Luxury

Napa's Valley

"Napa's winemakers are in the throes of a classic market disruption," reports Katrina Heron in the New York Times (2/17/10). Last year, according to Nielsen, "sales of wines priced $25 and above dropped 30 percent nationwide." Ivo Jeramaz, a vice president at Grgich Hills Estate, confirms that sales at his winery are down by about a third. The situation is so dire that at least one vineyard has taken to selling surplus grapes at a roadside stand, and others talk about just "skipping a vintage, which would amount to wiping a year off the calendar."

Ivo's boss, 87-year-old Mike Grgich, is so nervous that he's abandoned his lifelong distrust of technology. "Get me Facebook and Twitter!" he recently commanded his staff, perhaps hoping to bottle his old wine in new media. Vintners increasingly are embracing a strategy known as "retail room," a combination of "the winery tasting room, the now-ubiquitous wine club, and, most of all, nascent e-commerce."

Stuart and Charles Smith, of Smith-Madrone Vineyards, have been on this track for some time, tending "to their customer list with the same care they lavish on their wines." Stuart says his winery "would be in very tough shape if it wasn't for our on-site and internet sales." Dario Sattui of V. Sattui meanwhile has built its wine club into "40,000 active members" and "35 percent of his business is done via mail order or on the internet, with the balance handled on-site." But even Dario admits, "Making wine -- that's the easy part. It's selling it that's hard."

Connecticut Chocolate

Pierre Gilissen grew up in Belgium, makes chocolates in Connecticut, and won't ship his goodies anywhere, reports Jan Ellen Spiegel in the New York Times (2/14/10). Pierre's chocolates, available only at Belgique Patisserie & Chocolatier in Kent, Connecticut, sell for $65 a pound. Belgique produces just 18,000 pounds of chocolates a year. For this, customers can expect perfection: "I'm not going to do it if I can't do it right," says Pierre. "People think you just buy a block of chocolate; you melt it; you dip the strawberry in it. Not quite, it's a little bit tricky."

He demonstrates this while making chocolate shells, rejecting and remelting a batch that he deems too thick. He won't ship because "his molded, three-step chocolates are traditional Belgian pralines filled with classic gianduja, a hazelnut ganache, and other mainly chocolate mixtures that must be refrigerated because of the large amount of cream they contain." His artisanal enterprise is just one of at least nine chocolatiers that have popped up in Connecticut over the past dozen years.

Others include Knipschildt Chocolatier of Norwalk, which offers both single-estate and single-country chocolates. Knipschildt also mixes "chocolates with spices, herbs and other savory flavorings, especially chiles and sea salts." Interest in locally produced chocolates has grown with chocolate's "emergence as something just short of health food." Despite its calories and fat, high-cocoa percentage chocolate "contains flavonoids that appear to have several health benefits." Sales of white chocolate, meanwhile, have plummeted.

Warm Nuts

You can get any kind of nuts you want in New York City, but if you want them warm and freshly roasted, there's about only one shop left that still does that, reports Diane Cardwell in the New York Times (2/4/10). That would be SP's Nuts and Candy, where a "classic stainless-steel roaster spins in the window, churning out seven-pound batches of hot almonds, cashews and pistachios, up to 10 times a day." Michael Yeo, the store's owner, bought the store in 1996, and enjoys a devoted following. "My customers know that I roast here so I cannot stop," he says, "If I do -- big trouble."

A Korean immigrant who never developed a taste for nuts himself, Michael just stumbled into the business, finding it for sale in a newspaper ad. "Literally I didn't have any idea there were this many different kinds of nuts, this many kinds of candy," he says. But the previous owner taught him what he needed to know, and he's now "keeping alive a New York tradition that has all but vanished over the past several decades ... Of the 38 Manhattan retail food operations licensed with the word 'nut' in the company name, only seven bear any resemblance to the nut sellers of yore, and none of them roast."

Jerry Cohen, who runs Economy Candy on the Lower East Side, still sells nuts, but gave up roasting. "It just became too much, with the oils and the smells and the Fire Department coming to inspect each week," says Jerry. "You need this permit, that permit -- they don't let you live." Rocco Damato of Bazzini, a nut importer and wholesaler, meanwhile says a combination of fancy imported nuts, high rents, and customer migration to the suburbs created "the catastrophe you have now." It's a catastrophe that William Black saw coming "in the early 1930s, when he converted 18 Chock full o' Nuts stores into coffee shops." This was, of course, during the Great Depression, when it seemed like fresh roasted nuts were "too much of a frivolous luxury."

