Vuitton Values

The delicate balancing act of luxury for the masses


Deluxe: How Luxury Lost Its Luster, by Dana Thomas, New York: Penguin Press, 373 pages, $27.95

In September 2005, following the worst natural disaster in American history, the Federal Emergency Management Agency (FEMA) began distributing $2,000 debit cards to Hurricane Katrina's neediest victims. The cards carried a note saying they were not to be used for alcohol, tobacco, or firearms. But the cards said nothing about $800 monogrammed handbags.

"We've seen three of the cards," an employee of a Louis Vuitton store near Atlanta, Georgia, told the New York Daily News soon after the cards were issued. "This has been since Saturday."

Opinion pages and blogs tore into the Vuitton fans like outlet shoppers at a bargain bin. The Daily News called them "profiteering ghouls," and the syndicated columnist La Shawn Barber dubbed them "on-the-taxpayer-dime drunks." Apparently, some things were OK to buy with the recovery money, such as bottled water and TV dinners. And some things were not OK, such as purses priced at 13 times production cost.

Clearly these women had an elastic definition of need, one that arguably abused the public's generosity. But the bag ladies of Katrina should take heart; these days it's tough for anyone to be a virtuous consumer. Among the excesses of our age is a plus-sized literature on the vast wasteland of human consumption, of full closets and empty souls. Titles such as Born to Buy: The Commercialized Child and the New Consumer Culture, The Overspent American: Why We Want What We Don't Need, and Affluenza: The All-Consuming Epidemic point to an insatiable market for books that berate us for buying them.

To her great credit, Newsweek fashion writer Dana Thomas is not at all interested in inoculating her readers against the all-consuming epidemics that plague our shopping malls and threaten our children. In Deluxe: How Luxury Lost Its Luster, Thomas takes it as given that the purchase of a hand-stitched crocodile leather Hermès Birkin bag is an experience ennobling to buyer and seller, a triumph of taste over vulgarity and artistry over philistinism. Thomas never once speaks of a mythical, pre-consumerist past of communitarian solidarity and material equality.

Instead, she has penned her own mythical history of consumerism, a history that emphasizes a purer, more elegant experience of material consumption. Thomas pines for the day when luxury was "simply about creating the finest things that money can buy," when there was a place for "humble artisans who created the most beautiful wares imaginable." Thierry Hermès started as a lowly harness maker with a shop in Paris, Louis Vuitton as the son of farmers who scored an apprenticeship with a Parisian trunk maker. By the late 19th century, both were master craftsmen who served the French aristocracy.

By Thomas' account, some time in the 1980s, a decade she describes with all the nuance of a chainsaw-wielding Patrick Bateman in American Psycho, our humble artisans were replaced with bloodthirsty capitalists ripped from the pages of a Naomi Klein polemic. Fashion tycoons, Thomas reports, "hyped their brands mercilessly," adopting "the luxury equivalent of the American military's 'shock and awe' approach to war.…Luxury was no longer about creating the finest things money could buy. It was about making money, a lot of money."

Strip this narrative of its self-sacrificing royal artisans and cigar-smoking fat cats, and it's not implausible; something surely was lost as luxury went corporate in the late 1980s. The heirs of artisans who had dressed the French royal court started opening stores in airports. The House of Gucci, which began as a small saddlery shop in Florence, started selling its leftovers in suburban outlet malls; you could now buy last year's It Bag on your way to Pretzel Time. Fashion houses licensed their names to lesser designers, an idea they'd gotten from, of all places, the Disney Corporation.

But for a reporter who covers the economics of fashion, Thomas seems surprisingly unacquainted with the concept of a tradeoff. Just as surely as something was lost when Gucci started stamping its name on cheap T-shirts, something was gained when the men and women working the sales counters could buy into the brands they were selling. The story of the last 30 years in fashion is one of democratization and proliferation, of a middle class and an elite becoming increasingly indistinguishable.

Undeniably, it's also a story of filthy rich men getting richer. French businessman Bernard Arnault is fashion's most famous guru and, to some, an embodiment of all that has gone terribly wrong with high fashion. Arnault was a rapacious real estate mogul living in America who one day, Thomas writes, "called his counsel Pierre Gode and instructed him to find a company to buy." Gode pointed to Christian Dior, then part of a larger textile empire known as Agache-Willot.

Arnault had no roots in fashion. The way Thomas tells it, he could hardly dress himself. He spent $80 million on Agache-Willot and fired 8,000 workers. "Until the 1980s," writes Thomas, "business in France was a gentleman's game, governed by scruples and politesse." Arnault "was a new breed of French executive, the sort whose goal was to succeed at any cost."

