Portfolio | November 2017

ISSUE

143

END OF AN ERA

THE NEXT CRASH

Graydon Carter’s legacy

How the one per cent are preparing

LIBERTY LONDON

JEAN-MICHEL BASQUIAT

Iconic retail rediscovered

His street art legacy

THE WAR FOR YOUR WRIST Why the smartwatch battle is just beginning

Senator Excellence

Beijing · Dresden · Dubai · Geneva · Hong Kong · Macau · Madrid Nanjing · Paris · Shanghai · Shenyang · Singapore · Tokyo · Vienna

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NOVEMBER ISSUE 143

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EDITOR-IN-CHIEF OBAID HUMAID AL TAYER MANAGING PARTNER & GROUP EDITOR IAN FAIRSERVICE EDITORIAL DIRECTOR GINA JOHNSON GROUP EDITOR MARK EVANS marke@motivate.ae SENIOR ART DIRECTOR OLGA PETROFF olga.petroff@motivate.ae DESIGNER RALPH MANCAO ralph@motivate.ae SUB-EDITOR SALIL KUMAR salil@motivate.ae EDITORIAL ASSISTANT LONDRESA FLORES londresa@motivate.ae GENERAL MANAGER – PRODUCTION SUNIL KUMAR sunil@motivate.ae PRODUCTION MANAGER R MURALI KRISHNAN muralik@motivate.ae PRODUCTION SUPERVISOR VENITA PINTO venita@motivate.ae CHIEF COMMERCIAL OFFICER ANTHONY MILNE anthony@motivate.ae GROUP SALES MANAGER MICHAEL UNDERDOWN michael@motivate.ae

Emirates takes care to ensure that all facts published herein are correct. In the event of any inaccuracy please contact the editor. Any opinion expressed is the honest belief of the author based on all available facts. Comments and facts should not be relied upon by the reader in taking commercial, legal, financial or other decisions. Articles are by their nature general and specialist advice should always be consulted before any actions are taken.

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PRAGUE PRIZE P26

A beautiful restored apartment in the centre of the Czech capital

The future of data is not just in predicting our outermost behaviours, but understanding our innermost ones. What impact will psychometric data have on the financial world?

For a fresh perspective, visit LombardOdier.com

NOVEMBER ISSUE 143

CONTENTS UPFRONT

18

ISTANBUL RISES

The Turkish city’s high-end property market rebounds

LIVING

74

HOTEL

22

PLAIN SAILING

The luxury yachting app aiming to shake up the market

28

RENEWABLES

How companies are embracing a greener future now

Luxury lodgings in a converted barracks

80

WHAT TO PACK

From Hamburg to Johannesburg, we’ve got you covered

84

FOOD & DRINK

Why Korean food is taking over the world

35

LIBERTY OF LONDON

The British retail icon that’s going from strength to strength

88

EXHIBITION

A street art legend gets remembered at the Barbican

90

COLUMN

Microsoft’s CEO on changing a company’s culture

15

33,349 copies January - June 2017

NOVEMBER ISSUE 143

CONTENTS FEATURES

42

THE WAR FOR YOUR WRIST

Why luxury brands have embraced the smartwatch revolution

48

THE COMING CRASH

How are the rich preparing themselves for the coming crash?

54

HOW STREET ART GREW UP

Why the once-derided art form has moved from the street to the gallery

60

VANITY FAREWELL

We chart the rise of Vanity Fair under its recently departed editorial icon, Graydon Carter

68

THE ANXIETY OF THE ONE PER CENT

Why America’s rich are feeling more depressed than ever before

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Milan, Paris, London, New York, Los Angeles, Miami, Shanghai, Beijing, Tokyo

UPFRONT

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NOVEMBER / PROPERTY

ISSUE 143

Turkish delight Alexandra Locke takes the temperature of Istanbul’s high-end property market

E

very city has its landmark avenue or coveted zip code, an investment made for generations rather than speculation. In Istanbul, that real estate is not on a Fifth Avenue or a Kings Street, but the Bosphorus Strait.

The narrow channel separating Europe and Asia combines the central location of one of the world’s busiest shipping lanes with the sunbaked roofs and turquoise water of the French Riviera. As the pace of Istanbul’s development grows ever more breakneck, the best investment never changes: a waterside yalı.

These white-painted wooden mansions were once the second homes of the Ottoman elite, but these days, their fame comes from their starring roles in Turkish soap operas broadcast around the world. They typically change hands once in a generation, says Koray Dillioglu, managing director of Pera Property. “These are not advertised heavily. These are hush-hush, people keep it quiet…

Somebody wants to buy one, I make an offer to those people even if they’re not selling it.”

Those looking for a more modest investment will still find the prices steep: a mere view of the strait can add as much as 50 per cent to the cost, according to

Kerim Bertrand, CEO of the real estate information firm REIDIN. In July 2016, however, some of those homeowners found they had purchased more than they bargained for. Neighbourhoods overlooking one of the city’s Bosphorus bridges became frontrow seats to Turkey’s attempted military coup. When military tanks blocked the bridge, civilians confronted the soldiers, and 34 people were among those killed in the clashes that night.

Now these multimillion dollar views overlook a bridge with a decidedly different new name: the July 15th Martyrs’ Bridge.

The coup attempt was one blip in a string of bombs and shootings, an outpouring of refugees, and a political crackdown that’s put tens of thousands behind bars – and that’s just within Turkey’s borders. The upheaval disrupted an incredibly promising real estate market. In 2015, Knight Frank’s Global House Price Index estimated Turkey as the world’s fastest-growing property market, with 18.9 per cent growth. A year later, it had dropped to 12.2 per cent, and so far in 2017, it’s only recaptured a small fraction of that growth (12.7 per cent). Ali Pamir, the chairman of residential and commercial real estate firm Pamir & Soyuer, says, “[The]

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UPFRONT

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market is currently stagnant, to say the least. We used to sell around 30 to 40 residential units in the past, the last 12 months we sold seven.” That slowdown has been particularly hard felt in the prime real estate market; Istanbul lost 8.4 per cent on Knight Frank’s Prime Home Index in the first quarter of 2017, though the loss shrank in the second quarter.

Although investors were hoping 2016 would be a temporary dip, it appears recovery will be lengthy.

The change in fortunes has been most drastic among foreign purchasers. Turkey’s real estate market has always been overwhelmingly driven by local individuals, but in 2012, changes to reciprocity laws began to draw in small but growing numbers of foreigners. According to REIDIN, in the first five months of 2015, foreigners purchased 42.5 per cent of luxury residences. In the first eight months of 2017, the number was just 5.5 per cent. Bertrand says: “The last two years we only saw a significant decline due to the terrorist attacks, the failed coup as well as the returns that are not necessarily attractive anymore.”

High-end realtors have seen that change firsthand. Pamir says: “Until 2016, most of our clients were foreign, and mostly from the US and Europe.

Currently, we are working mostly with local clients both on the commercial and residential side.” Dillioglu says although his real estate firm initially started to serve international buyers, approximately 70 per cent of his clients are now Turkish.

While foreign buyers are dropping, wealthy Turks are increasingly voting with their feet. Businesses catering to Turks looking to move abroad have found a vast new market as the number of emigrants has risen. A study by the South Africa-based research

firm New World Wealth surveying millionaire migrants found Turkey experienced a 500 per cent emigration increase from 2015 to 2016, the highest of any country surveyed. Their property ownership was not studied, but Pamir says: “Quite a few Turks and foreigners are trying to divest, and looking to diversify their risk by investing abroad, in more stable markets such as London and Berlin.”

With a willingness to buck the bear market, however, Turkey’s booming population and shortage of housing stock can still make Istanbul a prudent long-term investment. REIDIN’s real estate confidence survey indicates that investor confidence is returning.

Dillioglu says that’s also the case at the high end of the market.

“In 2015-2016, the majority of foreign clients had low budgets,

Istanbul’s property market slowdown offers opportunities for investors

500% Increase in emigration in Turkey from 2015 to 2016

and the number of high-end properties sold were quite low. In 2017, the reverse has happened.

The number of buyers looking for a Bosphorus view in a city centre location has boomed somewhat, with the typical budget in the $2-$3 million range.” Istanbul’s luxury investments are best suited to buyers looking for a second home in excess of $1 million, particularly mansions and modern villas. Dillioglu says Pera Property has also noticed an increasing trend of ultra high rise, full-service “residence” style buildings.

Those looking in the highend range will find new value in longtime favourite neighbourhoods.

Among the most popular are the leafy Bosphorus suburbs of Sariyer and Bebek on the European side, and Kadikoy’s Bagdat neighbourhood on the Asian side.

