Deluxe: How Luxury Lost Its Luster (40 page)

When it is time to pay, you are ushered into a lounge-like room where you sit on one of the comfortable Louis XVI chairs, have a coffee brought to you by a uniform girl, and chat with your salesgirl while everything is run up. On the counter sits a pile of the latest Daslu CDs, a compilation by the Daslu deejay of hip Brazilian and Latin music, which you can buy for a few reales. On the wall is a flat-screen TV broadcasting Daslu TV. Throughout the store, Daslu radio is playing. You pay the bill and are escorted out by your Dasluzette, empty-handed. Everything has been sent down to your car, or up to the helipad.

There are seven hundred Daslu employees, including the uniform girls; a thousand others employed by brand shop-in-shops, travel agencies, restaurants, and so on; and nine hundred third-party service providers such as valets, janitors, and security guards. Next door, Daslu has an employee day care center called the Villa Daslu Educational Center with a nursery where female staff can come and nurse their babies three times a day, and a school for children up to age fourteen. Some two hundred attend. The children receive instruction in English, art, sewing, piano, guitar, and ballet—often by clients. When I visited the school, I met two tall, elegant clients who had just finished teaching a group of eight-year-old girls in the ballet studio. There is also a pediatrician, a dentist, and a psychologist. After a hot lunch in the school cafeteria, children seven and older go to the local public school. Younger children stay and play. They have snack time on picnic benches in the garden. “The uniform girls were unhappy with the schools and the quality of life for their children, so we opened the school,” explained Mendes as we walked down the hallway and visited classes. “This is even better than my children’s school.”

But what really sets Daslu apart from other luxury retailer’s is Tranchesi’s personal involvement with the business. Chances are, you’ll run into her while you are shopping, and she’ll ask how the kids are, help you pick out a few things, or assist in fittings. “In America, in Europe, retailers know what they’ve sold by looking at the numbers in the computer,” she told me. “I know what we sell here because I’m on the shop floor. I don’t sit in an office. I run the business from here”—and she tapped her belly. “In luxury brand stores, when you pay, they forget about you. They completely forget about you,” Mendes told me. “Eliana doesn’t just know the name of the client, she
knows
the client. Daslu is her house, and the customers are her guests.”

Shortly after the opening at the new location in July
2005
, Daslu was raided by federal police agents and Tranchesi was arrested for alleged tax evasion. The government alleged that import-export firms falsified invoices listing prices of imported goods far below market value to allow Daslu to pay less in duty. “It was crazy—
280
police came to the office,” said Mendes. “You never see that in a
favela,
even when there is a big drug trafficking bust. But Daslu, yes. It was to show off in the press, to draw attention from Lula and his problems,” she said, referring to President Luis Inacio Lula da Silva, the country’s socialist president, who has been embroiled in a series of corruption scandals. Tranchesi was released shortly after. In December
2006
, Daslu was ordered to pay $
110
million in back taxes. The store planned to appeal.

On the second day I went to Daslu—it took three entire days to see the place—I had lunch with one of its good customers, a chic woman named Cristiane Saddi, the marketing director for the local Mercedes dealership that her husband owns. She also volunteers at a local Syrian-Lebanese hospital that her grandmother and her great-aunt founded. Saddi is one of those remarkable women who give Brazil its reputation as the land of stunningly sensual women: thin, tan, and taut, with long black hair as slick as oil and eyes to match, she was dressed in a tight white Dolce & Gabbana blazer over a lacy white camisole, skinny white Diesel jeans, big diamond stud earrings, and towering heels. We met in Leopolldina, Daslu’s elegant restaurant and one of São Paolo’s top power spots, packed daily with celebrities, businessmen, and socialites. The chef is Italian, and the cuisine is a Best of Europe tour: filet mignon with red wine sauce, wild mushroom risotto, lobster-stuffed ravioli, prosciutto and melon, and seviche.

We talked of her Daslu experience. “My mother used to go to the original one and would take me,” Saddi said as she tucked into an ample lunch of beef filet and pasta. “I started shopping there myself when I was fifteen. Now I’m forty-three. It grows and grows and never loses that family feel. You’re not received as a client but as a family friend. When I got married, we lived just down the street. I would call and say, ‘I need a gift for this or that,’ and they would pull something. Salesgirls are your friends. They are in the same social swirls. When you go to Daslu, it’s not to buy a new pair of shoes. It’s to see your friends. You can’t find this service anywhere else in the world.”

