condence in

Qatar is the highest among the Middle East-

ern markets surveyed in the Index, with a

score o 96.5. When compared to the pre-

vious edition o the index, consumers are

more optimistic about regular income (99.3

vs. 98.4), employment (98.1 vs. 97.8) and the

stock market (92.0 vs. 91.1). The very posi-

tive results in Consumer Condence scores

are a reection o the booming Qatari mar-

ket and the Qatari governments ambitious

development plans or the uture. Con-

sumers who are optimistic in their outlook

or regular income and their employment

prospects in particular are more likely to

purchase non-essential items, thereore

stimulating the economy, explained Pan-

kaj Kathuria, Mastercards Area Head or

Southern Gul. The statistics also show

that Qatar currently ranks ourth in the ex-

pected spend on luxury goods in 2013, with

an average spend o QR7856 ($2,158). The

UAE leads with QR9723 ($2,671), ollowed

by Oman QR9326 ($2,562) and Saudi Ara-

bia QR8704 ($2,391) ranking third. Qatari

consumers are known or shopping in the

ashion and luxury capitals o the world

like London, Paris and New York. However,

they will also naturally make their luxury

purchases in the country that they reside

in, he said

thenumbersthat

MatterMAstercArd gIves us tHescorecArd on tHe sHoppIngspends In tHe regIon

OWN CURRENTLy INTEND TO OWN IN ThENExT 12 MONThS

36%

30%

I2%

27%

I3%

25%

I4%

4%

desIgner clotHes & leAtHer goods

Jewellery

desIgner AccessorIes & footweAr

luxury wAtcH

ownersHIp

Qr7,858Among Qatari

respondents, teaerage amount te

intend to spend onluur goods in 2013

I3%of respondents in Qatarintend to spend more on

luur goods in 2013 tante did in te 12 monts

prior to te sure.

sHoppIng pAtterns

Bus onimpulse/on

te spot

2I%

Considers it andten tends to buwitin one mont

2I%

Etensiel researcesand bus witin two-

si monts

25%

Decides on tespot, but waits for

sale/discount

32%

vIsIts dIscount weBsItesfor luxury goods?

89%yes

11%no

sources of InforMAtIon for luxury goods

Adertising(Tv/Print/Radio/

Outdoor)

Friendsand famil

Onlinesopping sites

Celebrities/Public figures

Outlets/brandsmailing lists/catalogues

Online blogs/forums/reiews

43% 39% I3% I0% 8% 3%

Documents

Fashion Makes Business Sense - Cover Story for Qatar Today Sept 2013