Chanel takes a stake in celebrity-founded brand
New York-based leathergoods brand The Row has won the admiration of Chanel, according to the Wall Street Journal. It said an investment vehicle set up by the family behind Chanel, the Wertheimers, has now taken a stake in The Row.
According to the WSJ, one of the reasons why The Row has attracted attention is its success in emulating an Hermès strategy, using “manufactured scarcity” to boost demand for its bags.
The newspaper said there is evidence that The Row’s Margaux bag is in “high demand” because its resale price is currently more than 40% higher than it costs to buy new. Made in Italy, the bag has a retail price on The Row’s e-commerce site of $4,700, but it is sold out. This is prompting fans to buy the Margaux second hand at a premium.
According to the WSJ, this puts the bag in an elite group of products with the Hermès Birkin bag, although at a lower resale premium.
The Row launched in 2006 as part of a shift from acting to the fashion business that child television and film stars Mary-Kate and Ashley Olsen made. The Olsen twins still run The Row; Ashley is the brand’s chief executive, while Mary-Kate is its creative director.
