Art fairs are the dealers’ combined response to the threat of the auction houses. Only galleries are allowed to take part in art fairs. The events are attractive to collectors because they offer the chance to see a large volume of work from the world’s leading dealers in one place and over a short space of time. And the leading dealers are there to greet them, their best work dusted off and ready for its close-up. The competitiveness between collectors and the air of excitement can provoke high prices.
The 40-year-old Art Basel is considered the most powerful art fair. It is sponsored by the Swiss bank UBS. Although galleries from around the world are desperate to pay around !200 per square metre for a stand at the event, Art Basel prides itself on its high standards. Any gallery taking part must have been trading for at least three years – and a seven-member committee of leading dealers vets all demands. Like other fairs, Art Basel is open to the public, but those of a low net worth can expect a frosty reception. The genuine collectors descend from on high: upstairs at Art Basel there is a maze of VIP lounges to which the milling throngs below will never gain access. This concentration of wealth inevitably attracts luxury brands. Associate sponsors of Art Basel 40 included Cartier and NetJets Europe. Among the ‘lounge hosts’ were Davidoff and Moët Hennessy. The champagne came courtesy of Moët & Chandon.
Didier Viltart of Opera Gallery told me that collectors could be surprisingly nationalistic: British buyers preferred to collect the Young British Artists, while Asian collectors tended to buy the work of artists from their region, and so on. Because Art Basel was viewed as a European fair, in 2002 its organizers created Art Basel Miami Beach to target the American market. The Miami edition is glitzier and more fashionable than its Swiss counterpart, attracting a slew of celebrities and, naturally, luxury brand sponsors. NetJets provides its owners with admission to the show, exclusive access to the invitation-only private preview and, of course, its own lounge. In 2008 Cartier flew in a crystal dome to shelter its guests during a party at the city’s botanical gardens.
London’s Frieze is the youngest of the ‘must see’ fairs, having been launched in 2003 by Amanda Sharp and Matthew Slotover. It started as a brand extension of their art magazine, also called Frieze, which they started in 1991 after graduating from Oxford. Their contacts in the art world enabled them to attract 135 galleries for the very first show. The number of exhibitors has more than tripled since then. ‘Frieze Week’ in mid-October is an annual rendezvous, with auction houses staging parties and sales to lure the collectors who descend on London for a few precious days.
In keeping with its London setting, Frieze has a hipper, edgier flavour to it than the other art fairs. It is just as much a part of the luxury world, though. A line from The Daily Telegraph newspaper sums up the ambience: ‘At the Cartier Frieze Dinner, guests including Charles Saatchi and Roman Abramovich’s girlfriend Daria “Dasha” Zukhova will discuss a blockbuster year which has seen records tumble at auction for works by the likes of Francis Bacon, Lucian Freud, Claude Monet and of course Damien Hirst’ (‘Frieze art fair: super-rich to cast economic crisis aside’, 16 October 2008).
THE SALE OF THE CENTURY
When viewed from the perspective of Basle or Frieze, FIAC is indeed a far more humble affair, with barely a superstar collector in evidence. But many of the dealers told me that the Paris show is growing in importance and prestige. Among them was Neil Wenman of White Cube, which was making its debut at the fair. The gallery’s stand was devoted to a new body of work by Jake and Dinos Chapman. Actually, ‘body’ is not quite the right word: the painted bronze sculptures reduced humankind to ramshackle constructions of cogs, pistons and oozing organs. The malfunctioning machines looked as though they’d emerged from some grim Gothic horror tale.
Looking on were a series of stern Victorian portraits. Except that the portraits had been defaced by plastic surgery, scarification and mutilation. ‘It’s all about ageing and decay,’ Wenman explained, cheer-fully. ‘We felt a solo presentation would have more impact than pieces by several different artists,’ he added. He said he was pleased with the show’s brisk first day, which compared favourably to the recent Frieze. ‘We did very well in London. The difference there is that all the real selling is done privately, behind the scenes. But of course we don’t have showrooms here in Paris.’
