One thrives on indulgence and the other on discipline. But fashion and the Olympics are not as unlikely bedfellows as one might think. As the August opening of the Beijing Games nears, the two are pairing up for an even more intimate relationship than ever before.

Besides giant activewear labels like Nike and Adidas, which regularly vie for the rights to design, sponsor or license competitive uniforms for the more than 200 national teams that have competed in recent games, fashion brands are creating more collections for athletes to wear around the clock - at the high-profile opening and closing ceremonies, medal events and just hanging out in the Olympic Village.

While some national teams, including France, Italy, South Africa and Australia, refuse to reveal their uniforms until the opening ceremonies Aug. 8, the U.S. organizers have trumpeted the news that Polo Ralph Lauren will be creating the official uniform of the Olympic and Paralympic teams as well as the custom wardrobes for their leisure time.

As we reported last month, this year’s American Express luxury conference was planning to focus specifically on the relationship between luxury brands and ecologically-aware strategies.

It’s a relationship that has been limited by a definition of luxury that has been focused on excess, a definition which is increasingly out of touch with the global mood.

One of the largest emerging opportunities for luxury brands is to incorporate ecological thinking as part of the business strategy, communicating on the origins of luxury products…

Knowing where and how a product is made is an important part of the luxury green movement. In some cases this can extend the feeling of luxury and people are willing to pay more for it such as leather goods that are made in Italy. People are starting to look behind the label as an assurance that a product is made under certain conditions. Fair trade, organic and sustainable are new value-added buzzwords but they can also be good for the businesses too. — (Via Luxist)

Luxury watch brands are being positioned as the rising stars in an accessories market as fears persist that the handbag market is failing to deliver the performance of recent years.

A steady rise in prices for luxury handbags has brought many fashion labels over the �1,000, or $1,500, mark. In fact, �1,000 bags are starting to be banal; the benchmark for top-end bags is closing in on �5,000. — (Via International Herald Tribune)

Another sign of their growing power is the fact that watch brands are extending their brands into the jewellery and mobile phone category, to take on contenders such as Vertu.

Luxury watch brand Tag Heuer will begin selling mobile phones carrying its label from the second half of the year, and other luxury fashion brands such as Prada and Giorgio Armani — which also sell watches — have all already hopped on the mobile phone bandwagon. Beyond mobile phones, watch brands are also quietly making inroads in the accessories business, further blurring the lines between traditional timepiece and fashion brands. — (Via Agence France Presse)

All this and more will be discussed heatedly during the Salon International de la Haute Horlogerie in Geneva this week…

Airport retail strategy is beginning to understand the full extent of the luxury retail opportunities that are possible. The capsule boutiques which have - until now - characterized airport shopping, have sometimes risked damaging the brand. Two recent articles from The Moodie Report set the scene…

US. Duty Free Americas (DFA), owned by The Falic Group, creates a retail initiative based on “dreams and fantasies” as it expands its luxury airport retail throughout South America, and beyond. — (Via The Moodie Report)

Hong Kong airport seeks luxury brands for its East Hall development, billed as one of the most concentrated luxury brand locations of any airport worldwide. — (Via The Moodie Report)

Meanwhile, airport retail is innovating in other ways too, for example the new British Airways home shopping initiative.

Customers will be able to buy the full duty-free range from the HighLifeShop, with the exception of cigarettes and alcohol, regardless of whether they have bought a BA flight. — (Via The Times, UK)

Yoga, pens, rollerskates and vomit bags feature in a round-up of recent luxury brand extensions

#1 BMW launches a yoga fashion line — (Via CanWest)

#2 Davidoff expands into watches pens and luggage — (Via ClassicDriver)

#3 Rather unexpectedly, Lamborghini releases a vomit bag — (Via MotorTrend)

#4 Armani’s roller-skate — (Via Emporio Armani)

The architecture of a cathedral-like flagship stores has become one of the central preoccupations of global luxury brands. In a recent post we talked about the rise of the flagship store as a piece of brand communication. (See ‘Flagship Stores Go In Search Of Transcendence’)

However, the message that the store is sending may be more complicated than just inspiring awe. Gucci’s new store on Fifth Avenue is thought to occupy the most expensive retail space in the world - but the fact that Abercrombie & Fitch is next door, suggests that Fifth Avenue presence is not always about high luxury. A recent article suggests that the Gucci store might be trying to court two audiences at once…