Today Bernard Arnault is the seventh richest man on Earth. He has amassed the world's largest luxury goods conglomerate, Moët Hennessy Louis Vuitton S.A., known as LVMH. Arnault has collected brands like his customers collect handbags: LVMH now owns Louis Vuitton, Givenchy, Fendi, Marc Jacobs, and dozens of other names.

This monster of a company heralded a transition in the way luxury was bought and sold. Just as middle- class consumers reached up toward aspirational brands in the '80s, the same brands were reaching down to meet them. Fashion houses refocused on smaller items accessible to middle-class consumers, such as handbags, wallets, and key chains. In the golden age of couture, clothes were the be-all and end-all. Today Parisian fashion shows sporting Louis Vuitton couture simply reinforce the brand that sells bags, wallets, and perfumes to lawyers and investment bankers. Clothing accounts for a mere 5 percent of Vuitton's sales.

Nowhere is this blurring of class lines more evident than in Las Vegas, where luxury retailing meets everyman in some of the most profitable retail space in the world. "In New York I feel so uncomfortable walking in a store, like I don't belong there," a Vegas tourist tells Thomas. "Las Vegas is much more relaxed, casual." There's a reason for that, as a retailer later explains: "You cannot be judgmental in Las Vegas. The person in the cutoffs and a holey T-shirt can open up a money belt and pull out $100,000 in cash."

Seen one way, the converging consumer experiences of the rich and middle class are a signature triumph of a thriving market economy. "The capitalist achievement," Joseph Schumpeter wrote in Capitalism, Socialism, and Democracy, "does not typically consist in providing more silk stockings for queens, but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort." But for Thomas and a number of designers she quotes throughout Deluxe, something is seriously wrong when a half-dressed tourist pulls a wad of money from a fanny pack and buys into the cherished heritage of Thierry Hermès. "In order to make luxury 'accessible,'?" argues Thomas, "tycoons have stripped away all that has made it special."

It's not just the denigration of what economists call positional value (that is, how the items you buy signal status) that worries Thomas, but what she argues is a decline in objective quality. Bags and wallets are mass produced, sometimes sloppily. Dresses are less durable and less likely to be lined. Well-known European designers have licensed their names liberally and outsourced production to China. Thomas takes us into these bag-making ateliers with all the sobriety of Upton Sinclair in a slaughterhouse, but here the cows are long dead. The cruelty is inflicted upon the fine leather, which deserves better than to be machine-stitched in a Guangdong factory.

And yet people continue to pay more, in ever greater numbers, for the goods Thomas says are worth less and less. The luxury bug hasn't just spread down the class hierarchy; it also has spread over the map. Paris' best customers are now the Japanese and by a long shot. Deluxe informs us that the Japanese buy half of all luxury goods and that 40 percent of Japanese people own at least one Louis Vuitton product. "Their impact on the business is immeasurable," writes Thomas. "Their travel habits dictate where brands expand, and their exigencies affect how stores are run."

Actually, it's not quite clear whether Japanese travel habits dictate where brands go or luxury megastores dictate where Japanese people travel. About 1.5 million of Hawaii's 7 million annual tourists are Japanese, and no one thinks they're there for the beaches. Since the mid-1980s, the Hawaiian neighborhood* of Waikiki has slowly morphed into one immensely profitable mall for Japanese travelers; at the famous Duty Free Store on Kalakaua Avenue, known as DFS, much of the signage isn't translated into English. Chanel was the first luxury brand to figure out there was money to be made selling to the Japanese on American soil, and today most of its sales in Hawaii are to Japanese customers.

When polled, Japanese say they prize luxury goods for their "durability," a curious response given the ease with which one could find a wallet of the same or better quality as a Louis Vuitton billfold for significantly less. Japanese consumers probably prefer the LV-stamped version for the same reason everyone does—status signaling—but they voice this preference in an unusually conformist and superficially classless culture. In a milieu not always kind to individualist expression, luxury brands are a socially acceptable mode of signaling. "By wearing and carrying luxury goods covered with logos," says Thomas, "the Japanese are able to identify themselves in socioeconomic terms as well as conform to social mores. It's as if they are branding themselves."

