Virgil Abloh: Building on a Legacy

Virgil Abloh was an icon and trailblazer. Called the Karl Lagerfeld of his generation, he brought intellectualism to streetwear with his label Off-White, while, conversely, injecting luxury giant Louis Vuitton with the ethos of hip-hop and skate culture.

But he also changed the fashion industry well beyond these brands, pushing the boundaries of collaboration, shaking up outmoded systems for creating and distributing products and opening the doors of fashion’s ivory tower to a wider cast of people, in particular young Black creatives, no matter if they lacked formal training.

His most significant legacy may ultimately be the way he reinvented what a creative director does: Abloh was multi-hyphenate talent, not just a designer and a DJ, but a branding maestro and a natural community builder who encouraged others to follow in his footsteps. “You can do it, too,” he used to say.

And yet, his talent was somehow singular. Which begs the question: can anyone replace him?

Louis Vuitton is a colossus that is far bigger than any one designer. As Vuitton chairman Michael Burke said in a recent interview, “the death of a designer is traumatic, but it’s not the death of the brand. Not at Vuitton.” Whether Virgil’s successor at the mega-label will deliver continuity or disruption remains to be seen.

But what does Abloh’s death mean for Off-White? Can the brand founded by the designer continue to grow on the back of the powerful legacy that he leaves?

Brief histories of Saint Laurent, Alexander McQueen and Versace may offer some signposts for what could be — or at least at add some context to the question.

Saint Laurent After Yves

Saint Laurent, the Kering-owned mega-label we know today, was built on the legacy of designer Yves Saint Laurent, one of the most transformative forces in 20th century fashion. He changed the way women dressed: replacing the signature cinched waist with a more fluid silhouette for his critically acclaimed debut collection for Christian Dior in January 1958; designing blazers, trousers and suits for women after debuting Le Smoking in 1966; and freeing the nipple with sheer organza blouses and transparent tops at the height of the sexual revolution in the late 1960s.

He incorporated art into his fashions, most notably with his 1965 Mondrian collection, but also in his use of Van Gogh, Warhol, Picasso, Matisse and Braque. He broke down boundaries in media and advertising, posing nude for the ad campaign for his first men’s fragrance in 1971, and was an early champion of diversity, casting the likes of Iman, Rebecca Ayoko, Katoucha Niane and Dalma Callado. He also added a new category to high fashion as the first couturier to create ready-to-wear.

YSL was acquired by the Gucci Group (now Kering) in 1999. Initially enthusiastic about the deal, Yves remained at the helm of the couture business whilst Tom Ford took over ready-to-wear. But as soon as Ford started to deviate from Yves’ codes, the knives came out.“ The poor guy does what he can,” said Yves to a gaggle of reporters.

Stefano Pilati hued close to the brand’s original DNA, faithfully reworking Le Smoking, the brand’s famous safari jackets and tulip skirts over his eight-year tenure. He also created one of the brand’s all-time bestsellers: the Tribute sandal. During his eight-year tenure, the brand grew turnover from €169 million to €344 million.

But major commercial success came, later, when Hedi Slimane took the reins in 2012, four years after Yves’ death. No doubt freed from the past, Slimane, inspired by the disruptive roots of the brand, mined its rock ‘n’ roll spirit, rebranding it as Saint Laurent and growing the brand to a turnover of €974 million within four years. In 2016, Slimane was succeeded by Anthony Vaccarello and the brand is now a major contributor of revenue and profit to Kering, surpassing €2 billion in sales 2019.

Alexander McQueen After Lee

Alexander ‘Lee’ McQueen was undoubtedly one of fashion’s greatest disruptors. He combined mind-blowing technical ability — his team learned never to say no to a challenge because they would often come into the studio in the morning to find a finished garment that McQueen had spent the night resolving himself — with an innate sense of theatrics and the desire to explore uncomfortable themes.

One of his first shows, “Highland Rape,” featured ravaged models in lace dresses, Scottish tartan and provocative tailoring. Its low-cut garments spearheaded a fashion trend that dominated the early noughties. The finale of his 13th show featured a spinning Shalom Harlow in a puffy white dress as two robotic arms from a car manufacturing plant sprayed her with paint in what was one of the first uses of high technology at a fashion show. “Voss,” his most memorable show, ended with a large nude woman covered in live moths, her face obscured by a gas mask. His final collection was beamed to the world in what was fashion’s first Internet livestream.

