Fashion meets corporate history in this giddy mix of high heels and big deals co-authored by a fashion journalist and an investment banker. This pair of female high flyers promise, 'a story of power, profits and the pursuit of the perfect shoe' alongside an enviable collection of endorsements from the great and the good of the fashion world. In the main, they do not disappoint. It's a thoroughly researched and clearly accounted beginners' guide to Jimmy Choo's history and the major characters in the cast. It introduces and intertwines fairly disparate subjects with considerable poise and is highly readable. If I had to point to a fault I'd say, very occasionally, it reads like it was written by committee or by authors taking turns to choose words! I’d guess the best chapters were sculpted by an individual and the few sections where the writing is muddled are the product of collaborations or, perhaps, areas of disagreement. My favourites were chapters eight and nine; a potted history of the luxury goods market and a character sketch of former Jimmy Choo CEO Robert Bensoussan respectively.
Founded by the unlikely duo of a youthful, high octane, fashion obsessed, party girl Tamara Mellon and middle aged, Malay-Chinese, master cordwainer Jimmy Choo. The business that started in a workshop in London's East End changed hands for £525m in 2011 and the current owners are discussing a potential £1bn floatation this year.
The book makes reference to a 'keeper of the brand's vision' and Tamara Mellon strikes me as just that during her involvement. She appears the very personification of the glamourous, sexy, international world of Jimmy Choo. The man himself is cast in a secondary role as technical maestro and craftsman; the 'back office' to Tamara's flamboyant 'front office'. This alone strikes me as an awkward structure, not to mention the minefield of culture differences that must have existed between the two. Jimmy's wayward niece from Hong Kong, Sandra Choi, may have helped to bridge differences in culture and personality. She dropped out of Central St Martins College to help Jimmy with the business and is now the company's creative director. Robert Bensoussan, who was brought in by the first private equity backers to professionalise management, also clearly played a big part in the company's success.
Two bits of history from the luxury goods market were of particular interest: Bernie Arnault, the billionaire CEO and Chairman of mighty luxury group Loius Vuitton - Moet Hennessy, was from a French construction family that built vacation homes in France. In 1984 he was working on an expansion into Florida when he quit and gained control of a bankrupt French textile group called Agache-Willot, which in turn owned Christian Dior. He sacked almost everyone at the sclerotic conglomerate, sold assets and made lots of money keeping the Dior brand aside as the foundations of a luxury group he hoped would rival LMVH one day. However, in 1988, the boss of Louis Vuitton, Henri Recamier, called Arnault and asked him to invest in the LVMH group, which had been formed by merger with Moet Hennessy the year before. Recamier hoped to gain Arnault as an allied shareholder against the Moet Hennessy CEO with whom he was having a internal disagreement. However, after gaining a controlling stake and a place on the board Arnault turned against Recamier and had him ousted in a bitter, two year, board room battle eventually gaining control for himself. Such ruthlessness seems commonplace amongst the seriously ambitious; this particular incident reminds me of fellow Frenchman and renowned investment banker Andre Meyer (1898 - 1979).
An equally interesting tale, albeit less bloodthirsty, is that of fellow luxury giant Kering. The owner of brands like Gucci, Alexander McQueen and Stella McCartney started out as PPR, a mid-market department store operator and mail-order catalogue operator in France. It gained its entry into the market in rather unusual circumstances. Again, Arnault plays a prominent part. Gucci had been trading as a public company since 1995 when Arab-backed owners Investcorp floated it. In 1998 the share price fell precipitously owing to the Asian financial crisis and the affect this had on luxury goods sales. The CEO of Prada bought c.10% but then LVMH, led by Arnault, announced a 5% stake and the Gucci share price rocketed in anticipation of a bidding war. However, Prada sold to LMVH at the newly elevated price increasing LVMH stake to c.15%. Arnault, a voracious corporate shop-a-holic and seriously ambitious as we've seen, continued to buy up to c.35% and began asking for board seats in order to gain control. Gucci CEO, Dominic De Sole, was not happy about having his biggest competitor as the largest shareholder and so began “The Handbag Wars”. Gucci employed Morgan Stanley to dream up ways of diluting LMVH and eventually elected to sell PPR a 40% stake, diluting LVMH to c.20% stake with no control and no seats on the board; the two things Arnault coveted. Arnault sued Gucci over this 'white knight' arrangement but lost the case. PPR encouraged the management of Gucci to expand the group and CEO De Sole and chief designer Tom Ford bought several brands and encouraged big name designers to the group creating a luxury conglomerate to rival LVMH. It was not all bad news for Arnault either, he agreed to sell his 20% to PPR at a pre-determined minimum price at any time before 2004 just before The World Trade Center was destroyed by the attacks of 9/11, 2001. Gucci's share price fell 50% after the attacks.
FUN FACTS AND QUOTES
- “Where the consumer goes, Wall St. follows”
- Johann Rupert principle “price per kg of a product is highly correlated to the inherent profitability of that industry”
- Year-on-Year sales in EVERY Jimmy Choo store in the US increased 30-40% in the week after 9/11. Shoe therapy?
