FREE MAGAZINE ISSUE#5 “Next Decade / From the Periphery to the Near Field”

Originally contributed by Yusuke Koishi to FREE MAGAZINE ISSUE#5 in March 2017. English translation prepared for the KLEINSTEIN TEXTS archive.

Throughout human history, the movement of the world has been brought about by the rise and fall of power players, and by the emergence and entry of new forces from the periphery. Many events that appear, in the present, to have occurred by chance can, when we look back, be found to have been born from movements at the margins that once seemed entirely unrelated. In fashion, renewal always occurs when outsiders from the periphery bring something into the center called Paris. From Tokyo to Paris, from Antwerp to Paris, from Vienna to Paris, from Russia to Paris. The scent of heterogeneous cultures born at the margins is purified on the stage of Paris, then returned to the street and consumed.

I was still too young to remember it at all, but I often hear that the period from the 1980s to the early 1990s was a creative golden age. What is always mentioned are the questions and forms of expression Comme des Garçons brought to bear on what clothing could be, and the original production processes it invented. Then there were the witty creations and experiments of Martin Margiela, stimulated by that atmosphere, and the currents Helmut Lang, quietly active in Vienna, brought to both menswear and womenswear in Paris from the 1980s through the early 1990s.

What arrived from the periphery carried an air and a way of thinking unfamiliar to the center of the fashion community, and I imagine some people found it unpleasant at the time. Young people who were then placed low in the hierarchy of an established community lined with authorities may have felt that allies, or representatives, had appeared. Time passed, the balance of power changed, and those young people have now rotated into the industry and become the very authorities of the established community. Of the three brands mentioned above, two have already seen their founders retire and leave the companies. What young people hear today are legendary stories, almost like a Kojiki born in a time before the internet was properly organized, told by the already established “former young.” I often wonder what the raw reality of the present is.

Looking across several decades, we see many names of people and organizations that attracted attention by presenting strong values and design at particular moments, creating record-setting gusts through the industry or society. But when we speak of those who determined contemporary currents with continuity, affecting not only output but also the back end of industrial structures and ways of thinking about work, not many names come to mind. In that context, Comme des Garçons, built in one generation, is one of the few examples we must not forget. Some might also name Giorgio Armani, who likewise built an enormous luxury brand from zero in one generation and over forty years, and who remains active in many directions, or Anna Wintour, who continues to influence the movements of large capital by using her own power. But there is one more person we must not forget: Bernard Arnault, chairman of LVMH, which now stands alongside Kering and controls many of the industry’s luxury brands.

To be honest, in the industry’s actual workplaces, I do not often hear his name spoken openly. He is not often featured in fashion magazines or even cultural magazines, though he appears in business publications such as The Economist and Fortune, and one almost never hears his name on the street. In the sense that young people do not talk about him, he occupies a strange position: at the center of the industry and yet somehow at the margins. But he was truly a person from the periphery, a newcomer from an outside world that should have had nothing to do with fashion. Little by little, over time, he moved from periphery to near field, and then to the center, remaking the game of the entire industry over roughly thirty years. Much of this has been written in his own interviews, but I would like to spend some space introducing how Bernard Arnault arrived at the present.

Bernard Arnault came from the construction industry. Born in 1949 after the war in Roubaix, a town near the Belgian border, he grew up in a family that ran a construction business. After graduating in 1971 from the École Polytechnique, which has produced France’s senior bureaucrats, scientists, and leaders of the business world, he joined his father’s construction company at the age of twenty-two. The next dozen years were dramatic. Five years after joining the company, in 1976, he persuaded his father, then the manager, to sell the company’s construction business and used the funds to remake the company into a real-estate business specializing in apartment development for travelers, achieving success.

In 1981, when François Mitterrand became president of France and launched socialist policies including nationalization of private companies, Arnault moved to the United States. There he built relationships with business figures who were also in New York at the time. The human network born there would become the foundation for his later activity.

In 1984, just as Calvin Klein, which is again discussed now because Raf Simons has become its director, Ralph Lauren, whose founder retired last year, and Giorgio Armani were enjoying prosperity in North America, Arnault returned to Paris, which was animated by new creation from Japan. With support from people connected to the investment bank Lazard Frères, whom he had met during his time in New York, he acquired Boussac, a major textile group in financial trouble. The company’s business was declining, but within the group were Christian Dior, known as a French luxury brand, and the department store Le Bon Marché. After acquiring Boussac, Arnault sold off all of the company’s assets and businesses except Christian Dior and Le Bon Marché, remaking it into a company specialized in luxury brands. This was his first entry into the fashion industry.

Four years after that acquisition, in 1988, only one year after Louis Vuitton and Moët Hennessy merged to form LVMH, Arnault obtained shares in the group through Guinness, famous for beer. He then rapidly acquired more shares and became LVMH’s largest shareholder, rising to the position of chairman one year later, in 1989. Incidentally, at the Paris spring-summer collections that autumn, Martin Margiela participated in Paris Fashion Week for the first time and excited the audience with an experimental presentation.

