Miika Miinala B00267686Miika Miinala B00267686

• Sir Paul Smith (born in Beeston, Nottinghamshire on July 5, 1946 ) was - is still – a cyclist enthuastic whose dream of being once a professional racer ended with an severe traffic accident. In the hospital he met creative people and met them also after the recovery. In these meetings he was convinced that fashion and clothing would be his destiny. He started to learn tailoring and his designs quickly led him to retail entrepreneur Harold Tillman who operated in the famous Savile Row which is famous of it’s traditional tailoring for men. 1970 he opened his first shop in Nottingham, London together with his wife who had fashion diploma form Royal College of Arts.

• In 1976 he had his first exhibition in Paris and at the time he gradually moved to retailing also. First licensed shop in Japan was opened already in 1984 and first shop in US popped out 1987 in New York and next year the first women collection was introduced. In 1990 company opened first franchise in Hong Kong and 1991 first Japanese flagship store joined the rest of the 60 retail locations in Japan.

• In 1990s the retail chain was extended to new Europe an and Asian countries and new product lines such as children’s wear, perfumes luggages , footwear, accessories and even Paul Smith Mini cars.

• 2000s have seen Mr Smith getting the knighthood and his company growing ever larger both in product lines (for example swiss watches and furniture) and number of retail locations. Company has shop presence in all the major luxury markets – although almost absent in South America – and products are sold approximately in 75 countries. In 2007 Mr Smith sold 40 percent of his company to his Japanese licensee, Itochu. In 2008 the company had 95 retail stores worldwide and the turnover had reached 346 million £.

Company HistoryCompany History

Concept Concept

• Paul Smith brand is very much about personality, story and design style and vision of Sir Paul Smith

• For gentlemen, London chic and creative people • English, also name = ”Paul Smith”• Trademark stripes,colourfulness and roses• Unconventional, classic with a twist• Tailoring tradition and added wackiness• Made in England and Savile Row heritage

Thanks to the fact that Paul Smith has been always been the creative director of the brand, it has maintained its brand identity which derives

heavily from the personality nad personal life of the owner. The brand has stayed true to the Sir Smith’s vision and persona. That is, never truly

growing up and finding inspiration everywhere.

Culture and sources of Culture and sources of identityidentity

””Targeted” consumersTargeted” consumers

Brand PositioningBrand Positioning

• Paul Smith brand is well positioned in its industry. Shops are create examples. Paul Smith stores differ like night and day from Burberry stores and in fact any other classic luxury brand stores. One can’t mix Paul Smith shop with any other luxury brand. With it’s eccentric and whimsical identity + upper class english tailoring heritage + the persona of the Mr. Smith and traditional luxury locations it is unique company in global scale luxury industry.

• Price vice, Paul Smith mainline, suits and some other collections are luxury, but some collections are more accessible a.k.a masstige. However it is clearly luxury brand when you look the average –high! – prices in the shop.

• Products vice, Made in England, high quality materials and designer designed. Long lasting and timeless. Although not the high high end luxury like say Hermes and Rolex which are made/said to last forever.

• Service vice, average in the luxury industry. After sales services are not very exquisite, but in-hoouse tailoring is rare for any brand.

Mass market competitorsMass market competitors

First of all the Paul Smith brand is well positioned within the luxury market because brand is quite unique in the designs. The most obvious competition on mens’ side comes from other luxury suit and men apparel makers, both English and foreign, such as Ralph Lauren Burberry Dunhill, Armani and Hugo Boss. Comme des Garcons has also same kind of appeal in its brand as Paul Smith.

On womens’ side the competition is broader because the designs are more universal and the clothes vary from expensive street wear to evening dresses. Obviously other eccentric British designers such as Jonathan Saunders, Giles and Matthew Williamson pose a threat. Paul Smith designs are also compared to Eley Kishimoto and Duro Olowu. On women’s side the competition is still more with other succesful luxury brands, such as Gucci, Prada, Dior, Chanel. Which are on the same streets and command same prices.

Paul Smith could be labelled also as elite street brand, because it is also credible brand among those who despise or don’t feel so comfortable with the classic luxury brands – a brand building well done!

Fast fashion brands like H&M, Clio, Zara can always offer product lines that are Paul Smith-ish, but can’t compete directly with it. Diesel , Fred Perry, and various other street credible brands are the more affordable substitutes for Paul Smith Jeans and Red Ear collections.