Almost everyone I met claimed that although the free-falling economy had deterred speculators, ‘real’ collectors continued to buy. The problem was that estimates of the number of these committed collectors ranged from a couple of thousand worldwide to just 200 individuals.
Some months after FIAC, the atmosphere at the Grand Palais was rather different. Now it was evening, and the magnificent glass-domed building was the setting for what the French press had dubbed ‘The Sale of the Century’. Christie’s was auctioning the entire art collection of the late fashion designer Yves Saint Laurent and his partner Pierre Bergé. The amount fetched by the sale – estimated at more than €300 million – would be donated to charity.
Modern art was the first category in the three-day sale. And as the names involved were colossal brands – Matisse, Picasso, Mondrian, not to mention Yves Saint Laurent himself – the event had attracted fervent interest from the media and the public. Almost 35,000 people had filed through the two-day preview exhibition. Now some of them stood outside the building as if hoping that the atmosphere would leach through the walls. Inside, more than 1,200 collectors, dealers and art enthusiasts were seated in rows before the podium. These were the visible potential bidders: others were waiting at the end of 100 telephone lines. The domed roof high above was suffused with a bluish twilight. Disc-shaped chandeliers the size of flying saucers hung in the immense space, warming the crowds along with the rows of spotlights that added to the sense that this was a blend of theatre and fashion show. The air was thick with anticipation and expensive fragrance.
In the end, François de Ricqlès, the chairman of Christie’s France, conducted the auction with a suave self-possession that – despite the enormous sums of money in play – made the event seem civilized and even gracious. When a fabulous piece sold for an astronomical amount, there was polite applause. No fewer than five world records were set that night. The first was for a wooden Brancusi sculpture called ‘Portrait de Madame LR’. Its value had been estimated at between €15 million and €20 million – in the end the hammer came down at €29.17 million. About 15 minutes later, Piet Mondrian’s ‘Composition in Red, Yellow and Black’ sold for €21.56 million – double the estimated price. A gloriously colourful 1911 Matisse, ‘The Cuckoos, a Blue and Pink Rug’, went for €35.9 million, while Giorgio de Chirico’s ‘The Returning Ghost’ fetched a comparatively modest €11.04 million. Marcel Duchamp, one of the leaders of the absurdist Dada movement, must have been smiling wryly on high when a fake perfume bottle whose label featured a photograph of him in drag sold for €8.91 million.
At the end of the three-day auction, the grand total fetched by the collection was a staggering €373.5 million. And this in the middle of one of the worst downturns the art market had ever known.
The auction’s success was due to the convergence of several luxury brands. First there were the artists themselves. Second there was Christie’s: a major art world brand owned, as we know, by luxury tycoon François Pinault. And finally, Pinault’s group also owns Yves Saint Laurent – the brand that really drove the success of the sale. That’s why the Christie’s website prominently featured an image of the late designer. It’s why people who might not normally have been interested in art pressed into the Grand Palais for the preview show. And ultimately it’s why the sale broke records. Everyone knows that it’s cool to own a Matisse. But it’s even cooler to own a Matisse that once belonged to Yves Saint Laurent.
The sums fetched at the sale prompted some observers to suggest that the art market was more resistant to the economic crisis than had at first been feared. For a few years, the market had been lofted into the stratosphere by a bub
ble of new wealth from Asia, Russia and central and eastern Europe. The bursting of that bubble precipitated a sudden plunge to earth. This was not necessarily a bad thing. When the US economy entered the doldrums in the 1970s, artists in New York began colonizing the post-industrial wasteland that later became known as SoHo. Similarly, the Young British Art movement – led by Damien Hirst – emerged in the thick of recession at the beginning of the 1990s. Just as SoHo artists had squatted decaying industrial spaces, so the Young Brits invaded warehouses in imitation of the illegal ‘raves’ that were transforming dance music. Today, empty retail spaces are being targeted by artists in search of new venues.
Like the Damien Hirst auction shortly before it, the Yves Saint Laurent extravaganza proved that art is driven by branding.
11
Upscale retail
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‘The first attribute of luxury is quality. The second is emotional reward.’