And we talked about life as a São Paolo socialite: “You can be everything all together—work, mother, hostess—because you have staff,” she said. “In return, you help with the schools, houses, everything. My driver has been with me twenty-one years, since I married, and I have watched his children grow up. When he was sick I put in him in the hospital and got him the best doctors, the best treatments. You help them, because they help you. All the families here do that. It’s an exchange.”

What I really wanted to know, though, was this: what, for Cristiane Saddi, is luxury today?

“Daslu is a luxury because you can do what you want,” she explained, pouring dark chocolate sauce over two slices of cake. “They have the best brands and the best choice in the world, from bras to evening gowns to housewares. Everything you need for everything. How many fashion stores also sell cars? You just think about a product—you can buy it at Daslu.”

After two days at Daslu, I understood what she meant. Daslu may have been dreamy, but it wasn’t a dream.

As she dug into her cake, I began to think about the state of the luxury business, how it seemed over the last two decades to have lost its soul. I wondered where it would go: what would it do once the Japanese and Americans had grown weary of luxury brands and emerging markets were saturated? When gimmicks like art galleries and gala concerts would no longer draw crowds in the stores? When there were no more corners to cut and there was no more growth to be had? Was there enough integrity or value left in these brands to allow them to continue to call themselves “luxury”? Or, more important, to maintain their legitimacy, I asked Saddi, would they be able to keep the wealthy like her and her peers as customers?

“Yes,” she said. “The Louis Vuitton here carries only its most expensive items,” she said. “Daslu clients don’t need the logo entry-level handbag or to wear labels or logos. We buy from luxury brands, but not ordinary products. Special items. There’s always something special. You can see what is mass and what is special. Luxury is not how much you can buy. Luxury is the knowledge of how to do it right, how to take the time to understand and choose well. Luxury is buying the
right thing.
”

And with that, Saddi wiped the chocolate off her lips, reapplied her lipstick, got up, and kissed me good-bye.

“Must get back to work,” she said, and she clicked off in her stilettos.

Deluxe
exists thanks in large part to two extraordinary women: Nina Hyde, the legendary fashion editor of the
Washington Post,
who gave me my first job as a fashion reporter in the late 1980s, and taught me that fashion was as serious and respectable a beat as covering the White House; and Amy Spindler, style editor of the
New York Times Magazine,
who assigned me a series of major investigative pieces about the fashion industry in the late 1990s, and said to me, “You should turn this into a book.” She was right. Sadly, like Nina Hyde a decade earlier, Amy Spindler succumbed to cancer far too young and before she could see it happen.

Peter Riva helped shape the idea for
Deluxe
and gave me the kick I needed to sit down and write the proposal. My agent, Tina Bennett at Janklow & Nesbit, had the patience to keep rereading it for what seemed like forever until it sparkled, then sent it to Ann Godoff and Emily Loose at Penguin Press in New York and Stefan McGrath at Penguin Press in London, who—on my fortieth birthday, no less—courageously took me on and guided me into authorhood. Penguin Press editors Jane Fleming and Helen Conford tag-teamed me, asking all the right questions and adding needed structure, both to me and the manuscript. Happily, their interpretation of “a couple of more months” was as elastic as mine.

Deluxe
would not contain half the information it has without
Newsweek.
My editors Fareed Zakaria, Nisid Hajari, and Susan Greenberg and my Paris bureau chief Christopher Dickey allowed me to wander the planet on behalf of the magazine in search of the real story behind the luxury industry, and published early versions of these reportages in
Newsweek
’s international edition. Sue Greenberg further gave up weekends and part of her New Year’s vacation to gently shape the manuscript into a seamless read, as she has done with my
Newsweek
copy for more than a decade. Longtime
Newsweek
Paris bureau photo editors Ginny Power and Jacqueline Duhau helped to choose and find just the right pictures to accompany my words and popped up my spirits when they started to wane.

A slew of young, hungry reporters helped me with research, including Marie Valla, Jenny Barchfield, Remi Hoki, J. J. Martin, Erin Zaleski, Florence Villeminot, Nicole Martinelli, Laura Czigler, and Lauren Greenwald. These dynamic young women spent hours chasing down obscure numbers, setting up interviews in far-flung places, and, when needed, translating foreign languages. Fact-checker supreme Austin Kelley pored through mountains of documents, deciphered my scribble, and followed up with sources to make sure I got it right. And several luxury brand PR folks—including Amee Boyle at Giorgio Armani, Olivier Labesse at DGM Conseil, Marie-Louise de Clermont-Tonnere and Claire Chassard at Chanel, Annelise Catineau and Olivier Monteil at Hermès and the unflappable Nathalie Tollu at Louis Vuitton—answered my seemingly endless barrage of follow-up questions with speed and aplomb. I could have never pulled this book together without them.