Paul Smith Ltd has however steady growth rate, even in the recession, so the competition from the mass market side poses no serious threat and it should not, given that is luxury brand .Fluctuations on global tastes and habits could see mass market gainging market shares from luxury brands, but that is not probable in the near future.

Luxury market competitorsLuxury market competitors

brand as a...brand as a...Person Product

Symbol Organization

Credibility, Eccentricsm

Trademark stripes & English quality tailoring

Playful, creative classand/or adores creative people.Sir Paul Smith himself

English, Savile Row. Sir Paul Smith. Timeless

Fashion credible, gquirky entleman, doesn’t search the most obvious. Individuality

High-quality,credibility , unconventionality

Relationship

Reflection Self-Image

Culture

PersonalityPhysique

Brand Identity prismBrand Identity prism

Exclusivity and Dream Factors in Product Offering in a Nut ShellExclusivity and Dream Factors in Product Offering in a Nut Shell

The world of Paul Smith is exctiting, credible, cool, fashionable, approved in Brick Lane pubs and snowboard and skateboarding circles, but also in FTSE and Savile Row and Parisian catwalks.

The personality and the story of Paul Smith makes you dream and marvel also. From the revelation that he wanted to do clothes he has turned to humble english gentleman – at public at least – and millionaire retail entrepreneur and the most succesful english designer who got knighthood. To his own words he just wants to travel and discover arts and music everyday and offer his findings to other people and would never ever go public with his company which is debt free. Stuff of dreams and refreshing attitude in the double digit growth targets of luxury industry, definetely.

“He comes across as a normal guy you’d wanna hang out with; he’s down-to-earth, likes biking and football… you might even find him working in one of his own shops.” Fashion blogger on Paul Smith.

Every design and accessory includes the trademark stripes which are known through out the fashion world. Staying true to english high society designs with a twist and casual t-shirts and trainer shoes go hand in hand. These two product categories reinforce each other in very clever way, which is not possible for many brands.

Street fashion credibility refers here to the fact that Paul Smith is very keen to collaborate with brands that produce subculture products that are widely recognized as strong , legendary or even unique brands in their field. This makes the brand more known and more credible outside the luxury industry.

Luxury side of the brand: collections are presented catwalks, world of fashion, Savile Row heritage of tailoring, high quality materials and designer products. Product to be found in extravagant shops on luxurious locations such as Fue Fabourg St-Honoire, 5th Avenue, Shibuya. Exclusive Bespoke tailoring and limited editions are also used for example Paul Smith for Evian and Audio Technica stereo headphones collaborations are limited edition. Suits and dresses speak exclusivity when jeansand shirts promise accessibility.

Sir Paul Smith is also keen art collector and does lot of projects with artists and musicians. Most of the company’s shops also sell wide variety of books (often signed by authors) from design to pthotographing, music, sports and locations. This is not new to luxury brands,but Paul Smith differentiates a bit from the basic luxury brand by concentrating more on the subcultures and more unorthodox, daring and eclectic forms of art and artists – contrast to high culture – and often collaborating with the artists and using his blog to promote the exhibitions, museums and artists he likes. He also hosts many exhibitions. In Japan, he has Space Gallery shop where one floor is dedicated for artist exhibitions. Art + Paul Smith products = dream factor. Other shops host every know and then some exhibitions. Paul Smith also collaborates with Manchester United football team and cycling firms Rapha andMercian Cycles.

60s’ Psychedelic Rock Posters

Rock Heroes Exhibition and Gibson guitar by Paul Smith

Paul Smith for Manchester United

Mai 68 collaboration

Dream Empire by Tanaami in Space Gallery

Prices Prices

• Paul Smith brand has over 20 product lines: 5 for men, 3 for women, Spectacles for both women and men, watches, shoes, Albemarle Street furnishing, Bespoke, fragnances, Fine China, Gainsborough silks , Rugs, children wear, gifts, sunglasses ,accessories and books.

•The price range of these collections vary. Some of them are clearly made to offer accessibility for the first time buyers such as Paul Smith Jeans collection where t shirts begin at 40€.

