FT SPECIAL REPORT The Business of Luxury

Monday May 12 2014 www.ft.com/reports | @ftreports

The Chinese are the world’s biggest tourist spenders and increased their spending by 28 per cent in 2013, Inside » according to the World Tourism Organisation. This underpins belief in Traditional “the growing purchasing power of Brand leader Chinese consumers and their appetite for western luxury brands”, Ms ’s Marco Huang Sun says. Bizzarri on how It is also driving the opening of luxury outlets for brands from Ferrag- to balance appeal markets amo to accessible bagmaker and exclusivity Furla in airports around the world, even in Europe where local demand Page 2 remains subdued. Another new focus for brands, such as ’s Prada, is con- Big names for verting concessions in department tough times benefit as stores into directly operated shops, and driving online sales. High-profile hires Hard luxury brands – with Swatch at the vanguard – are expected to face an increasingly open more stores selling directly to intense battle shoppers. China slows More than half of total luxury pur- Page 3 chases are influenced by online mar- keting, according to a BCG survey of more than 10,000 customers in 10 What next? countries. Social media and the rise of smart- Martin Wolf asks phones and wearable technology are top economists Growth is still focused on Asia-Pacific but sales also opening a new business frontier – as well as a potential threat. about prospects for in developed nations, particularly in the US, The fallout has extended to creative global recovery directors and management at leading have picked up, writes Rachel Sanderson fashion and luxury conglomerates, Page 3 LVMH, Kering and Richemont, all of which have moved to shake up at fter five years of rapid is swinging back to developed coun- least some of their business. Inside Mayfair’s growth driven by voracious tries where half of luxury’s total glo- Louis Vuitton and , the Chinese demand, the luxury bal sales are made to consumers in leather goods brands of LVMH and hidden gem industry is experiencing a their traditional markets. Kering, respectively, are considered Wartski’s Fabergé cold blast of reality. The US is considered the biggest by analysts to have only just emerged A“The bad news is that easy growth growth opportunity for the luxury from intensive care after their logo- find puts antiques on the back of opening stores in market over the next decade because heavy styles hit saturation in China, dealer in limelight China is over for most luxury of spending by locals as well as tour- prompting a repositioning. brands,” says Luca Solca, head of lux- ists, according to Boston Consulting At Gucci, which accounts for half of Page 4 ury goods research at Exane BNP Group (BCG). Kering’s revenues but where sales Paribas. Accessible luxury brands led by US remained sluggish in the first quarter, China’s lower economic growth, group Michael Kors, which doubled analysts say bolder creative choices anti-corruption crackdown, pollution its European sales at the end of last may be needed, especially since the in the big shopping cities and a year, are also changing the face of the hiring of young designers by other On FT.com » maturing consumer turned off by luxury industry. Kering brands and Saint logos have all been blamed by luxury Scilla Huang Sun, who runs the Laurent led to sharp sales rises. Online coverage of executives for lacklustre sales in 2013, Julius Baer Luxury Brands Fund, Meanwhile, Richemont’s decision the Business of which for many have extended into points out that it is crucial to differen- not to sell its underperforming the first quarter of this year. tiate between the moderation of lux- soft luxury brands, including Mont- Luxury conference Nonetheless, bright spots are emerg- ury sales in mainland China com- blanc and Lancel, means that ing as a result of macroeconomic and pared with the solid demand from in Mexico City social change. For example, the focus Chinese tourists, especially in the US. Not just window shopping: sales in developed markets have started to rise Reuters Continued on Page 2 www.ft.com/luxury360 2 ★ FINANCIAL TIMES MONDAY MAY 12 2014 The Business of Luxury

Return to Kering man has the billion-euro touch traditional markets Interview says. Instead, Bottega will increase the size of its smallest stores. Three years ago, Mr Bizzarri Chief executive, luxury couture and decided to limit openings in China Continued from Page 1 leather goods, Kering and raise investment in Bottega’s stores in Europe’s shopping capitals. they now need to be turned round. Talk of a China slowdown “That longer-term approach paid But while the mega-brands stutter, off, as the tourist flows have the anti-corruption drive in China and fails to ruffle rising star, increased in the past five years. return to form of US consumers are Many more Japanese and Chinese benefiting high-end niche players. writes Rachel Sanderson are coming to Europe than they did Loro Piana, bought by LVMH last in the past,” he says. year, and Brunello Cucinelli and Her- Does