tag:theconversation.com,2011:/us/topics/inseec-u-72326/articlesINSEEC U. – The Conversation2019-05-05T19:35:36Ztag:theconversation.com,2011:article/1157392019-05-05T19:35:36Z2019-05-05T19:35:36ZThe profane and the sacred: why luxury firms rushed to support Notre-Dame<p>The April 2019 fire at the <a href="https://theconversation.com/notre-dame-de-paris-from-searing-emotion-to-the-future-rebirth-of-a-world-heritage-site-115612">Notre-Dame de Paris Cathedral</a> came as an immense shock to the people of France, as well as throughout Europe and in countries across the world.</p>
<p>Even while the fire was still smoldering, a spontaneous effort to resist the blow dealt by fate quickly took hold. In three days, more than <a href="https://www.lemonde.fr/societe/article/2019/04/18/deja-850-millions-d-euros-de-dons-promis-pour-la-reconstruction-de-notre-dame_5452116_3224.html">850 million euros</a> were pledged. Some of the first were three big names of France’s luxury industry, the Pinault, Arnault, and Bettencourt families, whose Kering, LVMH and l’Oréal groups dominate the global market – the amounts pledged by each family were in the hundreds of millions of euros. The movement was also reflective of the symbolic significance of a fire that came close to reducing the edifice to ashes – an edifice which alone embodies the entire history of France and is an integral part of European heritage.</p>
<h2>Rich in controversy</h2>
<p>So why has the world of luxury been leading the drive to donate in order to rebuild Notre-Dame? Given the likely cost of the restoration work, the pledges of support are certainly welcome, but the context in France is complex, to say the least: the <a href="https://theconversation.com/why-frances-gilets-jaunes-protesters-are-so-angry-108100">“gilets jaunes” movement</a> erupted in late 2018 and has grown increasingly angry, with many of the demands centring on rising inequality and the imbalance between Paris and “forgotten” rural regions. Europe’s migrant crisis continues, as does rise in <a href="https://www.bbc.co.uk/news/resources/idt-sh/Paris_homeless">homelessness in big cities like Paris</a>. Claims that the wealthy donors were motivated more out of a hunger for positive press or a desire for tax breaks immediately surfaced. “The simplest thing would be for them to pay their taxes”, said the <a href="https://www.lemonde.fr/politique/article/2019/04/17/incendie-de-notre-dame-lancement-d-un-concours-international-d-architectes-pour-la-fleche_5451615_823448.html">senator Esther Benbassa</a>, a member of France’s Green Party.</p>
<p>Such explanations are not enough in themselves, assuming they have any basis at all – after all, two of the biggest donors, the Pinault and Arnault families, stated that they were already at the limit for charitable tax deductions and so would be <a href="http://www.leparisien.fr/culture-loisirs/franck-riester-les-dons-iront-a-notre-dame-pas-a-autre-chose-01-05-2019-8064177.php">giving the funds outright</a>.</p>
<p>But whatever the specifics, questioning why luxury firms would give such immense sums overlooks the deep historical roots of the industry.</p>
<h2>From the sacred to the profane</h2>
<p>While luxury firms may now be seen as the epitome of worldly excellence, luxury started out in the pursuit of the sacred. Since time immemorial, the most skilled artisans have invented and crafted exceptional goods out of the most valuable materials, worked on for countless hours, as priceless offerings to the Gods, whether to win them over before a battle, thank them for a victory, or to celebrate a good harvest. A recent example is the grave of a Celtic prince, unearthed in 2015 in Lavau, a town just a few hours south of Paris, which contained a <a href="https://www.livescience.com/50069-celtic-prince-tomb-uncovered.html">gold-tipped drinking vessel</a>. The immense cost of such goods is precisely why they were offered, in the literal sense of <em>sacri-fice</em> (“the act which makes holy”).</p>
<p>This explains in part why temples were covered with gold, why churches were adorned with the most beautiful artifacts. After the gods came the demigods, the kings and the aristocrats who would deny themselves nothing.</p>
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<img alt="" src="https://images.theconversation.com/files/269850/original/file-20190417-139120-awtnlx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/269850/original/file-20190417-139120-awtnlx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/269850/original/file-20190417-139120-awtnlx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/269850/original/file-20190417-139120-awtnlx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/269850/original/file-20190417-139120-awtnlx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/269850/original/file-20190417-139120-awtnlx.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/269850/original/file-20190417-139120-awtnlx.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">At the origins of luxury, we find the labour force mobilized for religious reasons.</span>
