First-Class Brand, But Will it Travel?

You know you’ve got it made, marketing-wise, when others start using your brand as a shorthand. “A new Jaguar estate car, launching in the glossies, asked if we’d mind if they said, ‘all you can hear is the rustle of Harvey Nicks bags’, in their ad. We didn’t mind,” says Julia Bowe, marketing director of luxury department store group, Harvey Nichols.

”There’s an international awareness of Harvey Nichols already - helped by the fact that Absolutely Fabulous has gone global. We’ve become generic for a fabulous lifestyle.”

PR plays a crucial role in building luxury department stores’ brands. Selfridges is hijacked by its festival every year, which transforms the retailer with themed merchandise and entertainment.

Anne-Marie Verdin, marketing and communications director at Harrods, says: “For a store that has traditionally sold everything from pins to elephants, PR lights the torch that communicates all the exciting new products, fashion and innovation.”

Bowe says her four-strong PR team in London generates monthly press equivalent to buying £1m-worth of press ads. But the big question for Harvey Nicks is whether it can really use PR on an international scale now that it has opened a licensed store in Riyadh, Saudi Arabia, and has plans to expand into Hong Kong and open a licensed store in Dubai next year?

Harvey Nichols’ PR machine has already cranked into action in Dubai and Hong Kong. But there does not seem to be a real marketing model for a department store launching in an international market. Even the biggest names - Saks Fifth Avenue, Neiman Marcus, Harrods and Selfridges - have rarely moved into international expansion beyond airport outlets. Harvey Nichols’ local teams from new markets will be under pressure to develop the enviable press relationships that the store has in the UK.

Lynne Franks, who headed up the store’s PR a decade ago, however says: “There are enough international magazines and London-based correspondents to build Harvey Nichols’ brand abroad. For fashion stores there’s just a small group of influencers that you need to target.”

One reason for Harvey Nichols’ popularity among fashion editors is its willingness to lend designer clothes for lavish photo shoots. Bowe describes this service as “the best product placement department in London”. One person in the marketing team is responsible for liaising with stylists, enabling magazines such as Vogue to borrow products every day of the week.

Significantly, Harvey Nichols is also legendary at throwing parties and often used as a launch pad for designers. Bowe recalls the 1999 party for Visionaire, the limited edition fashion magazine, with Kate Moss on the fifth floor of the store. “I remember pulling fashion designer Alexander McQueen out of the queuing crowds,” says Bowe. That event alone generated £350,000 worth of immediate PR.

Although 40 per cent of Harvey Nichols’ marketing budget is invested in PR, its press ads also generate column inches. “If you don’t have the largest marketing budget you have to create ads that stand out. If we used the same formula - photographer of the moment, sexy model of the moment - we’d get lost,” says Bowe.

An ad for Harvey Nichols’ new shoe department, depicting a glamorous mother-to-be giving birth in a pair of strappy heels and painted toe nails, generated so much publicity that shoe sales were 20 per cent higher than planned that season. “There was no need to advertise it again. An unconscious part of everything leads to PR - it’s part of our DNA,” she reveals.

However, Martin Thomas, partner of communications consultancy Nylon, suggests that Harvey Nichols may need to advertise in glossy magazines for other reasons. “They would never admit to it, but magazines such as Elle and Vogue are commercially sensitive and would expect Harvey Nichols to invest in advertising. These glossies are very influential and that relationship needs nurturing on every level.”

This is not the retailer’s first foray outside London. In 1996, Harvey Nichols launched a store in Leeds, followed by Edinburgh and Manchester and a boutique store in Birmingham. Anecdotal evidence from retail analysts suggest the regional stores are not yet performing as hoped.

”Aspirational department stores have limited scope outside big city centres,” warns Maureen Hinton, senior analyst at retail consultancy Verdict.

In the overseas market, the group is not deterred by arguments that it is actually Harrods which has a truly global brand. Harvey Nichols refuses to confirm speculation that it will soon be opening in Dublin Chief executive, Joseph Wan, however lists South America, China, India and Turkey as potential new markets. “These emergent markets have a large population where there is a sufficient base of 1-2 per cent of affluent, fashion-conscious consumers and a lower cost of doing business.”

Wan has ambitions for Harvey Nichols’ own-brand range in food, perfume, accessories and men’s and womenswear, to generate 10-15 per cent of the group’s turnover in a decade. “I want to create the Harvey Nichols brand in its own right, so it will be competing with the likes of Gucci. This is a higher-margin business and will also increase our brand awareness internationally,” he says.

Wan’s priority remains overseas licensed stores. Lynne Franks however suggests thinks the focus should be closer to home.

Franks adds: “What you do in London will have an effect across the world and rub off in newer markets. Harvey Nicks needs to get its ‘zip’ back. They should call me up. They’ve lost out to Selfridges.”