NOVEMBER

Bagdat in particular is known for luxury high rises, with panoramic views of the Marmara Sea and the historical peninsula skyline, home to Sultanahmet and the Hagia Sophia. Transport megaprojects, though controversial for their ecological impact, have made either end of the Bosphorus more accessible, for good or for ill. Both opened in 2016, the Eurasia tunnel spans the mouth of the Marmara Sea, while the third Bosphorus bridge runs near the Black Sea. As Istanbul’s urbanisation continues to spiral outward, other projects are bearing fruit in new neighbourhoods. The other side of the Eurasia tunnel has sparked development in the Zeytinburnu neighbourhood, and Dillioglu says the developments along the Basin Highway in Küçükçekmece also offer excellent prospects.

For those in search of a neighbourhood that’s less of a mouthful, realtors also recommend the central district of Sisli.

Dillioglu says: “The suburbs have been popular for investors over the past five years, due to low prices. However, the international investors are learning the true value is in the inner city interns of capital gain.” The secular elites’ redoubt of Nisantasi is always a favourite, but new to the scene is the Bomonti neighbourhood.

Hardly known at all just a few years ago except for its weekly organic market, it’s now home to shared co-working spaces for creatives, and a live music venue inside the old beer factory that gives the neighbourhood its name.

A Sisli high-rise provides both a Bosphorus view and convenient transport options, a significant

advantage to the car-clogged coastal road leading to the more tony waterside neighbourhoods.

The clientele who see Turkey as a safe bet is also shifting. While Brits, Russians and Germans were the top foreign property owners last year, according to Turkish government figures, the biggest purchasing nationalities are now all from Arab countries.

Buyers from Saudi Arabia, Kuwait, United Arab Emirates, Qatar and Iraq made up 43 per cent of all foreign purchases in 2017, according to REIDIN. For them, Turkey is close to home both in distance and in culture. Compared to some of its more tumultuous neighbours, it is still seen as a relatively stable investment. Both Pamir and Dillioglu agree that the time is right to buy. “Real estate is not a macro business,” says Pamir. “You can make money in the worst times and you can lose money in the best times.” He says the opportunities now are best for a 10- to 15-year investment.

Dillioglu’s recommendation is even more optimistic, saying: “The current availability of highend traditional mansions, villas and apartments is unprecedented.

We don’t believe this to be a new norm, rather a temporary blip as Istanbul is undergoing drastic changes. Once this settles over the next few years, the number of these types of property will diminish once again.”

Istanbul has had a grim few years, but as the lull in the violence continues to grow, every resident is hoping that “the time to buy when there’s blood on the streets”, as the saying goes, has almost passed. Real estate fortunes rise and fall everywhere, but investors in Istanbul should take a particularly long view. In a city of more than 25 centuries, a decade-long investment is a blink of an eye.

ISSUE 143

EUROPEAN CENTRAL BANK CONFIDENT ON MARKETS The president of the European Central Bank has said he doesn’t think that the markets are overvalued. Speaking at an IMF meeting in Washington, Mario Draghi said: “I think people are convinced that stocks and shares right now and bonds can go up as well as down. I don’t think we’re living in a bubbly situation.” The commercial real estate sector, though, does appear to be slightly overvalued, Draghi said. “Where we see some signs of valuations that tend to be stretched is in the prime commercial real estate,” he said. Macroprudential policy, not higher interest rates, is the best response to lofty valuations in the commercial real estate, Draghi added.

/ PROPERTY

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UPFRONT

Plain sailing?

A new app aims to bring luxury yachting to the masses. CJ Hannon investigates

H

22

iring a decent sized yacht, even for the well-off, is not cheap.

You can expect to pay north of $10,000 for a week’s worth of sailing in most of Europe’s harbours. Even an afternoon of sailing in Cannes can cost a few thousand dollars, not to mention the time spent filling out forms and dealing with the charter agency. However, a new app aims to bypass the hassle of hiring a yacht and open up the world of superyachts to a new class of customer.

Float was set up earlier this year by two yacht industry insiders: Gualtiero Giori, CEO of 21st Luxury and former owner of Camper & Nicholsons International, and Dimitri Semenikhin, CEO of Yacht Harbour, a superyacht database. Giori said the aim of Float is to bring the superyacht experience to the masses. “After working with billionaires and celebrities, amongst others, for their superyacht needs as owner of Camper & Nicholsons, I wanted everyone to be able to enjoy yachting, which meant making it more accessible and simpler to

enjoy, hence the creation of Float.”

In some ways, it’s an Airbnb for the water, which allows you to book just one seat on a luxury yacht, or gather a group of friends and hire out the whole boat.

Part of its appeal is the simplicity of the app. Whereas yacht chartering can often be a time consuming and frustrating affair, Float aims to smooth the process and enable its customers to get on the water with as little hassle as possible. “Float’s tech platform drastically reduces the complexity of chartering a yacht with its instant booking function and removes price as a barrier of entry,” says Semenikhin.

Indeed, the booking process takes less than three minutes.

Customers sign up on the app, choose their origin and destination, select the number of seats needed and pay. A few moments later, a boarding pass is sent to their Apple Wallet. Aside from the speed, the main attraction here is complete transparency: there’s no hidden costs or surcharges. This sets Float apart from traditional charter companies who add on fuel and food surcharges to their initial price.

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ISSUE 143

“We’re more like NetJets than a water taxi,” CEO Jean-Jacques Boude told Bloomberg earlier in the year. “We sell day charters by the seat or by the cabins for a few days on board, all through a fully digital app,” he says.

The company manages to keep costs down by utilising fractional yacht charters – where the cost of the charter is shared by the guests. This model has been successful in other industries such as private jets and property.

While the cost of participation in both of those segments can be prohibitively high, Float’s model is far more affordable –

Traditional charter companies often add myriad fuel and food costs onto the original quoted price offering short haul trips, where, for example, a couple could book a yacht for an afternoon to take them to a restaurant further down the coast. They just arrive at the dock and get whisked there and back. The long-haul option is tailored more for bigger groups who want to rent a yacht for a day, a weekend or a week.

The company currently services destinations in the south of France – Monte Carlo, St Tropez, Cannes and La Guerite – and the process is relatively simple. There’s a choice of two separate trips: Open for short day trips and Fly for long haul excursions. Customers

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UPFRONT / YACHTING

Float aims to expand across Europe, as well as to Miami and the Caribbean in the coming year sign up for either and pick the number of seats they will require, although the maximum capacity is 12. While the firm is focused on the French Riviera for now, there are plans to expand to Miami and the Bahamas during the winter months. Jean-Jacques Boude says expansion is on the

cards. “We will be in Miami starting this month and [we will expand] to Mykonos and Ibiza next spring. The aim is to be present in 12 locations across Europe and the US.” The company currently owns two vessels, but aims to operate three ships in Miami, including a

104-foot superyacht. That vessel will offer $1,000 per person overnight trips from Miami to the Bimini Islands. Back in Europe, and the prices start at $99, although, like Uber, the company plans to use ‘surge’ pricing, where, if demand is high, prices will rise accordingly.

Whether Float’s model can disrupt the yacht sector the way NetJets did to the aviation industry remains to be seen.

OTHER LUXURY COST SAVERS

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PRIVATE JETS Founded in 1996, NetJets allows its customers to use private jets at a fraction of the cost of owning one.

With access to more than 700 aircraft, the company claims to be the largest private jet operator in the world.

Customers get access to a certain number of jets for a certain number of hours per year depending on the cost. For example, a 25-hour Marquis Jet card will cost around $150,000 and allow the user 25 hours of private jet travel over a certain period of time. At

the other end of the scale, if you pay $4.4 million, you get 400 hours of flight time and have a much bigger choice of jets. Customers must also pay a monthly maintenance fee, which can range from under $10,000 to $60,000.

LUXURY PROPERTIES There are many companies offering fractional ownership of luxury properties around the world.

Customers own a percentage of a property, the higher the percentage the more weeks of the year they

get to stay there. Of course, each of the owners takes the risk that the property’s value will increase or decrease – there’s no guarantee that a customer who sells their ownership property will make a profit. This is a world of cash buyer – most banks won’t offer a mortgage for a fractional ownership property, and in many cases the cost is greater than a deposit on a traditional holiday home would be.

The upsides? Someone else manages the property and you get to decide when you use it.

UPFRONT

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NOVEMBER / PROPERTY

ISSUE 143

Czech class A period apartment in the heart of Old Prague

Prague

PRICE $2,900,000

celinka.cz/en/

L

ocated in a restored seven-storey apartment building in Prague’s Old Town, this 240 square metre apartment has been updated with care. The designers have ensured the original 1930s setting is kept intact, but that the space is compatible with modern living. From the kitchen that can be closed off or connected to the living room, a large walk-in closet in each of the bedrooms and a large laundry room, this is city living at its best. The main bedroom also features a balcony overlooking the street, and the neighbourhood is filled with boutiques, parks and turn-of-the-century architecture. For a slice of old Europe replete with the latest in interior design, this is a pied-à -terre anyone would be proud to call home.

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UPFRONT

Renewable future?