<span class="attribution"><span class="source">Jorisvo/Shutterstock</span></span>
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</figure>
<p>The French Revolution of 1789 marked the end of privileges of birth, but not the end of the right to the beautiful and the sublime by virtue of wealth – in other words, by virtue of one’s wealth and good fortune. Restorations and republics came and went, but luxury remained. The communist revolutions in Russia and China began by ostensibly eliminating inequalities, but they too eventually gave free rein to the process of liberalisation that re-created the inequalities they’d once banished.</p>
<p>Luxury feeds on inequality. Whatever the source of their wealth, legitimate or otherwise, rising social classes throughout the world have always sought to have their new-found wealth and status recognised. Hence the <a href="https://altagamma.it/media/source/WORLDWIDE%20LUXURY%20MARKET%20MONITOR_BAIN.pdf">extraordinary growth of the luxury industry today</a>.</p>
<p>While the sustained growth of the industry is the result of the emergence of successive waves of <em>nouveaux riches</em>, first from Japan, then from Russia and finally China today, to view luxury consumption merely as the expression of an interest in appearance and ostentation would be a mistake. While this may be true at the initial stage of their wealth, customers can come to see the cultural and sacred dimension of the ornate goods they purchase at such great expense. The paradox of luxury is that as well as raising the standing of buyers in the eyes of others, it elevates the customer. In the best of cases, he or she wears an incomparable item that captures the spirituality and living culture of a country, its history and its art, and rises above the mere material.</p>
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<img alt="" src="https://images.theconversation.com/files/269848/original/file-20190417-139110-1qrlsks.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/269848/original/file-20190417-139110-1qrlsks.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/269848/original/file-20190417-139110-1qrlsks.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/269848/original/file-20190417-139110-1qrlsks.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/269848/original/file-20190417-139110-1qrlsks.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/269848/original/file-20190417-139110-1qrlsks.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/269848/original/file-20190417-139110-1qrlsks.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">The Louis Vuitton Foundation in Paris was inaugurated in 2014.</span>
<span class="attribution"><span class="source">Oliverouge 3/Shutterstock</span></span>
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</figure>
<p>Luxury sees space, history and blood as the very foundations of its standing and quest for supremacy. Hence the importance of “made in” used by <a href="https://theconversation.com/hermes-behind-the-scenes-of-the-french-luxury-gem-80551">brands such as Hermès</a>, the cult of origins and of the legacy of designers such as <a href="http://theconversation.com/what-karl-lagerfeld-brought-to-the-fashion-of-today-and-tomorrow-112329">Karl Lagerfeld</a>. Longevity is precisely what lies at the heart of why luxury goods firms refuse to see themselves as makers of ordinary objects.</p>
<p>In its heart, the luxury industry itself aspires to be sacred. After all, luxury also has its own rituals, clerics and ranks. Its brands speak of their “icons” and build cathedrals in capitals throughout the world dedicated to the splendour of the brand and to developing the community of believers. It is thus easy to understand the affinity between the industry and Notre Dame, the legacy of a history that goes well beyond France, the embodiment of the sacred for eight centuries.</p>
<h2>The families, not the brands</h2>
<p>In the past, the patrician families of Florence and Venice sought to promote the arts, a role later performed by monarchs. Then the state became the custodian of culture by developing museums, art schools and academies. But in an era of fiscal limitations, nation-states cannot do everything, and with the means and the know-how, the luxury industry has become a key patron of the arts. Hence the proliferation of collaborations with contemporary artists, the sponsorship of spectacular exhibitions dedicated to fashion designers such as <a href="https://www.vam.ac.uk/exhibitions/dior-designer-of-dreams">Christian Dior</a>, and the creation of museums such as the Louis Vuitton Foundation. What this does is to change our perception of luxury items as products derived from art. It thus stands to reason that the major luxury brands should immediately run to the rescue of Notre-Dame, an immensely important symbol of history and culture at the heart of Paris.</p>
