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February 14, 2009

For Fine Recession Wear, $7,000 Suits From Saks

By STEPHANIE ROSENBLOOM
For years, executives of Saks Fifth Avenue have been wooing one of the world's most exclusive men's wear lines.
They made trips to Italy, where Kiton apparel is carefully sewn by hand and doled out to retailers in modest quantities. Gradually, they were able to offer a limited selection in places like Beverly Hills and Chicago. Finally, Saks's dream of opening a sumptuous Kiton boutique in New York came true - just in time for the worst recession in 70 years.

The retailer is about to find out how many men are left in New York with the money, and the moxie, to pay more than $7,000 for an off-the-rack suit, or as much as $21,025 for the made-to-order version.

For the more budget-minded, Kiton sunglasses can be had for $1,395. Trousers are $1,195. And jeans? A mere $795.
On Monday, the flagship Manhattan store plans to unveil what executives call the crown jewel of the men's department: a 2,000-square-foot boutique devoted to the Italian luxury label. The shop has a floor of Carrara marble and views of the ice-skating rink at Rockefeller Center, perfect for the Feb. 26 cocktail party Saks is throwing for its top customers. The company would not say how much it is spending to open the boutique.

The people who run Saks are only a tiny bit sheepish about introducing such costly garments at such a dire moment. (Saks, like many stores, has been marking some high-grade merchandise down by 70 percent.)

"These are decisions that are made with significant advance planning," said Ronald L. Frasch, president and chief merchandising officer for Saks. He emphasized that he would not undo the decision even if he could.

"A store like Saks needs to have the best product available," Mr. Frasch said. "And I do think the man who wants to present himself in a certain way, he's still out there."

In a recession, a luxury retailer like Saks must walk a razor's edge between lowering operating costs to survive a slowdown in consumer spending and maintaining its status as a purveyor of elite brands.

Figures suggest that many consumers are walking around in last year's suits and dresses. Every major department store, high-end to low, is experiencing sales declines, with luxury stores struggling the most. Sales at Saks stores open at least a year, an important measure of retail health, fell 23.7 percent last month. And the company eliminated 1,100 jobs, or about 9 percent of its workers.

Saks's optimism about Kiton stems from sales of its fall collection, some of which Saks offered in New York for the first time in June. The company declined to provide exact sales figures but said sales of the brand exceeded expectations - which were high because they were set in spring 2008, well before retail Armageddon.

"We had a very impressive first season with the collection," said Tom Ott, senior vice president and general merchandise manager for men's wear and home furnishings at Saks. "Which just shows that at the end of the day the customer is searching for value. And value isn't just in the price."

Kiton - which employs 330 tailors who create its garments by hand - produces only a few thousand pieces a year. It takes 25 hours to make a jacket. Fans of Kiton clothes, and it is a devoted cult, say the garments are soft, light and exquisitely made. They are said to fit like a second skin.

A suit jacket can supposedly be crushed into the crevice of an airline seat for a long flight, only to shed its wrinkles at the end.

"You have to be over a certain income level to even consider" the Kiton line, said Simon Collins, dean of fashion at Parsons the New School for Design. "Once you put it on, you can't go back."

Small, costly details of tailoring mark the brand. Unlike many suit jackets, Kiton's have "surgeon's cuffs," or buttons that open at the wrist. Some customers keep a couple of them undone as a subtle status symbol. But Mr. Collins, who owns a Kiton jacket, described that as a gauche habit.

"It's a really ostentatious thing to do," he said. "The tasteful thing to do is to have them and never open them."
Many of Saks's employees have visited Kiton's factories in Italy, enabling them to explain to clients why they are paying so much.

Mr. Frasch said he expected the new shop to do well. But not even luxury retailers own crystal balls. "We are flying blind, and that could be said of any retailer in this industry right now," he said.

Apparel sales numbers from SpendingPulse, a report by MasterCard Advisors, and from other groups have shown that men's clothing has been doing better than women's - a trend that has been noted in past economic downturns as men began dressing more formally, perhaps out of fear for their jobs.

Walter Loeb, president of Loeb Associates, a retail consultancy, said that while men's clothing was typically the most optional item in a family budget, more men were donning suits and ties nowadays.

"They want to give an image of neatness and being in command of the situation," he said. "In this particular recession, where people are threatened just by the news of unemployment around them, they have to be careful how they behave and how they look."

The Kiton shop at Saks is not, however, a counterintuitive recession strategy but part of a broader men's department facelift that has been going on for more than two years. Construction and manufacturing delays pushed back its opening. And while the timing may be inauspicious, Mr. Ott said Saks was investing in Kiton for the long term.

"I think at Saks Fifth Avenue, we've been here through tough times before," he said. Part of the luxury goods business, perhaps especially in hard times, is playing to customers' fantasies.

"You know," Mr. Frasch said, "everybody dreams."

https://www.nytimes.com/2009/02/14/business/14saks.html?_r=1&ref=business
 

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It's going to be interesting to see how/whether pure luxury clothing retailers do in the recession.

From talking to a few people, I rather suspect they'll survive fine with only a moderating of turnover. The only that will really suffer will be those in the "near-luxury" segment, who will become heavily dependent on massive discounting to maintain sales.

Kiton will be fine, though if there's a boutique nearby, the logic of having a concession in Saks is slightly questionable. I guess there's the advantage of the higher footfall traffic through Saks leading to referrals to the boutique when the Saks concession doesn't have the relevant item in stock.
 

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I've been to the Kiton boutique a few months ago.
A very small store with different models than
carried by Nieman Marcus in San Francisco,
for example. In fact the inventory was so limited
that they couldn't show me my size, 44R for a try-on.
My guess is that the Saks shop will sink or
swim with the economy, not due to the presence
a a small "flagship" boutique.
 

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Small, costly details of tailoring mark the brand. Unlike many suit jackets, Kiton's have "surgeon's cuffs," or buttons that open at the wrist. Some customers keep a couple of them undone as a subtle status symbol. But Mr. Collins, who owns a Kiton jacket, described that as a gauche habit.

"It's a really ostentatious thing to do," he said. "The tasteful thing to do is to have them and never open them."https://www.nytimes.com/2009/02/14/business/14saks.html?_r=1&ref=business
:icon_smile: That never stops me.
 

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:icon_smile: That never stops me.
When I was in Argentina for business, I met with some folks at the Central Bank - my colleagues in BA as well as the senior ministers all wore bespoke suits - and they all had one button undone on their suit jacket sleeve. I wasn't sure what it meant until I asked one of my colleagues... I'm not a fan of the practice.

Apparently BA has some excellent tailors and if you travel there regularly, you can get a very good deal on a bespoke suit. Argentina is teetering on the brink of economic disaster and the USD continues to strengthen against the Peso (ARS). If you are looking for an inexpensive South American vacation - Argentina might be a good place. Better hurry as you might be running out of time - if economic conditions worsen, it won't be a great place for a holiday.
 

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Kiton is such a small part on mens fashion that retailers such as SFA can control the amount of merchandise that they carry. During the recession a much smaller inventory vs larger as times change. I know a Barneys in BH, the kiton jackets and suits carried are limited. maybe half dozen styles in hald dozen sizes 38 reg-48L Same for suits.
 
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