The retail space is a crucial communications vector for many luxury brands. As we’ve heard time and time again, one of the key differences between a luxury product and a humdrum one is the element of fantasy. ‘Nobody needs another handbag,’ admitted Robert Polet, CEO of the Gucci Group, in an interview with The Wall Street Journal. ‘So you have to create what I call the “need to have it” factor, when the customer says “I need to have that $2,000 bag, and my only worry is that it be in stock. I want it now.” This is the emotional desire of the brand, the power of the dream’ (‘Gucci chief peddles power of the dream’, 24 September 2007).
So far so predictable – but Polet went on to say that he had experienced this power as a young man while sitting in his father’s brand new Austin Westminster car. ‘It had leather seats, and sitting in the car smelling the leather made a tremendous impact on me.’
This is exactly the kind of visceral response that luxury brands strive to provoke with their retail spaces. They want to seduce the shopper with lavish surroundings – to create a Disneyland of desire. If luxury brands have taken a hesitant approach to online retail (see next chapter, ‘Digital luxury’) it is because they are afraid that, when stripped of fancy framing in the form of these awe-inspiring stores, their expensive gewgaws might appear banal. The power of context has driven Prada to design stores with hip architects like Rem Koolhaas and Herzog & de Meuron, and Louis Vuitton to open flagships in emerging markets at the rate that other brands erect billboards.
Aldo Gucci defined the appeal of authentic luxury goods in 1938, when he hung a sign in the brand’s first store in via Condotti, Rome. It read: ‘Quality is remembered long after price is forgotten.’ Ironically, few people can remember what the store’s original interior looked like, because it has been redesigned to reflect each incoming designer’s interpretation of the Gucci brand. The latest transformation was overseen by Frida Giannini, who took over from Tom Ford as Gucci’s chief designer in 2005. Working her way through the chain of stores, she has banished Ford’s black-and-chrome aesthetic and replaced it with her own lighter, more gently nostalgic vision. In the world of luxury fashion, the retail space must correctly evoke the ‘codes’ of the brand, with no disconnect from what is going on in the advertising or on the runway, otherwise it risks the consumer becoming disenchanted. As each successive designer tweaks the codes of the brand, its original values disappear under layers of artifice.
Luxury brands tend not to attempt to weave their magic alone, however. Upscale stores are invariably located in elegant districts that transport strollers to a parallel, more sophisticated, world. One example is London’s Regent Street, the gently curving boulevard designed by John Nash in 1811. Despite being redeveloped by numerous architects in the early 20th century, it retains a beauty and symmetry that can compete with any of Europe’s finest thoroughfares.
Regent Street has a single owner, Crown Estates, which embarked on a £500 million renovation in 2002 in order to reinforce the street’s positioning as an upscale retail hub. ‘We knew from the very beginning that Regent Street had fantastic architecture but that it was lacking in brand or style in retailing terms,’ said David Shaw, head of Regent Street strategy and development. ‘We’ve been… focusing on bringing flagship stores to the street that can provide something above what can be found in other retail areas’ (‘London’s retailers look beyond today’s bad news’, International Herald Tribune, 17 September 2008).
The efforts have borne fruit in the form of 60 new stores since 2002, including Britain’s first Ferrari store. Meanwhile, Israel’s Alrov Group has leased the 150-year-old Café Royal at the end of the street and will turn it into a luxury hotel. As it is the sole landlord of Regent Street, Crown Estates can ‘curate’ the avenue to provide a coherent environment for brands and visitors. ‘What we are doing is looking at the whole of the street, not just at individual buildings,’ said Shaw. ‘You [shouldn’t] just think about retail space but also about restaurants and hotels and offices.’
Another example of a ‘curated’ district is Marylebone High Street, one of London’s most attractive shopping destinations. Once again, a single landlord, the Howard de Walden Estate, manages the street’s almost seamless brand identity. It wanted to develop a ‘village within a city’ that would set Marylebone apart from other neighbourhoods and deliver a nostalgic yet upscale experience. Its strategy was driven by the insight that customers are increasingly seeking an alternative to global brands and homogenized environments. The landlord discourages multinational chains and welcomes independent shopkeepers with unique concepts. Those who stroll down the street today can indulge in the archaic pleasures of visiting a traditional butcher and fishmonger, browsing in a quaint wood-panelled bookstore, or enjoying a cup of tea and a cake in a genteel café. Like Regent Street, the district also has its own website, solidifying its existence as a brand.