he see anywhere else taking mès, which do not rely excessively on n April, Francois Henri Pinault, over from China? “Frankly no. We fashion and focus on high-quality head of French luxury group are present in India, in Brazil, but goods in casualwear, are in better Kering, confirmed months of these markets are far short of the shape in China where they have rumours about a shake up in the potential of China. The decision- avoided the anti-logo backlash. The management ranks and promoted making process in China is far brands are gaining traction in the US, IMarco Bizzarri, president and chief quicker,” he says. where consumers prefer a casualwear executive of , to a Mr Bizzarri believes the tensions look. new role as head of couture and are typical “of an industry that is Sales at Cucinelli rose 50 per cent in leather goods for the luxury division. going to undergo consolidation China in 2013 and 20 per cent in the The move underlined Mr Bizzarri’s sooner or later”. He believes that US. Bottega Veneta, the ultra-luxe emergence as a rising star of the luxury goods companies need to be brand owned by Kering, saw first luxury industry. At a time when global in order to spread their risk quarter sales up 15 per cent on the executives are sweating about the and have a footprint large enough to end of 2013. slowdown in China and the catch tourist shoppers wherever they Meanwhile, valuations of independ- disruptive effect of technology on are in the world. ent Italian brands Moncler, Tod’s and consumption in mature markets, Mr Another issue arising for the Ferragamo remain high amid expecta- Bizzarri has turned Bottega Veneta industry is the suggestion that tions that they, like Giorgio Armani, into a billion-euro brand with some luxury is starting to mean more than will be takeover targets, as the of the strongest growth in the sector. just clothes and bags for consumers In his new role, the 51-year-old in traditional markets such as the Italian former management US, Japan and Europe. 28% consultant will oversee some of the Moving up: in his new role at Kering, Marco Bizzarri will oversee some of the world’s best-known luxury brands Reuters Analysts suggest that technology is world’s best-known luxury brands, disrupting the market, with Chinese tourist spending growth, 2013 including Bottega Veneta, Saint hankering after the latest Laurent, Alexander McQueen, Stella Mr di Marco, Gucci’s current In Bottega’s case, the focus is on smartphone overshadowing a desire Chinese slowdown drives consolida- McCartney, and . Curriculum vitae president and chief executive – at its woven intrecciato – a traditional for the latest . tion. Mirroring the extent to which Kering’s global mega-brand Gucci, the height of the financial crisis in technique from the region It might amount to as big a the global economy moves into a sus- which accounts for more than half of 2014 Kering, chief executive, luxury 2009. But Mr Bizzarri maintained – where the company is based. The problem for the industry as a tained recovery, luxury will grow too, the company’s luxury sales, will couture and leather goods and was subsequently proved right – brand has expanded from bags into slowdown of sales in China. according to Deloitte Touche Tohm- remain under the aegis of longtime 2012 Kering, non-voting director, that luxury shoppers in Asia would , clothes and homeware, but its Mr Bizzarri believes technology is atsu, the professional services firm, in chief executive Patrizio di Marco. 2009 Bottega Veneta, president and trade up to Bottega’s style of discreet signature criss-cross design has less relevant for Bottega, where the an upcoming report. Speaking to the FT before he takes chief executive but pricey, no logo as they remained constant, patterned on manual craft that goes into its bags Not unexpectedly, notwithstanding on his new job, Mr Bizzarri shrugs 2005 Stella McCartney, president and became more sophisticated shoppers. shoes and even on the bottoms of has become a selling point. The the slowdown in China, growth is off concerns about a slowdown in chief executive The company’s sales in the first drinking glasses. company has invested heavily in the still disproportionately focused on China and the impact of technology 1993-2004 Mandarina Duck Group, quarter rose 14.6 per cent at constant “Craftsmanship is becoming more past couple of years in the men and the Asia-Pacific region. Although on consumer spending. Instead, he general manager currency rates to €250.8m, compared and more successful. But for me, women who make its handbags. economic growth has slowed lately says, the brands that will thrive will Pre-1993 Accenture, strategy with the previous year, which was what is even more important is that “We wanted to create a cocoon for in much of Asia, this is to some be those that manage to sell consultant also a slight increase on the last you need to be consistent. The world our employees and our artisans. We extent offset by the rise in income themselves to consumers as unique quarter of 2013. outside is too crowded; consumers