Many of the world’s biggest businesses have committed to go 100 per cent renewable.

Mike Scott looks at what this really means

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ost companies source their electricity from the local power company. If they are particularly large energy consumers, they might have a special deal in place, but they won’t give much thought to how the power is being generated as long as it’s sufficiently reliable and cheap.

However, a growing number are looking to power some or all of their operations using electricity generated by clean energy sources such as wind, solar and biogas.

Leading the way is RE100, an initiative that aims to get the world’s most influential companies to go 100 per cent renewable.

Recent signatories include cereal maker Kellogg’s, US banks Citi and JP Morgan and Singaporebased DBS Bank. They join more than 100 other companies ranging from Apple to BMW to Heathrow Airport. Between them, RE100 members have committed to buy or generate more than 152 terawatt hours of electricity, enough to power all of New York state.

“This is a huge trend. It started with technology companies, but it is now spreading across economic sectors and across the globe,” says Henning Wuester, director of the

Knowledge, Policy and Finance Centre at the Abu Dhabi-based International Renewable Energy Centre (Irena). “It started in the US and to a certain extent in Europe, but we are now seeing new examples in countries across the world, from China and India to Morocco and Mexico.”

The initial driver for companies to secure clean energy supplies was corporate social responsibility, he adds, with many companies setting climate and sustainability targets in part to enhance their reputation. However, the number of firms looking for clean energy accelerated following the signing of the Paris climate change agreement in December 2015, which committed countries to keep global temperature rises “well below” 2°C and “endeavour to limit” them even more, to 1.5°C. The business community was one of the driving forces for the signing of the Paris agreement, with many companies becoming more worried about the impact that climate change will have on their operations, their customers and their supply chains. They are also keen to act before they are made to by regulators and lawmakers.

The agreement is being translated into national and

NOVEMBER / RENEWABLES

international targets – the EU, for example, has targets for 2030 to cut greenhouse gases (GHGs) by at least 40 per cent (from 1990 levels), to generate at least 27 per cent of its energy from renewable sources and to improve energy efficiency by at least 27 per cent.

Dubai’s Clean Energy Strategy 2050 will see investment in the emirate of around $163 billion in the next three decades, with the aim of having 44 per cent of the energy mix coming from renewable sources, 38 per cent from gas, 12 per cent from ‘clean fuels’ and six per cent from nuclear energy. The strategy also calls for a 40 per cent improvement in energy efficiency by 2050.

The main way to limit temperature rises will be by limiting the amount of GHGs emitted as a result of human activity. The power sector is the biggest emitter of GHGs thanks to its use of fossil

ISSUE 143

However, as the Financial Times said earlier this year, “the shift to clean power has begun to accelerate at a pace that has taken the most experienced experts by surprise”. The reason is simple – the cost of renewable energy technologies such as wind and solar continues to plummet year on year.

The average price per MWh of both solar and wind fell by 10 per cent in 2016, according to the United Nations Environment Programme. The installed price for home solar systems in the US is less than half what it was a decade ago while the cost of onshore wind power projects in a German capacity auction dropped by 25 per cent between May and August this year. The result of these plummeting prices was that in 2016, eight per cent more clean energy capacity was installed than in 2015, but investment was 23 per cent lower.

Dubai’s clean energy strategy will see $163 billion invested over the next three decades in a renewables push fuels such as coal, and gas and so not only is the sector one of the main targets for governments looking to cut emissions but switching to renewable energy is one of the quickest and most effective ways to do so. “There is a growing feeling that the regulatory space for not being low-carbon is narrowing,” says Martin Chilcott, chief executive of 2degrees Network, a platform for allowing companies to collaborate on sustainability issues. “Regulation is moving inevitably in one direction over time, and that is towards decarbonising the economy.”

Wind and solar power are now the cheapest forms of new energy in almost every country around the world, and by 2030 they will be cheaper than even existing fossil fuel power stations, according to Michael Liebreich, founder of research group Bloomberg New Energy Finance.

There is a very strong business case for switching to renewables now, and it goes beyond just the headline cost of energy, says Wuester. “Renewables are cost competitive but large energy consumers also see them as a way of stabilising energy

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UPFRONT / RENEWABLES

prices over the long term. You can get contracts of between 15 and 25 years. You can not only guarantee the price but secure your supplies as well.”

There are three main routes to procuring clean energy – you can generate it yourself, buy it from a utility or go direct to a project developer and sign a power purchase agreement (PPA) for the energy produced by a particular project. Ian Kelly, manager of the Rocky Mountain Institute’s Business Renewable Center, says that the advantage of PPAs is that the developer is able to take that commitment to its financiers and borrow money against it.

Corporate procurement also creates its own virtuous circle – the more energy companies buy, the more the price comes down.

However, the path to a

renewable future is not all plain sailing. Wind and solar suffer from intermittency – the wind does not always blow, and the sun does not always shine – but energy storage costs are coming down as rapidly as the costs of renewables and will help to overcome that problem. More serious is the pressure that a plethora of individual projects places on grids that were not only designed to distribute power from a few, large power stations but are also coming to the end of their lives.

This means that fossil fuels, particularly gas, will still have a key role to play in power generation. However, its role will mainly be to balance the grid rather than deliver “baseload” power. “If you look at the future structure of our power supply,

10%

Fall in average price per MWh of both solar and wind in 2016

you can see that although there is going to be an enormous amount of renewable energy, you still need fossil energy to keep it balanced,” Liebreich said at a recent conference. “You need the flexible generation to make it all work.

And how you do that is a core challenge for the next decade.”

The number of companies switching to renewable power is likely to accelerate, but electricity is only part of the energy equation. To be truly 100 per cent renewable, companies will have to decarbonise their transport requirements as well.

There are already signs that this is starting to happen – the Climate Group, which launched RE100, has just announced another initiative, EV100, to fast-track the uptake of electric vehicles and infrastructure.

MUSK UNDAUNTED IN QUEST FOR MARS The billionaire inventor and businessman Elon Musk has announced he intends to send a manned mission to Mars by 2022. The Tesla head says that the current plans to inhabit the planet are too expensive (at around $10 billion per person), but if the price per person can be brought down to $200,000, Musk believes we will see the planet inhabited in his lifetime. He is currently working on a multi-use rocket that can carry 100 people at a time, which he claims will make Mars travel feasible for many of us.

NOVEMBER ISSUE 143

MOST WANTED

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MUSIC PLAYER This stunning piece of kit is worth every penny – the best sound reproduction of any device its size and it looks beautiful too. South Korean tech at its best.

Astell & Kern, from $4,481, us.astellnkern.com

4

ICON YACHT A remarkable vessel, Icon has seven cabins, a Jacuzzi, a spa, a hammam and a gym as well as state-of-the-art interiors. This is one of the most beautiful yachts on the market right now.

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Icon Yachts, from $51,000,000, fraseryachts.com

MODERNIST SPEAKER Made of poured concrete, the M&D MA770 is a beautiful piece of kit, but it has got more than looks as it can apparently run at 100 watts of power without distorting.

Master & Dynamic, from $2,165, masterdynamic.com

FLOOR LIGHT

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This Andrea Branzi-designed floor light is a standout addition to any room. With a brass finish and simple design, it’s inspiring without being overbearing.

Ghidini 1961, from $7,260, ghidini1961.com

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URWERK WATCH This is a serious piece of horology – the 105CT Streamliner is a retro throwback with some beautiful details. The standout detail is the ‘hood’, which can be raised up to reveal the watch’s inner workings.

Urwerk, from $67,000, urwerk.com

CHINA’S MALLS BUCK LUXURY RETAIL TREND A recent report has revealed that China closed more luxury stores than any other country in the world. The country’s high-end shoppers have embraced e-commerce, ensuring a slowdown for traditional bricks and mortar stores. More than 50 per cent of people surveyed said they increased their online spending on luxury goods in the past year. The survey also revealed that 66 per cent will increase online luxury spending next year.

UPFRONT / SPEND

NOVEMBER UPFRONT / THE BUSINESS

Liberty belle Emma Woollacott explores one of world’s most iconic department stores, Liberty of London

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rom the day it first opened in 1875, Liberty of London had a whiff of the exotic about it – “the chosen resort of the artistic shopper”, as Oscar Wilde put it a few years later.

Taking advantage of the British public’s fascination with all things oriental, founder Arthur Lasenby Liberty, a young man working for a London shawl retailer, took out a lease on half a shop at 218a Regent

Street to sell fabric and objets d’art from Japan and the East.

It was a success from the start, and within 18 months, he’d repaid a £2,000 loan from his fatherin-law and bought the property next door. Further expansion allowed the creation of a costume department and the iconic Eastern Bazaar in the basement, which cemented the company’s exotic image by selling oriental rugs and furniture.

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As well as Wilde, luminaries including Dante Gabriel Rossetti, Ellen Terry, James McNeill Whistler and Frederick Leighton were fans, and the store quickly became an institution.

