Toys “R” Us and Fashion

I have been fielding questions from the press and colleagues about the bankruptcy of Toys “R” Us and its challenge to stay in business after shutting many stores in the chain. A leading question, typically asked with evident nervousness and need for reassurance: “It couldn’t happen this way in the fashion business, could it?” The answer: it could and it has. Some points to consider:

The Toys “R” Us model was to put familiar, heavily advertised brands into large stores for one-stop toy and game shopping. That worked in part because children see toy advertisements and play with friends’ toys with such regularity that “shopping” is often simply a matter of picking up what they have requested (over and over) and then fending off enough impulse purchases at least to give the illusion of parental control over the process. Trust me on this: I have an eight-year-old.

And trust me on this as well: pushing a shopping cart through large, undifferentiated corridors, plucking brand-name toys off shelves, is not an adult-friendly experience. Contrast that to the flagship Hamleys shop, which has cleverly positioned itself on London’s Regent Street, in easy walking distance from both my tailor and shirtmaker. Eager, helpful people are constantly demonstrating products, which is how, on my latest visit, I got two wafer-thin model airplanes for £10 that broke up on first crash landing and a coin-trick magic set I haven’t quite got the hang of yet—though I’m working on it. Yet it was a fun visit, which is quite the point. Just as important for the chain, a large portion of its merchandise is private label, which makes part of what they sell both exclusive and retailer-branded. If you want it, that is, you have to go to Hamleys, and when you bring it home, the name on the product reminds you from whence it came.

Providing a quality in-store experience and building a brand through exclusivity and desirability are very much points for any fashion retailer to consider. There is no benefit in falling back on the familiar mantra: “We are working to enhance our presence online.” Consider what, if anything, is unique about the Toys “R” Us website that would bring you there first instead of to Amazon. A certain segment of the population still wants to walk into shops, and what you provide online, at least in the near term, will be seen as an extension of what you provide in-store. Private label is still largely a bricks and mortar play, and it is often a very necessary one to reinforce the power of a brand and to build and hold onto customer loyalty. Private label has so far not had the same impact on fashion websites as it has in-store, in fair part because it is quite challenging to recreate the kind of storytelling experience that the best store brands provide in real space. (Is there any doubt, when you are in an Hermès shop anywhere in the world, that you have entered the Hermès world—one of chic sophistication, style and even, around corners framed by carefully arranged displays, a touch of mystery?) A website can support that experience, but so far, at least, cannot fully replicate it.

So the lesson for fashion retailers is simple: make them want it, and make them want to come in to get it. Which is to say, the lesson is what you already knew. Major bankruptcies are like traffic accidents. You drive slowly by, saddened by the damage; and, although you surely already knew that driving safely is a must, the experience brings the message home with great force.

Credit: Alan Behr


Matryoshka Marketing

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We have all seen Russian matryoshka (nesting) dolls: open one and out comes another, and open that and you get another, and so on. When a fashion brand incorporates components from another brand into its finished product, it is rather the same thing, with a difference: although the brand covering the finished product is the brand that in all likelihood is the primary branding driver of consumer demand and the primary branding influence for consumer purchasing, that brand will not exist in isolation. It will be helped or hurt by the quality, function and aesthetic appeal of the brands of the constituent parts.

Perhaps the easiest place to see that at work is watchmaking. There are many more well-known watch brands than there are watch movement makers. Although most watch brands design and make their own cases, they often rely on others to make the most important thing in the package: the actual movement. If the movement is not working properly—if the watch is not keeping time—good luck trying to convince the consumer that all he or she really wanted was a well-designed bracelet with a watch-face for decoration. Typically, the maker of the movement is not even mentioned in advertising, on the product or in the accompanying instructions. Clothing, however, is a bit different since there are some key fabric vendors whose brands are considered important enough to drive sales, which is why garment makers are willing, if not eager, to place the Gor-Tex and Loro Piana trademarks on clothes made with fabrics bearing those brands.

All well and good, but a couple of key points should be considered:

First, no matter how you, the manufacturer, market the finished piece, you are helping build good will (and therefore value) in the brand of your supplier. Your vendor is the legal owner of that goodwill, not you. Your advertising will promote and otherwise benefit the vendor, which at times might also participate directly by adding its trademarks to the ads. All of that should be considered when entering into the agreement by which the vendor’s trademarks will appear on your fashion products. In addition, your vendor will likely require an agreement permitting it to exercise quality control over the use of its marks—which is again what the law expects—so be prepared to have the vendor involved in production in a way you might not typically expect from a supplier of components not displaying B2C branding.