Much has been made about how Gucci’s new 46,000-square-foot store, at the location that used to house Asprey, represents the latest in ultra-luxury shopping. But while the store is poised to draw international tourists, the super-wealthy and aspirational affluents, some brokers speculate that its location along high-traffic Fifth Avenue sends a different message: Despite the gloss, Gucci is determined to court a clientele that is simultaneously broader and more middle-brow. — (Via TheRealDeal)

While in Milan, luxury headquarters are also building new cathedrals, but of a much more corporate kind…

The soaring high-rise structure etched against the sky might be in Los Angeles - if it weren’t for the gray clouds reflected on the glass. But a shiny new building burnishing a street of aged industrial brickwork is the latest trend in Milan. Thanks to the force of Italian manufacturing, fashion houses are creating an urban renaissance. — (Via International Herald Tribune)

The growing enthusiasm for bespoke products is part of a wider commitment to quality in the luxury industry.

American tailors - notably Thom Browne, and Tom Ford - have built powerful new brands on the power of bespoke. And now other categories are getting in on the action…

Bespoke perfumes have been on the rise for several years, and continue to grow in strength

Bespoke perfume (and cologne, for men) is one of the ridiculous luxuries of a certain self-absorbed demographic, with the likes of Chanel and Cartier charging as much as �60,000 for the privilege of having a nose find your perfect scent. — (Via GridSkipper)

While Sir Hand Sloane offers bespoke chocolates

The $2,400 tailor-made package includes tasting consultations, a handmade rosewood-and-maple inlaid box containing 60 customized chocolates, and a backup box of another 60. — (Via Time)

And Perrier-Jouet recently announced a bespoke initiative, claiming it to be the most expensive champagne ever made.

Each of the successful buyers will also visit Perrier-Jouet’s Maison Belle Epoque in Epernay, and work with cellar master Herve Deschamps to tailor-make their own bottles, made with a base of Perrier-Jouet Fleur de Champagne Blanc de Blancs 2000 cuvee. — (Via DrinksInternational)

Indian luxury is booming…

The $450 million luxury brands industry, which plans to stick to its high tagline, is all set to witness a whopping 1.40 lakh families spend on such brands by 2010 as compared to 2,000 families in 2002. — (Via Financial Express)

And is so successful that everyone in India seems to have a premiumization strategy, including McDonalds…

“It is fundamentally a problem of greed,” says Anand Halve, co-founder, Chlorophyll Brand Communications Consultancy Pvt. Ltd, who maintains that just as a mass brand will always envy the margins of a premium brand, a premium brand will always envy the volumes of a mass brand. So, it makes sense for a mass brand to look at improving its margin profile through propositions that could include personalization, premium services and higher price points. — (Via Wall Street Journal)

The world’s wealthiest luxury brands seem increasingly fond of the strategy of the grand gesture. In particular, the proliferation of acceleratingly impressive flagship stores suggests that cathedral-like structures hope to transcend economic downturns.

One of the key shifts seems to be that the architecture of the flagship store is evolving from a definitive statement of the brand into an active piece of brand communication.

Some of the most dramatic examples are in Tokyo. As the Financial Times reports, luxury brands in Japan are on an investment spree, but behind the scenes, confidence in such bold gestures may be fading…

“It’s difficult to admit that the era of high growth is over,” says Yves Alemani, head of Japan operations at Christofle, the French silverware maker, which will launch a new store in the posh Roppongi Hills shopping centre in May.

Luxury brands, he says, “continue to look at Japan as a promising market”, when it is in fact a mature and daunting one. Heavy competition and a stagnant population ago profile do not help. — (Via Financial Times, UK)

In the ultra-luxury market, winners and losers are emerging. Makers of Maserati are celebrate the rising success of the brand, while confidence at Maybach is fading fast.

As the ‘nichification’ of luxury cars continues, Maserati has become a key player, positioning itself against the high-tech interfaces that characterizes the luxury of German car design. Maserati is strengthening its personality as an authentic Italian experience.

But we are talking style here. Italian style. With Maserati’s limited sales, there is value for some in being the only cat in the neighborhood driving a “Maz.” Indeed, the body, designed by Italian coach builder Pininfarina, borders on sumptuous. The hand-stitching on the rich leather surfaces inside is enough to make you forget how much your house fell in value last month, or the cost of the fill-up. — (Via BusinessWeek)

Meanwhile, the story looks increasingly bleak for Maybach. The brand was launched amid a flurry of publicity as a vanguard of the Mercedes portfolio. It gained guest appearances in hip-hop videos, and trailers for The Apprentice, but has failed to capture sales.