The success of the group since Arnault became chairman is obvious to anyone walking down the main streets of large cities around the world. On the first floors of luxury department stores in city centers, the logos of Louis Vuitton and Christian Dior almost always shine. The appointment of creative directors at long-established brands is often discussed in fashion media as if it were a cabinet reshuffle in government. Even the strategic industry practice of headhunting creative directors and placing them effectively above brands was something LVMH began aggressively from the late 1980s into the early 1990s. It assigned the Italian designer Gianfranco Ferré to Christian Dior, which had lost momentum when it was acquired, and drew out demand. It placed Marc Jacobs, a designer from an acquired company, at Louis Vuitton. When signs of a trend toward avant-garde design appeared, it placed John Galliano at Christian Dior. Conversely, in order to use talent effectively, it did not hesitate to change the organization itself, launching Dior Homme within Christian Dior for Hedi Slimane. Star directors are then replaced strategically and coldly according to the era. Today, the brands under LVMH include Celine, Givenchy, and Loewe, sixteen fashion brands in all, and if jewelry and other businesses are included, the group controls about seventy companies.

Its investments are not limited to fashion brands. It has made enormous investments in Central Saint Martins, a major supplier of talent to the fashion industry. Less widely known is that LVMH’s investment company L Capital, now merged into L Catterton, is the second-largest shareholder in YG Entertainment, the Korean entertainment agency that has produced numerous fashion icons, with a share of more than ten percent after the founder. It also holds shares in Chinese skincare brands, an India-based distributor of luxury goods, advertising companies, and restaurant chains. Not all of these investments are directly tied to the main LVMH business, but they are made with an eye toward futures that may produce latent synergies. The breadth of that field of vision is astonishing.

Many large capitalists have staged acquisitions of fashion brands, but there are few examples of investors who have succeeded as outstandingly as Bernard Arnault. I suspect this is because the world of fashion contains distinctive, difficult-to-verbalize business customs, protocols, and ethics that cannot easily be expressed in numbers, and these have obstructed the simple formula that capital injection automatically creates growth. Arnault’s success was probably possible because, although he was originally a person from the periphery, he was able to decode the principles and ethics within a complex industry and rewrite its language.

Today it has become ordinary for brands to sit under enormous holding companies. Certainly, because many designers’ home countries are saturated markets, connecting with large capital that has many sales channels brings major benefits. Rather than taking the old strategy of starting a company and expanding little by little at one’s own pace, founding members of brands, including designers, welcome the injection of outside capital, use those networks to accelerate growth, and sell when the time is right. Economically, that may indeed bring greater benefits.

But recently I cannot help feeling that the side effects have begun to appear. There are now many brands whose output faces not the consumers and customers who actually buy things, but famous shops, influencers, and in more extreme cases investors. Rather than growing by selling products, they gather momentary attention in order to invite outside capital. The clothes and shoes produced are no longer simply products but promotional materials, and the brands, companies, or even people who make them have themselves become the things being sold.

Watching an industry pushed about by the movement of huge capital, the world of fashion begins to look a little like Silicon Valley in America. Once attention is gathered, investors crowd around startups making unfinished products, and the startups conduct various public-relations activities to create reasons for investors to gather. Then new companies are born to serve those PR activities. Of course, most investments do not succeed, but when an IPO or sale does happen, the successful experience of a small investment returning many times its value spreads and draws still more players into the game.

For the 2017-18 autumn-winter collection, Balenciaga presented a sweatshirt printed with the “Kering” logo. When the name of a back-end company in the industry, one that had never been a topic on the street, begins to appear on the front surface, I cannot help feeling that a turning point is approaching this world. In fact, people from Silicon Valley and other outside fields are already flowing again toward fashion’s outer edges, and at the periphery we can begin to see shadows aiming for the next Bernard Arnault position.

I think we have reached a time to ask what fashion is now. What, in the first place, is the design of “fashion” meant to target? In an era when people could not choose their own appearance or way of life by their own will, fashion was once a revolutionary device for hacking a world that saw human beings as signs. Now that anyone can choose clothing and ways of life, what should we hack? When I think about this, I sometimes remember the words of Shusaku Arakawa, whom I met in my early twenties. Moving constantly between artist and architect, he always said, “In order to change society, we must remake the ethics of the human beings who are its components.” And he continued, “To make that possible, we must change the human body.” I think fashion, too, may now look boldly toward such a long range. It may be unfashionable. But abstractly, boldly, toward methods and ways of thinking that have not existed before. If it is possible to change the world all the way down to human ethics, then spending time concentrating on that possibility does not seem so bad. Revolutions have always been born from the periphery.