Business Blog: Hoover’s Business Insight Zone

LVMH has not been hurting from recent market turmoil. WWD has the scoop:

Crisis? What crisis?

Suggesting luxury has been unruffled by recent financial turbulence, LVMH Moët Hennessy Louis Vuitton said sales accelerated in the third quarter, gaining 10.3 percent to total 4.03 billion euros, or $5.54 billion, versus 3.66 billion euros, or $4.67 billion, a year ago.

The world’s biggest luxury group beat forecasts and posted double-digit organic gains across all business groups, trumpeting the “stellar” performance of Louis Vuitton and Hennessy cognac in the three months ended Sept. 30.

Thing is, you could lose your job at a hedge fund or an investment bank or the like and still have plenty to drop on a new Vuitton suitcase for Mom and some Hennessy for yourself . . .

Here’s the link (via Lauren).

Some brand names manage to become so prominent that they stand in for a whole class of goods — Kleenex, Coke, Xerox, Frigidaire. But not many brands can be used as shorthand for a social class. Since it was founded in 1818, Brooks Brothers has come to enjoy that cachet, with its name used as a stand-in for prep school, Wall Street, quiet money, and conservative sartorial style. Abraham Lincoln was wearing a Brooks Brothers suit the night he was killed, and when Katharine Hepburn first wore trousers on screen, they came from Brooks Brothers. The clothier of the east-coast Establishment is now trying to rebuild its relevance for new generations of businesspeople who have little connection to neckties and suits, much less old money.

To aid these efforts, Brooks Brothers has rolled out the largest print advertising campaign in its history, one example of which is the 24-page black-and-white spread in the current issue of American Express’s luxe Departures magazine. While the ads evoke the clothier’s long history, they’re meant to promote its spanking-new Black Fleece collection, with which designer Thom Browne aims to maintain Brooks Brothers’ classical style while updating it for today’s consumers. (This includes women, who account for about one-fifth of the retailer’s sales.) Retail Brand Alliance, the clothier’s parent company, has divested most of its other businesses to focus on Brooks Brothers, which is extending its brand into new markets by opening stores in Britain and on the Continent. All of these efforts should allow Brooks Brothers to take advantage of booming sales of luxury items, and to compete better with a range of rivals that includes specialist retailers like shirtmaker Thomas Pink and high-end clothiers with global aspirations such as Burberry and Polo Ralph Lauren.

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* This article originally appeared on our Company of the Day page on 22 August 2007. Unless I’m mistaken, this catches us up on Company of the Day postings that didn’t originally appear in simulcast on this blog. From here on out, you should see only “current edition” Companies of the Day.

Bullet points, because it’s late and I don’t want to forget these before I hit the sack:

–> The other day I mentioned this, but now my colleague Alex Biesada has much more detail: Limited Brands is selling . . . The Limited. Alex has some suggestions for new corporate names.

–> I am begging you, folks: please don’t go onto BitTorrent in the next couple of days, download the pirated copy of the seventh Harry Potter book, PhotoShop it into legibility, stay up all night reading it, and then lard my comment threads with spoilers. I’m third in line to read the book in my household, which — even with the way my daughter and wife slurp down books — means I’m not going to lay hands on it before a week from now. So, you know, help a fellow out.

–> In case it somehow escaped your attention, my colleague Daysha Taylor has all the dope on the tentative agreement between News Corp. and the Bancroft family that would enable News Corp. to buy Dow Jones. This reminds me of an op-ed-style blog post that James Fallows wrote last month, when the deal was first bruited.

Dear Bancrofts: You could make more money by selling to Murdoch. But really, isn’t there such a thing as “enough”? Your family didn’t become known, respected, and influential by going for the greatest possible profit whatever the consequences. The quality of your newspaper has been part of your family’s legacy and assets. More money is always great. Do you need it this much?

Agree with him or not, Fallows has earned his chops in journalism across virtually every medium: I respect what he has to say.

A few bullet points for your end-of-week delectation:

• I like Whole Foods — it was founded here in Austin, I like their overall approach to business, my family shops there fairly regularly — but its CEO, John Mackey, apparently lost all grasp of reason in at least one crucial way: as detailed in any number of places, he posted roughly a bazillion (okay, 1,000) messages to Yahoo! financial discussion boards on Whole Foods. Which — acknowledging here that I’m not a lawyer — would seem to raise some problems with that whole “insiders improperly discussing their companies” thing, not to mention that other “misleading your readers” thing. It will be interesting to see what shakes out of this, especially if Federal inquries into it queer Whole Foods’ planned purchase of Wild Oats Markets.
• It’s probably only a matter of time before Chinese car makers start selling their wares here. It’s already happening in Europe.
• The Big Three video game console makers try to spin their recent performance. Or, not to put too fine a point on it, Microsoft tries to ignore the problems it’s had with the Xbox (like that pesky recall), Sony tries to convince everyone that the PlayStation 3 really will make money some day, and Nintendo beams over the stellar performance of its Wii and DS gaming units.
• It’s been a tough couple of weeks for the fashion house Liz Claiborne. First its remarkable founder slipped off this mortal coil, then the company announced it would divest more than dozen apparel brands as it tries to simplify (and thereby strengthen) its operations.
• Another stalwart of clothing retail is remaking itself: The Limited is getting rid of its namesake chain so it can focus on the brands (especially Victoria’s Secret and Bath & Body Works) of its Intimate Brands unit.

Enjoy your weekend!

When I signed on with Hoover’s back in 2000, one of the company veterans I talked to warned me about a common affliction of Hoover’s editors: you end up knowing waaaay more about companies and industries than you can ever safely trot out at a cocktail party. He said he knew he had reached this point when he was driving down the highway, saw an eighteen-wheeler owned by a big-but-not-huge trucking company, and immediately remarked to his passenger that the trucking company was owned by Parent Company A and competed primarily with Companies B, C, D, and E.

In other words, we’re geeks for this stuff.

A recent reminder of this came when I was talking to our editor Catherine Colbert, who has covered apparel makers for Hoover’s for several years. She was telling me about Crocs — they make the popular clog-style shoes of the same name — and said that the company was “doing really well and seems to have itself together.” Catherine covers her whole beat like a hawk, but she said that this company had really started to stand out from the crowd for her — a phenomenon I well remember from my days covering STMicroelectronics (the best huge microchip maker most people have never heard of).

As if I needed confirmation of Catherine’s opinion, I found it in this post about Crocs from the Trendsspotting blog. (Take a look at their logo and you’ll see why the double-s in the name is intentional.) The charts at the bottom of the post are particularly useful for showing how the Crocs brand has extended its reach over the past couple of years.

Two things ring sour for me in the Trendsspotting post:

1. The opening description of Crocs as “questionable shoes.” True enough, some people find them questionable in terms of fashion, but there’s no question that they’ve caught on in a big way. While I have no flag to carry for Crocs (and no financial interest in its success), I would note that my daughter’s third-grade class is populated wall-to-wall with Crocs wearers. She liked hers so much that she persuaded me to buy a pair, which I find great for gardening.

2. The post ends with this:

“My conclusion: yes, Crocs is behaving as a catching and spreading trend. Now, would you say it is a fad – soon to be eliminated?”

Catherine, at least, would say no. She points out that Crocs doubled its revenue last year, while also increasing its profit margins. The company has grown both in organic sales and through a series of small, complementary acquisitions, and seems to have an expanding reach in terms of its marketing. (Witness its big deal with Disney.) Yes, I’m biased, but my guess is that Catherine has read this one right.

Long live the merry Hoover’s band of business geeks!