“A dazzling dream of colour in all its infinite variety that in itself makes one of the most magnificent étalages in London, a vision that only the poetic faculty of the artist could have devised – that is what we have learned to associate with a sale at Liberty’s,” read a 1907 article in the London News.

But it wasn’t until 1924 that the present, iconic, Arts and Crafts building was constructed using authentic Tudor techniques and incorporating the timbers

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UPFRONT / THE BUSINESS

“Craftsmanship is really important, from furniture to fashion. If it can be British, that’s the icing on the cake” from two ships: HMS Impregnable and HMS Hindustan.

Even today, the store has an eclectic feel, with the ‘bazaar’ theme very much in evidence.

Rugs hang over the balustrades of the walkways around the main central lightwell, with a warren of rooms leading off.

Over the years, of course, there have been changes. But the Grade II listed building has recently been refurbished and returned to something more like its original style. Boarded-up windows have been reinstated, original fireplaces have been uncovered, and each room has been redecorated to illustrate its founder’s vision of an artistic home, with vintage rugs, Liberty print armchairs and a scattering of eye-catching objets d’arts.

“We’ve stripped the building back to reveal more of its heritage,” says Liberty buying director Gina Ritchie, who oversaw the refurbishment. “We’re working with the building, rather

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than trying to make it work for us.

We’re returning to what Arthur wanted – he was extremely brave, and had the most exquisite taste.”

The store also continues to make the most of its long-standing reputation for fabric design. In the early years, its buyers imported silks and cottons from the Far East, but by the 1880s it was producing its own pattern books and hand-printing its trademark Tana Lawn fabric in England.

Some of the store’s bestknown designs were created by William Morris, and many, such as the Hera peacock feather pattern, are still going strong after more than a century.

Liberty prints were particularly popular in the 1960s, with young London designers like Jean Muir, Foale & Tuffin and Mary Quant using them in their work, as well as Parisian fashion houses such as Cacharel and Yves St Laurent.

These days, the store still does more than its fair share when it comes to nurturing new design

80

Percentage of Liberty of London customers who come from the UK

talent. “The product’s always got to have a great story. With a lot of the brands we work with, we know the people making the products,” says Ritchie.

“Craftsmanship is really important, and that goes right through the building, from furniture to fashion to accessories. If it can be British, that’s the icing on the cake.”

Unlike many flagship brands, indeed, Liberty maintains a very London-centric focus. Back in the 1950s, it did expand, opening regional stores in Manchester, Bath, Brighton, Chester, York and Norwich, but these were closed in 1996. And although it now has an outpost in Japan, these days the company is once again focusing far more on its core market.

“Our customer base is still 80 per cent UK, which is something we’re really, really proud of,” says Ritchie. “Customers from overseas are buying into the British sensitivities, that’s for sure, but I’m always thinking about the British customer.”

As well as refurbishing the building, Liberty has also recently overhauled several departments.

It has launched a range of luxury Liberty print pyjamas, along with new soft homewear, decorative ceramics and stationery, in time for Christmas.

Lingerie is back, along with much missed Liberty favourite Eskandar, and there are 20 new brands, including Rejina Pyo, Rosetta Getty, Teija and The Vampire’s Wife.

“We’ve relaunched menswear and womenswear. They haven’t had close attention for a number of years, but for us it’s getting back to our roots and nurturing local designers,” says Ritchie.

“Liberty customers have a sense of discovery. We’re relaunching furniture, going back to our roots with an emphasis on arts and crafts and vintage design.”

NOVEMBER ISSUE 143

UPFRONT / THE BUSINESS

“We have stripped the building back to reveal its heritage. We are working with the building, rather than making it work for us”

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This August, Liberty opened the Interiors Emporium, a new department on the third floor with an ever-changing array of limited edition and exclusive products from new designers and artists.

And the latest addition is a mini food hall, opened in September. It’s not quite on the same scale as, say, Selfridges, but features more than 50 artisan products from 15 producers, some of which have been made specially for the store.

Highlights include Pembrokeshire Beach Food Company’s Laver Seaweed from Wales, Liberty London Blend Tea from the Tregothnan estate in Cornwall and Manfood Beer Jelly

made in Cambridgeshire.

“We set out to curate an exciting collection of British food and package it in an unexpected, artistic way.

We didn’t want to launch a predictable own label brand but rather create something with real heart and soul that only we could do,” says Sarah Coonan, head of buying for home.

“We are proud to support these great British producers, and because of that, we’ve made sure they are central to the overall story.”

This sense of Britishness and localism extends to throwing open the doors to the local community. Liberty now has

Top: Liberty London’s Food Hall Above: Hand-made craftwares in the Interiors Emporium

a room in its haberdashery department that’s filled with industrial sewing machines for fashion students to come and refine their craft.

Meanwhile, the ‘Disappearing Store’ pop-up on the fourth floor hosts everything from yoga workshops to art exhibitions, charity events to cinema screenings. It’s also recently hosted a series of ‘In Conversation With’ talks with craft connoisseurs.

“Liberty has a really strong place in the culture and texture of London, and for me being a big part of the Soho community is very important,” says Ritchie.

In the run-up to the festive season, Liberty has opened its annual Christmas Shop – an annual pilgrimage for many Londoners. A fairy-lit paradise, it’s full of quirky baubles – it sells one modelled on the building itself – wooden advent calendars and toys from model soldiers to stunning cuddly animals.

All in all, there’s no doubt that Liberty is one of the most characterful department stores in the capital, and Ritchie is determined to keep it that way.

“We constantly remind ourselves to be risky, fearless and fun,” says Ritchie. “Our mantra is: if we’re excited about it, our customer will be too.”

Enter into a world of visionary leadership, thriving connectivity and breathtaking architecture. Fostered by an internationally recognised legal and regulatory framework, Dubai International Financial Centre is home to a vibrant community of highly-skilled talent and leading global organisations. As one of the world’s top ten financial centres, with over a decade of achievements, we have built the ideal platform to help your business grow.

difc.ae | @difc

NOVEMBER ISSUE 143

UPFRONT / CLASSIC READ

Think And Grow Rich

By Napoleon Hill

Hill focused on the psychological barriers that had stopped his readers from being successful

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apoleon Hill wrote Think And Grow Rich in 1937 at the height of the self-improvement wave, and it heralded a glut of copycat books that promised the world but delivered little. Hill’s book has often been lumped in with them, but it is more than a get-rich-quick scheme. Its success is astonishing – it sold more than 70 million copies before Hill’s death in 1970.

The story of how Hill came to write the book is fascinating.

Hill, then a young journalist, was challenged by Andrew Carnegie, the industrialist and philanthropist, to research and write a book about prosperity. He wanted a book that the average

man or woman on the street could read and then go accumulate wealth for themselves. Carnegie introduced Hill to the movers and shakers of the time: inventors, businessmen, royalty, presidents, athletes and socialites. Hill, it has to be said, took the job seriously.

He spent 20 years working on the book, before he identified 17 common principles that anyone can adhere to in order to achieve success. There was one problem, however, the book – The Philosophy of Success – sold poorly. Putting into practice what he had learnt, Hill changed the name of the book to The Science of Personal Achievement. That sold equally poorly, so Hill tried again – calling the book Think And Grow Rich.

70m

Number of copies the book sold before Hill’s death in 1970

Hill stayed away from references to money or stocks, focusing instead on the psychological barriers that had stopped many of his readers from achieving success. And it’s here that the book’s critics step in, claiming it’s a no more than a succession of ideas predicated on wishful thinking; that it’s no more useful or unscientific than The Secret. For sure, this is not a book that will give you an actionable step-by-step goal to success; rather it focuses on core principles that Hill believed anyone could master.

The book is divided into 17 principles that Hill believed anyone could learn and practice on a daily basis. These range from having a definiteness of purpose to the use of imagination to understanding specialised knowledge to knowing about the subconscious mind.

Hill emphasises the point that thoughts are things, and how we think about the world affects how we do in it. Does the book work?

Like anything, it’s probably only as effective as each reader lets it be. But, despite the criticisms of the book’s more ‘folksy’ content, it continues to be read by millions around the world to this very day.

After the success of the book, Hill started to live a lavish lifestyle, and although he published another eight books in his lifetime, none had the phenomenal success of Think And Grow Rich.

THE

WAR

FOR

David G Taylor examines the smartwatch industry and how luxury brands want a piece of Apple’s pie

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WRIST

he battle for the definitive smartwatch is hotting up now that luxury brands have joined the fray. Vowing to “take fine watchmaking into the digital age”, March 2017 saw the launch of the Montblanc Summit, the first fully-fledged smartwatch from the revered German brand most famous for its exquisite pens and analogue watches.