<p>It is worth emphasising that the donations made by the Pinault, Arnault and Bettencourt families were made through their foundations rather than their their well-known brands. After all, the symbolic impact would have been quite different. To showcase a brand would be to do business, to reintroduce the merchants in the Temple at a time when the edifice itself was fragile and when any notion of short-term interest needed to be set aside. Above all, that would have been to depart from the sacred.</p><img src="https://counter.theconversation.com/content/115739/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jean-Noël Kapferer ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>The biggest names in France’s luxury industry have given millions of euros to help rebuild Notre Dame. Questioning why they would do so overlooks the deep historical and religious roots of the industry.Jean-Noël Kapferer, Professeur Senior, INSEEC Grande ÉcoleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1123292019-03-04T19:13:10Z2019-03-04T19:13:10ZWhat Karl Lagerfeld brought to the fashion of today and tomorrow<figure><img src="https://images.theconversation.com/files/260420/original/file-20190222-195864-180wau4.jpg?ixlib=rb-1.1.0&rect=4%2C8%2C1484%2C990&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Karl Lagerfeld in 2012.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/73856455@N06/6823678358">Flickr / Modasplendida</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>Through his solemn gestures, impenetrable gaze and distinctive and elegant dress code, Karl Lagerfeld left his mark on fashion as well as popular culture. He was such an enduring presence that we believed him to be immortal – but he is no more, having left us in February 2019 at age 85. What a paradox for a man whose calling in life led him to work around the clock in the fleeting world that we call fashion. The luxury and fashion sectors are in shock, as a true giant has left us. Here, we examine his legacy.</p>
<h2>Refining the most French of brands</h2>
<p>Karl Lagerfeld was proud of his German heritage and kept his accent. Yet at the same time, he was a man of the world in all senses – curious, cultured, fluent in four languages and open to outside influences and trends. And this despite one of the key principles of luxury being the label “made in”.</p>
<p>While the nationality of “fast fashion” brands is of little importance (it matters little that Zara is Spanish or H&M Swedish), for a luxury brand, cultural roots are absolutely fundamental. Chanel is the epitome of France. And yet, the man who saved Chanel back in 1983 was German. During the Renaissance, Leonardo da Vinci placed himself at the service of the King of France, and when French fashion was at its peak, Karl restored Chanel’s image as an iconic French brand.</p>
<p>Many comparisons have been made between the lives and careers of Karl Lagerfeld and Yves Saint Laurent. They were great rivals, in both their public and private lives. While Lagerfeld never invented a style in the way that Christian Dior, Cristobal Balenciaga, Yves Saint Laurent and Coco Chanel herself did, the Chanel brand never enjoyed as much success while Coco was alive as it did during Lagerfeld’s reign.</p>
<h2>Shaking up the status quo</h2>
<p>Karl Lagerfeld’s great talent was to bring new life, dynamism and inspiration to major fashion houses terrified of betraying the heritage of their creators. Had it not been for Lagerfeld, where would Chanel be today? As its chief designer, it was he who brought Chanel renewed success, without which it may well have fallen into obscurity and would certainly never have become the symbol of fashion and chic <em>à la française</em> that it is today.</p>
<p>How did he achieve this miraculous feat? Here lies the second lesson: by upsetting and shaking up the status quo. In effect, if too much respect is given to major fashion houses and their heritage, they become mummified, entombed, immobilised. It was this man, irreverent yet respectful, who was willing to – as he himself put it – “turn Coco Chanel in her grave"… in order to keep her name alive and highly relevant.</p>
<p>Lagerfeld inspired other gifted designers to dust the cobwebs from their institutions and transform them into the watchwords of class and elegance, such as John Galliano at Dior or, more recently, Michele Alessandro at Gucci.</p>
<h2>Expanding Chanel beyond fashion</h2>
