Founded in 1983 by Jeremy Hackett and Ashley Lloyd-Jennings, Hackett, unlike the other bon ton brands of Europe, has been a late entrant in the international market. However, since 2005 Hackett has been continuously expanding globally so much so that today it operates from 77 stores in 16 countries across the globe. In an exclusive conversation with Angshuman Paul of B&E, Jeremy Hackett, The Founder and the man at the helm of affairs at Hackett explains why Europe still scores over Asia when it comes to market luxury goods...
B&E: As far as European countries are concerned, Hackett, like any other luxury brand, has been promoting events such as Aston Martin Racing, British Army Polo, International Polo, et al. But, when it comes to Asia, the brand still seems reluctant to such sponsorships. What’s the reason behind this divide?
Jeremy Hackett (JH): We have always believed in positioning the brand Hackett as a supporter of events central to the British sporting and social circuit. It’s because of this philosophy we have been sponsoring British sports such as Aston Martin Racing, British Army Polo, International Polo, The London Rowing Club, Beaujolais Run, et al. Though, in Asian nations like Singapore we believe there’s definitely a strong market for our products, the scope of enhancing our brand image through such sponsorships is really less. In fact, we don’t take up such sponsorships just for spreading awareness. It’s certainly much more than that.
B&E: From working in a tailor’s shop to creating a multinational premium chain of men’s haute couture, you have come a long way. So, what difference do you see when you compare the business model of a standalone store to a chain of stores that operates globally?
JH: I have even sold second-hand clothes and I can say that there’s a distinct business model for each of these formats of business. But then, the revenue-earnings model in all of them is the same which is based on the common concept of the consumer behaviour. For instance, when you are selling second-hand clothes or old stocks you have to keep the price of products high as buyers will bargain or ask for price discounts while purchasing these products. However, if you want to create a premium pricing for a luxury brand then you need to have a strong brand equity. Further, conditions across countries vary when it comes to setting price of your product.
B&E: While most of the luxury brands have diversified into various aspects of haute-couture for both men and women, Hackett has kept itself limited to menswear? What’s the logic behind this strategy? Do you plan to foray into other segments as well in the near future?
JH: You can say that we want to specialise. We want to be known as an expert in men’s dressing. Further, when it comes to diversification in the luxury industry, I think luxury brands, which have done phenomenally well, have also created a special range or sub-brands for each of the segment that they cater to. This is a retailing concept that works very well in European and US markets. But, in Asian nations like Japan, it’s more of extremely specialised services that work for a luxury brand and that’s where Hackett’s positioning is perfect.
B&E: Do you mean to say that a specialised model works well for the luxury brands in Asian markets? But then, in China, there are many luxury brands like Gucci which have been doing very well but they don’t believe in specialised or one category concept. So, what, according to you, is the ideal model for success in luxury business in Asian nations?
JH: In China and India the retail concept is emerging exactly in the way it started in European nations, particularly in China where gigantic retail stores are the order of the day, all thanks to the law that allows standalone stores of luxury brands in the country. But in this case, to fill up an exclusive brand outlet, the respective luxury brand needs to have an array of products in its portfolio. This I think is costlier and the company also takes a lot of time to reach break-even in this case. However, in Asian nations, it would always be better if you are a part of a multi-brand outlet and remain focused on your specialised area of luxury.
B&E: Among all the emerging markets across the globe, which have the maximum potential for your brand?
JH: Singapore, China and India are definitely very promising when it comes to the demand for our products. But still, I think it would be over-optimistic to expect that these nations will outdo Europe’s leading market in terms of turnover from luxury goods immediately. So, it’s really difficult, as of now, to say particularly which one has the maximum potential; but yes, Middle East have always remained a sure bet for Hackett.
B&E: As far as European countries are concerned, Hackett, like any other luxury brand, has been promoting events such as Aston Martin Racing, British Army Polo, International Polo, et al. But, when it comes to Asia, the brand still seems reluctant to such sponsorships. What’s the reason behind this divide?
Jeremy Hackett (JH): We have always believed in positioning the brand Hackett as a supporter of events central to the British sporting and social circuit. It’s because of this philosophy we have been sponsoring British sports such as Aston Martin Racing, British Army Polo, International Polo, The London Rowing Club, Beaujolais Run, et al. Though, in Asian nations like Singapore we believe there’s definitely a strong market for our products, the scope of enhancing our brand image through such sponsorships is really less. In fact, we don’t take up such sponsorships just for spreading awareness. It’s certainly much more than that.
B&E: From working in a tailor’s shop to creating a multinational premium chain of men’s haute couture, you have come a long way. So, what difference do you see when you compare the business model of a standalone store to a chain of stores that operates globally?
JH: I have even sold second-hand clothes and I can say that there’s a distinct business model for each of these formats of business. But then, the revenue-earnings model in all of them is the same which is based on the common concept of the consumer behaviour. For instance, when you are selling second-hand clothes or old stocks you have to keep the price of products high as buyers will bargain or ask for price discounts while purchasing these products. However, if you want to create a premium pricing for a luxury brand then you need to have a strong brand equity. Further, conditions across countries vary when it comes to setting price of your product.
B&E: While most of the luxury brands have diversified into various aspects of haute-couture for both men and women, Hackett has kept itself limited to menswear? What’s the logic behind this strategy? Do you plan to foray into other segments as well in the near future?
JH: You can say that we want to specialise. We want to be known as an expert in men’s dressing. Further, when it comes to diversification in the luxury industry, I think luxury brands, which have done phenomenally well, have also created a special range or sub-brands for each of the segment that they cater to. This is a retailing concept that works very well in European and US markets. But, in Asian nations like Japan, it’s more of extremely specialised services that work for a luxury brand and that’s where Hackett’s positioning is perfect.
B&E: Do you mean to say that a specialised model works well for the luxury brands in Asian markets? But then, in China, there are many luxury brands like Gucci which have been doing very well but they don’t believe in specialised or one category concept. So, what, according to you, is the ideal model for success in luxury business in Asian nations?
JH: In China and India the retail concept is emerging exactly in the way it started in European nations, particularly in China where gigantic retail stores are the order of the day, all thanks to the law that allows standalone stores of luxury brands in the country. But in this case, to fill up an exclusive brand outlet, the respective luxury brand needs to have an array of products in its portfolio. This I think is costlier and the company also takes a lot of time to reach break-even in this case. However, in Asian nations, it would always be better if you are a part of a multi-brand outlet and remain focused on your specialised area of luxury.
B&E: Among all the emerging markets across the globe, which have the maximum potential for your brand?
JH: Singapore, China and India are definitely very promising when it comes to the demand for our products. But still, I think it would be over-optimistic to expect that these nations will outdo Europe’s leading market in terms of turnover from luxury goods immediately. So, it’s really difficult, as of now, to say particularly which one has the maximum potential; but yes, Middle East have always remained a sure bet for Hackett.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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