Montblanc was one of the first luxury labels to embrace the trend for wearable technology with its hybrid e-strap watches back in 2015. However, the quest to snatch the luxe smartwatch crown is now well and truly underway thanks to the recent release of both Louis Vuitton’s own smartwatch and Tag Heuer’s upgraded second-generation model. With other elite brands expected to follow suit, the luxury connoisseurs’ smartwatch is looking more than a mere trend.

“Consumers who would traditionally go with, say, a Rolex or Omega are starting to catch on to the usefulness of a smartwatch,” says Scott Purcell, editor of the luxury lifestyle website ManofMany. com. “What’s going to be interesting to see is how brands that have made themselves famous for making products designed to last a very long time cope with the ever-changing, fast-paced world that is digital technology, and the reality of obsolescence.”

“We’ll see more luxury brands break up the smartwatch duopoly between Apple and Samsung,” John Guy, an analyst at MainFirst Bank AG, told Bloomberg.com. “It not only provides consumers with a luxury option, where the aesthetic is more in harmony with technology, but it also provides a springboard for younger consumers to move into traditional Swiss watches at a later stage.”

Exciting times lie ahead as competition between top brands escalates and the luxury smartwatch evolves rapidly as it discovers its true potential. “Luxury brands are experts in storytelling,” says Roger Ruegger, editor-in-chief of WatchTime magazine. “So the potential for added content – travel guides, boutiques, etc – and added functionality – automated check-in to a Bulgari hotel, for example – is absolutely enormous.”

Montblanc is owned by Richemont, the Switzerland-based parent company behind

THE WAR FOR YOUR WRIST

Can brands that are known for making products that last a very long time cope with the fast-paced world that is digital technology?

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luxe brands such as Cartier, Chloé and Dunhill, and its debut smartwatch offers a classic design, inspired by Montblanc’s 1858 collection. “In the creation of the Montblanc Summit’s design, we wanted to bring a one-of-a-kind vintage design expression into this new product category to inspire the younger generation who appreciates the vintage look,” says Montblanc.

A scratch-resistant sapphire crystal dome covers the Summit’s digital screen so a power button on the side is used for navigating the interface.

The Summit’s customisable style options include four case choices – such as stainless steel with a satin finish or a black PVD-coated stainless steel and a range of strap choices from rubber to sumptuous Sfumato calfskin leather. There are eight digital watch faces that can be reconfigured at any time via the settings, and to ramp up the luxury there’s the option of plumping for a titanium case and an alligator leather strap, a mere snip compared with many of Montblanc’s mechanical watches at $1,020.

Not all critics have been impressed, though, with Chris Martin, consumer tech editor at PC Advisor, awarding the Summit three out of a possible five stars in his review for TechAdvisor.co.uk.

“There’s no doubt that the Montblanc is a stylish and extremely well-made smartwatch,” said Martin. “However, it misses the mark in various ways making it very hard to recommend spending the asking price.” Although Martin praises the smartwatch’s “top-notch build”, he cites a number of key omissions: “The Summit isn’t going to satisfy those who are serious about fitness… there’s no GPS, which for most will be integral.” Clearly, it’s still early days for these pedigree smartwatches and some further evolution is probably needed.

Just days before the Summit’s release the smartwatch style war intensified with the launch of Tag Heuer’s Connected Modular 45. It’s an ultraluxurious Android Wear watch “combining Swiss luxury watchmaking and Silicon Valley technology” thanks to its collaboration with Google and Intel. Prices start at $1,550 and watch enthusiasts can choose from a range of bodies, straps, lugs and bezels including 18ct rose gold, satin finish titanium and diamond encrusted titanium options costing up to $6,750.

The original Tag Heuer Connected Watch released in 2015 was the first proper premium smartwatch on the market and, in a bid to appease those worried about obsolescence, had

Some analysts believe smartwatches will become more independent from smartphones and play a bigger role in our lives

THE WAR FOR YOUR WRIST

FIVE SMARTWATCHES

Louis Vuitton Tambour Horizon Very much at the top end of the smartwatch market, the Horizon is all about looks rather than functionality (you have to download two apps to get it to work with your iPhone).

Launched: 2017 Cost: $2,900

the added incentive that – for an additional cost – at the end of the two-year warranty period, you could trade it in for one of the mechanical Tag Heuer Carrera watches, said to have inspired the smartwatch’s look.

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ost recently, Louis Vuitton, the luxury brand famed for its suitcases, escalated the battle of the elite smartwatches by launching its first connected watch, the $2,450 Tambour Horizon. More than eight times the price of an entry-level Apple Watch and smaller and more streamlined than its Montblanc and Tag Heuer competitors, it foregoes many of the fit-

Apple Watch The most successful smartwatch on the market, Apple has launched four versions of its watch.

Although Apple doesn’t release figures, it’s been estimated the company owns about 50 per cent of the smartwatch market and has sold more than 20 million watches.

Launched: 2015 Cost: $349 to $17,000

ness features favoured by its competitors, instead aiming itself squarely at the wealthy jet setter.

Inspired by Louis Vuitton’s sleek analogue watch the Tambour Moon, its Android-powered interface boasts bespoke apps such as My Flight, which aims to make world travel more seamless with features such as flight and terminal/gate information, delay alerts and time until landing, plus access to Louis Vuitton’s acclaimed real-time digital city guides on London, Beijing, Shanghai, Paris, Los Angeles, New York and Tokyo – although the style conscious may be more delighted to know that the Tambour Horizon offers nine watch faces and 60 different interchangeable straps to choose from.

So the battle is o n . W h y, t h o u g h , have prestige brands been relatively slow in picking up on the s m a r t wa t c h t r e n d ?

“Luxury brands aren’t slow to adopt in so much as they’re aware of the antithesis which are smar t watches,” s a y s Jo n a t h a n H o, g roup dig ital managing editor for the luxury lifestyle website Luxuo.com and associate editor of WorldofWatches.com.

“Luxuries became luxuries because they are products that endure.

By virtue of Moore’s Law, the rapid evolution of technology dictates that smartwatches are, by their very nature, impermanent. Mechanical watches, on the other hand, are steam engines in the age of bullet trains. They are symbols of classic refinement and, more importantly, by virtue of physics and mechanics, will last as long as the knowledge exists to maintain them.

The technology which makes Louis Vuitton’s water resistant waxed canvas has changed little since they made steam trunks. Yet, there are companies such as TAG Heuer that address this contradiction by designing their smartwatches to be modular, that is to say, able to be switched for a mechanical watch head or simply traded in for a mechanical model once the digital model is obsolete.”

Will the luxury consumer be satiated by elite brands and top-quality materials or is added functionality being called for? “Personalised experiences are and will be very impor-

LV’s new Tambour Horizon watch is eight times as expensive as an entrylevel Apple watch and more refined than its competitors’ efforts

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THE WAR FOR YOUR WRIST

46

tant – the TAG Heuer offers a modular case and interface, Louis Vuitton and Montblanc different dial designs, etc,” Ruegger says. “But both the brand image and the product’s design currently are most likely the most important difference to buying a smartwatch from Apple or Samsung, for example. If someone buys a Tambour Connected, usability might not be as important as the product’s design and the brand. Individuality, status, brand, etc, are likely more important.”

“More than half of the smartwatches sold are from Apple,” Ruegger explains. “So luxury brands will have to offer emotional add-ons to attract customers and justify a price premium, be it through design, brand or new features that will help create a different relationship between brand and consumer. Imagine them offering special access to the brand’s hotels, premium travel services, virtual concierge services, connecting its consumers, etc… the potential for something additional, unique to the brand is endless.”

Alongside these new luxur y smar twatches, consumers have an ever-expanding range of excellent smartwatch choices to navigate –

Apple CEO Tim Cook speaks about the Apple Watch Series 3 at its launch

“Apple sells more than half of all smartwatches, so luxury brands will have to offer emotional add-ons to justify a price premium”

something that WatchTime will be addressing in its forthcoming Design Issue 2018. There’s a dizzying range of options from wearable tech devices that function more like a smartphone on your wrist such as the Apple Watch 3, to fitness tracker kind of smartwatches like the Fitbit – but do they even work?

“Although there has been recent criticism in the press regarding the effectiveness of smartwatches, I have found them very useful for clients who are struggling to reach normal activity levels,” says Victoria Brown, a freelance personal trainer and specialist programme co-ordinator at London’s biggest gym, the Central YMCA Club.

“Having something on your wrist that tells you if you have not walked your 10,000 steps or been active for 30 minutes is very motivating and really helps to stop people overestimating what they actually do on a daily basis.

“I’m a runner, so I tend to like the smartwatches that incorporate a reliable GPS and a fitness tracker such as Polar or Garmin, but these are often more expensive than Fitbit. The Fitbit HR Charge or Altea are very popular and the Fitbit app is very

THE WAR FOR YOUR WRIST

user friendly and my clients love the weekly e-mail telling them how hard they have worked in the week. For design, the Apple watch is always a winner as the watch itself is stylish and obviously will work with your other Apple gadgets.”