Last year, the world’s wealthiest motorists purchased just 146 Maybach vehicles, some of which can nudge over the $500,000 mark with the right level of customization. That number is barely a tenth of what the then-DaimlerChrysler AG originally projected for the brand, which was a revival of a once-legendary German luxury marque, but one which hadn’t seen production since before World War II. — (Via CarConnection)

Last year when Louis Vuitton launched their ‘Gorbachev’ campaign, one of the clear strategic aims was to reach beyond the brand’s fashion base, to establish LV in a wider (business) context.

It’s part of a shift which has been gathering pace for some time, established publications - together with a couple of new ones - have realized that luxury brands are an important part of the world of business, not just fashion.

The International Herald Tribune has launched T, a global edition of the New York Times magazine section. And more surprisingly The Economist, conducted its first fashion shoot in the 150+ year history of the magazine. While the Wall Street Journal has hired Tina Gaudoin, the editor of quarterly style magazine Luxx, to develop the new luxury WSJ magazine to be published later this year.

And two new titles are entering the increasingly crowded market…

#1 - HR, a magazine which used to focus on watches has re-invented itself with a broader interest in luxury goods (Via HR Luxury)

#2 Ferrari and Conde Nast have collaborated on a limited-release magazine focusing exclusively on all things Ferrari (Via Edmunds)

Luxury brands continue to gain confidence in new categories; from the strategic, to the intriguingly random…

Fashion designer Elie Saab bakes a cake… (Via TendanceHighTech)

Emporio Armani builds a tennis racket… (Via TennisWire)

Maserati makes a pen… (Via Sybarites)

Bulgari opens a restaurant (Via Bloomberg)

Loro Piana goes interior (Via Loro Piana)

Forbes has a good piece today about how PPR, of which Gucci Group is a subsidiary, balances the high-visibility of its luxury brands, with more discrete and strategic lower-end brands. These ‘redcat’ brands operate in the less-than-glamorous world of camouflage outfits, budget furniture and elevators. Perhaps most ironically - given the current debate on anorexia in fashion - PPR also operates a discrete plus-size fashion brand for large women…

Fran?ois-Henri Pinault, chief executive of PPR, believes that the traditional PPR / LVMH strategy of acquiring sleeping luxury brands can operate for mass brands too…

The 20% operating margin of the luxury business is maybe four times that of mass retail. But there’s only so much growth that a high-end producer can extract from, say, India or China. Hence Pinault’s conscious effort to take PPR even further down-market by acquiring dowdy brand names and expanding a little-known retail chain he bought on the cheap.

Is there anything wrong with Gucci being inside the same holding company as a firm that sells camouflage for wildlife hunters? “Luxury or mass brands–it doesn’t matter,” Pinault says. “It is the same skill.” — (Via Forbes)

Luxury in the automotive category used to depend on a very traditional definition; based around engineering, performance and features.

However, that definition is clearly changing as the luxury automotive industry aligns itself more generally with a broader, more ‘lifestyle-oriented’ approach, similar to other luxury categories.

Audi has announced a specific challenge to Lexus - a plan which BusinessWeek describes as a “stunningly ambitious goal of becoming the biggest-selling luxury brand in the United States, by 2015″ (Via BusinessWeek). It took its first step with a revisionist TV campaign, broadcast during Superbowl… (Via Agenda Inc.)

Retro brand Morgan appears to leap a generation from being the brand that defined the 1960s and the 1970s to launching a new futuristic definition of luxury via eco-friendly design — (Via BBC)

A sign of the evolved lifestyle appeal of luxury vehicles, comes with the launch of a French version of the excellent Intersection magazine - with a first issue that draws on the support of Karl Lagerfeld, Hedi Slimane, Lancel, Krug, Apple and Christofle. — (Via AutoSpectator)

Bugatti collaborates with Hermes on a new design. — (Via AutoBlog)

Bentley booms — (Via The Guardian, UK)

And, as automotive brands begin behaving more like luxury brands from other categories, perhaps its no surprise that the first batch of fake Ferraris has just shown up in Italy, priced at $30,000…

Italian police say they have smashed a counterfeiting ring in Sicily that produced the ultimate status symbol. Imitation Ferraris were being sold online at a fraction of the real price - a dream for those who could never afford one. — (Via BBC)

Paris Fashion Week ended last night with the Marc Jacobs show for Louis Vuitton. The week was characterized by a sense that the looming recession would be an inspiration for designers, not a strategic threat. Creativity through responsibility was a clear theme. As was a new austere sense of purpose.

While fashion themes often appear disconnected from the larger world of luxury, questions about the relevance and future of luxury were an overwhelming sub-text.