•Price* premium of the ”Paul Smith” men and women mainline collections are set to signal exlusivity:- Jackets from 480€ to 800€ - Wool jumpers from 240€ to 350€ - Womens’ dresses 220€ to 1300€- Womens’ jumpers and cardigans from 220€ to 440€- Suits from Paul Smith London collection are around 730€

* Prices are converted to Euros with 1,10/1. rate. Sterling is weak still at the moment. This makes comparison tricky, but the figure give the good iderafrom the prices .

Price Premium compared to competitor in Price Premium compared to competitor in the luxury sectorthe luxury sector

Prices are approximated averages acquired from the brand online shops. Different collections are considered when looking for average.

Paul Smith Dunhill Hugo Boss Armani Burberry

Jacket, Blazer 600 800 no 800 550

Shirt (for suit) 130 125 136 130 220

Jeans 150 130 165 200 220

Knit/wool 290 250 180 300 300

Suit 730 no 725 850 800

Paul Smith is price vice definetely luxury. It can’t or it doesn’t want to use price premium similar to more known brands such as Armani and Burberry. But it wants to be more exclusive than Hugo Boss or Dunhill which are not so known for their designers or tailoring heritage. It justifies its locationing in places like Rue Faubourg Saint Honoré , when Hugo Boss is ”just” in Rue Saintt Honoré. Brand signal that it’s high end luxury, not middle end .This is true especially when pound was still rated at 1/1,5€.

Price Premium compared to competitor in Price Premium compared to competitor in the mass and middle market sectorthe mass and middle market sector

Paul Smith’s direct competitors at mass market are hard to point out because of the positioning of the brand. Zara, Gap and H&M offer the individuality fast and cheap. Brands like and Fred Perry and Diesel have similar kind of appeal in their brands and they are not in the high end f the luxury spectrum.

Generally speaking, Paul Smith designs seeks timelesness and high quality rather than fast fashion. Prices are ten times higher than mass market and 3 to 4 times than Diesel and Fred Perry which are high end street fashion brands. Exclusivity, but down-to-earth. You don’t buy bling-bling or diamonds but style, design and high quality.

Paul Smith wants to differentiate from fast fashion with prices and quality and the author suspects that Paul Smith would never do a collection for H&M or use outside ”celebrity” designer.

ObservationsObservations

Some accessories are not in the line with the cloth prices. Good example is the watches which vary from 220€ to 300, which are relatively cheap for luxury brand (Paul Smith is not a very visionary watch designer either).

Prices are definetely exclusivity signaling and there are no discounts in stores Brand uses warehouse sales to get rid of the extra stock. Internet has few websites which sell Paul Smith products with hefty discounts, but the author suspect s – from the very ugly and hazy design of the web pages that these don’t have nothing to do with the real Paul Smith brand. Or products.

Accessories and t-shirts and Paul Smith Jeans collection are the entry products for new and young customers. Prices increase according to different collections which makes possible a lifetime relationship for the customer as there is always something new to dream about. This is very usual for contemporary luxury brands and justifies the masstige expression for Paul Smith.

Co-branded products have also ”Paul Smith” premium and keeps the pricing on line with the main brand.

Paul's many facesMovie, click to play

Wedgewood charity mug

Dream and Exclusivity Factors in Brand CommunicationDream and Exclusivity Factors in Brand Communication

AdvertisingAdvertising

Quirky, stylish, colorful, the stripes, the Paul Smith logo, playful...Coherence of the brand achieved!

Last but not least, himself and his various activitiesLast but not least, himself and his various activitiesSir Paul Smith is the ultimate manifestation of the brand which carries his name. Apart form the art and sports lover, he loves travelling and exploring. He has major impact dream and exclusivity factor through his public activities and comments in news papers and his own blog. It is hard to see anybody hating the persona of Mr Smith ( author found one doubting comment from the Economist, where someone criticized the prices of Paul Smith products). He contradicts the usual perception of star designer and fashion milloinaire and his brand does the same for the classic perception of luxury brand. Either he has a very clever image campaign which is used to differentiate from the competitors or he is truly an odd bird in the fashion industry. He is simply invaluable for the the Paul Smith brand.

and his various commentsand his various comments “I go to my office in Delhi, just for the day. I also went to the Great Wall of China and Vietnam for the day. My favourite was a day trip that took in Moscow in the morning, St Petersburg in the afternoon and New York at night. I'm busy - I have to visit places briefly.'

