With European powerhouses LVMH and Kering, the fashion world has begun to question why the world’s most powerful country does not have a conglomerate to call its own.
It’s best to begin with a definition: a conglomerate consists of a number of companies or ‘subsidiaries’ that are part of a larger corporate group. So, let’s take a look at the previously mentioned LVMH and Kering. Both French multinational conglomerates hold the world’s biggest names in luxury goods, covering categories such as Wine & Spirits, Fashion & Leather Goods and Perfume & Cosmetics. LVMH – with the abbreviation itself standing for Moët Hennessy Louis Vuitton – manage Dom Pérignon, Givenchy, TAG Heuer and Benefit Cosmetics to name a few. The likes of Gucci, Yves Saint Laurent, Stella McCartney and Puma are part of the Kering family.
However, this does not answer why America does not have its own conglomerate. Perhaps it is simply due to the US not having the means nor the demand to comparably challenge groups as huge and successful as LVMH and Kering. The biggest names in the luxury goods business are already owned, so one may ask, what really would be the point in America launching its own conglomerate?
The pattern emerges that European, particularly French companies are owned by French/European based conglomerates. Former fashion and style columnist for The Wall Street Journal Christina Binkley succinctly identifies that, ‘What we tend to think of as ‘luxury’ brands are, by and large, all European.’ This provokes us to think of tried and true American luxury brands. The names Tommy Hilfiger, Ralph Lauren and Marc Jacobs come to mind, yet the latter is already part of LVMH, and despite their firmly positioned fashion reputation and multi-billion pound revenues, Hilfiger and Lauren simply do not feel as luxurious as the likes of Balenciaga (owned by Kering) and Dior (owned by LVMH).
Nevertheless, there may be hope in the form of Coach. Since Stuart Vevers – alumni of Louis Vuitton and Givenchy – was appointed as Creative Director in 2013, the brand has transformed. Coach still offers their renowned and timeless high quality leatherwear accessories, but their fresh and exciting collaborations with Chloe Grace Moretz for their eponymous fragrance, and recently this month with Selena Gomez, has massively broadened the brand’s clientele.
Fashionista reported that ‘Coach is the closest to a stateside luxury group the U.S. has, having already acquired Stuart Weitzman and, as of this May, Kate Spade, the latter of which comprised a $2.4-billion deal.’ So there is certainly potential for Coach to launch an American conglomerate model, but needless to say, decades will have to pass for the brand to get anywhere near a Chanel status.
But all these questions may be getting asked too soon. There’s no one to say that America has to acquire already established luxury goods brands and fashion houses to create a Stateside conglomerate. And that’s where Adam Pritzker and Vanessa Traina come in.
Pritzker, a descendant of the Hyatt Hotel Family, and Traina, daughter of romance novelist Danielle Steel and BFF come consultant for Alexander Wang, have decided to launch several brands themselves to create their own conglomerate, all under one American roof.
Pritzker founded Assembled Brands, and with the perennial aid of Traina, the duo have now created an e-commerce site called The Line, with showrooms in Los Angeles and New York City, luxury brand Protagonist, homewares company Tenfold and Scandi inspired contemporary fashion label Khaite, all under the Assembled Brands name.
The New York Times commented that Pritzker ‘aims to use his experience and his own brands, started from scratch and shaped by Ms. Traina, to create an ecosystem with tentacles that provide services (financial, logistic, digital) to a host of independent emerging talent.’
The notion of supporting upcoming talent, rather than well established, age-old companies, compels us to evaluate the aspirations for Assembled Brands being feasible and achievable in the long run. Pritzker nor Traina intend to immediately launch numerous stores each year in a bid to instantly rival LVMH or Kering. Pritzker’s strategy was reported in The New York Times to expand ‘via a network of services for brands making around $1 million to $2 million a year in revenue,’ rather than ‘François-Henri Pinault, the chief executive of Kering, who often talks about buying medium-size companies (with revenue between $50 million and $100 million) and building them up.’
The duo behind Assembled Brands have their work cut out for them, but they certainly sound like they know this journey will not be easy. The saying ‘life is not a sprint; it’s a marathon’ comes to mind. Perhaps this tactical mind set is what will secure the success of Assembled Brands in years to come.
Do you think America’s own Assembled Brands can become the next conglomerate to rival LVMH and Kering?
Text: Natalie Zannikos
Images: Fashionisers, Kering, Fashionista, Pinterest, The New York Times, Khaite