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Jimmy Choo founder Tamara Mellon puts the boot into private equity; They come in and raid – raid your bank account and take your accomplishments. It’s all about fattening the pig for the slaughter, with no care about the people or the product. They came in, their only focus was their exit strategy, [and] on exit, you are thrown to the wolves.”

Jimmy Choo founder Tamara Mellon puts the boot into private equity

The Jimmy Choo co-founder wants to boot private equity out of fashion.

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Tamara Mellon co-founded Jimmy Choo in 1996, after a stint as Vogue’s accessories editor Photo: Rex Features

By Katherine Rushton

9:00PM BST 28 Sep 2013

The first fashion collection Tamara Mellon will produce under her own name includes an extraordinary garment called “Sweet Revenge” – a pair of tight-fitting leather leggings that end with high-heeled boots. The Jimmy Choo co-founder is counting on this item to put her new venture on the map. The name is deliberate. It is, she says with a wry laugh, an example of the kind of innovation that was all but bled out of the luxury shoe label before her departure in 2011. Mellon, 46, takes a dim view of the private equity industry’s compatibility with the fashion business, or any creative endeavour for that matter, after a bruising decade at Jimmy Choo while it was being passed between different private equity owners. “They’re the sociopaths of investment banking,” she says. “They come in and raid – raid your bank account and take your accomplishments. It’s all about fattening the pig for the slaughter, with no care about the people or the product. “I’ve been through three private equity deals, and it was the same thing, every time. They came in, their only focus was their exit strategy, [and] on exit, you are thrown to the wolves.” Read more of this post

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How Converse went from bankruptcy to a $1.4 billion business

How Converse went from bankruptcy to a $1.4 billion business

By Laura Lorenzetti September 28, 2013

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As its parent company commands, Converse is just doing it. The 105-year-old brand has grown at breakneck pace since Nike rescued the company in 2003, two years after it filed for bankruptcy. Since its cultural heyday in the ’80s, the hip sneaker has experienced a rebirth. On Thursday, Converse posted an 18% increase in revenue over the past three months, a shining star on an overall impressive balance sheet for Nike. From now on Converse will report its earnings separately, heralding the brand’s standalone success. In 2002, the flailing company reported just $205 million in revenue. Since, Nike has transformed the brand into a $1.4 billion business—and this year’s revenue is on pace to surpass that number. Converse has seen the strongest growth in the North America, China and the UK, where it’s made significant investments over the past several years. How was Converse able to turn around?

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VF Corporation’s TSR-Led Transformation

VF Corporation’s TSR-Led Transformation

by Gerry Hansell, Jeff Kotzen, Eric Olsen, Frank Plaschke, and Hady Farag

SEPTEMBER 17, 2013

VF Corporation is the world’s largest apparel company, with a market cap of $22.8 billion and a stable of strong brands ranging from heritage businesses Lee and Wrangler jeans to more recently acquired lifestyle brands such as The North Face and Timberland. Over the past seven, five, and three years, VF has delivered a TSR of 19 percent, 21 percent, and 30 percent, respectively, making it a consistent top performer among its direct peers. (See Exhibit 1.) The company just missed making our top-ten rankings for the broader global consumer durables and apparel industry by half a percentage point; it came in at number 11.

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Managing the “Unmanageable”: Radical Innovation

Managing the “Unmanageable”: Radical Innovation

by David Küpper, Markus Lorenz, Andreas Maurer, and Kim Wagner

SEPTEMBER 25, 2013

Overview

In recent decades, one of management’s objectives has been to add discipline to innovation. Companies have greatly improved the efficiency of new-product development, and managers have been able to draw on a variety of processes, methods, and tools to maximize the return on their R&D investment. Unfortunately, these advances have had the unintended consequence of discouraging radical innovation: technical breakthroughs that render existing products obsolete or that create new markets altogether. In this report, we look at products—not services or business model innovation. Unlike incremental innovation, radical innovation involves a great deal of uncertainty—the very quality that is not tolerated by most management techniques. As a result of this intolerance for uncertainty, companies have been undertaking less and less radical innovation. A recent study by the Product Development and Management Association found that radical innovation accounted for only 10 percent of an average company’s innovation portfolio, down from 21 percent in 1990. As the new productivity measures gained traction, managers naturally gravitated to projects that succeeded under the new constraints. More and more, breakthrough projects with high failure rates and less predictability lost out when investment priorities were set.

