Fighting for Rihanna, the infighting between luxury giants?

The luxury fashion retail landscape continues to change, and LVMH, the world's largest luxury goods group, is also looking for new breakthroughs.

According to a number of sources quoted by the Women's Daily, LVMH is secretly negotiating with social media queen and American hip-hop female singer Rihanna Rihanna to prepare a brand new luxury brand under her name, which will be launched soon later this year. It will cover multiple categories such as ready-to-wear, leather goods and accessories.

The source continued, LVMH began preparations in Paris six months ago, under the responsibility of Sidney Toledano, Chairman and CEO of LVMH Fashion Group, and from the two most respected brand teams of Louis Vuitton and Celine Rihanna conducts docking communication.

Sidney Toledano was previously CEO of Dior Fashion and was recognized by LVMH Chairman and CEO Bernard Arnault for his successful Lady Dior handbag. Under his leadership, Dior's performance has maintained steady growth.

From this team, we can see that LVMH attaches great importance to Rihanna's luxury brand of the same name. If the news is true, this will be the second luxury brand launched by LVMH since its founding in 1987, Christian Lacroix. It is also the first and female star. Co-launched luxury brands.

As of now, LVMH refused to respond to the news, and Rihanna has not yet responded to media interviews.

It is worth noting that this is the third important strategic move that LVMH has sent in the past month or so. Following the $3.2 billion acquisition of high-end hotel operator Belmond in December last year, LVMH announced this week the acquisition of a minority stake in the New York designer brand Gabriela Hearst. After the deal is reached, Gabriela Hearst will be the first designer brand acquired by LVMH after shutting down Edun last year.

But unlike buying a brand, what LVMH is doing now is to rebuild a luxury brand, which is no easy task in today's volatile market environment. Some analysts believe that Bernard Arnault dared to make this bold decision at this time, not only because of the high attention and commercial value that Rihanna comes with.

A senior executive revealed that although he is a hip hop singer, all fashion cooperation related to Rihanna can break the performance record, which is inseparable from Rihanna's huge social media influence. Currently, she has more than 67 million fans on Instagram's social platform, no less than any luxury brand. Rihanna is also fully aware of his strong influence and continues to work with fashion brands to realize their own flow and achieve great success.

In 2012, Forbes magazine named Rihanna one of the most influential celebrities in the world. In the same year, she was named one of the “100 Most Influential People in the World” by Time magazine. In 2014, Rihanna received the “Fashion Idol Lifetime Achievement Award” from the American Fashion Designers Association CFDA.

In May 2015, Rihanna established its own fashion company Roraj Trade LLC. and registered the $CHOOL Kills trademark in New York under the trademarks “leather goods” and “clothing”. Cihan Pardo, creative director of Rihanna, stressed in the legal documents at the time that Rihanna was trying to prove that she was a serious fashion designer.

The relationship between Rihanna and LVMH began with Dior, who was Dior's first African-American spokesperson, not only participating in fashion shows, but also collaborating with Dior to launch the sunglasses collection. In 2017, KENMO's beauty incubator KENDO invested $10 million to launch the Fenty Beauty by Rihanna in partnership with Rihanna.

According to research by Slice Intelligence, consumers spend an average of $471 per year at Fenty Beauty, which has surpassed popular brands such as Kim Kardashian's make-up brand KKK. Although LVMH will not separately publish specific data on its beauty products, it was mentioned in its full-year earnings report that the performance of Fenty Beauty is one of the main driving forces for its 14% increase in sales of perfumes and cosmetics.

At the beginning of last year, Rihanna launched the first underwear brand “Savage x Fenty” with the help of fashion group TechStyle, which covers T-shirt bras, corsets and accessories, and is priced between 14.5 and 99 US dollars. It is reported that Savage & Fenty offers a $50 one-year paid membership option, and member consumers can enjoy the benefits of purchasing new products in advance, exclusive limited products, free shipping and return.

However, Rihanna's first official position in the fashion industry came from the sports brand Puma. In December 2014, Puma appointed her as the creative director of Fenty by Puma. Although the contract period was only three years, the profit growth that Rihanna created for Puma shocked the industry.

Driven by the Fenty by Puma series of products, the popularity of the Puma brand, which has been quiet for five years, has been rising, and its performance has begun to grow. In 2016, it achieved new breakthroughs. Net profit rose 68% to 62.4 million euros, and sales increased by 7 % to 3.627 billion euros, Rihanna is regarded as the biggest hero, once defeated Yeezy designer Kanye West to become the most concerned designer in New York Fashion Week.

In addition, the Creteer sneakers of the Fenty by Puma series also defeated Kanye West's Yeezy Boost 750 launched by adidas. It was sold out in just three hours and was named "Shoe of the Year" by the industry.

What is meaningful is that Puma was affiliated with Gucci's parent company Kaiyun Group. It was not until the beginning of last year that it resumed its independent operation. Rihanna also canceled the contract with Kaiyun Group in 2017. Therefore, some people in the industry have speculated that LVMH may choose Rihanna as the founder of the new luxury brand.

Since last year, the battle between LVMH and Kaiyun Group has been continuously upgraded, and the fuse is the most powerful Gucci.