Those disappointed that Apple discontinued its line of 18-karat gold Apple Watches last year, selling for as much as $17,000, as it repositioned itself as the “ultimate sports watch” with added health functions, will be relieved to hear that the Series 3 has an Hermès edition. It comes with a built-in cellular phone, a watch face inspired by the classic Hermès Carrick font and a choice of handcrafted leather straps, including the Double Tour band, which wraps twice around the wrist and comes in faux Barenia or indigo Swift leathers, retailing at $ 1,299. It is then increasingly possible to pimp your smartwatch with some luxe brand-names and fine accessories but clearly Apple Watch and its competitors could go a lot further to satisfy those used to displaying their taste, success and status on their wrists.

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ne compromise has been the so-called hybrid smar twatches, which look like prestigious mechanical wristwatches but have a limited range of clever smartwatch-inspired functions hidden inside. Alpina’s Horological Smar twatch, from $ 1,050, for instance, can also do clever stuff such as tracking your activity levels, monitoring your sleep cycles or letting you know when to check your smartphone for that urgent text or e-mail by vibrating. There’s even a luxe ladies’ version with a diamond studded stainless-steel bezel for $2,595.

“I am not so sure about the long-term potential of traditionally designed luxury watches with limited digital ‘smart’ add-ons (like a pedometer),” says Ruegger. “I believe a luxury smartwatch should at least offer the same functionality/usability and connectivity as an iOS/Android-based product with screen. Additionally, luxury brands will need to come up with a solution for updates: if a customer needs to buy new ‘hardware’ every 12 months, chances are he/she will drop out of the process after the first update.”

So does Apple have the smartwatch market sewn-up already? “There are some micro-brands out there making baby steps in the genre of smar t-mechanical hybrid watches,” says Jonathan Ho. “But the truth is, Apple’s popu-

Mont Blanc Summit The Summit uses Android’s OS and the company hopes it can take some of Apple’s demographic.

Launched: 2017 Cost: From $849

Alpina Horological A hybrid watch, this could well be the future of the luxury smartwatch sector.

Launched: 2017 Cost: $700

Pebble Pebble raised $10.3m on Kickstarter in 2012.

It sold more than a million watches, but shut in 2016.

Launched: 2012 Cost: $99 to $149

lar dominance – not so much its market share – tends to shape perspectives and tastes. Other tech companies are struggling because they are tech companies not consumer companies. That said, there hasn’t been a senior executive as intuitive as Steve Jobs since his passing. Whether Apple successfully defines this market as their iPods and iPhones have in their respective categories remains to be seen.”

The jury is still out on who will ultimately dominate the smartwatch market and if they’ll do enough to capture the imaginations of high-end consumers; not least because on the horizon are more developments still. Following the success of Fitbit Blaze fitness tracker, there’s been rumours that the American company is already working on an unnamed new Fitbit Blaze 2, although details remain sketchy. Pebble, the first commercially successful smartwatch brand, closed down and Fitbit acquired some of its personnel and assets last year. Fitbit has made further acquisitions in 2017, including the mobile payment company Coin and a smartwatch known as the Vector Watch, so speculation is high that a bold new Fitbit smartwatch could be on the cards.

“We believe we are uniquely positioned to succeed in delivering what consumers are looking for in a smartwatch: stylish, well-designed devices that combine the right general purpose functionality with a focus on health and fitness,” Fitbit CEO James Park said in the statement earlier this year. He’s even hinted at a Fitbit app store in what would be a direct challenge to Apple’s dominance.

As the boundaries between wearable tech, fitness trackers and luxury mechanical watches seem destined to be increasingly blurred, what upcoming trends can the experts predict? “Smartwatches are here to stay,” says Ariel Adams, founder of the horological site ABlogtoWatch.com, “and they are going to further evolve.

“I am convinced that the increasing utility of smartwatches will continue to convince more and more consumers that wearing them is a good idea.

Smartwatches will continue to be more and more independent from mobile phones.

“Given how closely they are worn on our bodies, I believe that the future of smartwatches is more in what information they record about what we are doing (and thus are able to help make useful predictions about what we need) as opposed to merely being another ‘screen’ in our lives,” Adams adds.

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THE NEXT CRASH

Lauren Razavi and Jesse Onslow Norton investigate when the next global recession will happen

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ay you live, the Chinese used to say, in interesting times.

That was always intended as a curse rather than a hope, and it’s safe to say, as we reach the end of 2017, that the world has rarely been more interesting. There are troubles everywhere you look, from Trump’s America to Brexit Britain, from Russia to Turkey to North Korea and everywhere in between. And, despite the economy doing well, with stock markets booming, many are warning that a new crash is coming, and possibly sooner than we think. In September, Deutsche Bank weighed in on the debate with its annual long-term assets survey. The report, gloomily titled: ‘The Next Financial Crisis’, outlines a series of potential catalysts for the next global crash including widescale deflation, collapses in market liquidity and a global slowdown in trade.

Doomsday predictions for global economics are nothing new, but investors believe that several key performance indicators are now cause for concern. In June, Warren Buffett announced that Berkshire Hathaway has close to $100 billion in cash due to doubts over the current investment climate. Shrinking confidence in markets is particularly concerning to central banks, who resorted to drastic measures to stimulate lending after the crash of 2008.

Quantitative easing (QE) is seen to have stunted growth for the past decade in many economies.

Rather than generating demand and providing access to cheap credit, the stimulus measures are perceived to have promoted risky speculation and produced

According to the UN, the 2008 crisis was never fully resolved and could be about to enter its third phase

The former governor of the Bank of England, Mervyn King, believes that the global economy is showing signs of recovery, but that debt to GDP is too high

greater levels of wealth inequality. More importantly, QE has done little to deleverage the global economy.

Levels of public indebtedness are now greater than they were when the previous crash began.

Mervyn King, former governor of the Bank of England, believes that the global economy is finally showing signs of recovery. But he warns that total debt relative to global gross domestic product (GDP) is still far too high: “At the end of 2016, household and corporate debt in the world economy, as a share of GDP, amounted to 138 per cent, compared with 115 per cent at the end of 2007. For advanced economies, that ratio averaged 195 per cent last year, compared with 183 per cent at the end of 2007. With only a few exceptions, in most countries, public debt rose significantly over the same period.”

Unconventional monetary policies such as negative interest rates and quantitative easing are part of the reason central banks are so leveraged, but large-scale asset purchases have also played a role in increasing public debt. While these actions were intended to improve conditions for borrowing, they also unintentionally drove asset managers to begin investing in the corporate bonds of emerging economies.

According to the UN’s annual trade and development report, the financial crisis of 2008 was never fully resolved and could be about to enter its third phase. Speculation in bond markets has led to corporate debt levels exceeding $ 25 trillion in emerging economies. A shift in monetary policy could cause a slowing in GDP growth, sparking widespread defaults globally and triggering a damaging deflationary spiral.

“What we’re most wary of at the moment is the rates cycle. We’re in the foothills of the hiking of rates and the easing of QE. As a result, it’s only a matter of time before you get a squeeze on the economy and the downside of the cycle takes place,” says Roger Jones, head of equities at asset management firm London & Capital. “Central banks need to tread a fine line or they risk tightening monetary policy too quickly by increasing the cost of credit and debt, thereby eroding the consumer’s ability to spend and drive growth.”

Europe was severely impacted by the previous global financial crisis. Since the end of 2009, the continent has been embroiled in an ongoing sovereign debt crisis and the EU has been forced to repeatedly bail out Greece. Despite signs of an economic recovery, uncertainty over Brexit and the UK’s future trading relationship with the EU is creating instability in markets. Should another asset bubble burst, it could be enough to send the Eurozone spiralling back into crisis.

THE NEXT CRASH

The return of fast growth in the property and real estate sector has had a positive impact on Europe’s recovery. But the rapid rise of house prices in cities like Berlin, Amsterdam and Paris may signify further financial troubles. A survey by YouGov found that 53 per cent of the UK’s population believe that another housing crash will occur within just five years.

The current housing boom in the UK is the direct result of record low interest rates. Since the 2008 global financial crisis, interest rates have fallen from 5.75 to 0.25 per cent, the lowest rate the bank has set since it was established in 1694.

Low interest rates increase the availability of cheap credit and encourage investors to speculate on fixed assets, like luxury accommodation. But low interest rates have only been used as a short-term measure to stimulate economies.

“Cheap-money policies are crucial in aggravating the boom and bust cycle. A sudden tightening of monetary policy, which at a certain point will become unavoidable, will clearly indicate that the crisis is about to begin,” says Carmelo Ferlito, senior fellow at Malaysia’s Institute for Democracy and Economic Affairs.

“Rising interest rates will be a consequence of a boom, rather than the cause of the crisis.”