<p>Another major legacy of Karl Lagerfeld is that he understood that today’s luxury brands need to leave their mark well beyond their specialist areas (in Chanel’s case, clothing, accessories, perfume and jewellery). To achieve this, they must maintain close links with those in cultural, artistic, musical and photographic circles – photography in particular having an increasing cultural impact on social network sites, from WeChat to Instagram – and with the crowds clamouring for beauty in a world that is strikingly less beautiful.</p>
<p>Lagerfeld was one of the first designers to produce branded content for millennials hungry for surprise and creativity, expanding Chanel beyond the designs that he had conceived in his own exacting way. He broke down the barriers separating fashion and luxury, using a degree of theatrical flair in creating his own public persona. This led some to <a href="https://www.lemonde.fr/series-d-ete-2018-long-format/article/2018/08/20/karl-lagerfeld-et-la-sensation-warhol_5344268_5325928.html">liken him to Andy Warhol</a>, whom he met in 1970.</p>
<p>For all that, the Kaiser never referred to himself as an "artist”. This wasn’t out of modesty, but rather pragmatism. At a time when many designers sought to be seen as artists to increase their sense of importance, raise their profile and escape the tag of “designer”, Lagerfeld would usually respond – in the rather scathing way for which he was renowned – that they were there to sell handbags and that their contracts would be torn up if sales failed to satisfy the shareholders. For him, things were very clear: luxury is first and foremost a business.</p>
<h2>Long-term vision</h2>
<p>This leads us to his final legacy: Karl Lagerfeld left the matter of the best governance to adopt for a luxury fashion house completely open. Under his stewardship, Chanel earned more money than it ever did before. Thus an independent, “family owned” fashion house, which is not accountable to the stock exchange and therefore has time on its side, has emerged as the best path forward when it comes to high-end luxury. This path was much more profitable in every sense than those of large consolidated groups. Karl Lagerfeld often said that he didn’t do marketing, that he had never attended a business meeting, that he let his creative instincts speak for him. Of course, those words need to be taken with a pinch of salt, as they were made to maintain the myth of luxury. But they also provide a lesson in leadership that the Wertheimer brothers, the owners of Chanel, understood.</p><img src="https://counter.theconversation.com/content/112329/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jean-Noël Kapferer ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>Karl Lagerfeld (1933-2019) was a presence in the fashion world for so long that he seemed immortal. With his passing, we look at his impact and future legacy.Jean-Noël Kapferer, Professeur Senior, INSEEC Grande ÉcoleLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/1115822019-02-21T23:24:44Z2019-02-21T23:24:44ZTo sell luxury, should it still be called luxury?<figure><img src="https://images.theconversation.com/files/258298/original/file-20190211-174883-1c3kif4.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">file u n</span> </figcaption></figure><p>It is no coincidence that one of the favoured gathering spots of France’s “gilets jaunes” protesters is the Champs-Élysées – after all, it’s where the icons of globalised luxury are on display, and with them, the ever-widening gap between the haves and have-nots in our society. </p>
<p>Today, luxury is both a market and a major social phenomenon. As such, the players within it need to be aware that the meaning of the word <em>luxury</em> has escaped their grasp and begun to take on a negative social connotations, raising questions over its very use. A survey of the websites of major brands and groups indicates that many no longer use the term <em>luxury</em>, preferring instead to highlight its fundamentals. For the major players in a sector to ensure its long-term viability, they need to ensure its social acceptability. Yet at this moment, powerful movements, campaigns and signals are emerging all over the world that highlight social and economic inequality. While luxury brands and goods are not the cause, they are the visible manifestation of a gap.</p>
<p>In China itself, set to become the <a href="https://www.bfmtv.com/economie/en-2024-les-chinois-seront-les-premiers-clients-des-marques-de-luxe-1531109.html">leading luxury market</a>, President Xi Jinping placed high-end brands and their customers under observation two years ago. His stated concern was preserving social harmony, which is <a href="https://www.persee.fr/doc/perch_1021-9013_2007_num_100_3_3551">an important concept</a> in Chinese culture. In general, the emerging worldwide demand for more sustainable development is not limited just to environmental aspects but encompasses this necessary social harmony that luxury goods can upset.</p>