Hybrid Oysters

If efforts to cross-breed oysters are successful, it could "turn a delicacy for the wealthy into the food of the masses," reports the Economist (1/30/10). Dennis Hedgecock of the University of Southern California has been working on this for several years now. He and his colleagues discovered that crossing "a tiny inbred strain called 'oyster 6' ... with a the similarly puny 'oyster 7,' the result is a large and fast-growing oyster -- 'oyster 6x7' -- which is easy to open and produces tens of millions of eggs."

The only problem is that you can't then breed the 6x7 oyster with itself because "the resulting offspring are puny again." That wouldn't be a problem if it were possible to produce large quantities of the 6x7 oyster, but it isn't. So Dr. Hedgecock and his team have taken "some other puny inbreds and created a second hybrid line, oyster 8x9. This variant doesn't breed well with itself either, but the magic happens when the 6x7 makes whoopie with the 8x9.

When that happens, the result is the "super-duper 6x7x8x9 crossbreed," which is large, flavorful and can be produced in "large quantities." Next year, these hybrid oyster SUVs will be "grown on a commercial scale." If that works, "oyster farming could follow the same path as salmon farming." Unlike salmon farming, however, oysters "are filter feeders that clean up the water column, making oyster farms healthy parts of the ocean," perhaps pleasing "consumers and environmentalists alike."

Art of Shaving

Eric Malka, co-founder of Art of Shaving, thinks it's a mistake "to underestimate the importance of a smooth shave," reports Sean Gregory in Time (1/06/10). He -- and his wife, co-founder Myriam Zaoui -- should know. Fourteen years ago, they sold their BMW for twelve grand and started making shaving cream. "She blended some oils for me to put under my shaving cream so that the razor glided over the skin and didn't grab hair," says Eric. "It worked magic for my skin and was the catalyst for starting the shaving business."

Today, the Art of Shaving has 36 stores across America that look perhaps more like jewelry stores than anything else -- trimmed in wood and displaying fancy razors in glass cases. Prices are pointed accordingly: A "sterling-silver razor, stand and brush" sells for $3,400." If you cheap out go for the nickel-plated brass handle, it's still $175. Five ounces of shaving cream will set you back $22. If you think that sounds wildly out of step with the times, you'd be right -- except that the store's "revenues rose 19 percent during the last quarter of the year."

Not only that, but Procter & Gamble bought the franchise last June for an undisclosed sum (link). This left some observers puzzled: "You kind of wonder what they are doing here," says Linda Bolton Weiser, an analyst, suggesting the company may have lost its way. But another analyst, William Chappel, thinks otherwise: "This is alternative marketing, just another way to promote the Gillette brand," he says, adding, "This isn't a core push into retail." And, as Eric Malka notes, "spending $100 on shaving products becomes very inexpensive once you realize the benefits our products have on your skin."

Tears of Mermaids

"Pearls embody how humans can trick Mother Nature into producing some of the world's most expensive objects," writes Stephen G. Bloom in "Tears of Mermaids," as reviewed by Joseph Sternberg in the Wall Street Journal (12/28/09). "A perfect natural pearl of extraordinary quality may be the product of one out of ten million oysters," Stephen explains. This, of course, is the reason pearls are so expensive, and until the late 1800s, only the very wealthy could afford them.

That began to change in 1888, when "Kokichi Mikimoto, the son of a poor noodle-maker in Japan, started a pearl farm that would eventually democratize the world pearl market. By the first decade of the 20th century, Mikimoto had perfected a technique for cultivating pearls, inserting a nucleus of North American mussel shell into an oyster that would then produce a pearl in as little as two years ... Cultured Japanese pearls took America by storm in the 1940s and '50s when homeward- bound GIs bought them for their wives and girlfriends."

It was kind of a no-brainer, since pearls, essentially, are just "accumulations of concentric layers of nacre, a compound of calcium carbonate that some mollusks ... produce to line the insides of their shells." But pearls also form a kind of "aesthetic rapport ... with their wearers, absorbing body heat and seeming to glow and reflect luminescence onto the skin." Today, Chinese entrepreneurs "have found ways to culture pearls in a species of mollusk that can produce more pearls per bivalve than the typical oyster," making pearls "cheaper and available in more varied colors" to more people than ever.

Luxury's Touch

Snooty attitudes are giving way to customer service worthy of a hardware store at some of the top luxury retailers on Madison and Fifth, reports Eric Wilson in the New York Times (12/22/09). Actually, a recent report by the Salt & Pepper Group "rated the service in luxury stores like Nordstrom, Bergdorf and Saks as no better than what was found in home-improvement stores like Lowe's and Ace Hardware." Rick Miller of Salt & Pepper says the problem is that most retailers are good at transactions, but "not very good at building sales relationships." But in a funky economy, even the haughtiest retailers are attempting to make shoppers feel more welcome.