realised that the safer creative inequality. and exclusive, even if they are being Under the direction of its creative need to know what to look for when people and craftsman feel, the better Income available to upper-income sold in the millions. director, Tomas Maier, and Mr they enter certain shops,” he says. the collection they produce. If they households is therefore growing faster “The winners are those able to Bizzarri, Bottega has become a Bottega Veneta has expanded in do a better collection, my revenues than overall income, Deloitte main- offer a better shopping experience everything. As far as Bottega is successful lifestyle brand for one of the past five years, opening a vast grow. It is not easy to attach figures, tains. with a product that is more concerned, we don’t see any luxury’s priciest houses. One of its flagship store in Milan last year to but it is what happens,” he says. The near-term future of the luxury exclusive than in the past,” he says. slowdown. I will continue to grow signature Cabat handbags in woven give it a total of 226 directly As for advice for up-and-coming market will depend, in part, on how As for China, Mr Bizzarri believes double digit in China. Many brands leather intrecciato infilato has a operated stores worldwide – far luxury executives, Mr Bizzarri is the global economy evolves. it will remain a strong growth are complaining because they were starting price of about €4,800. fewer, however, than Louis Vuitton clear. Deloitte considers the more promis- market for Bottega Veneta, even as used to selling everything. But that Alongside other big brands, such or Gucci. Mr Bizzarri also plans to “You always need to be curious ing markets to include Colombia, other brands flounder. was going to change,” he says. as bigger rival Louis Vuitton, open fewer stores this year than last. and study,” he says. “The market is Mexico, Philippines, and much of sub- “The market is approaching Mr Bizzarri, former chief executive Bottega has also focused on “Exclusivity will remain the added moving so fast, there is nothing set Saharan Africa – where Ermenegildo maturity and when you reach of Stella McCartney, started at highlighting the manufacturing of its value. We will slow down the into the wall. You need to be very, Zegna, Hugo Boss and MAC have been maturity, consumers stop buying Bottega Veneta – taking over from luxury goods. openings in the coming year,” he very flexible.” at the vanguard of opening stores. FINANCIAL TIMES MONDAY MAY 12 2014 ★ 3 The Business of Luxury High-profile hires face increasingly intense battle

C-suite Brand executives face problems in Asia, volatile exchange rates and a tough fight to win in emerging markets, writes Elizabeth Paton

he once stellar growth to see what this young, charismatic Christopher Bailey Stacey Cartwright Nicolas Ghesquière enjoyed by leading luxury moderniser will do. Chief executive, Burberry Chief executive, Harvey Nichols Creative director, Louis Vuitton groups has slowed Following the high-profile defection Rolex’s latest chief Ms Cartwright’s arrival at Harvey Following Marc Jacobs’ exit from the considerably in the past 12 Marco Bizzarri of Angela Ahrendts to Apple last executive, Jean-Frédéric Nichols in January prompted brand last year to focus on the months, hampered by Chief executive, couture and leather year, the luxury world will be headlines that the recent flat figures imminent initial public offering of Twaning enthusiasm from Asian goods, Kering watching closely to see whether new Dufour, will be its fourth of this prestigious British chain his eponymous label, Mr Ghesquiere customers, volatile exchange rates In April, Kering announced that it chief executive Mr Bailey is cut out might enjoy a boost, after it has joined LVMH’s flagship in November. and a bitter battle for the attention would be restructuring its luxury for taking on both creative and since 2008 been largely eclipsed by rivals. After an unceremonious exit from of emerging market consumers. department into two divisions: commercial control. The affable and Much-touted by City financiers, the Balenciaga – and bitter public fallout This has led to a stream of C-suite couture and leather goods; and digital-focused Yorkshireman was the appointment of the former chief with its parent group Kering – the appointments, as brands look for watches and . driving force behind Burberry’s financial officer of Burberry also led French designer received rave additional sources of growth, Taking the helm at the former rebranding success. to rumours of a possible sale. No reviews for his first Louis Vuitton continue to flirt with initial public is Mr Bizzarri, the much-lauded Sales momentum has been steady sign has emerged of any deal yet, collection in February. offerings or buyouts, and take high- chief executive of Bottega since the announcement in October but a spot of window dressing is Its “strong creative momentum” risk experiments with pricing, Veneta – and currently the star of the appointment of Mr Bailey, clearly in train. was praised by