The other key point to consider is that, even if the consumer is aware of the vendor’s brand and the vendor’s contribution to your finished product, the consumer will most likely hold your brand accountable for the performance of your product. Going back to the watchmaking example: ETA SA Manufacture Horlogère Suisse (a subsidiary of Swatch Group Ltd.) makes movements that go into a number of watch models made by Breitling SA, which is an unrelated, privately held Swiss company. Even a consumer who is fully aware of that fact is not going to say, “Hey, my Swatch stopped working!” in the (highly unlikely) event that his Breitling should cease to function—even though, in a purely mechanical sense, that is exactly what happened.

Just a few things to keep in mind when entering into supply contracts with important vendors.

Credit: Alan Behr


Designers Defending Their Names

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If you are interested enough in fashion to be visiting this page, I cannot tell you anything new about Roy Halston Frowick, better known as Halston. He was unique in many ways, starting with the fact that he launched his career with a single piece: the pillbox hat that Jacqueline Kennedy wore to John F. Kennedy’s inauguration as president, in 1961. (The fact that Mrs. Kennedy was also wore a Halston pillbox while sitting in the car next to the president as he was assassinated, in Dallas, led to the style going out of fashion in the blink of an eye.) By 1983, Halston’s company, Halston Limited, was owned by Norton Simon, Inc. Unless Halston had agreed to all that at some point, the likely explanation was that there had been no form of what lawyers call a non-assignment clause in place in the relationship that Halston, the man, had set up with the owners of Halston, the brand. In any event, within about one year, Halston was no longer designing for Halston Limited. He died in 1990, a man without his own name in design. Once that disassociation occurred, Halston, the brand, which still exists, has a life of its own, and it has since changed hands seven times more.

Catherine Malandrino recently filed a lawsuit against Elie Tahari and others, claiming she was wrongfully deprived of rights under a deal by which she sold her brand (and, for all intents and purposes, her professional name) to a company controlled in part by Tahari, which employed her as its creative director. Malandrino had only minority representation on her new employer’s management committee. She alleges that her co-venturers and others routed around her in subsequent dealings, damaging the brand and failing to compensate her as agreed. Although the complaint is passionately composed, it does not directly address what appears to be the underlying issue: Malandrino and her representatives did not provide, in the agreements she signed, the kind of contractual protections that could have reduced or eliminated many of the alleged wrongs and that would have given her final say as to what was and was not a Catherine Malandrino creation.

On a happier note there is the long, circular tale of Joseph Abboud. His eponymous menswear line debuted in 1987. His name was registered as part of trademarks that he licensed to a joint venture in which he took an interest through a corporation he owned. He then sold off his equity interest and worked as a consultant to the company that now exclusively owned his name in the fashion business—until creative differences caused an abrupt. Abboud tried to start a new brand called “jaz,” making it known in the trade that he was the designer. In the lawsuit filed by the company that owned the Joseph Abboud trademarks, the court ruled, “Abboud is permanently enjoined and restricted from using her personal name to sell, market, or otherwise promote, goods, products, and services to the consuming public.” In all, a humiliating result for one of my favorite menswear designers. Several sales of branding rights and changes in price point later, man and brand were effectively reunited; in 2014, Abboud became chief creative director at Men’s Wearhouse, which is the current owner of the Joseph Abboud brand and trademarks.

And we must not forget that there are many success stories. Karl Lagerfeld is still a walking brand, regardless of whatever house for which he has already has served or may yet serve as designer. Ralph Lauren’s name is owned by his company, which is public and so owned by many shareholders—but he has set up everything quite nicely and is surely not losing sleep worrying about whether he will still be designing under his own name.

The message: every good designer is either a good business person or should work in close company with someone else who is just that—and every good business person watching over a designer’s name should have a lawyer nearby who knows what to do to keep the designer and his name permanently in each other’s company.

Next: we will show a bit of how that works.

Credit:  Alan Behr

See previously published related posts:


Welcome to Designer Hell, No Name

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The applied arts, including fashion, stand in service of utility. There is no l’art pour l’art (art for art’s sake) even if you are talented and even if you are French. A useful object made beautiful, fun or even compelling is still something you can use, and things that can be used are objets de commerce, first and foremost. That is one of the reasons, as we have discussed in these postings (and surely will again) that the law treats fashion, jewelry and accessory designs—and related objects such as perfume bottles and lipstick cases—differently from how it treats paintings, sculptures and photographs. All art follows commerce, and artists do not quit their day jobs if they are not commercially successful, but when it comes to fashion, commercial success remains rather the point. If you are a designer and do not believe that, ask your retailers and financial backers if they disagree.

The first and perhaps most personally compelling fact of that distinction between what the law considers design to be versus how it treats fine art is that, although the artist can never lose his name—there was only one artist who could paint a Pablo Picasso and only one artist who could chisel out a Michelangelo—it is possible for a designer to wake up one morning and find that, professionally, his name is no longer his. To his mother, he may always be, “My son, Martin, the designer,” but the clothes bearing his name might be designed by someone else—perhaps someone he does not know, or perhaps even someone whose work he finds indifferent or just plain terrible. Even worse, should he wish to continue designing clothes, he may have to do it under a different name.

