Merchandising maestros make or break fashion brands
Fashion Week is in full swing in Paris, the last leg of a marathon that starts in New York, heads to London and Milan and ends in the City of Light. Buyers, journalists, celebrities and “friends” of brands run from show to show, catching their breath and finding their seat just before the music starts. But what you see on stage is not necessarily what you find in the stores. What consumers get to buy is usually a less dramatic, more market-friendly version of the outfits and accessories shown on stage.
Who decides what is sold in the shops is a person often overlooked by luxury investors: the chief merchandising officer (CMO). Industry analysts tend to focus on the CEO and the designer. Yet, to measure the desirability, popularity and sales momentum of a brand, it’s worth paying very close attention to whether the CMO, also called merchandiser, is doing a good job, industry executives and insiders say. A merchandiser can make or break a brand. It’s the crucial bridge position between creativity and business. In short, the merchandiser may not be glamorous, or well known, but she or he is the person who ensures whether a brand translates into financial success.
Take the example of Alessandro Michele’s tenure at Gucci. One of the industry’s most reveredformer chief merchandising officer is Jacopo Venturini. A fashion veteran, now in his early 50s, Venturini played a pivotal role in the blockbuster success of designer Michele’s tenure at megabrand Gucci. Venturini left in October 2019 to become CEO of Valentino. The slowdown in Gucci’s sales growth that eventually led to the exit of Michele last year can be traced to the timing of Venturini’s departure. “Jacopo was the right-hand man of Alessandro Michele,” said one person who worked with both men. “Venturini was very good at translating Alessandro’s message for the market.”
Venturini, who spoke to Miss Tweed in an exclusive interview, believes the merchandiser needs to build a relationship of trust with the designer and vice versa. That’s when the magic happens. Like the creative director, the merchandiser needs to be completely tuned into the Zeitgeist and have a sixth sense with regards to fashion trends: what’s hot and what’s not.
In Venturini’s telling, the merchandiser is a 360° person who needs to both have a strong aesthetic sensibility and a flair for business and consumer demand. She or he is both creative and business leader. Such people are difficult to find. However, that role can be fulfilled in different ways. “There is no recipe, as it depends on the designer as well,” Venturini told Miss Tweed in an interview at Valentino’s beautiful offices on Place Vendome in Paris.“It’s all about creating value around creativity to enhance it, not dilute it,” he said.“A designer needs to express the best of his orher visionwith a maximum level of freedom. Challenging creativity adds value to the process,” Venturini explained.
Some designers need more input from merchandisers than others. Hedi Slimane at Celine, owned by LVMH, is known to have total control over product assortments, display, advertising and the even the store concept itself. Industry sources say Slimane uses merchandisers to make sure a collection is complete and coherent. One person who has first-hand knowledge of the relationship between the Celine studio and the brand’s commercial teams said: “Merchandisers at Celine make the design studio believe that they are in charge and wear the crown, but the studio actually welcome their feedback. The brand’s merchandisers know they have to package their message and information well in order to have influence over the studio. They have to convey it in a positive way otherwise it won’t work.”
Maria Grazia Chiuri at Dior is a designer who is also regarded as a natural-born merchandiser. She knows how to decline her collections and themes into bags and dresses women want to buy. That’s why Dior has been LVMH’s fastest growing fashion brand in the past five years. Dior today sells a lot of $900 T-shirts on top of $3,000 handbags. It is one of the only few brands, together with Chanel and Dolce & Gabbana, that has such a full assortment of wares for consumers to buy, from $30 lipsticks to $50,000 dresses.
Also, Pietro Beccari, who’s just become Louis Vuitton’s new boss after driving Dior for five years, is a good merchandiser himself. Delphine Arnault, the 47-year-old daughter of LVMH boss and controlling shareholder Bernard Arnault, has become Dior’s new CEO. She may not have the warmth and charisma of Beccari, industry veterans say, but her father trusts her eye for visual merchandising and curating products. Delphine is the only Arnault offspring to sit on LVMH’s executive board. Previously, she was vice president of Louis Vuitton, in charge of all of the brand’s “product-related activities.”
Tancrede de Lalun teaches merchandising at Institut Français de la Mode and is global merchandising director at Balmain, Valentino’s sister brand. “The new generation of designers know that you have to create to sell and sell to create. You have to make it work… There is always a tension between buyers who want products that they know will sell, and merchandisers who also want buyers to test demand for new products.”
Lalun said the ultimate merchandiser was Karl Lagerfeld.“He took Chanel’s codes and used them on everything. The chain, the camellia, the tweed. Chanel was recognizable everywhere.” The late Kaiser could not stand being told what to do by anyone, merchandising people included. “If people do not do what I ask, then there is nothing to be done, » he used to say in his trademark German accent.
In 2015, Lagerfeld told Miss Tweed in an interview that Françoise Montenay, president of Chanel’s supervisory board, had asked him for 10 little black dresses. He declined, saying: “It’s not the season. And tell me - how much money are you going to make with those dresses?” Montenay did not know what to reply.