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ince December 2015, the US Federal Reserve has hiked fund rates four times, raising them to 1.25 per cent. As other central banks around the world consider similar action, there’s mounting concern that less accessible credit will have a negative impact on demand for housing. The effects of this squeeze could be most severely felt in the same Southeast Asian tiger economies that were decimated by the 1997 Asian financial crisis.

“On paper, Malaysia has experienced steady economic growth since the 2008 global financial crisis, but that growth is fragile and unsustainable in the long run,” says Ferlito. “[Many think that] owning a house is a right, rather than a possibility.

More and more people are trying to live beyond their means to afford a house.”

More property development in major urban areas is partly the consequence of global migrations and demographic changes. According to Unicef, 70 per cent of the world’s population will live in cities by 2050. But in many of the world’s most attractive cities, property prices are rising faster than wages, meaning that few arriving citizens can afford to buy their own homes.

“When the Malaysian property bubble finally bursts it will have a big impact on the national economy,” says Ferlito. “At the end of 2016, household

The fallout from Brexit shows no signs of abating with prime minister Theresa May’s position looking increasingly weak

“Many people think that owning a house is a right rather than a possibility, and they live beyond their means to afford one”

debt rose to 88.3 per cent of GDP, a steady increase from 60 per cent in 2008. Non-financial corporate sector debt is currently close to 100 per cent of GDP. Neither people or companies have strong liquidity and another crash could trigger a domino-effect across other sectors, not just in property.”

This situation is not unique to Malaysia; its similar in Indonesia, Mongolia, Sri Lanka and, above all, China, where a debt-driven centralised economy is now out of control. Many of Asia’s developing economies are highly leveraged, both in the public and private sector. “The real crash will happen when China publicly declares that it can no longer support development based on debt, particularly private debt,” Ferlito adds.

Many observed that the BRIC economies (Brazil, Russia, India, China) were best positioned to weather the global downturn following the last financial crisis. Today, however, strong growth in these economies can no longer be assured.

In 2016, India was the fastest growing major economy in the world, with its GDP rising by 7.3 per

THE NEXT CRASH

cent in the third quarter, but this year, India’s growth slowed to just 5.7 per cent. Exports typically drive the country’s economy, but in August an $11.44 billion trade deficit opened up when the growth rate of its exports slowed to an eight-month low.

The BRIC nations now account for 40 per cent of the world’s population and are a major driver for

“Some countries have hollowed out their economies to the advantage of China” global demand. When they boom, they provide a crucial avenue for capital investments and a steady flow of cheap exports. But when growth slows, so does global trade, making it difficult for investors to get a reliable return on their investments.

China’s economy, in particular, has experienced phenomenal transformation over the last four decades, but it may finally be running out of space for further growth. In 1978, Deng Xiaoping became leader of the People’s Republic of China and steered the country through far-reaching economic reforms. At the time he took power, China’s total GDP was just $200 billion and accounted for 4 per cent of global GDP. Since then, Deng’s reforms have grown China’s economy from $200 billion to $11 trillion. Today, it accounts for 15 per cent of global economic activity.

The modernisation of China’s economy and the opening up of trade through special economic zones has been one of the most significant changes to the global economy over the past half century.

This powered extraordinary growth in the world’s most populous country and established China as the world’s de facto manufacturing hub. But it’s careful control over the value of the country’s currency that made it sustainable.

Up until 2005, the Chinese government artificially pegged the exchange rate to 8.27 yuan per dollar. For a few years leading up to the last financial crisis, China experimented with allowing the currency to fluctuate, but when Lehman Brothers collapsed in 2008, it returned to a fixedrate policy in order to keep Chinese exports attractive to foreign markets.

Today, China’s careful control of its currency is only one factor that contributes to its status as the world’s largest exporter. China doesn’t charge any export taxes, while its biggest buyer, the United States, charges no import tariff. In total, this relationship accounts for an estimated $648 billion in trade each year. Growing anti-globalisa-

Donald Trump’s erratic leadership has hindered the US economy and its traditional global leadership role

tion sentiment in developed economies, however, means that many governments are contemplating more protectionist policies.

“Protectionism has a very prerogative tone to it, but really there’s no such thing as free trade. What we live in is a world of managed trade and continual trade wars. The question is: who’s winning and who’s losing?” says James Rickards, economist and author of The New York Times bestseller Currency Wars: The Making of the Next Global Crisis.

“Certain countries have been losing more than they’ve gained – manufacturing jobs, for example – and they’ve been hollowing out their economies to the advantage of trading partners, primarily China.”

Rickards worked on Wall Street for over three decades, advising the US intelligence community on international trade and financial warfare tactics. He believes that Brexit and the election of Donald Trump indicate the global economy is entering a new era of abandoning free trade in favour of countries openly vying against each other for competitive advantage.

“It’s no longer good enough for national leaders to believe in a borderless world and a global perspective. They have to be more aware of their own constituencies,” he explains. “If you’re not attentive to your own constituencies you end up like David Cameron or Hillary Clinton” As part of Trump’s “America first” trade policy, the US Department of Commerce has imposed a 220 per cent tariff on the planes built by Canadian

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THE NEXT CRASH

Vladimir Putin and Xi Jinping: both of their countries are challenging US hegemony in global affairs

aviation firm Bombardier. In retaliation both Canada and the UK have announced they will refuse to purchase military equipment from the US company Boeing. As isolationism gains popularity in developed economies, it seems even the closest of trading partners are imposing punitive tariffs to gain competitive advantage. Rising barriers to international trade could risk global productivity and investment, resulting in widespread stagnation and recession. The biggest risk is that trade war spills over into actual war.

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n April 6th, Donald Trump met with President Xi at Mar-A-Lago Florida, Palm Beach. During his 18-month election campaign, Trump had made bold proclamations that he intended to label China as a currency manipulator, impose tariffs on Chinese exports and punish the country for stealing American intellectual property. But when the meeting took place, nothing happened.

“Real war tends to get in the way of trade wars,” explains Rickards. “We’re looking for Chinese help with North Korea. We want to impose much more stringent sanctions, cut off their financial oxygen, cut off trade. Trump has explicitly said to Xi if he can help with that then they’ll go easy on the trade front.”

In September, Trump issued an executive order mandating that any country which continues to

With the right safeguards, the next financial collapse could be as much an opportunity as a crisis

trade with North Korea would lose access to the US financial system and have their assets frozen.

These measures have been seen as a provocation towards China as it accounts for 80 per cent of North Korea’s trade. Should China retaliate by imposing a tariff on US exports or locking out American investment in Chinese firms, billions of dollars of trade could be lost overnight.

Where there are risks, there are opportunities.

Market veterans who have already weathered past economic storms will be familiar with navigating geopolitical uncertainty, but it can still be difficult to assess how best to diversify portfolios. So what’s the best move for investors?

“I think a 10 per cent allocation of physical gold is prudent, and a large allocation of cash too – as much as 30 percent,” says Rickards. “Look at Warren Buffet: he has $100 billion in cash on the balance sheet, because he knows that when markets collapse and bubbles burst there are bargains to be had and the person with cash has the flexibility to pick them up.” Despite the prospects of a global slowdown in trade, there’s some good news for investors. Central banks around the world are beginning to reconsider their approach to monetary policy, meaning that investors may soon be able to realise new opportunities.

“In a period of upward rate movements, financial assets tend do well. For example, bank profitability is boosted by steeper yield curves, though this is a shorter term opportunity,” says Jones. “Cash markets and deposit rates are interesting again and are no longer just about preservation. In the depths of QE and loose monetary policy, negative rates were a real problem. Investors can now look at cash and deposits again as a safe haven.”

One thing is clear though: the recent stock market boom looks unsustainable. If property markets collapse, holding publicly traded equities could prove particularly risky. “If you put all your money in liquid investments, or even in the stock market and it declines rapidly, you could find that you can’t get cash easily or you lose it,” says Rickards. “I keep away from publicly traded equities, but I have a private equity and venture capital investments. They’re not liquid, but that’s how I would generate some upside rather than chasing public markets.”

It’s unclear exactly how or when the next global financial crisis will strike, but both public and private sectors are heavily leveraged and asset prices are inflated across a variety of markets. In the near-term, investors should consider taking precautions to shield against the impact of another collapse. With the right safeguards, the next financial collapse could be as much an opportunity as it is a crisis.

THE ART OF

David Whelan examines how street art has transcended its origins and – thanks to collectors and dealers – found a home in the gallery

THE POSSIBLE

THE ART OF THE POSSIBLE

S

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eptember of this year saw the opening of Jean-Michel Basquiat’s first major UK art exhibition at the Barbican – a building that has had a troubled relationship with graffiti on its walls. The mysterious Banksy, in retaliation, put up two new pieces on the Barbican, seemingly both to protest Basquiat’s exhibition and, also, to alert onlookers toward the complicated relationship street art has had with the high-end market for decades. There is a democratisation inherent in the reclaiming of private walls for public consumption, an act of creative subversion in the face of capitalistic tendencies – they are free to see, to enjoy and appear, almost with deterministic surety, precisely where they are most unwanted. Banksy – whose name is one of the most recognisable in the art world – and his ilk, however, transcend that process, until it becomes inevitable that any great collection of art world would not be complete without their work.