The Louis Vuitton show invitation was printed on grey recycled card, and many thought that the distressed Chanel suits were a comment on the economic times — (Via International Herald Tribune)
Viktor & Rolf just said No — (Via International Herald Tribune)

Comme des Garcons worked on themes of disharmony and randomness — (Via The Times, UK)

Nicolas Ghesquière brought a responsible sense of austerity to Balenciaga — (Via International Herald Tribune)

And Yves Saint-Laurent avoided it all by blasting into the future… — (Video at Frillr)

An emerging group of luxury fashion designers - led by Daphne Guinness - are finding that they are their own best muse - and creating luxury products based on their rarefied lifestyles.

It’s not clear to say what role generous financial backing and well-connected social circles have in the success of the brands, but many of these famous names are reversing the typical route to market which depends on seeking out celebrity, and operating under brand names that mask their origins…

Their advantage, knowing their audience, and a claim that generations of luxury living has instilled a sense of luxury in their DNA…

Any mention of her family annoys Eugenie Niarchos. After much coaxing, the 21-year-old jewelry designer made a fleeting reference to Gloria Guinness, her maternal great-grandmother, but that is all.

“I want to be known for my work and nothing else,” said the Greek heiress, who is based in London. Going under the professional name Eugenie N, she is making considerable headway, having co-designed Czarina, Repossi’s youthful line of fine jewelry, and doing a capsule collection of costume jewelry for Vanessa Seward at Azzaro. — (Via IHT)

Confidence is somewhat restored to the future of the luxury market, as both Prada and now Ferragamo ramp up their plans for IPOs later this year.

Although Prada’s IPO has been canceled several times, word at the brand is that this time the deal will go ahead (Via The Huffington Post)
And now, luxury shoemaker Ferragamo announces an IPO worth around $2.2M (Via Bloomberg News)

In Deluxe, the 2007 book from Dana Thomas, she quotes Bernard Arnault, in saying that to be successful, a luxury product line must fulfill a fantasy: “It is so new and unique you want to buy it. You feel as if you must buy it, in fact, or else you won’t be in the moment. You will be left behind.”

But with the increasing ubiquity, luxury risks over-exposure, and brands are upping the ante in trying to create that “in the moment” stimulus.

At a retail level, the solution for many luxury brands is by offering limited editions, limited availability and VIP-only access… Increasingly this is more about the fact that these items are not just rare, they also have a time limit…

#1 Colette is obviously the best example of the highly-edited, limited edition store. (Via Colette)

#2 Celux, by LVMH, is a member’s club offering limited edition items - but only to those who qualify. (Via Celux)

#3 Yesterday, the new guerrilla store by Comme Des Garcons opened in Singapore (Via Guerrilla Store )

#4 The limited edition meets the department store with the new Wonder Room in Selfridges (Via International Herald Tribune)

If the old model of luxury used to be about timelessness, and the more recent one - the ‘it bag’ era - was about disposable luxury each season, an emerging strategy for luxury brands is based on a kind of compelling evanescence… From timeless to time-critical. It’s an old retail strategy, but in the luxury category it is powerfully gathering pace. We will see much more of this in the months to come.

For 15 years, Adbusters magazine has preached a manifesto of anti-corporate, anti-brand attitudes. It has questioned the power of corporations, the wisdom of mass marketing, and the co-opting of alternative culture.

However, this month, the magazine has evolved its attitude. It has launched a positive message of hope for the future of cool.

Now the fog is lifting. We’re finally beginning to understand where this bogus cool has been leading us: not to happiness and prosperity as promised in the ads, but to cynicism, ecocide and a brutal, dog-eat-dog future.

This is the magic moment in which capitalist cool can stumble and authentic cool can start bubbling back up again. And after decades of wandering around the wilderness, we on the Left are finally realizing what that magic moment is all about. — (Via Adbusters)

Luxury, like cool, is a slippery concept which has been much abused over recent years. And reading the Adbusters article and swapping out ‘cool’ for ‘luxury’ gives us a useful analogy for the state of the luxury market.

Change is overdue; and luxury is in the midst of evolving into a new configuration.

This morning, reporting on the new Gucci campaign, The Guardian references the new tone… “Uproar as model smiles in fashion ad” — (Via The Guardian)

It may be just a smile in a Gucci ad. But it’s also a symptom of a new strategic attitude. As Adbusters mentions, related to alternative culture, so too the world of luxury is “realizing what that magic moment is all about”

“Luxury is not going out of style. It needs to change its style.” — Tom Ford, October 2007

Welcome to the future of luxury.

One of the effects of the oft-promised recession is that it is forcing brands to be more strategic.