LVMH in its latest licensing and costly product rollouts. performer in Kering’s brand who will retain his present Ms Cartwright’s revamp includes a set of earnings in April. Mr Here are the 10 latest – and portfolio. responsibilities as chief creative fresh brand assortment, a Harvey Ghesquiere will be pivotal in taking highest-profile – hires. Henceforth, Mr Bizzarri will be officer, but shareholders will be Nichols in-house label, and an the brand further upmarket. expected to guide the group’s watching closely to ensure he has expansionist drive overseas. Jean-Frédéric Dufour other niche brands – these the financial and managerial Francesca Amfitheatrof Chief executive, Rolex include Stella McCartney and wherewithal to sustain these Steve Shiffman Design director, Rolex has experienced a Alexander McQueen – along levels at the British luxury Chief executive, Calvin Klein Tiffany & Co high executive turnover in a comparable path to giant. Following the announced The US jeweller recent years. growth. retirement of longtime chief appointed its first design Its latest chief executive, Marigay McKee executive Tom Murry in director last October. Ms Mr Dufour, will be its Delphine Arnault President, March, parent group PVH Amfitheatrof is known to fourth since 2008 and was Executive vice-president, Saks Fifth Avenue promptly turned to Mr industry insiders for her appointed in April. Louis Vuitton The former chief merchant Shiffman, who has worked previous collections for Mr Dufour, who replaces Two years after her brother of Harrods, Ms McKee across the company for more luxury fashion labels Gian Riccardo Marin, Antoine took the reins at transformed the than two decades. including Chanel, Fendi and hails from LVMH- Berluti, Ms Arnault Knightsbridge store Most recently chief Marni. owned Zenith, was installed last into one of the commercial officer, Mr where he executed June at Louis most profitable Shiffman will be Stuart Vevers a much-admired Vuitton after stints luxury shopping given the Creative turnround, at McKinsey and meccas in the responsibility of director, Coach including Christian Dior. world. shoring up the Following Reed refocusing product Overseeing all She was hired brand’s position Krakoff’s exit lines, product-related by Hudson’s Bay, in mature last summer to implementing activities, Bernard a Canadian markets at the launch his own shrewd marketing Arnault’s daughter retail same time as womenswear strategies and has been quick to conglomerate, in developing its line, Mr returning to make her mark on the September to footprint in Vevers arrived classic models brand. oversee an newer regions. at Coach in to rejuvenate After suffering overhaul of He hopes to September sales. softening sales in Saks Fifth take the label – after being With China’s 2013, last month the house Avenue, which best known for poached from corruption reported its best fashion it has bought its jeans and the LVMH- crackdown and and leather goods growth for $2.4bn. underwear owned leather increasing in more than Capital business – further accessories competition from two years. expenditure of upmarket, in brand Loewe. Swatch and She has been the $1bn has been On the move: keeping with a Mr Vevers takes Richemont architect behind the earmarked to from left to right, broader industry on the task of continuing to pioneering LVMH take the US chain Delphine Arnault, trend. breathing new life weigh on Young Designer Prize, a upmarket, as Louis Vuitton; Mr Murry, into the US Swiss watch clever means of department stores Marigay McKee, meanwhile, will powerhouse amid exports, many forming ties with seek to counter Saks Fifth maintain a stagnant sales and industry emerging talents market share erosion Avenue; position as superior competition observers will who will be needed by ecommerce and Christopher adviser until the from the likes of be watching to define the future own-brand luxury Bailey, end of the Michael Kors and Rolex closely of luxury. flagships. Burberry financial year. Kate Spade. Experts broadly positive on global recovery but warn risks remain

devaluations” to close the leading to a credit crunch positive. This year, the US region’s competitiveness in the eurozone. recovery will spill over gap – raising the risk of into Mexico through trade deflation. In this regard, GOM First, half a decade and remittances, and the ECB’s hints at targeted of zero policy rates in growth will also start to additional stimulus down developed economies might benefit from some of the the road are a welcome have engendered financial structural reforms development. risks that are not yet on approved in 2013, In Japan, the signals officials’ radar. In the US, particularly in finance and Economists’ Q&A regarding the success of growth might challenge the energy. MARTIN WOLF Abenomics have been Fed’s commitment to a Given the current output mixed. The reform gradual normalisation in gap (output that is well What does the world programme still has some interest rates. Policy could under potential), the pick- economy hold in store? way to