The reason for that is because the name is not merely a name; it has become a brand. And brands can be sold, along with the trademarks that represent them, and the goodwill that those trademarks generate and perpetuate. (An artist’s name can also be his brand—but the art market has not yet accepted the idea that, say, Lucian Freud could have sold his name on retirement, for use in connection with fine art by Damien Hirst.) When designers sell their trademarks, therefore, they are, to the fashion world, effectively selling their names.

If the price is right, that may be a great idea. Sometimes, however, regrets follow. In posts to come, we will show what has happened and can yet happen when designers lose control of their own names.

Credit:  Alan Behr


The Blogger Blogged

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As everyone knows, lawyers have far too many stellar qualities to enumerate here. We have a sense of humor. (Who can forget, after all, the priceless nugget of wit that goes: “What do you call one hundred lawyers on the bottom of the ocean?” Answer: “A good start.”) We are sure there must be just as many good ones about chiropractors, occupational therapists and entomologists.

And lawyers are media stars. Whenever an attorney is convicted of a felony in the line of duty, doesn’t it always make headlines? Lawyers are also highly respected for their assertiveness, as knows any lawyer whose application to rent an apartment was mysteriously and inexplicably denied.

But who knew that lawyers could also be fashion trend-setters? So it appeared from a blog several months ago, in which the author of this blog was blogged. The post was in the form of a column about accessories worn by attendees at the charity benefit held on the opening night of an antiques fair.

The site is New York Social Diary, in which David Patrick Columbia, combining the roles of Edith Wharton and Henry James for an earlier generation, chronicles the real life moments that those earlier writers drew upon for much of their fiction. The blogger in the guest column was Alison Minton, a friend and queen of New York style, who reports for the site on accessories. In my debut as a fashion icon, you can clearly see the Ralph Lauren necktie and pocket square that were the objects of the author’s attention, along with a fair bit of the Henry Poole bespoke suit that they accented and almost none of my face. As my earlier appearances in New York Social Diary and elsewhere have shown, that omission was no loss at all to the reader. It did, in this instance, force all attention on not who I am but on what I had chosen to wear in the expression of who I am. It demonstrates in pictorial form that what each of us holds as our personal style is both a part of us and an abstraction of us. We are what we wear, but what we wear is also a part of us and a metaphor for how we wish to be perceived.

It also reminds me that, as someone who will on occasion take this forum as a soapbox on which to stand and proclaim what is and is not good style, acting as a fashion authority is uniquely hard work. A theater critic need not act or direct; an art critic is not expected to paint or sculpt; but we all wear clothes. A style critic, therefore, is always in danger of being held accountable for his or her own style success and failures. (And we all have both, to be sure.) This line of work is not for the faint-hearted—but neither is any job in fashion and accessories. Would any of us have it any other way?

Credit: Alan Behr


Keeping Control Over Your Brand

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In the movie A Hard Day’s Night (1964), unscrupulous menswear marketers lure George Harrison into their office, there to assure him that the two new shirts they put into his hands are essential to his self-esteem. When George says the goods are frightful, the head marketer comforts his team that, “within a month, he will be suffering a violent inferiority complex and loss of status because he isn’t wearing one of these ‘nasty’ things.”

The point was that the guiding spirits of the generation of the 1960s formed up against the commercialism and consumerism that were behind marketers’ attempts to pass off “nasty” goods as status symbols for insecure youth. How times have changed. Someone with a device in his pocket that pitches out brands and branding stories faster than summer rain drenches a field views branding and the commercial motives behind it in a much more positive light. Brands ignite consumer interest as never before, and brands win when they have good stories to tell—stories that create interest and become viral once consumers are engaged. Brands are, after all, nothing but good will with consumers, and once that is obtained, the message is spread most effectively by consumers imitating each other and aspiring to what each other has. The bad news that follows from the good is that consumers, in exchanging with each other messages about brands they know, are becoming as important in the control of a brand’s destiny as the brand’s owner—and its marketers.

For that reason, never has the creation and the protection of strong trademarks been more important for the fashion business. The value of the trademarks is applied directly to the bottom line in the form of good will. There are terrific fashion brands that own little else but their trademarks and related domain names—not the factories that make the clothes, not the stores in which they are sold, not even the photocopy machines in the corporate office. What they have are strong trademarks protected throughout the areas of current use and expected operations. The moral of the story: work with your trademark lawyer to develop, as early as possible, a solid and workable trademark protection program, and then stick to it by carefully searching and analyzing all new prospective trademarks and by registering them promptly as soon as the anticipated need arises. What have you to lose by not doing that? Only everything you may have.

Credit:  Alan Behr