Over the last few months, we have noticed brands ramping up their innovation, redoubling their focus on ROI, and demanding much more in terms of business ideas. When the dust from the recession settles, brands might be armed with a much greater amount of strategic ideas than they had going into it…

Here are four retail strategies that luxury brands are using to minimize the effect of the recession.

#1 SURPRISE. Pop-up retail is not a new idea, but is gathering pace as a strategy to surprise - and excite - jaded shoppers. (Via Financial Times, UK)
#2 FLEXIBILITY. Staying close to trends, and moving quickly is a fashionable strategy for tough times.
(Via BusinessWeek)

#3 CLUSTERING. London’s Regent Street has announced a $1M renovation to create a “mini Manhattan’ of flagship store. (Via International Herald Tribune)
#4 CELEBRITY. Damien Hirst turns shopkeeper (Via Evening Standard, UK)

Is trading up an out-moded concept? Is old luxury attacking new luxury with a spirit of ‘assommons les pauvres’? In our consulting work, we’re certainly seeing signs of it…

The shift from ‘old luxury’ to ‘new luxury’ over the last 10 years involved a redefinition of the luxury market. The luxury marketplace used to target around 5% of consumers, but as brands realized that money was being left on the table, there was a deliberate softening of the definition of the luxury consumer. By various estimates, ‘new luxury’ incorporated between 40% to 60% of all consumers.

As the chatter about the possible recession continues, one of the major themes is a sharp movement in the opposite direction; and a backlash is emerging…

Instead of trading up and down, we are seeing a growing movement to consolidate. This might be an obvious consumer reaction as ‘new luxury’ consumers save money on, for example, Starbucks

But there are signs that the ‘old luxury’ consumers, the old 5% are fighting back!

There is a kind of bravado of ultra-luxury with high net worth consumers relishing the fact that they are closing the drawbridge on the mass consumers that have been their consumption partners in recent years…

In a recession, not worrying about money becomes a real sign of luxury…

The development is nowhere more clear than in Japan where “kakusa shakai” meaning gap society has become a recent fascination (Via The Independent)

According to a recent survey by Elite Traveler magazine, the super-rich are looking forward to the recession as an opportunity to invest.

84 percent of the super rich said the current economic environment represents an investment opportunity, and they will continue to spend more on luxury products and services and increase donations to charitable organizations.. 58.2 percent of “Rich” consumers (those with a net worth from $10 to $30 million) will increase their spending on luxury goods and services. However, 21 percent of consumers with a net worth of less than $10 million plan to decrease their spending on luxury goods and services. — (Via Elite Traveller)

The recession, says the New York Daily News, will not stop big spenders

While average American Joes and Janes fret about recession, rate hikes and rethinking that second home, the international jet set has barely a wrinkled brow (and it’s nothing to do with too much Botox). — (Via NY Daily News)

Today Swiss analysts and watchmakers offered confident projections for on-going success in 2008…

Watchmakers are set for further growth in 2008 as strong demand in Asia and the Middle East offsets economic gloom in the US and Europe… Swiss watch exports as a whole grew 16.2 percent to 15.96 billion Swiss francs, with particularly strong demand from Hong Kong.

Bank Vontobel analysts expect watch sales to grow 10 percent in 2008, with the Olympic Games in Beijing giving a particular spur as Omega is one of the official sponsors.

– (Via Agence France Presse)

At a time when the luxury watch business is booming, one of the most interesting strategies has found future promise in practices from the past.

A watchmaker Max Büsser, profiles in early January in the IHT, has rewritten the business model, returning to the origins of the luxury watch business as executed by Breguet 200 years ago; pre-selling and asking for down-payments from retailers to complete the work.

And perhaps equally importantly he has redeployed a strategy that he used while at Harry Winston for celebrating the brand and the designer.

As head of Harry Winston Rare Timepieces… Büsser gave credit where it was due, by putting both the name of the brand and that of the watchmaker alongside the dial and movement. This was something of a breakthrough in the watch world, where companies prefer to highlight the brand name and downplay the designers behind their products.

To Büsser, bringing the design talent out of the backroom and into the spotlight is simply good business. “All these people are usually unsung heroes working for other brands,” he said recently while in Singapore for the introduction of HM2. “For them and for me it’s a win-win situation, because it’s the first time that their names appear somewhere, so they’re going to give it their best.”

It seems like a good strategy all around, including a nice move against counterfeting.