go. But the Bank of then tighten more quickly up in growth is unlikely to Looking into their crystal Japan seems more than than expected. generate inflationary balls at today’s Business of willing to support activity Emerging economies are pressures. This will allow Luxury Summit in Mexico in the meantime. better prepared than monetary policy to remain City are Willem Buiter, Emerging markets, on before. But one cannot rule accommodative. chief economist of the other hand, show a out balance-of-payments or As demand accelerates, Citigroup, and Guillermo less rosy picture, but not financial crises. A structural reforms will Ortiz Martínez, former one so pallid as to reverse potentially disruptive expand the economy’s governor of the Mexican their expansion. development has been the productive capacity. central bank. I asked both During the “taper massive expansion of Mexico is also less of them three questions. tantrum” of 2013, several corporate debt in emerging exposed to global risks economies did seem on the economies, some of it than other emerging The IMF forecasts brink of crisis, but the denominated in foreign economies. Orthodox continued recovery in the vulnerabilities proved less currencies. macroeconomic policies world economy over the drastic than feared. A second risk to the still in place serve to next two years, Acceleration in demand global economy is a sharp distinguish Mexico from particularly in the high- from developed economies growth slowdown in the most other emerging income countries. Do you should support export Chinese economy. A crisis economies. Sound financial agree that this is the most growth, while further in China could have regulation and a free- likely outcome? adjustment – tight fiscal severely negative effect for floating exchange rate and monetary policy the global recovery. have kept maturity and Willem Buiter Yes, I do. coupled with structural Third, we might observe currency mismatches at reforms – should improve a “jobless recovery”, bay. China risk poses Guillermo Ortiz Martínez prospects for the medium particularly as robots and relatively little threat. The Over the past year, term. automated processes next presidential elections analysts have turned more The wild card is China’s replace human labour. are a comfortable five bullish on developed economy, to which the This should be a positive years away, while current economies – and rightly so. performance of several development in the long trends in polls for the In the US, waning fiscal emerging economies is run. But, in the short run, midterm elections signal drag, continued household tied. In the base case, it might cause high continued progress on balance sheet repair, and Chinese policy makers unemployment, higher structural reform. uptrending corporate pursue economic corporate profits and The country still faces earnings have set the stage rebalancing and weaker demand many challenges. But, if for a long-awaited return liberalisation efforts, while Finally, geopolitical officials can implement the to above-trend growth in financial excesses are tensions between the west approved reforms, Mexico coming quarters. curbed and growth settles and Russia might raise would be at the start of a In Europe, the UK’s and at close to 7 per cent. uncertainty and risk virtuous circle of economic eurozone’s recoveries seem aversion in global markets. development with nearly less well balanced. What do you see as the unlimited potential. However, as they overcome downside risks? What are the short- to The rest of Latin different challenges, they medium-term prospects for America is generally more are likely to feed off each WB First, an unfudgeable Mexico and also for the closely linked to China and other, to positive effect. Russian invasion of eastern rest of Latin America? has displayed less resolve In the UK, concerns have Ukraine followed by on structural adjustment. been raised about the stringent sanctions against WB Mexico: good and even Even though there is sustainability of Russia, a cut-off of gas great, if it can raise space for expansionary consumption growth and shipments from Russia to domestic capital formation fiscal or monetary policies bubbly real estate prices. Europe and a recession in to at least 25 per cent of in certain economies, the But broader improvement Europe. Second, a gross domestic product. best days of growth and in fundamentals reveals a recession in China Chile, Peru and Columbia: reform might be behind robust recovery. triggered by the bursting good; Ecuador, Paraguay many countries. The eurozone continues of its credit bubble and the and Bolivia: reasonable; There is, however, a to exhibit an uneven end of the construction Brazil: mediocre; sharp contrast between recovery between its “core” boom. Third, unsustainable Argentina: poor; and countries favouring and “periphery.” public debt dynamics in Venezuela: disastrous. market-oriented policy While Germany and the eurozone’s periphery frameworks and those of a other northern members and an honest asset GOM For the first time in more interventionist bent. are performing well, quality review and stress several decades, the The outlook for the peripheral economies must test of banks by the prospects for the Mexican former is significantly rely on “internal European Central Bank, economy are strongly better than for the latter. 