This Bloomberg News story on luxury brands waving the red, white, and blue leaves much to be desired.
First, it’s one of those annoying trend stories that’s neither totally implausible nor firmly supported. The Olsen twins make their high-end clothes in the U.S. Tiffany built a plant in Kentucky (with corporate welfare that we’re not told about). Brooks Brothers makes more of its clothes in the U.S. Three anecdotes and a cloud of dust.
The problems start in the lede:
The Made-in-America label has undergone a deluxe makeover. Everyone from Brooks Brothers to the Olsen twins is using it to hawk luxury goods, a tactic made popular by blue-collar brands such as Levi Strauss & Co. and Chrysler Corp.
I don’t think “blue-collar brands” means what Bloomberg thinks it means. “Not luxury” does not necessarily imply “blue collar,” which for me conjures more F-150 than 300.
Beyond that, the evidence of an American luxury manufacturing renaissance is awfully thin:
While Brooks Brothers made few goods in the U.S. 10 years ago, today a “large percentage” is American-made, he said.
Some numbers would have been helpful there. When we do get them, they’re imprecise:
Tiffany & Co. (TIF) has moved past its Northeast home turf and into the South by expanding its manufacturing base to Lexington, Kentucky. The New York-based company makes 60 percent of its jewelry itself, all of it in the U.S., compared with 20 percent 15 years ago, according to Mark Aaron, a company spokesman.
Bloomberg is saying Tiffany makes 60 percent of its jewelry itself, up from 20 percent fifteen years ago, but this doesn’t tell us much of anything about whether more of its jewelry is made in the U.S.. For all we know, it was making all its Tiffany-made jewelry in the U.S. fifteen years ago and buying the rest from U.S. sources.
The demand-side evidence that this is a growing trend is weak, too:
More than three-quarters of affluent consumers surveyed this year by American Express Publishing and the Harrison Group, a luxury research firm, said they like brands made in America, up 5 percentage points from 2008. Sixty-five percent say they try to buy U.S. products whenever possible, a 3-point gain.
I’d bet that both the 3 percent and the 5 percent gains are within the margins of error for those surveys.
This, you can bet, was a pitch-driven story, and here’s the pitch:
Among more than 1,300 affluent shoppers surveyed by Unity in April, the U.S. ranked highest on an index measuring the quality of its luxury goods manufacturing, scoring 267 compared with an average of 100, the Stevens, Pennsylvania-based firm said. That topped Italy and France, home to Salvatore Ferragamo Italia SpA and Hermes International (RMS) SCA, respectively.
This survey is the primary demand-side evidence we get, but I’m skeptical. Are more fashion buyers really going to prefer something made in the U.S. over Italy? Are more luxury car buyers going to want American or German engineering? And are these 1,300 shoppers American or international? We’re not told.
Finally, this kind of quote (placed up high + from the company that did the survey = probably who pitched the story) just drives me nuts:
The U.S.’s reputation for quality is benefiting upscale labels as more Americans question where their goods come from, and how their buying affects the economy, said Pam Danziger, president of Unity Marketing Inc.
“Made in America feeds into the values proposition,” she said. “They are voting with their money not just for U.S. jobs, but for a way of life. In 2007, they were on a spending jag — they weren’t thinking about things like this.”
We should all agree to lose the marketing speak. Values proposition? Come on. Every time there’s a downturn in the economy do we have to trot out these marketing types to yammer on about how we’re returning to core values and “meaning” after a good times-fueled binge of conspicuous consumption? It’s particularly obnoxious in stories about people paying $250 for t-shirts and from marketers who’ve written books with names like “Let Them Eat Cake: Marketing Luxury to the Masses - As well as the Classes.”
Speaking of obnoxious:
The self-made nature of much of America’s wealth may be one of the reasons the pitch is so appealing, says Andrew Sacks, head of of New York luxury ad firm Agency Sacks.
“There is a built-in inherent interest among those successful people to do whatever they can do to help,” Sacks said. Recent increases in labor costs in China, a sagging greenback and stalling U.S. economic growth probably will lead to more American manufacturing, he said.
But also: Why is Bloomberg quoting the head of a luxury ad firm on Chinese wage inflation, the weak dollar, and American manufacturing?
That’s a signal that this one needed more reporting.Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at firstname.lastname@example.org. Follow him on Twitter at @ryanchittum. Tags: Bloomberg News, Luxury, Marketing, Public Relations