Bergdorf Goodman actually fired its doormen because they weren't friendly enough and is now sending customers thank-you notes "for buying as little as an $18 bottle of nail polish or a lipstick." Lord & Taylor "has been coaching sales people to be less intimidating." At Dennis Basso, a fur shop, Dennis himself is now greeting customers, even transient Christmas shoppers. At Hermes, where shoppers sometimes must join a waiting list for certain items, Jody Black was shocked when a saleswoman bothered to track down a particular handbag for her.

"That's the kind of store where they really don't care if they don't have what you're looking for," she says. Jody was even more surprised when the same saleswoman remembered her when she returned to the store weeks later. "Every customer is valuable ... and they're even more valuable today because there are fewer of them," says Ron Frasch, merchandising chief at Saks. Lord & Taylor ceo Brendan L. Hoffman agrees: "As the business gets more challenging, customer service is one of the first places we're going to look to improve," he says, adding, "It's like mom and apple pie."

Cowboys Stadium

Jerry Jones says he could've built the new Cowboys Stadium for only $800 million, but he "wanted this stadium to have a 'wow' factor," reports Mark Yost in the Wall Street Journal (9/9/09). So, instead he built it for $1.2 billion, "mostly by going to the credit markets, just like every other highly profitable business is expected to do. He did get $300 million from the city of Arlington (Texas), but in an era when taxpayers are expected to pick up most -- if not all -- of a stadium's cost, this was a bargain."

The stadium itself measures "three million square feet" and qualifies as "the largest air-conditioned room in the world ... The main structural support beams, which each span a quarter mile from end to end ... help project the institutional swagger of a franchise that hasn't made it past the wild-card playoff in more than a decade but still calls itself, 'America's team." It seats 100,000, but of course some fans are created more equal than others, and can buy "suites that carry a $150,000 one-time license fee." Club-level seats meanwhile "carry a one-time personal license of up to $50,000 and a season ticket costs $3,400."

Indeed, "it's clear that the primary focus of this stadium is luxury, including five levels of suites and clubs." The most innovative are field-level suites that feature a patio "just 10 yards from the sidelines." The view isn't great from there, so there's a private staircase to "the first two rows of stadium seats for these fans." For everyone else, there are $29 standing-room tickets, and extra-wide open stairways that "offer great views" both of the field and the stadium's "$40 million video scoreboard." Presumably the cheap seats also provide ready access to the stadium's $13 Kobe burgers and $9.50 bottles of beer.

Room 4 Us?

I've never been to Bergdorf Goodman, the fancy Manhattan department store, much less its Room 4. You've probably never been to Room 4, either. It's the dressing room in Bergdorf's personal shopping department, where the rich or famous are pampered with champagne or food as they check out really nice clothes and stuff, selected exclusively for their consideration.

I only know about Room 4 because Alan Feuer of the New York Times wrote about it, and I assume he wrote about it because Bergdorf invited him in. Alan describes Room 4 as "peach-walled" and tricked out with wi-fi, zebra-patterned ottomans, three-way lighted mirrors and generally flattering atmospherics. He also quotes Todd Okerstrom, whom he describes as "Bergdorf's immaculately clad director of personal shopping."

Todd says, "Everything is possible here," but suggests the experience is more about convenience than luxury. "The time factor is enormously important," he explains. Alan wonders if it's "a blind spot of the boutique trade to create false divisions among the comfortable, the rich and the extremely rich" like this. I wonder if it's a blind spot in retail to create those divisions between those folks and everybody else. Is there Room 4 the rest of us? What do you think?

Tea Boutiques

Sales of gourmet tea are up, even when the economy is down, reports Sonia Kolesnikov-Jessop in the New York Times (9/18/09). "There is definitely no crisis when it comes to gourmet tea; our sales have been increasing every year by 15 to 20 percent ever since we started in 1987," says Francois-Xavier Delmas, founder and chief executive of Le Palais des Thes in Paris. Another high-end tea retailer, Mariage-Freres, also reports healthy growth, and says it would be growing even faster if it offered franchises, which it won't.

"Believe me, so many have called us for that, we could have opened a store a month become a Tea Starbucks," says Phillippe Cohen-Tanugi, director. Yet another French gourmet tea company, Dammann Freres, "sells about 800 tons a year" and last year opened "its first tea boutique in Paris. Since then, it has opened three boutiques in Japan and is considering a second in the French capital and one in London." By now you must be wondering why all of these tea companies are French, and not English or Asian.

It's actually been that way for the last 20 years. Francois-Xavier says he thinks it's "because unlike the British who are very used to drinking tea, the French had no preconception about tea; they are willing to experiment." And Phillippe says, "The French drink the widest range of teas in the world, bringing the same attention and connoisseurship to the choice of the right tea as they would the proper wine." They do have competition from Singapore-based TWG Tea, which plans to open its first New York shop next year. Mariage Freres also has its sights on NYC, sometime after 2010.

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