Leadership Lessons from the Height of Fashion

By Shellie Karabell
culled from:http://www.forbes.com
“It’s not how far you fall; it’s how high you bounce back,” luxury industry executive Mark Weber told me in an interview recently, roughly paraphrasing General George Patton to illustrate his own return from an ignominious dismissal from his first executive position to the one from which he recently retired – as head of Donna Karan International, Inc. and CEO of North America for LVMH Inc.
Weber began his four-decade high-end retailing career at Phillips-Van Heusen Corporation (PVH PVH 0%), becoming president, board member and CEO. He joined the French luxury brands group LVMH in 2006 as Chairman and CEO of Donna Karan International Inc., where until 2014 he lead the growth of the Donna Karan and DKNY brands in emerging markets, notably China and India. Today, post-LVMH and pursuing what he calls his “entrepreneurial chapter” as consultant and advisor for LVMH and m3 Relativity Media, Weber has also found time to write a book – Always in Fashion, published by McGraw-Hill – sharing what he’s learned from the heights of fashion.

It’s not such an easy business, this high-end retail. “You have to develop a broad base of skills and knowledge,” Weber told me in an interview for this blog recently. “You need to understand people first and foremost; you need to understand what’s going on in the world, global events (because if you are selling consumer products, you have to understand the environment), and you need to understand finances.” Want It, Need it
No one needs to spend upwards of $2,000 for a handbag, afterall. But “need” is not the basis of luxury. “Luxury customers are very affluent,” Weber points out. “They continue to consume what they think they need but really only want. So it’s up to the luxury industry to continually redefine itself, to render obsolete what you have now and to create a new demand for something.” This strategy works as well for the wanna-be luxury client, “who will save to buy the piece that makes him feel really good. We are really selling dreams.”
Ferrari is a case in point. When you buy a Ferrari, you are buying a car you haven’t actually seen, paying a price which you don’t know what it is until it arrives, and you have to wait seven months to get it!” laughs Weber. “But if you actually drive a Ferrari, you know there’s nothing else like it!”
Weber’s luxury industry mantra is threefold:
1. Nothing is more important than the image of the brand. “You are creating a dream,” he reminds us. “And you are appealing to people who want and can afford the best. You have to deliver!”
2. The brand must be protected at all costs. This explains the termination of license agreements by virtually every luxury house in the late 1990’s/early 2000’s. “I remember seeing a comment made by the CEO of Hermes referring to a statement made by someone else in the industry: the thing one should fear most is making ugly products – they’ll sell, certainly, but other people will see it!” cautions Weber. “You can’t survive on mediocrity. You can’t make expedient decisions like taking things out of a product to get to a price point.”

3. You have to make a product that is awe-inspiring. “Your level of execution must be unlike anything else,” he claims. “The creativity must inspire people.”

For Weber, there are a few brands that exemplify these criteria. Louis Vuitton , “The time and attention they put into their products, showing things never done before,” he exclaims. “Dior’s attention to detail and their steadfast adherence to what the brand represents,” he continues.. (NB Dior is owned by LVMH) “And Ralph Lauren for his British-New England tradition. He’s created and built a lifestyle and for me he has the best execution across all areas,” opines Weber.

Not Only Frippery
This lifestyle, however, is miles away from much of the rest of the world, and it’s easy to view the luxury industry as mere frippery. Weber, as expected, disagrees, but with good reason. “We do not cure disease, it’s true, but we are among the most generous industries,” he claims. “We are also one of the first to develop industry in third world countries,” he continues, a reference to the large amount of clothing manufacturing taking place in countries such as Indonesia, Vietnam and parts of Eastern Europe where labor is plentiful and costs are favorable. Increased transparency recently into global labor practices, coupled with customer outcry, has reduced allegations of industrial “sweat shops.”
Despite its celestial and global setting, the luxury industry is pretty cutthroat, and Weber has some down-to-earth advice for those bopping to scale those heights. “Don’t be a wise guy,” he says, referring to Americans , especially, doing business abroad. “Understand other cultures. Americans think they’re funny; often they’re not.”
“Don’t work for a toxic company,” he warns. “Find one in which you can advance, where there are people you can learn from. You’ll know you’re in a good company if you find yourself being encouraged. Then you go the extra mile and do what others aren’t doing. Remember, when you become CEO…it’s not about you; it’s about other people. And don’t expect everything to be ‘fair’. ‘Fair’ is for kids.”

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