– (Via IHT)

Meanwhile, also from the watch category, it’s worth remembering that a best-in-class marketing initiative across the entire luxury industry can be found in the Rolex Mentor And Protégé Arts Initiative. In a marketing environment where sponsoring new talent sometimes feels opportunistic and short-term, Rolex has demonstrated over 6 years an absolute commitment to its role as a talent incubator.

Facing an uncertain economic future, luxury brands are increasingly turning East for the future of their brands. In particular, the appeal of China is compelling. The amount of luxury activity in China recalls the dot com frenzy of the 1990s in the US.

As China prepares to show off its gleaming new architectural assets to the world later this year at the Olympic Games, luxury brands are already tapping into a market more transactional assets…

The fascination that new Chinese consumers have for cash is demonstrated in this recent China Daily article which explains how online account management has become a national obsession (Via China Daily)

A recent article from Agence France Presse suggests the excitement that luxury brands are experiencing.

Top brand names are salivating at the prospect of ever-increasing sales to newly enriched Chinese consumers eager to buy into the apparent status that brands carry.

“Desire for luxury goods is increasing month by month (in China),” Giancarlo Di Risio, Versace’s chief executive, told the Financial Times last year.

David Rudlin, director of international markets at the Diamond Trading Company, the rough diamond distribution arm of De Beers, told AFP in a recent interview: “In China, the sky’s the limit if we can get what happened in Hong Kong (to be replicated there).”

The companies behind the big brands are finely tuned to hook new customers — and to feed them up the chain.

– (Via Agence France Presse)

AFP also reports that luxury brands are increasingly avoiding Hong Kong and heading straight for the mainland

Increasingly, luxury brands and designers are by-passing Hong Kong to head straight into the mainland.

Last year, Italian luxury group Fendi staged a speculator fashion show on the Great Wall to show off its new line partly designed by Karl Lagerfeld, while Giorgio Armani continues to expand into major Chinese cities.

– (Via Agence France Presse)

In the midst of the activity comes a compelling new book Brand New China

Brand New China offers a detailed, penetrating, and up-to-date portrayal of branding and advertising in contemporary China. Wang takes us inside an advertising agency to show the influence of American branding theories and models. She also examines the impact of new media practices on Chinese advertising, deliberates on the convergence of grassroots creative culture and viral marketing strategies, samples successful advertising campaigns, provides practical insights about Chinese consumer segments, and offers methodological reflections on pop culture and advertising research.

– (Via Amazon.com)

Meanwhile, the most hotly anticipated book on the subject is Elite China Luxury Consumer Behaviour in China to be published in June (Via Amazon)

A boost for the luxury sector on Friday, when HSBC bank delivered a an optimistic report on the future of luxury. Most notably, the bank seemed to echo sentiments expressed elsewhere that the top end of luxury would continue to grow, and be largely unaffected by the increasing pressure on ‘new’ / mass luxury brands.

As part of the report, HSBC upgraded its outlook on Hermes, and Bulgari.

Consumers in Eastern Europe, the Middle East and Asia excluding Japan should add about 6 percent to global growth in sales of luxury goods in 2008, HSBC analysts Antoine Belge and Erwan Rambourg wrote in a note today.

HSBC cut its forecast for the industry’s “organic” sales growth this year to 9 percent from 10.5 percent and lowered its 2008 and 2009 earnings estimates for luxury companies by 6 percent as a result of the subprime mortgage crisis and a spreading consumer slowdown. The bank still expects luxury-goods makers to increase earnings before interest and taxes this year.

– (Via Bloomberg)

From $255,000 to $1,700,000, a look at the world’s top ten most expensive cars.

– (Via The Weekly Driver)

Meanwhile, The Luxury Institute publishes its survey of the favorite luxury car brands of high-net worth consumers. The top 3

#1 Maybach
#2 Rolls Royce
#3 Bentley

– (Via Yahoo Business)

Interestingly, the trend for luxury cars is to move away from V8 engines, towards smaller, faster, more sophisticated, suggesting that even though luxury vehicles can have V8, the clear movement is towards efficiency.

Luxury cars present an interesting case because their engine power is entirely discretionary. They won’t be used to tow trailers, and their buyers aren’t deeply affected by rising gas prices. They can afford V8s - it’s all about whether or not they want them.

The broad shift indicates that an interest in saving gas is partly a consideration, said Michael Omotos, an analyst with J.D. Power and Associates. Improved V6 performance clears the way for customers to make that choice without sacrifice, he said. “If you can get 300 horsepower out of a V6, what’s the point of going for 340 out of the V8?”