'It would be wonderful if fashion shows died out completely.'

“So many brands are too conscious of what everybody else is doing. I like to get my inspiration elsewhere: from exhibitions, books, or even a stained-glass window."

"Frankly, I don't care what people wear. If a person is nice, with good manners, I couldn't give a damn if he's wearing a shell suit."

"The business came about organically, but we've never borrowed money and we've been careful not to overexpand our product ranges,"

"I do often think what a privileged human being I am," he says suddenly. "I have a really enjoyable, interesting life, and I'm aware of that every day."

“I take pictures every day,” he explains. “It’s a visual diary of where I’ve been; something to show the grandchildren. I’ve always got a camera and a notebook stuck in my pocket.”

“We made the hamster T-shirt in three days. We get letters like that constantly.” Mr Smith after receiving hamster t-shirt query from 7 year old who had a pet hamster named Rubert.

On retailing in fashion industry. Click for video

Web pages and InternetWeb pages and Internet• The main web page of the company is very plain compared to brand

esthetics and brand DNA. It is filled with information, but it is disappointing especially if one visited Paul Smith shop before the web pages. Web pages fail also to make visual contributions to dream and exclusivity factors. They concentrate more on information which of course thells about the world of the brand, but as the saying goes: picture is tells more than thousand....

• Mr Smith’s blog is interesting and reinforces his image and tells about his world and what he finds exciting and novel. Of course there are his company related posts also. He also uses Twitter and Facebook in very same way as he does his blog. This feels like you are invited to his world and by the man himself. Not many other luxury brands use their main designer this efficiently to promote the brand and company.

• Official online shop is also somewhat disappointing because it has the dull main page as a platform. Products of brand like this suffer from plain surroundings.

Observations on communicationObservations on communication• Even the quirky brand liike Paul Smith uses relatively traditional advertising semiotics such as

youth, nature, high society, good looks. Although, it is not5able that Paul Smith doesn’t play too much with sex in the ads. Compare that to other luxury brand peers!

• Company succeeds perfectly in hiding their strategic and financial facts, thanks to not being public company.

• Sir Paul Smith is the manifestation of the brand. He has very good public image and is charismatic and likeable and his persona fits perfectly to Paul Smith brand. This is no surprise as he is the main designer, but a cynic might think that the knoghthood, humbleness and down-to-earth and controversial relation to fashion might be just a clever trick to differentiate from the competitors. Whatever the reality, it works and media feed from his hand. His impressive cavalcade of friends doesn’t do harm to brand and the dream it offers.

• Brand communication is very coherent and the feel and trademarks of Paul Smith brand are always present.

• Design and concept of the web pages should be rethought. They are not used optimally to reinforce brand image and dreaming & exclusivity (expect with prices in the online shop). Alhtough they provide lot of information about the company and Sir Paul Smith

International Distribution ModelInternational Distribution Model

International Distribution ModelInternational Distribution Model• Company has approximately 100 retail and 300 wholesale locations in 50

countries. These include:- Flagship stores and normal concept stores + airport stores- Department stores and smaller specialty stores such as footwear stores that

sell Paul Smith footwear or Colette which sell his accessories. • Flagships are located in the luxury shop districts which enhances the dream

and exclusivity factor, although the Paul Smith shop usually doesn’t seem to fit next to Gucci or Dior.

• Department stores where the brand is present are such caliber as Harvey Nichols, Harrord’s Gallery LaFayette, GUM, Barney’s and Neiman Marcus.

• Specialty stores are usually small and concentrate offering particular products forexample shoes, shirts, fragnances or watches etc...These also located often in high streets.

• Paul Smith has licensing on Fine china, fragnances, Spectacles clothing line and rugs. Licensees are top of the line producers. For example Watches are Swiss made and Fine China by Thomas Goode.

• Notable detail is that principal Japanese licensee, Itochu, owns now 40% of the Paul Smith company.

Physical Shop ConceptPhysical Shop Concept

• Concept in a nutshell is ”Expect the unexpected”. First timers which don’t know the brand can be even confused what the shop is about

• The dimension of Sir Paul Smith who visions every shop and approving the shop locations

• Every shop has different design, an odd idea in the luxury industry but fitting for the brand.

