In addition to announcing €21 billion in revenue for the first 3 months of the year (an increase of 17% year-over-year), LVMH management addressed the rise of “quiet luxury” during a Q1 conference call this week. The background here: Quiet luxury has been a topic of (seemingly unending) discussion lately, prompted by an array of factors – from enduring economic volatility, which tends to lead to consumers to shun overly branded apparel/accessories in favor of more timeless pieces to the fashion media’s dissection of Gwyneth Paltrow’s recent trial wardrobe & the costumes in the latest season of Succession.
While the push towards subtle (read: logo-less) apparel & accessories may be a way for trend-centric companies to sell more stuff (SHEIN, for instance, now has a “Quiet Luxury” section on its site), it raises questions for brands like Louis Vuitton and co., which are in the business of selling the image of the luxury lifestyle primarily via logoed wares.
During the call on Wed., LVMH execs revealed that they don’t see this trend in branding – or better yet, lack of blatant branding – as a problem in large part because most consumers “will continue to favor products with logos.” Nevertheless, LVMH “has seen this no-logo luxury trend before,” Bernstein analyst Luca Solca stated in a note. “The co. is ready to offer products tailored to clients’ needs, whether they prefer quiet luxury or more overtly branded items.” (You may recall that LVMH responded to the Great Recession, for instance, by walking back to some extent on “bling” in favor of less aggressively logo-ed wares. More about that here).
It’s worth noting that as of now, Louis Vuitton’s U.S. e-commerce site is still leaning heavily into its famous branding, with 326 of the 434 handbags bearing some bold indicator of source in the form of a monogram print, Damier checkered pattern, etc.
A movement away from logos is not the same (of course) as a movement away from branding, and in fact, should brands in the upper echelon of the market opt to emphasize quiet luxury wares as a way to cater to consumers of varying tastes/in varying geographies, etc., this will be an opportunity for them to lean into other types of TMs that they have in their arsenal, including product trade dress/shape & other “non-traditional” TMs, such as color.
Hermès – which also reported stellar Q1 results this week – is in a good position in the regard; the design of its largely word mark/logo-devoid Birkin and Kelly bags are indicators of source (as the co. has consistently reiterated in the MetaBirkins case). Co. like Valentino – which has successfully made use of non-logo elements of branding over the years, such as strategically-placed Rockstuds and the more recent Pink PP hue – will also be well equipped should consumers opt out of logos but still want to indicate the source of their clothes or bags in a less obvious manner.
THE BOTTOM LINE: The rise of “stealth wealth” is a call for co. to rely more heavily on/develop alternative or additional TMs. This is backed up by extensive research on the effectiveness of “non-traditional” marks when it comes to source indication. A recent study commissioned by UK-based firm Stobbs, for example, shed light on how heavily consumers rely on elements like color & product shape in making associations between products & the brands (and the qualities associated with the brands) behind them.
In Litigation News …
– Louis Vuitton v. Westgate Discount Mall Inc., et al. – LV has filed its latest flea market-focused counterfeiting suit, alleging that the defendants own, operate, control & manage a well-known flea market in Atlanta, where 60 of the 62 booths were selling counterfeit LV products. (Complaint is here.)
– Roblox v. WowWee – WowWee filed an amended answer & counterclaims, accusing Roblox of intentional interference w/ contractual relations and w/ prospective economic advantage. According to WowWee, “With knowledge of [its] & Gamefam’s groundbreaking partnership” to create the My Avastars toys, Roblox “sought to thwart the [parties’] momentum by pressuring Gamefam to abandon its contractual obligations & rescind its contribution” to the collab.
– Garrison v. Bankman-Fried, et al. – A Fl. federal judge has shot down the plaintiffs bid to serve Shaq w/ a complaint via email and/or direct message in the suit that they filed against SBF & big-name celebs last year for promoting unregistered FTX securities. The plaintiffs wanted to serve Shaq via the internet under Texas law but the court held that “for TX law to apply, TX must be where service is made.”
Web3 Watch: While AI has taken much of the attention away from web3, brands are still engaging to varying extents. This week, adidas announced the launch of ALTS by adidas, which is the latest development in its broader “Into the Metaverse” venture. A release describes ALTS by adidas …
In a smaller-scale project, Ami launched a virtual version of Paris’ Montmartre neighborhood on social gaming platform Zepeto. The brand’s CEO Nicolas Santi-Weil told WWD that for digital endeavors like this to be successful, “We need to have beautiful [brick-and-mortar] stores, beautiful [runway] shows & a story that we can embark people on.” Only with these real-world assets will “clients trust us to buy digitally.”
The Bigger Picture is that brands are mixed when it comes to the metaverse; some co. – like adidas, Nike, etc. – are continuing to invest in this space to connect with consumers and ideally, generate revenue. Others, including Disney, are reevaluating their involvement and/or walking way back on their efforts given that short-term returns are simply not in the cards.
As for web3 TM filings, they have stabilized from the spike in late 2021/early 2022 but co. are still filing. For example, on Apr. 1 (in what is presumably not an April Fool’s joke), PwC filed a number of 1B applications for registration for its name & logo for use on things like “financial exchange of virtual currency” and “providing an online marketplace for buyers & sellers of downloadable digital t-shirts, hats, … trophies & plaques authenticated by NFTs.”
In some deal-making news …
– Express and WHP Global have reached an agreement to acquire menswear brand Bonobos from Walmart for a combined purchase price of $75M. (Walmart paid $310M for it in 2017.)
– ChimHaeres Investment Holding – a new JV between private investment firm Chimera Abu Dhabi & PE investment co. Haeres Capital – has acquired Vionnet in its first fashion industry deal.
– LVMH will acquire a majority stake in Platinum Invest Group “to strengthen its production capacities in the region & support [its] strong growth in fine and high jewelry manufacturing.”
– Materials science co. Kintra Fibers has raised $8M in a Series A round, which included H&M Group Ventures.
– Randi Zuckerberg-founded Hug has raised $5M in seed funding in furtherance of its quest to build out a social marketplace that connects digital art & NFT creators w/ collectors.