– (Via CNN)

In a highly ironic move, but at a time when China is increasing its need for brand legitimacy, Beijing’s most notorious location for counterfeit luxury goods - SilkStreet - has just turned itself into a legitimate brand and threatens anyone who tries to counterfeit the intellectual property of the SilkStreet trademark…

The first items to bear the SilkStreet name, displayed on Wednesday, include apparel such as neckties shirts and scarves, as well as a few household items such as tablecloths. They are marked “quality guaranteed” with a label that tells buyers that “the goods are certified by the Silk Street Market. If any quality problems are found, the market will bear the responsibility of compensation.”

“SilkStreet products are sold exclusively in the market. Anyone using the brand outside will be held liable,” the Beijing Evening News quoted Wang Zili, general manager of the market, as saying. — (Via China Daily)

The rush of brands attempting to redefine luxury has officially become a stampede.

Hyundai claims to have redefined luxury by “presenting a credible alternative to the premium automobile offerings from Germany, Japan and the United States.” (Via EMediaWire)

Audi has gone a step further and is actively threatening old luxury in its new Superbowl campaign …

“Audi Puts Old Luxury on Notice with Super Bowl Ad… … Audi will boldly declare its intention to redefine luxury in the automotive segment with its first Super Bowl ad in nearly 20 years, the company said today. (Via Audi of America)

But auto brands might be doomed in the attempted, VW, alredy tried, and presumable failed to “redefine luxury” in 1999 (Via MotorTrader)

Singapore Airlines aims to “totally redefine luxury” too, but only in the sky. (Via 101Suite)

Meanwhile, the clothing designer John Smedley in the UK collaborates on a new clothing line, which goes all the way, and calls itself Luxury Refined. (Via Luxury Redefined)

And yet in Paris, the excitement and energy around this week’s haute couture shows suggests that some aspects of luxury are much better left un-redefined. (Via Vogue)

Luxury brands are beginning to extend their remit beyond the boutique. The first Bulgari Hotel in Milan has proved very successful, and more are planned. The Palazzo Versace Hotel in Australia is planning a development phase which will see 14 more locations over the next couple of decades. And Armani plans a dozen, the first to open in Burj Dubai.

However, according to Agence France Presse, the cutting edge of this growing movement is Tokyo.

“Until now, Japanese wanted luxury clothes and items to last for a long time. But recently they’ve want to taste luxuries that are ephemeral — like nice food, cozy spaces or comfortable services,” said Maiko Manji, editor-in-chief of fashion magazine Elle Japan. “Designers offering lifestyles is a brand new concept here in Japan as there are very few Japanese designers who have opened restaurants or designed things other than clothes. And Japanese jump at whatever’s new,” she said. — (AGENCE FRANCE PRESSE)

In the last few weeks it seems to have become impossible for journalists to mention luxury brands without mentioning the fact that a recession may be waiting in the wings.

This morning Lehmann Bros downgraded the entire luxury sector to ‘negative’ (Via Trading Markets)

The gold price continues to soar, Tiffany, Remy Martin and Burberry have taken beatings, and some analysts are gloomy.

Part of the problem is the ‘masstige’ trend which has created a more vulnerability in luxury brands which used to stay above most market fluctuations.

However, whatever the size and depth of the recession, this is a key time for luxury brands. Strategy becomes even more important when markets are difficult. Four key areas of focus need to be ROI, micro-monitoring of consumer behavior changes, a greater priority on below-the-line initiatives, and a shift from advertising to branding.

Businessweek writes the obituary of the masstige movement, as the new luxury shopper is the first to feel economic jitters. (Via BusinessWeek)

The Business Of Fashion takes a look at a report from Bernstein Research examining how much padding exists in the luxury sector.

“Any problems in the general economy are certain to spill over into the luxury sector, especially for companies who have tapped into the aspirational luxury market like Coach and Gucci.” (Via Business Of Fashion)

Reuters reports on some interesting research suggesting that luxury shoppers are shopping more tactically, smartly, and closer to home. (Via Reuters)

And yet, Londoners shop while the economy burns… “With so many luxury goods at huge prices being snapped up, a hedonistic climate prevails in which spending has become infectious.” (Via The Guardian, UK)

The menswear shows in Milan got started over the weekend; with themes of melancholy elegance, and influences that include English painter LS Lowry.

But the strategic story from fashion week is the growing backlash against accelerated production processes, a ravenous thirst for new trends, a market which at times sacrifices quality for quantity. The Canadian Press quotes four designers on the story.

“Everybody is doing everything fast. The consumer needs time to understand.”– Tomas Maier, creative director at Bottega Veneta, told The Associated Press after his much applauded show Sunday. “The consumer needs time to understand.”