<p>In this context, not only does the word <em>luxury</em> no longer serve commercial interests because of the lack of differentiation between brands, but also the concepts signified by this word are becoming less socially acceptable. Might the only way to continue creating luxury goods and experiences be to no longer call them by that name?</p>
<h2>Luxury fragmentation</h2>
<p>While luxury is experiencing worldwide success, with 2018 revenue estimated at <a href="https://altagamma.it/media/source/WORLDWIDE%20LUXURY%20MARKET%20MONITOR_BAIN.pdf">$1,170 billion</a>, it is also facing an existential crisis: the term <em>luxury</em> is now compromised by the large number of brands and companies around the world who want to position themselves in customers’ minds under its umbrella, without really <em>being</em> it. In other words, the term has become clichéd and the concept diluted by brands that are merely expensive, without offering true quality or unique savoir-faire. To differentiate themselves and capture the fleeting spirit of the times, these brands have fragmented the concept of luxury, resulting in the fanciful terms such as “accessible” luxury, “modern” luxury, “jet set” luxury and “casual” luxury.</p>
<p>Ironically, the success of luxury has drawn in its wake all kinds of players who are bewitched by the sector’s growth and margins, but with no intention of meeting its prerequisites. It is also true that the high <a href="https://www.journaldunet.fr/business/dictionnaire-comptable-et-fiscal/1198433-ebitda-definition-calcul-simple-et-difference-avec-l-ebit/">EBITDA multiples</a> (earnings before interest, tax, depreciation and amortisation) used to determine the financial valuation of brands in the luxury sector are an additional incentive to them.</p>
<h2>Has the word <em>luxury</em> become undesirable?</h2>
<p>Even worse, the concepts that are signified when referenced by the word <em>luxury</em> are no longer the stuff of dreams. In this age of <a href="https://theconversation.com/how-selfies-can-build-and-destabilise-brands-76738">social media and selfies</a>, it is not surprising to observe that the visible or even flashy face of luxury has been privileged by customers with limited interest in the brands’ original values and high quality than they are in the social status projected by conspicuous consumption.</p>
<p>But they should not be criticised for this. Such customers are young, ambitious and keen to take their place at the global banquet table, and also ensure the growth and profitability of the luxury sector. Thanks to their purchasing power and desire to gain respectability and status, these newcomers have produced and will ensure the steady growth of the sector and its brands.</p>
<p>Corruption has also dented the image of luxury through association with the suspicious enrichment of customers who are proud of their success and make money from their power. That is why in China the term that has been used up to now to denote luxury, <em>she shi</em>, is being dropped by the brands and their customers themselves, in favour of a return to the meaning of exceptional goods.</p>
<h2>Back to the essentials</h2>
<p>It is no surprise that, in this context, the real luxury players are distancing themselves from the term, which has taken on meanings that are far from its essential values. The dilemma is to stand out in a sector that is constantly attracting new competitors that dilute the concept as they enter the market. The solution is to re-establish and update the essential signifiers and differentiators of luxury: masterly expertise and a rich heritage, firmly rooting in modernity.</p>
<p>But it is not because the term <em>luxury</em> is no longer acceptable that flaunting one’s social difference has become totally passé. Luxury is a dual source of value: for oneself and for those around us. Therein lies the dilemma: luxury continues to act as a mood enhancer in today’s society, and its shameless flaunting is well and truly present. At the same time, snobbery must become more subtle.</p><img src="https://counter.theconversation.com/content/111582/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anne Michaut has received financing from HEC Paris</span></em></p><p class="fine-print"><em><span>Jean-Noël Kapferer ne travaille pas, ne conseille pas, ne possède pas de parts, ne reçoit pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'a déclaré aucune autre affiliation que son organisme de recherche.</span></em></p>With more and more brands claiming to be “luxury”, historical players have begun to rethink their use of the term.Jean-Noël Kapferer, Professeur Senior, INSEEC Grande ÉcoleAnne Michaut, Professeur Affilié, HEC Paris Business SchoolLicensed as Creative Commons – attribution, no derivatives.