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Fashion Opts for Safety in Paris, Milan Amid Recovery ‘Clouds’

Michele Norsa, chief executive officer of Salvatore Ferragamo Italia SpA. Photographer: Daniel Acker/Bloomberg
Michele Norsa, chief executive officer of Salvatore Ferragamo Italia SpA. Photographer: Daniel Acker/Bloomberg

Sept. 22 (Bloomberg) -- Less may still be more at Milan and Paris Fashion Weeks.

Even amid signs that demand for luxury clothing and accessories is returning, makers of the goods will “play it safe” for spring-summer 2011, according to Sue Evans, senior editor of catwalks at fashion forecaster WGSN. The shows start today in the Italian city before moving to the French capital.

“People are still adjusting to life after the crunch,” said Averyl Oates, buying director at U.K. department store Harvey Nichols. “If someone is looking to spend a large sum of money on a coat for instance, they want to be sure it isn’t going to become redundant next season.”

Fashion and luxury-goods companies have responded to the recession by toning down their selections, focusing on classic looks and emphasizing quality and craftsmanship. Companies including LVMH Moet Hennessy Louis Vuitton SA and Hermes International SCA posted double-digit revenue growth in the six months through June as shoppers, particularly from China, spent more and distributors restocked inventories.

“The recovery in luxury consumption has been quicker and more robust than we could have expected,” Salvatore Ferragamo SpA Chief Executive Officer Michele Norsa said in an interview. “Consumers have returned to spend in a significant manner.”

The worst U.S. recession since the Great Depression ended in June 2009, the National Bureau of Economic Research said this week. Yet the slowdown in economic growth in the world’s largest economy raises the possibility of another slump.

Bondage Dresses

Luxury sales growth will slow in the second half of 2010, mainly because of a tougher basis of comparison from the final months of 2009, when the recovery started to take hold. Total sales by luxury companies listed in Europe may rise 11 percent in 2010, slowing from the 14 percent rate in the first half, HSBC analyst Antoine Belge estimates. They’ll likely advance 7.5 percent next year, according to the analyst.

Gucci, the Italian brand owned by Paris-based PPR SA, boosted its first-half operating margin by 1.5 percentage point after introducing tailored pants and coats for fall, contrasting with its spring-summer 2010 “bondage-style” dresses and shoes. The luxury brand’s move “up market” to a more discreet positioning is allowing it to sell more higher-priced goods, PPR CEO Francois-Henri Pinault said in July.

Longer Skirts

“Although sexiness remains the trademark of the Gucci woman, my guess is that we are not likely to see bondage dresses on the Gucci catwalk for quite some time,” Paola Brandi, visiting professor at Paris-based fashion university ESMOD, said in a phone interview.

Longer skirt lengths and elongated silhouettes, which emerged last season at Prada and Louis Vuitton and continued during New York Fashion Week, may feature in Milan and Paris, according to WGSN’s Evans. Looks inspired by the ‘70s, such as “high-rise flared pant shapes,” and “a sort of deluxe hippy feel,” may also return, said Jodie Ball, WGSN’s fashion editor of catwalks.

Some are concerned about the sustainability of the recovery. It’s “too soon” to draw any conclusions given the levels of debt in the U.S. and parts of Europe, Cie. Compagnie Richemont SA Chairman and CEO Johann Rupert said Sept. 8. “We have to be cautious” amid an uncertain economic outlook, LVMH Chairman and CEO Bernard Arnault said in July.

“The current environment is much better than last year but there’s still uncertainty in some parts of the world,” Dennis Weber, an analyst at Evolution Securities in London, said in a phone interview.

Bulgari, Brioni

To be sure, designers will still need to innovate to keep Asian customers interested and drive market share gains in the U.S. and Europe, according to Evolution’s Weber. “Brand equity will be increasingly important,” especially for labels with limited distribution, Weber said.

Bulgari SpA will present a handbag collection by Matthew Williamson in Milan, marking the first time the jeweler has collaborated with a fashion designer. Tod’s SpA will unveil a one-time clothing and accessories line by German designer Karl Lagerfeld under the Hogan brand. Brioni Roman Style SpA will show its first full collection by new women’s wear designer Alessandro Dell’Acqua, the former Malo designer hired in May.

As growth slows, prices will probably be unchanged overall, though designers may include fewer items at the low-end of the range, Weber said.

They will also be helped by increased spending from retailers. Their budgets were up by about 20 percent last season as distributors restocked inventories, said Armando Branchini, vice president of Milan-based consulting firm Intercorporate. For spring-summer 2011, retailers like Bloomingdales, Saks Inc., Bergdorf Goodman and Neiman Marcus will have to buy more merchandise than last year to compete with one another, Branchini said.

Still, after the credit crunch, most houses are proceeding with caution.

“There are a few clouds appearing in the sky again and this immediately can push these high-end consumers who are normally very well informed to pull the brakes,” said Francesco Pesci, Brioni’s commercial director.

To contact the reporter on this story: Andrew Roberts in Paris at

To contact the editor responsible for this story: Celeste Perri at

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