4 ★ FINANCIAL TIMES MONDAY MAY 12 2014 The Business of Luxury Mayfair gem Foreign forays go hand in hand holds a trove of with focus on home market Interview came to the US from mining new markets for the global traveller. postwar Europe and opportunities and have He says 42m Chinese William Lauder founded our beauty been early to market on consumers who buy beauty Exec chairman, Estée Lauder business.” numerous occasions, products at home also buy eccentric curios The affable 54-year-old especially in and beyond products abroad and “50 served as Estée Lauder’s the Brics,” says Mr Lauder. per cent of visitors to our Global travellers chief executive for five Results for the first MAC store in Times help counterbalance years until Fabrizio Freda quarter of this year Square hail from Brazil”. took over in 2009. showed that combined “The shops with the best Wartski Fabergé discovery has put spotlight on market volatility, He believes that this sales in the company’s 12 sales growth in Sydney says Elizabeth Paton pioneering spirit is fuelling emerging markets outside have Mandarin-speaking venerable antique dealer, writes Helen Barrett Sold: Fabergé’s imperial Easter egg the company’s rapid China exceeded that of assistants. The facts and development across China, China alone – although the figures speak for Nigeria has 16,000 echoing his father latter remains the themselves and we need to ewellery buyers head to Lon- reported in the Daily Telegraph to be jewelled stickpin featuring a devil’s millionaires – and Leonard’s rollout across company’s “largest continue adapting don’s Bond Street for interna- £20m. Wartski did not confirm the face and a gold brooch in the shape of counting. The hefty the US in the 1960s. emerging priority”. accordingly,” he says. tional superbrands such as sale price, but Mr McCarthy says the a kitten’s head. spending power of this Now, Estée Lauder has Brazil is also showing After studying the Chanel of Paris or Tiffany of deal was worth “many millions”. Inside, 300 items of jewellery, gold- ever growing demographic 30 brands in 150 countries particular promise. Estée favourite destinations of New York. But if they turn What makes buyers part with vast smiths’ work and glassware are has caught the attention of and about 500m consumers. Lauder introduced MAC to Chinese citizens, the Jinto Grafton Street, they find an sums for such rarities? The answer, displayed. As well as imperial Russian the luxury goods industry, Net global sales hit the the market in 2002, taking company created the incongruous alternative: Wartski of Mr McCarthy says, lies in the urge treasures, the business specialises in but to date, most brands $10bn dollar mark last concept of “travel Llandudno. wealthy people have to mark their Saxon jewellery. have remained wary of year. Mr Lauder corridors” for product- The antique dealer, founded nearly triumphs. In the 20th century, Wartski was a entering the country. The trick to achieving says he is launch decisions after 150 years ago by Morris Wartski, a “Life is very short, and the more cult destination for international col- Last year, however, one that level of success, says keen not to noting they were most Russian émigré and jeweller, was powerful and rich you are, if your lectors. The British royal family, Jac- group took the plunge. US Mr Lauder, is recognising overlook the likely to pass through – until the 1970s run from the Welsh presence and ego are going to be queline Kennedy and Hollywood beauty giant Estée Lauder the “core client”. group’s US and shop in – airports in seaside town. A London branch was recorded, you do it through works of actors were among its customers. opened a boutique in Lagos “She is often a middle- birthplace Hong Kong, the Republic added in 1911. Mr Wartski’s descend- art. You live forever by your owner- Today, it sells to collectors, dealers for MAC, its 29-year-old class consumer with newly of Korea, Paris and New ants own the business today. ship of these objects.” and museums, including the British cosmetics line, becoming higher disposable income, York. Inventory was then Modern Wartski does not advertise, Collectors view and handle those Museum in London and the Metropoli- the first western prestige and we strive to offer her over distribution in 2011 shaped according to their nor does it pay attention to public objects in Wartski’s shop. Grade II tan Museum in New York. The shop, beauty brand to open there. products and awareness and has since been rapidly product tastes. relations. But it made headlines this listed and with a bronze exterior, it says Mr McCarthy, is a place for cus- That gamble has clearly that enhance her opening stores to keep up About 12 per cent of 2013 year with its discovery and sale of the stands