This self-branding may be most evident among the luxury-soaked Japanese, but the impulse is universal. As Tom Wolfe documented in his 1976 essay "The Me Decade and the Third Great Awakening," a society whose material needs are met is one that turns its focus to individuation. Luxury goods, while accessible to greater numbers of people, still signal heightened status, elevated taste, and mastery of a system of tacit rules that govern consumer choices. They allow consumers to buy into idealized identities. Thomas is right that the role of luxury is changing as conglomerates focus more on branding and less on quality, but she is far too hasty to assume that this shift amounts to a loss for consumers.

Arnault, probably more than anyone in the business before him, actually understood what he was selling. Buying into a dream has always been part of high fashion's allure, but never has storytelling been so central and quality so peripheral to the business. As Francois-Henri Pinault, the CEO of the conglomerate that owns Gucci, Yves Saint Laurent, and Balenciago, tells Nancy Hass in the September Portfolio, "People have to realize that what we are selling is an experience, from beginning to end."

Pinault should know. Gucci was failing and floundering in the '80s before Pinault's father, then CEO, picked up designer Tom Ford and rescued the brand. Ford was a sexually charged high-society type who could craft a persona as well as a line of clothing. He wasn't just Gucci's designer; he was Gucci, period. He gave interviews and wormed his way into gossip columns. "Soon," Thomas writes, "Ford and Gucci became synonymous for a hedonistic lifestyle." And that sold handbags.

The success of luxury conglomerates like LVMH depends partly on their ability to keep their many brands distinct, their story lines intact. To buy Prada is to buy into a vision of sleek urban sophistication; to buy Versace is to buy into a vision of sexual liberation. Whatever you are buying, it is not a piece of leather. "It is not meaningless," the University of Florida advertising expert Jim Twitchell writes of luxury in his 2002 book Living It Up. "If anything it's too meaningful."

The luxury industry, says Thomas, "has sacrificed its integrity, undermined its products, tarnished its history, and hoodwinked its consumers." Perhaps. But it seems that what Arnault and others have done is to sell something that unprecedented numbers of people very much want to buy. The Elle and W ads are, as always, ethereal and suggestive. They offer to take aspirational consumers to a place they've never been, a place where they perhaps feel they don't belong. The ads might well intimidate the very people they're supposed to attract, were it not for ego-stoking media outlets that at once elevate fashion's gods and pull them back to earth.

Fashion is more celebrity driven than it used to be, and the editors at US Weekly never tire of revealing how celebrities are "just like us." Pictures of Renee Zellweger taking out the garbage are as important as pictures of her on the red carpet. You can pull off a Carolina Herrera dress too, or at least a wallet. You both do chores. You're practically twins.

It's not only actresses who are newly human. We now know that models are just like us, thanks to Tyra Banks' America's Next Top Model, and designers are just like us, thanks to Heidi Klum's Project Runway. It's all a bit much, and it smacks of some kind of coming luxury apocalypse, as Thomas senses. There must be an end to all of this celebrity/schlub intimacy; luxury goods, after all, are supposed to signal status and distinguish their owners from the hoi polloi in some particular, definitive way. At some point, the brands will lose their mojo, as famously happened to Burberry the moment Britain's working class "chavs" decided the brand was part of their identity. Zaftig belly-baring mothers on the dole carrying a baby in one arm and dangling a Burberry purse in the other did little for the brand's image, and by 2004 the association between delinquency and Burberry was so complete that clubs across the country starting turning away customers sporting the signature plaid. Democratization is a dangerous game, and the executive who misjudges the balance between accessibility and positional value can destroy a brand's cachet in a single season.

But it's a risk worth taking. Luxury moguls have built fortunes tapping into something deeper than the desire for well-crafted textiles. To follow fashion is to watch billionaire businessmen like Bernard Arnault tremble before the spasmodic whims of 27-year-old urban women, who are in turn jockeying with one another, throwing out signals like crazed fireflies, waiting for another designer to present another story they can manipulate.

With material like this, Dana Thomas could have told a profound psychological drama about consumer identity in a time of great demand. Instead she has written a bizarre conspiracy story about capitalist tycoons shattering an elite's claim on haute couture. Deluxe has much to say about what goes on behind closed doors in Paris and Milan, at the factories of Guangdong and the retailers in Las Vegas. But high-end trivia doesn't explain the psychology of consumers, who seem to need the stories and aspirations LVMH is selling far more than the well-crafted objects for which Thomas longs. Deluxe is a fascinating read, but it doesn't begin to explain why a woman who has lost everything would spend $800 on a bag.

Kerry Howley is a senior editor at Reason.

*This article originally identified Waikiki as an island rather than a neighborhood in Honolulu. We regret the error.