Rockol Tracks: Why fashion empire is courting Korea’s YG Entertainment
Recent news that LVMH, the luxury-fashion group, is to invest a reported $97 million-plus in YG Entertainment, South Korea’s biggest music-entertainment company, caught much attention in the international business media.
The media reports sounded skeptical. What did a fashion empire want from the Korea record label and artist-management company? But the fashion business and the music industry have much more in common than they realize.
Both have definitive influences in the international creative sector. Both rely on live shows to market their brands: fashion with the catwalk shows and music with live concerts.
Both depend on high-brow customers: fashion with the designer labels and music with classical-music labels.
Both need mass sales to generate regular income: fashion designers with their pret-a-porter, ready-to-wear range and music with pop-and-rock recordings.
Moreover, YG’s roster of acts is a roll call of young, multi-talented (singing, dancing, acting) performers with model good looks.
Alliances between the fashion-design world and music are nothing new. For the most part, they come together for marketing purposes.
As artists like Jennifer Lopez, Beyoncé, Rita Ora, Kanye West and Usher become brands in their own right, what they wear on and off stage is name- checked in fashion magazines.
It continues a trend writ large by Madonna in the early 1990s. She made French fashion enfant terrible Jean-Paul Gaultier, dare we say it, fashionable by wearing his now iconic cone brassiere and matching corset during her Blond Ambition tour.
These days, music journalists take note of catwalk models and fashion designers letting their hair down at music festivals like Coachella, Glastonbury, Lollapalooza, and Bonnaroo. Rosie Huntington-Whiteley, Cara Delevigne, Iman Chanel, Jourdan Dunn, Henry Holland and Julien McDonald are among the professional fashionistas muddying their boots in music-festival fields.
Increasingly, however, the relationship is much more than just a marketing ploy.
Producer/rappers extraordinaire like Kanye West and Pharrell Williams list fashion design in their resumés. The fashion-brand owners want to do serious business involving musical recordings and the rights owners.
The first earnest hint in this direction was American designer guru Tommy Hilfiger’s agreement to design high-end fashion range for Universal Music Group (UMG) in 2011. The deal had less to do with promoting artists and more to do with creating pop and rock-inspired fashion line and delivering new income stream for UMG.
H&M, the Swedish multinational upmarket fashion retail chain, was the only fashion-brand sponsor at last year’s Coachella festival. It was joined by beauty-and-cosmetics brand owner Sephora this year.
But instead of only paying to be associated with the festival’s music-fused surroundings, H&M also set up a branded VIP party nearby where singer-songwriter Santigold and blues band The Dough Rollers performed last year. This year, H&M joined forces with designer Alexander Wang. They hosted a Coachella party featuring performers like DJ Jesse Marco and hip-hop princess Iggy Azalea.
Burberry, the quintessential British luxury brand, actually invests in unsigned acts. The company uses their unadulterated independent spirit to drive its brand message internationally. It features videos of these emerging artists playing acoustics sets exclusively for the Burberry.com website and YouTube channel.
Unknown teen singer-songwriter Misty Miller has had iTunes charts success following her appearance on Burberry Acoustics. Established acts like Keane and Jake Bugg have also participated. This brings us back to LVMH. Why is the owner of exclusive fashion brands like Louis Vuitton, Donna Karan and Marc Jacobs, interested in YG Entertainment, which introduced the world to YouTube phenomenon Psy and Gangnam Style?
This is definitely not a marketing exercise. The $97 million investment YG would get is via L Capital Asia, LVMH’s Singapore-based investment arm. The private-equity company focuses on creativity and technology investments in Asia. Its current portfolio, includes mostly jewelry companies, luxury retail, a food emporium, cinema chains and, of course, fashion.
Should this YG investment go through (we know the talks are genuine because it was confirmed by the Korea Exchange stock exchange), the international music industry could be seeing an exciting new player.
YG has already established its claim to fame. It was founded by Yang Hyun-suk, a former member of successful Korean boy band Seo Taiji & Boys. Its record-label division rode and drove the recent Korean Wave in Asia and North America that was inspired by K-Pop (Korean pop music).
In addition to Psy, whose Gangnam Style became one of the few K-pop recordings to gain true international-hit status and currently boasts more than 2 billion YouTube views, it manages other popular acts from the region, including the all-girl pop group 2NE1.
YG is seeking funds to diversify. It has invested in Korean animation-film company Red Rover International, and Next Interactive K, a next-generation technology-driven entertainment venture.
We are now waiting to hear whether LVMH will really become a major YG shareholder. Should the deal get the go-ahead, industry observers should not be surprised. Popular music, which YG is good at producing, and fashion, which LVMH owns in spades, go well together. Music and money, which LVMH also has, know how to get along harmoniously, if not necessarily profitably.
[Juliana Koranteng]