I am deeply grateful to the hundreds of people I interviewed for
Deluxe
on the record, including Wanda McDaniel, Kenneth Fang, Tom Ford, Laudomia Pucci, Kris Buckner, Handel Lee, Menehould de Bazelaire, Leslie Caron, and Olivia de Havilland, and those who spoke to me off the record and told me the secrets of the luxury industry. Mônica Mendes was right to insist that I travel to São Paolo to see Daslu firsthand, and was extraordinarily welcoming when I did, and Jennifer Woo and Bonnie Brooks of Lane Crawford, Wilfred Koo of Givenchy, and David Tang helped me negotiate Hong Kong and Guangzhou, making what seemed impossible achievable. Several friends, including Laurie Sprague, Cathy Nolan, Kevin Mulvey, and Mike Medavoy, read
Deluxe
in rough form or debated its premise with me, and their input shaped its outcome. I must also thank photographers Don Ashby, Marcio Madeira, and Patrick Demarchelier and artist Tom Sachs for generously providing beautiful images for
Deluxe,
Andre Balazs, Philip Pavel and everyone at the Chateau Marmont for putting up with me as I tried to channel the hotel’s writing ghosts, and the indefatigable June Newton, who kindly invited me into her home and took the most honest portrait of me ever.

More than once while reporting and writing
Deluxe
I thanked the heavens above for allowing me to start my journalism career in the Style section of the
Washington Post
—the writer’s section of the writer’s newspaper—during the reign of the
formidable
Ben Bradlee. Editors Mary Hadar, Deborah Heard, Rose Jacobius, and Gene Weingarten and music critic Joseph McLellan took me as a green and eager college student, gave me terrific assignments, and pushed me to dig deeper and write better. It was journalism boot camp and finishing school all in one, and I use all that they taught me every day of my career.

Most important, I could have never written
Deluxe
without the encouragement of my family and the profound support and love of my husband, Hervé, and our incredibly patient daughter, Lucie—my light—who gamely accompanied me on many of my reporting adventures and spent half of her six-year life waiting for me to finish this project.

Now, honey, now we can go play in the park.

INTRODUCTION

Page

The luxury goods industry:
Claire Kent, luxury goods analyst, Morgan Stanley London, e-mail, April 18, 2005.

Thirty-five major brands:
Claire A. Kent et al., “Making the Sale,” Morgan Stanley Dean Witter, March 11, 1999, p. 10.

In Asia:
David B. Yoffie and Mary Kwak, “Gucci Group N.V., (A)” Harvard Business School, case 9–701–037, September 19, 2000; revised May 10, 2001, p. 4.

The Chinese enriched:
Palmer White,
The Master Touch of Lesage: Embroidery for French Fashions
(Paris: Editions du Chêne, 1987), p. 16.

As Diana Vreeland:
Diana Vreeland,
D.V.
(New York: Da Capo Press, 1997), p. 47.

“I’m no philosopher”:
Stanley Karnow,
Paris in the Fifties
(New York: Random House, 1997), p. 263.

In
2005
:
“Best & Most 2005,” Generation DataBank, www.generation.se.

In their best year:
Rana Foroohar, with Mac Margolis in Rio de Janeiro, “Maximum Luxury,”
Newsweek Atlantic Edition,
July 25, 2005, p. 44.

The Swiss bank:
Rana Foroohar, “Going Places,”
Newsweek International,
May 15–May 22, 2006, p. 54.

The private security:
Ibid., p. 58.

By
2011
:
Foroohar, “Maximum Luxury,” p. 44.

When Arnault:
Deborah Ball, “Decisiveness and Charisma Put Yves Carcelle in the Hot Seat at LVMH’s Principal Division,”
Wall Street Journal Europe,
October 1, 2001, p. 31.

“What I like”:
“Arnault, in His Own Words,”
Women’s Wear Daily,
December 6, 1999, p. 11.

CHAPTER ONE: AN INDUSTRY IS BORN

“Luxury is a necessity”:
Anna Johnson,
Handbags: The Power of the Purse
(New York: Workman, 2002), p. 21.