out among Mayfair’s glass-and- tomers to learn about the items – few paid off. MAC has soared confidence in her own with demand. Yet again, sales derived from the lost “third imperial Easter egg” – one steel retail outlets. “It may [be] out of make spontaneous purchases. “Per- past rivals to become the beauty. MAC is the company’s travel retail channel. of 50 created by Carl Fabergé in the fashion, but it has credibility that haps one every year; it’s very rare.” country’s number one “The beauty of beauty – jewel in the regional crown Yet despite huge growth late 19th and early 20th centuries for transcends. And we like it,” says Mr Its clientele is international – high-end cosmetics brand, excuse the pun – is that it as Brazil’s best-selling potential in newer markets, the Russian tsars Alexander III and McCarthy. “industrialists, royals, film stars, an accolade it also holds in is the approachable entry prestige cosmetics brand. Mr Lauder believes some Nicholas II. “Often shop owners see [listed sta- musicians” – and includes wealthy other emerging markets, point and first step into Its recent performance of Estée Lauder’s biggest The third was among eight thought tus] as a burden,” says Catherine Russians. “We get historically minded including India and Brazil. luxury spending for there has counterbalanced growth could occur closer to be lost after they were sold by the Croft, director of the Twentieth Cen- [Russians] who are focused on [their So, what did the team at millions of women.” a softening of sales from to home. “Our evolution Bolsheviks in the 1920s and 1930s, tury Society, an architectural conser- country’s] past,” Mr McCarthy says. Estée Lauder see that He adds that adapting to double-digit to single-digit abroad remains incredibly until it turned up recently in the vation group. “But Wartski are genu- Tensions in Ukraine are causing others did not? new environments and growth in some of China, exciting, but it’s also hands of a US antiques dealer. He had inely interested . . . They [also] seem worry among international auction William Lauder, tastes is essential, as when South Korea and Thailand. important not to overlook tried – and failed – to sell it for scrap, really interested in the stories behind houses about this summer’s sales, executive chairman, says: for example the company Mr Lauder believes the North America and our before realising his acquisition might the things they sell. I went round amid concern that the fallout will “It’s been embedded in our created lighter foundations key to balancing volatile loyal consumers here, be worth more. A Google search led to there to look at the architecture and deter Russian collectors. “So far, our DNA to enter new markets for Asia to combat hot and market dynamics is given that this is where Wartski’s experts in London. ended up trying on tiaras. communications with Russia haven’t right from the start, from humid weather. focusing on today’s most our story began,” In April, the imperial egg was exhib- “So many [Mayfair shops] are retro, [changed], although maybe we won’t 1946 when my grandmother “We are constantly powerful beauty consumer: he says. ited at the shop for four days – the would-be Regency or ‘historic- notice until the summer, because first time it had been seen in public inspired’ façades,” she adds. “But that’s when Russians descend,” says for 112 years. To the surprise of staff, Wartski’s shop is determinedly not- Mr McCarthy. more than 2,000 people showed up. flash.” That reticence is reflected in a Will Wartski ditch its association “You can sit here for days and not window display that shuns vast dia- with Llandudno, where the shop doors Contributors » much will happen, we are so slow and monds in favour of curios such as a closed more than 40 years ago? Morris Edwardian,” says Kieran McCarthy, a Wartski’s nomenclature made sense director of Wartski and an expert on when the then-wealthy resort was a Helen Barrett Rachel Sanderson Andy Mears [email protected] or Fabergé. “Then all of a sudden, we holiday destination known as ‘the Commissioning editor, Milan correspondent Picture editor your usual FT representative. had queues stretching towards Bond He had tried – and failed – Naples of the north’. But is the faded special reports Street. People from St Petersburg and town relevant today? Martin Wolf Steven Bird people from Tunbridge Wells, pulling to sell it for scrap . . . A The Wartski business believes it is. Elizabeth Paton Chief economics commentator Designer All FT reports are available on up in Bentleys and getting off the Google search led him to “We are very proud of being from US fashion and luxury FT.com at ft.com/reports bus.” By the time it was exhibited, the Llandudno,” says Mr McCarthy. “It’s correspondent Hugo Greenhalgh, Leyla For advertising details, egg had a buyer in a deal brokered by Wartski in London an eccentricity...that allows the Boulton, Ian Moss contact: Victoria Roberts Follow us on Twitter Wartski for an undisclosed sum, business to thrive.” Editors +44 (0)20 7873 3226, @ftreports