First, the CEO of Kaiyun Group, Fran?ois-Henri Pinault, said that to "eliminate" Louis Vuitton, Gucci CEO Marco Bizzarri also said that Gucci's annual sales target of 10 billion US dollars will be achieved as soon as possible. In June last year, Gucci suddenly announced that he would hold a show in Paris, held on the same day as Dior of LVMH, and directly burned the fire to the base of LVMH.

From a performance perspective, Gucci successfully broke the "fire but three years" curse. In the third quarter ended September 30 last year, sales rose 35.1% year-on-year to 2.1 billion euros, higher in the previous year. On the basis of the base, it has recorded an increase of more than 35% for the seventh consecutive quarter. In the first nine months, Gucci sales rose 40.8% year-on-year to 5.848 billion euros, a record high. Thanks to this, Kaiyun Group's sales rose 31.5% to 9.526 billion euros.

In contrast, LVMH's revenue for the third quarter of last year increased 10% to 11.38 billion euros, and its core fashion leather division, including Louis Vuitton, grew 14% to 4.458 billion euros, which has recorded double-digit growth for eight consecutive quarters.

Some analysts predict that if LVMH can't effectively block Gucci's pace, according to the current Gucci quarterly average higher than the LVMH fashion leather department's 20% growth rate, the number one luxury brand position will give way to Gucci within five years.

What makes LVMH more vigilant is that in addition to Gucci, Kaiyun Group has also fostered two “quasi Gucci”s, Saint Laurent and Balenciaga, and appointed another 16-year-old creative director, Daniel, who worked at Celine for Bottega Veneta, another core brand of the group. Lee, intends to make the second echelon brand contribute more sales to the group while avoiding the risk of Gucci falling out of favor.

Bernard Arnault will naturally not let the Kaiyun Group arbitrarily provoke. In an interview with foreign media, he insinuated that competitors such as Kaiyun Group have been imitating in the past decade and believe that they will not succeed.

After making up his mind to set off the glory of the cloud group, LVMH's movements have become very quick and decisive. Rarely, a creative director shuffled and made a very controversial street trend opinion leader, Off-White. Virgil Abloh invited his Majesty and transferred the brand new designer Kim Jones to Dior Menswear, and gave full support to Celine's new creative director Hedi Slimane's innovative initiatives.

In this regard, the industry regards the frontal defense of Louis Vuitton and Dior as LVMH's "A plan", and Celine is the group's "B plan". If the source of the cooperation between LVMH and Rihanna is started six months ago, this means that This move does not rule out Bernard Arnault's other secret weapon against Gucci. His intention is very obvious, that is, to create a luxury brand that brings freshness to young people with the stars with the most traffic and commercial value.

But still need to be wary, the star created a luxury fashion brand, but also has a higher risk when it has a certain fan base. Victoria Beckham, a member of the American "Spicy Girl Group" with 24 million fans on Instagram, is a classic example.

Victoria Beckham founded the eponymous brand in 2008, which is very similar in style to Celine during the Phoebe Philo period. In November last year, it received a £30 million investment from the private equity fund NEO to expand its digital and retail business, in addition to NEO owner Ralph Toledano. The chairman of the brand.

However, according to public data, Victoria Beckham's losses in the past three years have been increasing, and Victoria Beckham, who has two design teams and 100 employees in London, is under tremendous pressure. Although its sales rose 17% year-on-year to 42.5 million pounds in 2017, the loss recorded 10.2 million pounds, or nearly 90 million yuan, much higher than the loss of 4.6 million pounds in 2015 and the loss of 8.4 million pounds in 2016.

For reasons of continued losses, the brand said it is primarily a continuous investment in brand infrastructure and employee costs, as well as increased expansion costs in markets such as Asia and the United States. According to analysts, Victoria Beckham's current valuation is about 100 million pounds. Earlier there was news that LVMH's L Catterton was interested in acquiring Victoria Beckham shares, but the transaction negotiations ended in failure.

In addition, LVMH is also at risk for the high-end positioning of Rihanna's personal brand, especially when investors are predicting that global luxury consumption will slow down, consumers may not be willing to pay for the purchase of Louis Vuitton handbags for Rihanna.

Diana Espino, vice president of global marketing and brand development at KENDO, who has worked with Rihanna for many years, believes that Rihanna is still at the top of social media celebrity star attention, but how can it present a fashion icon and entertainment in the era of social media transparency? The authenticity of a star is the key to its commercial value.

In the early hours of the morning, LVMH suddenly issued a statement saying that Bernard Arnault's only daughter, Delphine Arnault, had joined the group's board of directors. At the age of 43, she was the youngest member of the board and the first descendant of the Arnault family to join the LVMH board. Bernard Arnault stressed in a statement that the addition of Delphine Arnault to the board will help the group to better promote the development of youth.

Undoubtedly, the card battle between luxury giants continues, and the future luxury industry competition is no longer a single-brand dispute, but a matrix battle. Some people in the industry pointed out that today's consumers don't want to read editorial reviews or published magazines. They care about what shoes Rihanna wears on Instagram. For luxury brands, social media is shaping the choices of consumers.