Its flagship:
Eric Wilson, “Optimism’s the Point, Not Excess Baggage,”
New York Times,
October 13, 2005, p. G1.

“Luxury is crossing”:
Joshua Levine, “Liberté, Fraternité—but to Hell with Egalité!”
Forbes,
June 2, 1997, p. 80.

“High profitability”:
Suzy Wetlaufer, “The Perfect Paradox of Star Brands,”
Harvard Business Review,
October 2001, p. 123.

Louis XIV dressed:
Stanley Karnow,
Paris in the Fifties
(New York: Random House, 1997), p. 268.

Louis XVI’s wife:
Judith Thurman, “Dressed for Excess: Marie-Antoinette, Out of the Closet,”
New Yorker,
September 25, 2006, p. 138.

She was “an object”:
Palmer White,
The Master Touch of Lesage: Embroidery for French Fashion
(Paris: Editions du Chêne, 1987), pp. 20–21.

“French fashions”:
Karnow,
Paris in the Fifties,
pp. 268–69.

At the age of thirteen:
Paul-Gérard Pasols
Louis Vuitton: The Birth of Modern Luxury,
(New York: Abrams, 2005), p. 13.

The
292
-mile trek:
Ibid., p. 21.

“Here you find”:
Ibid., p. 24.

Vuitton became:
Ibid., p. 30.

In
1854
:
Ibid., p. 354.

Throughout the mid-
1800
s:
White,
Master Touch of Lesage,
p. 24.

“Women will stoop”:
Karnow,
Paris in the Fifties,
p. 270.

Worth’s dresses:
White,
Master Touch of Lesage,
pp. 24–25.

His prices:
Karnow,
Paris in the Fifties,
p. 271.

Louis Vuitton’s business:
Pasols,
Louis Vuitton,
p. 88.

To keep up with:
Ibid., p. 76.

“In those days”:
Maria Riva,
Marlene Dietrich: By Her Daughter
(New York: Knopf, 1993), p. 111.

In the
1920
s, France:
White,
Master Touch of Lesage,
p. 56.

In five years:
Ibid., p. 51.

In the
1930
s:
Ibid., p. 62.

“The huge skirt”:
Diana Vreeland,
D.V.
New York: Knopf, 1984), p. 98.

But couturier Lucien:
Marie-France Pochna,
Christian Dior: The Man Who Made the World Look New
(New York: Arcade, 1996), p. 78.

“You can force us”:
Ibid., p. 77.

The Vuittons were:
Kim Willsher, “Louis Vuitton’s Links with Vichy Regime Exposed,”
Guardian,
June 3, 2004, p. 15.

“The styles [during]”:
Karnow,
Paris in the Fifties,
pp. 266–67.

I remember Ivana:
Nina Hyde, “Lacroix’s Curtain-Raising Couture; Kicking Off the Fall Shows with Soft Chiffon & Crepe,”
Washington Post,
July 24, 1988, p. G1.

The swanlike models:
Karnow,
Paris in the Fifties,
pp. 258–59.

“After all the horrors”:
Ibid., p. 264.

The Parisian clients:
Ibid., p. 263.

Couture houses:
Ibid., p. 260.

By
1951
:
White,
Master Touch of Lesage,
p. 80.

Soon licensing:
Richard Morais,
Pierre Cardin: The Man Who Became a Label
(London: Bantam, 1991), p. 91.

“I was staying”:
Vreeland,
D.V.
, pp. 106–7.

“Bloomingdale’s”:
Ibid., p. 134.

By
1977
:
Nadège Forestier and Nazanine Ravaï,
The Taste of Luxury: Bernard Arnault and the Moët-Hennessy Louis Vuitton Story
(London: Bloomsbury, 1992), p. 54.

Finally, in
1977
:
Hugh Sebag-Montefiore,
Kings on the Catwalk: The Louis Vuitton and Moët-Hennessy Affair
(London: Chapmans, 1992), p. 82.

He decided:
Ibid., p. 16.

Recamier expanded:
Pasols,
Louis Vuitton,
p. 280.

In
1984
:
In 1984, Vuitton sales were 1.25 billion French francs and profits were 197 million French francs. Chris Hollis (Investor Relations, LVMH), e-mail with the author, February 5, 2007.

In
1986
:
Sebag-Montifiore,
Kings on the Catwalk,
p. 115.