Another designer who has a knack for merchandising is Simon Porte Jacquemus. The 33-year-old designer and social media superstar also has full control over what his brand puts out and how the products are presented in boutiques. His spokeswoman told Miss Tweed that Jacquemus did not have a chief merchandising officer – a telling detail.
CHALLENGING CREATIVITY
Balmain and Valentino are owned by Mayhoola, a Qatari investment company based in Doha which is said to be closely associated with Sheikha Moza, mother of the actual Emir of Qatar. Before the pandemic, Mayhoola harbored ambitions to do an initial public offering but industry sources say it has put such plans on ice for now until market conditions improve. Mayhoola also invested in London’s Anya Hindmarch and Italy’s Pal Zileri. In 2018, it tried to acquire Lanvin but lost against China’s Fosun Fashion Group which is still struggling to turn France’s oldest fashion brand into a profitable business.
As Valentino CEO now, Venturini tells Miss Tweed hisjob is to“help build the long-term equity of the brand.“Having a clear company culture is very important. Creativity and an internal culture of respect and trust, of peoplecentricity and clientcentricity, are all fundamental pillars for us.”
Valentino, a brand estimated to generate more than $1.5 billion in annual revenue, is not there to satisfy needs. Its goal is to sell dreams and beautiful stories.“We need to create desire and satisfy a need to escape,” Venturini explained. As former superstar merchandiser, Venturini is well placed to describe the strategic importance of that position.
“You have to be humble and really understand what the designer wants to express,” he said. “The products have to reflect the designer’s aesthetics in a coherent way in order to build trust. In that light, the role of the merchandiser is very important as it can help finetune creativity, the overall collection, and the product offering. The result must be coherent with the designer’s vision, but also complete from a product point of view,” Venturini explained.
“As a merchandiser, you can dilute creativity, but you can also cultivate it by nurturing a creative mindset within the company, one that trickles down to all processes without necessarily following predefined lines until it arrives in the stores. Everybody plays a part in that.”
FROM MERCHANDISING TO CEO
Venturini is not the only merchandising maestro to have become CEO. There are a few notable others, such as Cedric Charbit, who was Saint Laurent’s top merchandiser before he took the executive reins at Balenciaga in 2016. Since 2019, he’s a member of Kering’s executive committee. Charbit may have been sucked into in a scandal last year about Balenciaga’s shocking ad campaigns that seemed to sexualize children, but he remains one of Kering’s greatest merchandising chiefs.
Some industry insiders say this is part of the reason why Kering did not wish to sack Charbit and gave him another chance. That being said, Balenciaga creative designer Demna Gvasalia is also a strong merchandiser. He’s the one to come up with ideas like €1,000 dog pads and €400 beer glasses.
Saint Laurent is currently Kering’s fastest growing brand. Its CEO Francesca Bellettini has an eye for products and works well with designer Anthony Vaccarello. Industry sources say merchandisers at Saint Laurent have little power. The brand’s chief merchandising officer Sandrine Sonder just left to join Burberry. Investors should be hoping Kering will not be splitting Saint Laurent’s winning designer-CEO duo. They are now concerned Gucci’s newly appointed designer Sabato De Sarno will live up to their expectations.
GUCCI
Last week, Gucci presented a collection in Milan which critics damningly described as a good effort but incoherent. “It was a bit of a mess. There was no clear point of view,” the former CEO of a major Italian brand told Miss Tweed in confidence. “They pulled out some past best-sellers and revamped them. I think they wanted to clear the memory of Alessandro Michele and prepare a clear territory for when Sabato arrives.”
Gucci’s last womenswear collection raises questions about the strength and experience of Maria Cristina Lomanto, a Miu Miu and Roger Vivier veteran, responsible for the Gucci collection’s coherence. She’s been Gucci’s executivevicepresident and brandgeneral manager since last yearoverseeing merchandising for all the product categories at Gucci as wellas visual merchandising. She is also responsible for beauty,eyewear licensing and retail training. But to be fair, her job is not easy since the brand is in a transition period until De Sarno arrives.
At Acne Studios, the brand’s designer Jonny Johansson does not let merchandisers tell him what to do. “He takes their input but will not allow them to dictate what the brand should produce,” a senior director at Acne said on condition of anonymity. Of what people saw at Acné’s show during Paris Fashion Week on Wednesday, only 40-60 percent will be produced and sold in the brand’s boutiques and by wholesalers. “If the item from the show is too crazy, too sexy, we produce versions that will be more commercial and easier to wear. That may mean a longer skirt or turning what was a bra into a bustier – that sort of thing,” the Acne executive said. Popular items are put back on the market every year with new with just new colors, fabrics and cuts, he said.
Brands risk losing steam and look repetitive if their merchandisers have too much power and ask for the same products to be manufactured over and over again, industry experts say. If you see that a brand stagnates, it may mean that the merchandiser is blocking creativity or has lost the designer’s trust. If you are an investor, it’s always worth investigating the influence and talent of the merchandiser. Yet, crucially, all the evidence suggests while the merchandiser is vital there must be a limit to their clout or else the magic je ne sais quoi of luxury is lost. Instructively, the most powerful merchandisers are those at fast-fashion brands. But that’s a different business model entirely.