• Atmosphere is inspiring, elegant and still cozy and there are usually many sections with different themes. Products are placed traditionally but also sometimes one can’t say if something is buyable

• From cloth collections to books and to curious little objects like mini-robots and tooth brushes and candles

• Roses and paintings are trademark s are also the the stripes and colourfulness. • Especially visual sense is employed, music is relaxing but not classic, different

materials add touch –f or example wall made of pences in the Paris shop.

MerchandiseMerchandiseIn paper, the colourful and eclectic appereance of the shops can sound like circumstances that products get drowned to furnishing and decoriation, but they are natural part of the shops and theu are pieces of that Paul Smith world. Packaging and paper bags are line with the experience and make a memory

Shop Dream and Exclusivity factorsShop Dream and Exclusivity factors

Lot of shop art exhibitions and Lot of shop art exhibitions and happenings. Why?happenings. Why?

Space Gallery at Tokyo – Click for more information

Globe at Heathrow – Click for more information

Services and after salesServices and after sales• Service level is good . Stylish staff knows their products but they don’t push them and they don’t mind how much you spend time looking at the books or how do you look like.• Willing to help you find the product from other stores or inform you about the web pages. • 30 days return policy doesn’t promote luxury or high quality, but they take back even used products - through mail also - and return money to your credit card, not just shop credit• Judging from the web reviews from Paul Smith shops arounds the world, the customer experiece is not coherent though and some people felt that they have received mediocre or even service and after service. Volatility in service experiences is common problem in luxury industry• Exclusivity and brand heritage promoted by Bespoke in-house tailoring services which are available in major stores

Future of the brandFuture of the brand

Paul Smith is doing well at the moment and despite the recession it’s not in any trouble, Thanks to debtless state of the company, strong brand and brand loyal customers. The Chinese market has beeen difficult for the company. It might be that the Chinese consumer is not ready fot eclictic designs of the brand. The classic such as Chanel, LV Hugo Boss and Burberry are more easier and safer options for consumer in a culture that is highly community based and doesn’t yet feel secure enough to fanfare individuality what PS represents.

The role of the Japanese licensee, Itochu who owns 40% of the company, is interesting. Paul Smith went to Japan already in 1984 so the company is well established there and the probable reason for the selling is that the Sir Paul Smith’s side of the company wants to concentrate on other emerging markets. Kodanshaya knows the company culture and the Japanese – maybe also Chinese because they are huge in Asia – markets after 25 years and Smith seems to trust them 100%. There are still risks that they want to develop brand to other direction because it is probable that licensee staff is changing all the time and the respect for the brand DNA and heritage can detoriate if the trends in the markets are in conflict with the brand style and culture of the company.

Biggest question is what happens after Sir Paul Smith and his wife go from here to eternity or get too old to run the show. Brand is manifestation of Smith’s persona and designs. The move to sell the 40% to the trusted Japanese Itochu could have been sign of trying to ground the base for retaining character for the time after Smith. Many brands carry their founders name and use the heritage of these greats to carry on the business, but this may be trickier for Paul Smith because the designs are so personal. The finding of a new creative designer will cause headache to executives. Keeping the exclusivity is easy, but the dream side is made of from the very dreams of Sir Paul Smith.

Some lessons learned from Paul Smith’s 4PsSome lessons learned from Paul Smith’s 4Ps1. You can be succesful by staying true to yourself. It may feel safer to go with the flow,

but the brand loses originality in blind trend worshipping.2. Logos and trademarks in the design are important to sustain fom collection to

collection. Logos are not dead, they are very much alive, just make them smaller. You can have one main designer over 30 years and use the face effectively in brand building.

3. By staying true to brand DNA in all time and collaborating with unexpected subcultures, Paul Smith has gained also credibility from consumers that are not exactly in to the luxury and it has been able gain attention of creative class and subcultures.

4. You can execute your marketing campaigns and catwalk showdowns without relying heavily on sex, seduction and bare skin. Everybody can take their clothes off, it is not exclusivity. You can also do withouth continuous advertisement and celebrities attached to your brand. Credibility is what you get in exchange.

5. Shops can be done in very imaginative style. Location and prices and service makes it exclusive, inside of the shop is what makes you dream. And there are wide variety of dreams in people’s heads. You can look behind the bling-glam-shiny-pinstripe-gold-diamond clichés and find new consumer groups for luxury products.