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- 8 Mar 2010

A Double-edged Sword

In spite of all the apparent advantages to mixing social media with business, Sagra Maceira de Rosen is reluctant to wholeheartedly bless the new union. Reig Capital Group’s managing director of luxury & retail has concerns over individual privacy and corporate confidentiality – and not only for investors like the Spanish-Andorran private equity group.


I always thought that social media would be an interesting way to connect with consumers. It has evolved so much since the early days. It’s used by a wider demographic than I could ever have imagined. I mean, even my great aunt is active on Facebook – very active.

Yes, social media is a great marketing and communication tool that can be used to better understand consumer behaviour, get the word out and communicate new products, brand values, initiatives, so on. But as it is also a very public domain, I wouldn’t consider using it for many private business matters, particularly in my role as investor. Personally, it hasn’t greatly impacted the way I work so far. Yes, I think it can bring efficiencies but I’m also concerned about the drawbacks. I think it can sometimes be a time-sink. And I’m not sure that receiving a virtual pair of Jimmy Choo shoes as a present on Facebook would do anything for the brand…

Having said that, professional online communities are different. I do like Luxury Society. Their network was useful not only for connecting with people in the same industry but also for filling a position at one of our companies though recommendations by members. For the last four years, I’ve been a managing director of Reig Capital, where I oversee the group’s investment in this sector. Before that, I was at JP Morgan running the global luxury goods and fashion research team there for seven years. I first entered the industry as an equity analyst at Morgan Stanley’s luxury goods team, straight out of business school. It was a great time because it was when luxury was starting to become a clearly defined sector in the financial markets, right after the IPOs of Bulgari and Gucci.


I’m not sure that the virtual revolution is changing the fundamentals of the luxury industry. The internet is exciting because it’s a new channel but the product/service that luxury customer wants is still the same. It is making luxury more accessible and therefore maybe less exclusive but it’s a normal progression in so many industries as they grow. New direct distribution channels for luxury is good news as I believe the bricks and mortar wholesale model will continue to shrink, ultimately leaving just the best operators. I’ve never thought that distribution is a very long-term, sustainable and defensible competitive advantage. I’ve been a huge fan of value in luxury and that is a trend that’s here to stay, in my view.

I think the luxury goods industry will continue to thrive through and beyond this new age. It’s human nature, after all. The main challenge is the same that it has always been: to continue to produce products and deliver services that customers feel they can’t live without.


Sagra Maceira de Rosen, Managing Director, Luxury & Retail, Reig Capital Group