Managing_Unmanagable_Ex1_Large_tcm80-145175 Managing_Unmanagable_Ex2_Large_tcm80-145178 Managing_Unmanagable_Ex3_Large_tcm80-145181 Managing_Unmanagable_Ex4_Large_tcm80-145184 Managing_Unmanagable_Ex5_Large_tcm80-145187 Read more of this post

The Most Innovative Companies 2013: Lessons from Leaders

The Most Innovative Companies 2013: Lessons from Leaders

by Kim Wagner, Eugene Foo, Hadi Zablit, and Andrew Taylor

SEPTEMBER 26, 2013

“Innovate or die,” goes the oft-cited corporate cry, and according to The Boston Consulting Group’s most recent survey of innovation and new-product development, companies across all industries and regions have taken the admonition to heart. Respondents ranked the importance of innovation higher than ever, building on a trend of the last five years.

(https://www.bcgperspectives.com/content/interactive/innovation_growth_most_innovative_companies_interactive_guide/)BCG has explored the state of innovation with eight surveys since 2005. The data collected from more than 1,500 senior executives each year allow for comparisons over time as well as across regions and industries. The findings capture executives’ views of their own innovation plans, as well as their opinions of other companies’ innovation track records. As in past surveys, the 2013 results reveal the 50 companies that executives rank as the most innovative, weighted to incorporate relative three-year shareholder returns, revenue growth, and margin growth. The list has its share, as always, of well-known technology innovators (especially among the top ten), but automakers also show a strong surge, a trend that began last year and gathered strength in the current results. This time, we also asked respondents to identify up-and-coming companies at which innovation is driving rapid growth.

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How Value Patterns Shape Priorities for Value Creation

How Value Patterns Shape Priorities for Value Creation

by Gerry Hansell, Jeff Kotzen, Eric Olsen, Frank Plaschke, and Hady Farag

SEPTEMBER 17, 2013

How do successful companies make the right choices in order to create attractive shareholder value? There is no one simple or universal formula. Companies as different as the North American retailer of high-end yoga and exercise clothes Lululemon Athletica, the Korean automaker Hyundai Motor Company, and the U.S. industrial supplier W.W. Grainger all delivered shareholder returns over the past five years that were strong enough to earn them a spot in our top-ten rankings in their respective industries. But they illustrate the diversity of company starting positions, and each achieved superior performance following quite different paths.

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Unlocking New Sources of Value Creation

Unlocking New Sources of Value Creation

by Gerry Hansell, Jeff Kotzen, Eric Olsen, Frank Plaschke, and Hady Farag

SEPTEMBER 17, 2013

Unlocking New Sources of Value Creation is the fifteenth annual report in the Value Creators series published by The Boston Consulting Group. Each year, we offer commentary on trends in the global economy and world capital markets, share BCG’s latest research and thinking on value creation, describe our experiences working with clients to materially improve their value-creation performance, and publish detailed empirical rankings of the performance of the world’s top value creators. This year’s report offers four different perspectives on successful value creation. We begin by analyzing the recent disconnect between uneven global economic growth and buoyant global equity markets. Next, we describe how senior executives can use value patterns, a concept we introduced in last year’s report, to identify the most appropriate “unlocks” to create new value. We follow with a detailed case study of how one BCG client, the branded apparel company VF, has used a focus on total shareholder return to transform the company’s business, accelerate its growth to the point that today it is the world’s largest apparel company, and deliver shareholder value at the top end of its peer group. Finally, we conclude with our annual rankings of the top ten value creators worldwide and in 25 industries for the five-year period from 2008 through 2012.

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