After the designer’s suicide in 2010, the future of the Alexander McQueen brand was unknown: its DNA wasn’t fully formed, and though its collections were selling, it had not yet become a real commercial success. But Sarah Burton, Lee’s right-hand for 14 years, was able to take the essence of McQueen and imbue it with her own identity, drawing upon the same themes explored by the designer to celebrate craftsmanship and produce flattering clothes, taking the brand to a new level of commercial success, symbolised by the Duchess of Cambridge wearing McQueen for her wedding.

Versace After Gianni

Gianni Versace was a rare fashion genius, too. Christy Turlington, Naomi Campbell, Linda Evangelista and Cindy Crawford walking down a runway lip-syncing to George Michael’s “Freedom! 90″ was one of history’s most iconic fashion moments. The man who orchestrated it? Gianni Versace. He also helped launch the career of actress Elizabeth Hurley and pioneered the concept of celebrity front rows.

“Much of what is considered de rigueur about fashion … [Versace] put his stamp on in his 1990′s glory days — the splashy, expensively made ad campaigns; the star-studded front rows; indeed, the entire fashion-celebrity nexus,” noted Vogue.

Beyond tearing up the fashion rule book with collections drenched in opulence and sex, Versace’s greatest manoeuvre was mixing rock ‘n’ roll with royalty. At the time of his murder in 1997, he was one of the most famous fashion designers in the world and counted Princess Diana, Elton John and Tupac Shakur as fans.

The daunting task of continuing Versace’s legacy fell to his sister Donatella. The pressure sent her to rehab, but she emerged with fresh perspective: “I had been listening to everyone else, and then I realised, ‘Who was the person my brother listened to? Me,’” Donatella told The Guardian in 2017. Her newfound confidence put the label back on track, ultimately leading to a $2 billion deal with Capri Holdings, valuing the Versace business at an EBITDA multiple of 41x.

Off-White After Abloh

Like Yves Saint Laurent, Lee McQueen and Gianni Versace, Virgil Abloh leaves a powerful legacy. But finding a suitable successor will be a challenge. Off-White, while controlled by Vuitton parent LVMH and operated under licensed by Farfetch subsidiary New Guards Group, is entirely Abloh’s creature, at least creatively.

But his death does not necessarily spell a dull future for the brand. A bid for continuity, drafting in someone who completely aligns with Virgil’s creative vision, would be a safe play, as illustrated by the Chanel’s choice of Virginie Viard to succeed the towering Lagerfeld after his 2019 death.

But Off-White is a young brand, so synonymous with Abloh that continuity may require a successor to stay anonymous. Another option is a faithful design team. How LVMH and New Guards Group decide to proceed remains to be seen.

The Savigny Luxury Index (“SLI”) gained over 7 percent in November on the back of further strong results announcements and expectations of a solid holiday trading season closing the year at well above -pandemic levels, while the MSCI was flat.

SLI vs. MSCI

Going up

• Richemont topped the leaderboard this month, with a share price increase of just under 21 percent, driven by excellent first half results notably at its jewellery maisons, the market welcoming it was in advanced talks with Farfetch regarding the sale of a stake in YNAP, and the release of strong Swiss watch export data.
• Hermès gained 20 percent in November fuelled by the speculation the stock is to be included into blue-chip European index EuroSTOXX 50 as of December.
• Capri Holdings ended November up 11 percent on the back of a full-year profit forecast rise.

Going down

• Burberry’s shares lost 9 percent of their value this month on the back of flatlining second quarter sales (vs 2019) due to bad weather and Covid travel restrictions in China.
• Ralph Lauren’s shares took a hit as a result of supply bottlenecks increasing shipping and raw materials costs — the stock ended November just under 9 percent down.

What to Watch

Ferragamo’s share price ended the month almost 10 percent up, despite a disappointing set of results. The family-controlled company has been struggling to find its feet since the matriarch Wanda Ferragamo relinquished control, eventually passing away in 2018. Wanda had taken over the company after her husband Salvatore passed away from cancer in 1960 and over the course of five decades, first as president and then as chairwoman, oversaw the growth of the company from a small shoe-design and manufacturing concern in Florence into a leading luxury goods house that ranged beyond shoes to sell leather wallets, silk scarves, crystal flacons of perfume and much more. She also steered the company towards a public listing in 2011, having rebutted numerous offers by strategic buyers. Now hopes are pinned on ex-Burberry chief Marco Gobbetti who will start in his new role as CEO in early 2021 and by the looks of the recent share price performance, expectations are high.

Sector Valuation

Pierre Mallevays is a partner and co-head of merchant banking at Stanhope Capital Group.