“There is so much sloppiness out there. It’s time to put some order into fashion, starting with gender,” — Giorgio Armani.

“What’s happening in fashion is like inviting someone to dinner and stuffing them with double helpings. By the time desert comes around, they can’t look at food anymore.” — Stefano Gabbana.

But Donatella Versace suggests that the solution to the issue might be a move upscale - particularly for the men’s market - “Luxury is a cure for the present market saturation, and a relatively unexplored route where men are concerned,”

An interesting article on the way in which ‘the rich’ fulfill a kind of R&D role in the future innovation of luxury goods.

They make a million or more a year, whilst we are able to comfortably live on a fraction of that. They drive Bentley Continentals, whilst we prove by the millions that you could live with a Ford Ka. They have no primal need for luxury goods, and we get along just fine without them, so it does beg the question, why is this useful to society?

Well, when it comes to luxury goods, we would be extremely well advised to keep in mind that the luxury items of today are the standard items of tomorrow.

MUMBAI -

Travel down any of India’s highways, and you’re bound to spot brightly colored trucks with TATA emblazoned across the rear. The company’s branded cars are a lot harder to spot because India’s largest bus and truck maker, Tata Motors, has only a decade of passenger vehicle manufacturing experience.

As it closes in on acquiring Ford’s iconic Jaguar and Land Rover brands, there is skepticism at home and abroad about whether Mumbai-based Tata Motors (nyse: TTM - news - people ) will be able to take on two companies whose combined revenues are twice its own and whose product models have few similarities with those it already makes.

Iconic cosmetics designer Shu Uemura died today in Tokyo. He was a pioneer in innovative products, boutiques, and was one of the first recent Japanese cosmeticians to reach out to the West. One of his main inspirations was the simplicity of nature (deep sea water was a key ingredient of many products), is an inspiration which is more relevant than ever for luxury brands.

The edo-ko, the natives of Tokyo, have a special gift: an ability to push the envelope, to innovate, to pioneer. That was certainly true of Shu Uemura, who went from being the only man in his Tokyo beauty school class to Hollywood make-up legend to international entrepreneur. In convention-worshipping Japan, he defied convention — and made his name and fortune by doing so. – (TIME)

Is the sixth time the charm?

The Italian fashion house Prada, which has shelved plans to go public five times since 2001, says it will try again next year.

The company said today that its board has approved plans to list on the Milan stock market. It has named Intesa Sanpaolo, UniCredit, and Goldman Sachs as joint global coordinators and bookrunners. Mediobanca will be an adviser.

A boom in counterfeit goods is threatening the revenues of luxury brands, according to new research.

The demand for luxury products is rocketing, driven by a wish to emulate the celebrity lifestyle. Furthermore, the tightening economic environment is also prompting many consumers to turn to designer fakes, as they struggle to come up with the cash to pay for the real McCoy.

MILAN: The volume of online commerce has grown this year and is expected to increase even more rapidly during the holiday season as Internet shoppers move away from buying books and DVDs and increasingly purchase high-end luxury items like leather bags, gold watches and diamond rings.

Internet retail sales excluding travel will jump 19 percent in the United States during November and December, to $31 billion and will account for about a quarter of the yearly total, according to eMarketer, a research firm and consultancy. ComScore, a company that monitors online consumer trends, is expecting a similar increase, and Forrester Research is expecting sales to hit $33 billion.

MOSCOW: The luxury industry, a booming business for the last 20 years, is positioned well for continuing spectacular growth - Bernard Arnault, chairman of LVMH, predicted a doubling in the next five years to �300 billion - but needs to heed the growing ethical concerns, particularly of younger consumers in Western markets, industry leaders said Wednesday.

At the first session of the seventh annual International Herald Tribune conference on luxury, Arnault reiterated his call in 2004 for the luxury industry to use its weight with politicians and consumers to fight counterfeits. He also issued a strong call for governments to break the deadlock at the stalled world trade talks, known as the Doha round, noting that luxury companies were truly global industries that could benefit only from the most open markets.

NEW YORK: For years, eBay has defined itself simply as an online marketplace that links buyers and sellers.

But in a weeklong bench trial in U.S. District Court in New York, lawyers for Tiffany argued that the online auction house was far more than that: it is a distribution network that allows the trading of counterfeit Tiffany items.

If Tiffany wins its case, not only could other lawsuits follow, but eBay's business model could be threatened because it would be difficult and extremely expensive for the company, based in San Jose, California, to police a site that now has 248 million registered users worldwide and approximately 102 million items for sale at any one time.