New developments confirm the theory that luxury brands like company. When the 46-acre (19-hectare) Westfield shopping centre opened in the west of London at the end of 2008, it instantly became one of Europe’s biggest luxury shopping complexes, offering brands such as Dior, Gucci, Louis Vuitton, Miu Miu, Prada and Valentino.
In the article mentioned earlier, the designer Amanda Wakeley – who was poised to open a site at Westfield – said she intended to distinguish her brand with superior service. ‘The customer has to feel assisted but not intimidated,’ she said. Although some customers may get the feeling that vendors in luxury boutiques take lessons in glacial snootiness, service is a primary concern – especially when it comes to targeting high net worth individuals.
SERVING VIP CUSTOMERS
The personal touch is part of Louis Vuitton’s marketing strategy. The company has a department called Private Client Relations, whose mission is to target the fabulously wealthy. The company estimates that there are around 8 million people worldwide with immediate access to a million dollars or more. Many of them are already Louis Vuitton customers – but it is very keen to attract those who are not. In order to seduce this elusive market, Louis Vuitton uses a combination of ‘ambassadors’ and ‘in-store private shoppers’.
Each ambassador has a defined territory. Their job is to attract newcomers to the brand via special events and social occasions. An insight into how this might work is provided by the following snippet from a blog called Fresh Mess:
Anette Stai, early supermodel, brand ambassador and marketing chief of Louis Vuitton Norway, greeted the well-heeled guests. Flutes of Moët & Chandon were served while everyone admired the stunning display of Special Order creations flown in for the event from France. In exhibition were a beauty case in leather from 1927, a violin case in natural cowhide leather from 1895, and a picnic trunk in monogram canvas from 1926, all encased in vitrines. Guests were also treated to a demonstration of Louis Vuitton’s eminent craftsmanship by artisans from France (19 June 2008).
Once the ambassadors have lured high net worth individuals to the stores, the private shoppers can take over to look after them. Home or hotel visits can also b
e arranged. If all goes according to plan, the target will join Vuitton’s existing database of around 5,000 VVIC (Very Very Important Clients) around the world.
But even the average salesperson in a luxury store is supposed to be slicker than his or her downmarket equivalent. According to Chevalier and Mazzalovo in Luxury Brand Management: ‘The way luxury store sales staff engage with, talk to and deal with potential customers is very particular… The aim is to establish a relationship that goes beyond a mere commercial transaction. Many personal relationships between sales personnel and their clients are born this way.’
Elsewhere in the book the authors note that the jewellery-case-style displays of the typical luxury boutique – which almost dare consumers to touch the goods – serve partially to encourage interaction with the staff. If you want to handle an item, you have to ask.
In order to get a view from the sales floor, I set up an interview with an acquaintance of mine who’d done a stint as a vendor at Louis Vuitton in Paris. Let’s call him Samuel. I wanted to know what traits separated super-rich clients from idle browsers like me. ‘One thing is certain: everybody knows when an important customer is in the store,’ he says. ‘Louis Vuitton has a heightened sense of client relations and the store managers are fully briefed on who is who.’
Samuel’s flair for languages – particularly Arabic – meant that he was often asked to help wealthy visitors from the Middle East. He notes that they preferred to deal with the same vendor each time: ‘These people feel special and like to be treated as such. After that, there are cultural variations. When visitors from the Gulf come to the flagship store in Paris, they are only interested in exclusive and limited edition products. They want the items that are not available in their home market. Customers from emerging markets tend to go for the flashiest and most expensive items. Very few of them leave with just one piece; some of them want to be branded from head to toe. Louis Vuitton is popular with nouveau riche consumers because the brand is internationally recognizable – so they can communicate their status anywhere.’
Luxury World: The Past, Present and Future of Luxury Brands Page 15
