The second chapter will provide necessary background information on the development of the French luxury fashion industry. The four dimensions determine which of the two specific types of capitalism the economy falls into: liberal market economies or coordinated market economies. The first of the two main varieties of capitalism outlined by Hall and Soskice are called liberal market economies.
Due to the fact that management has a lot of power within the business community, unions are not extremely common in liberal market economies. Managers are concerned that strong unions will harm managerial authority. That said, the fluid nature of the workforce in liberal market economies means that workers can simply quit and move on if they're not satisfied.
The other of the two main versions of capitalism is the coordinated market economy model, which is less market-oriented and more focused on the coordination of non-market factors. However, the methods by which these countries approach each dimension of capitalism are not sufficiently aligned with liberal market economies or coordinated market economies to place the country in question in one of the two existing categories. The variety of pre-World War II French capitalism fits firmly into the category of the state guided by Hall and Soskice's framework.
However, the wave of liberalization that hit the European economy as a whole in the 1980s meant that every version of capitalism had to adapt to the system change.
French Fashion
In a move to consolidate his court and further centralize that power, Louis XIV moved the French court twenty miles from the city of Paris to Versailles. He not only brought and fostered a flourishing textile industry in France, but he placed the textile industry under government control to ensure the quality of the products France sent to the world and to allow it to control profits.67. Rose Bertin, her favorite designer and dressmaker of the time, held this post until the fall of the monarchy.68.
In 1858, France commissioned a design inspired by a regional fashion house to become the official uniform of the French Navy. Later, just before the Belle Époque period, a Brit named Charles-Fredrick Worth changed the literal name of the game in vogue for generations to come. During France's Belle Époque era, the invention and continued existence of haute couture in the French capital attracted countless seamstresses and tailors of the time to Paris.
At the turn of the century, France clung to its status as the center of fashion while forever changing the limitations of clothing for women. The 1910s and 1920s saw the introduction of the legendary Coco Chanel and her new corsetless, freedom of movement clothing for women. The German occupation and massive wartime textile rationing caused many of France's leading fashion houses, including Chanel, to close their doors.
Copyright and patent law failed to protect designers, but in the early 1950s, both the Chambre Syndicale and some of the best French designers of the time began to push back against the "era of knock-offs."76 People were caught not adhering to the rules. to the entrance fee to designer shows or reproducing material under copywrite were brought before the highest courts in their respective countries of origin. Hermès and Chanel are due to a large number of factors, both in the internal structure of the brands and in the external policies of the state. These factors include the use of savoir-faire, attention to craftsmanship and management of the specific French brand name.
Many scholars attribute the creation of the concept of luxury to France, dating all the way back to the Sun King's creation of a guild system to support the luxury industry.81 France was also responsible for the creation of haute couture. It was only at the end of the dirigiste era, when the introduction of "affordable luxury" began to develop, that French companies were forced to start finding other ways to support their dominance in the industry. Fashion was forced to respond to the changes, but the necessary changes were facilitated by changes taking place outside the fashion community.
Luxury
Vogue, a magazine that has made a business out of showing luxury fashion, gives a pretty comprehensive explanation of the luxury fashion industry. During the rest of the study, several major luxury fashion companies will be mentioned and used as a reference. Three of the six will serve as exemplars for the company's country of origin in the comparative analysis: Hermès for France, Hugo Boss for Germany and Burberry for Great Britain.
Kering differs from the others in that the roots of the luxury fashion sector in France are not as firmly established as the other three French companies. Coco) Chanel, the company, flourished thanks to the creative genius of the creative head and the venture capital of the Wertheimer family. Burberry's initial focus in the nineteenth century was on specialized outdoor clothing, such as the iconic trench coat – a design and innovative textile of its own making.
An increasing importance emerged for these art directors to also act as a face of the house. Examples of the movement for directors to act as ambassadors are people like Tom Ford or Karl Lagerfeld. After recruiting the talent – such as art directors – fashion houses must focus on the brand of the house.
The art director's job is to manage the current brand, to respect the legacy of the house and to follow the trends of the times. Brand management deals with clothing, textile engineering, aesthetics and brand design.103. Hermès is primarily known in the luxury fashion community as the epitome of a luxury brand due to the diligence that goes into preserving the heritage component of the Hermès brand.
With the rise of the digital age, innovation is even more important today than it was twenty years ago. Along with the digital age, the modern industry climate has brought about the need for a more vertical business model. Maintaining control of the value chain and distribution constitutes the vertical integration necessary for a luxury fashion firm, as does licensing content.
Representations of the other two luxury needs—harvesting talent and innovation—are not so easy to quantify. However, Hermès is most compliant with the law because production has never left France, nor has the company relinquished control of the value chain or distribution.
Connecting Varieties of Capitalism to Luxury Fashion
The only other conglomerate of the same size of Kering and LVMH is Richemont in Switzerland, but Richemont's focus is mainly on jewelery with houses like Cartier running the show (It is also worth mentioning that Cartier itself as a French brand, as well as more than a quarter of all Richemont's houses.). While France scaled back large amounts of the state-led system, the state introduced industrial policies aimed at helping small to medium enterprises. The overall objective of IFCIC is to allow cultural and creative sectors to obtain bank financing.120 The corporate governance sector of the new French system allowed the financing of the new small and medium-sized enterprises.
Luxury fashion is an industry characterized by a need for coordination, and the shift of the 1980s increased interfirm coordination across France. The French system is characterized by the degree of coordination between the different parts of the value chain. At the top of the business side of the luxury fashion industry hierarchy are CEOs such as Bernard Arnault, Francois-Henri Pinault and Axel Dumas (LVMH, Kering and Hermès respectively) who were all trained in the most prestigious grandes écoles in France.
119 Julien Neuville, "New Life In Paris", The Business Of Fashion, 2015, https://www.businessoffashion.com/articles/intelligence/new-life-in-paris. After school, there is a tendency for these designers to train under one of the already established brands such as Dior, Givenchy, etc. As for technically "lower skilled" workers such as those responsible for producing the physical pieces in suppliers' companies such as tanneries, textile production and sewing, firms provide vocational training to keep production vertically integrated and to ensure quality.121 The vocational training of the French variety of capitalism aligns with the needs of the French luxury fashion industry.
French companies are not only at the forefront of the industry financially, but also at the forefront of the minds of luxury consumers around the globe. Cultivating the concept of luxury in France is what started their position in the industry. In more modern times, post-war France was characterized by a strong variety of state-led capitalism, but as the global shift in capitalism took place in the 1980s, France was forced to evolve into a state-enhanced variety.
The combination of history and modern changes gives French luxury its strength in the modern luxury fashion market. 34; The co-evolution of new organizational forms in the fashion industry: A historical and comparative study of France, Italy and the United States. American Masses.
