When LVMH bought 80 per cent of Loro Piana, the über-luxe Italian brand, for €2.7 billion, there must have been a host of reasons, but one thing we can be sure of is that LVMH didn't eye it up just for its 130 retail outlets and the cachet of the label.
Much more interesting was its access to the rarest and finest of fibres, for it is one of the world's largest manufacturers of fine cashmere, depending on a supply of baby cashmere from northern China and Mongolia as well as vicuña from llama-like animals in the Andes which Loro Piana has the right to shear.
It's not just the fibres themselves which are rare and sought-after, but also the skills needed to wash, treat and process them; they are key if the world's most fastidious customers are to go on being pleased. It is, as one fashion commentator put it, the opposite of fast fashion -- it's the textile equivalent of extremely fine wine.
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The irony is that what people in the luxury goods industry feared most -- customers snapping their wallets shut, sales faltering and desire for the goods receding -- has turned out to be nothing but a chimera. The makers of soft-as-butter handbags, swanky shoes and silken scarves have gone on thriving.
As anybody who studies the performance of the great big conglomerates and companies such as Richemont, Hermès and LVMH will have noticed, in one sense things have never been rosier. Up and up go the share prices, onwards go the sales and the punters keep on coming.
What is beginning to furrow the brows in the boardrooms of both the grand and the niche players in the luxury markets is something quite other -- the realisation that resources are limited and in many cases diminishing. And by resources we're talking about all the things that go into the making of most haute luxe products -- skills that take years to perfect, as well as the rarest and finest of natural materials.
There is after all only so much land on which you can grow grand cru wines, only so many perfect diamonds (or emeralds or natural pearls), limited supplies of baby cashmere... You get the picture.
This is a real and alarming fear and it's one of the reasons for the spate of acquisitions that the major players have been indulging in over the last few years. Niche suppliers of fine leathers and skins, factories with rare skills, fields of precious plants -- all these have been bought up partly so they can go on making the fine leather handbags, the silken blouses, the elegant perfumes and the marvellous watches, and partly because buying up specialist suppliers has the other great advantage of denying access to everybody else.
It's why Chanel, for instance, took steps back in 1987 to buy three hectares of jasmine and 70,000m2 of rose de Mai fields in Grasse in Provence, the legendary home of the finest flowers for perfume makers. It had seen the acreage devoted to these essential ingredients for its Chanel No 5 perfume diminish year-on-year and needed to be sure that it would always be able to get the essences it needed.
One ounce of Chanel No 5 contains the essence of a thousand jasmine flowers (and it has to be a specific jasmine found only in Grasse) and twelve roses de Mai, which gives some idea of why it needed to take the action it did. And it's why it has since added iris pallida and tuberose fields.
March of time
Just as precious are the hard-earned skills of experienced craftsmen, and nobody depends on them more than the rarefied world of haute watches. Competition for skills, and for factories with the experience to deliver the best of the best, is fierce. The label 'Swiss made' is highly coveted and essential to justify fancy price tags, and there's concern that if there is a shortage of mechanical movements, one of the key and most expensive elements of a watch, those who can't get hold of them will lose out.
Swatch, which has supplied key components to competitors for many years, has won permission to reduce its sales of 'movements' to other companies and to end them entirely by 2020. This spread alarm throughout the industry and seems to have kick-started an almost $1 billion buying spree.
It's why Richemont, seeing problems ahead way back in 2000, bought up Les Manufactures Horlogères, a company renowned for its expertise in manufacturing high-value movements essential for quality watches. It's also why in 2012 it bought Varin-Etampage, a Swiss maker of cases, buckles and other components.
Late last year Hermès entered the fray, buying the two-thirds of the Swiss watch-case maker Joseph Erard that it didn't already own. This gives Hermès easy access to supplies of cases for watches such as its well-known Arceau Le Temps Suspendu line. 'We wanted to secure our future supply of strategic components,' Luc Perramond, chief executive of the watchmaking division La Montre Hermès, was quoted as saying at the time.
Not to be outdone, in 2011 LVMH bought ArteCad, a Swiss company specialising in the making of dials, while Ulysse Nardin SA, another Swiss watchmaker, bought up Donzé Cadrans, a maker of enamelled watch dials, which it sees as being key to distinguishing its watches from competitors.
It was partly concern about the rapidly disappearing skills in China that was behind Hermès's initiative to launch Shang Xia, its beautiful Chinese-inspired label, which initially had just one small shop in China but now has another in Paris. The label has a Chinese designer and craftsmen and products are almost entirely made in China, but running through it is the Hermès insistence on quality and craftsmanship.
But the deeper motive is the notion that the making of these products helps keep alive -- and in some cases resurrects -- China's traditional craft skills, which in the rush for modernisation were already being lost at an alarming rate. The result is a series of almost 'cultural products', all carrying the code of a long aesthetic heritage but updated and re-interpreted for a modern age.
Hermès, like all other luxury goods companies, is realising that without all these precious commodities -- the long-honed craft skills, the fine leathers, beautiful silks, cashmeres, fields of jasmine and rose de Mai -- the luxury goods industry as we know it would cease to exist. It wouldn't matter how many people clambered for their wares -- they simply wouldn't be able to make them. Watch out for more action on this front -- it's by no means all over yet.
WHAT A CARRY-ON!
Troubadour is a wonderful new luggage brand that may just have the answer to your travelling prayers.
Its founders, Samuel Bail and Abel Samet, wanted classic, durable holdalls and carry-ons that, in their words, 'married function and style' but couldn't find them elsewhere. So they tracked down fine leathers, great tanners (who would use only vegetable tanning methods with no chemical finishes or artificial patterns) and some wonderfully authentic-looking artisans residing in the Tuscan hills, and created a range of seven pieces.
There's the Weekender (£1,275), which is designed to be stowed in a plane's overhead locker. It has two external front pockets for easy access when on the move, as well as an internal zipped pocket to keep important documents safe. It comes with a cotton canvas lining and durable rivet-reinforced straps.
Then there's the Day Bag (£1,095), which is perfect for going to the gym or running round town, and the briefcase (£975) with its beautifully soft unpretentious design -- all classy and laid-back luxe.
After that come the smaller leather pieces -- the washbag (£425), the iPad case (£275), the iPad Mini (£225) and the wallet (£210), all aesthetically in tune with the bigger bags.
Troubadour positions itself as a menswear brand, which seems a bit of a pity since most of these pieces are distinctly unisex. What is lovely about them is the softness of the leather and the fact that there is nothing extraneous about the design. They have the kind of classic elegance that many a woman would like too.