Steve Lazarides, owner of the LazInc Gallery in Mayfair, London, has seen this shift with his own eyes. “I went around the auction houses yesterday to see where the movement is,” he said, “and it’s two street artists from the 1970s and ’80s that are the biggest selling on the planet at the moment: Jean-Michel Basquiat sought after artist on the planet. This is a present that would and Keith Haring.”

Basquiat – a deceased, drughave been unimaginable in the time of his pomp – when using black man from Brooklyn Manhattan’s art scene bubbled with tension and snobbish known primarily for his counterfriction. Originally, the work sold for $19,000. It is an astronomical rise in value and desire. Basquiat’s piece is now the culture slant and death of overdose sixth most valuable work of art in existence, and the first piece at the age of just 27 – became of art created after 1980 to sell for more than $100 million.

America’s most expensive artist in “I hope it brings as much joy to others as it does to me, and May, when his 1982 piece Untitled that this masterpiece by the 21-year-old Basquiat inspires our sold for $110 million this year, surpassing Andy Warhol’s XXXX. future generations,” the buyer said in a statement.

But what is driving this change in fortune for street art? Why It would be remiss not to emphahas the mural of the populace become, all of a sudden, the jewel sise how powerful a statement of in the collector’s crown? “This is something that’s always been change that is. Basquiat came to there,” says Lazarides. “It’s been happening since the 1980s. prominence with the informal grafWe haven’t changed anything – what’s happened is ‘the real fiti duo SAMO© in the late 1970s art world’ has caught up. That’s not to say there haven’t been and later through his association a lot of very good collectors for a while. If you look at Banksy’s with Warhol, He is now the most market, for example, it’s been a steady growth. There’s been no artificial jamming of the market. They’re becoming blue-chip, naturally, because they’re great works of art.”

The profile of the buyer of Untitled – Japanese internet entrepreneur Yusaku Maezawa, founder of fashion site Zozotown – reveals the upward momentum of street art from the gutter Jean-Michel Basquiat’s work on to the penthouse. Maezawa, who is worth more than $3 billion, display at Sotheby’s (right) and has precedent: in 2016, he spent $98 million on multiple pieces at a gallery in Milan (top)

THE ART OF THE POSSIBLE

Pilar Ordovas, a London-based art dealer, after the sale. “But when you have the right material, which is fresh to the market, and the right estimates, things are performing incredibly well.”

Nowadays, there is a general trend for the urban artist to fight with and against the system. In Berlin, a local group of artists named Paintback spend their days altering swastikas into such things as penguins and humanoid figures; in Bristol, by contrast, the home city of Banksy is actively trying to remove street art from its walls.

It’s an uncomfortable place for the work to sit – but it adds to allure. The originals are always, by nature, fleeting. Here today, maybe, and gone tomorrow. Basquiat’s work, for example, is now mostly in the hands of the elite – many famous names have acquired his work, including Madonna, Leonardo DiCaprio, and American hedge fund billionaire Steve Cohen.

David Choe is a contemporary street artist Jean-Michel Basquiat who has transcended the tradition by gaming the system. Choe, 41, is an American in just two days, including another work by Basquiat – for a then artist, graphic novelist and muralist, record fee of $57 million. and probably the richest street artMaezawa is only 40 years old, born 17 years after Basquiat. ist in the world. His work has been The face of the collector is changing, and so are their tastes. co-opted directly into the Venn diaMaezawa represents the new art collector: young, upwardly gram crossover between high art mobile, wealthy and with contemporary, international tastes. and pop culture. Jay-Z and Linkin Maezawa has a Twitter account and an Instagram: his collection Park have enlisted his services for is shareable, tradable and, in some ways, more available to the album cover art, while his work has public than ever before. “You could say Instagram has made this also been seen in the sets of films market,” said Tina Ziegler, the organiser of Moniker, London’s such as Juno and The Glass House. largest urban art fair.

Another inter net entrepreneur, “If there’s one thing you can guarantee in life,” says Lazarides, Sean Parker – famous for establish“it’s that nobody is going to hang the same art on the wall as their ing file-sharing service Napster and parents. This new generation of 40-45 year olds, whose parents investing in Facebook – became a were buying Hirsts, don’t want to copy that. These buyers are fan, and asked Choe to decorate worldly and savvy, and want to do something new. A generational the walls of Facebook’s office. He shift is happening. People are lookwas offered $60,000 for his services, but chose, instead, to take shares ing for something that is theirs. This in the company – he is now worth, is art that belongs to us, our time, by stock-estimates, roughly $ 260 our era. Street art grew up in the late million. Barack Obama is also the ’70s, early ’80s – just like the buyers.” owner of a portrait Choe designed Maezawa is not only focused on of him – a street artist hanging in modern art, however. He also owns the White House, in the best way. work by Pablo Picasso, Alberto This is the great, contemporary Giacometti and Jeff Koons, to name issue of art – the point of collision just three. He plans to loan out his between the street and the galart to galleries, until the moment lery, the public wall and the private he has enough to launch his own, viewing space. Money, after all, conin Chiba, Japan. “The uncertaintinues to run its mouth: everything ty of the world and the economy has its price, no matter how is reflected in the art market,” said

“Nobody is going to hang the same art on the wall as their parents. A generational shift occurs”

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THE ART OF THE POSSIBLE

anti-this or contra-that its original intention. But it’s not all bad, or even, necessarily bad. “What’s really funny, the way I look at it, is seeing these pieces being sold and thinking – oh, that’s my footprint on the back of the canvas,” says Lazarides.

“Some of these pieces have been in the boot of my car or under my desk. But these days, no one is getting picked up and rinsed out by galleries any more – there’s a lot of trust for our artists.”

“I am opposed to things being ripped off a street and put in a gallery. It’s created for the enjoyment of the population”

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And, yet, there are grey areas. Banksy, for example, is not clean of the process he is critiquing. In 2014, after the Folkestone Triennial, his piece Art Bruff, displaying a woman with headphones staring at a plinth, was carved out of the wall it was set on, shipped to America and sold for, reportedly, street art to happen pretty much anywhere – all that happens is $500,000. A local Folkestone charithat, there’s nothing to lose. They have a totally different mindty, Creative Foundation, fought back set to the original generation. Where’s the rebellion?”

(Banksy didn’t want to be involved) Banksy, of course, has precedent for selling his pieces to the through legal channels and, eventuhighest bidder. In 2008, his Keep It Spotless piece, a defaced ally, reclaimed the piece. This set a Damien Hirst painting, was sold by Sotheby’s for just under $2 million; Simple Intelligence Testing went, at the same time, for precedent – that pieces painted onto $1.3 million; Vandalised Phone Box, a sawed in half phone box walls should remain at the original originally located in Soho Square, London, went for $605,000. locale. After all, while the artwork “These artists are incredibly creative,” says Lazarides. “What could be traded, the choice of canthey make for the gallery was completely different than what vas opens up a variety of legal and they were doing for the street. They understood that they had ethical questions about ownership. to do something different. And it shows. Banksy, Haring – what This is, one assumes, the point of these people were doing was a passion. These guys were going street art. But the strange silence out on the street and working. They weren’t going out with any of the artists while the legal dispute idea except making stuff on the street.” was ongoing spoke volumes.

In September of this year, controversy visited Banksy again, “I’m vehemently opposed to when his Haight Street Rat piece was removed from its original things being ripped off the street location, the outside wall of a bed and breakfast in San Francisco, and put into a galler y,” says and moved to the Sierra Arts Gallery in Reno. What made this Lazarides. “It was put there by the controversial was the extra presence of a red line drawn by the artist for the enjoyment of the whole artist alongside the original piece, accompanied by the words population, not to enrich one or two “Here is where I draw the line.” This seemed, to most consumpeople. Let’s be honest: if you take ers, to be a critique of gallery, consumer culture and, yet, the art from the street, you’ve stolen it. piece was moved by collector Brian Grief. Grief insisted at the Taking the art away just makes the opening reception that he was not going to sell the piece but had city poorer. I also have issues with also failed to donate it to the San Francisco Museum of Modern cities, like Melbourne, which allow

THE ART OF THE POSSIBLE

– where lives are lived in and out of the digital/analogue simultaneously, where most communication occurs through a phone with the world blocked out in headphones – urban art erupts through that divide, and combines the two. French artist JR is a perfect example. Any viewer of the 2016 Olympic Games in Rio would have noticed from the hundreds of panoramic shots of Guanabara Bay a huge print of an athlete swimming – this was the genre, existence bending work of JR. “I’m tagging faces of persons,” he says. “They are the ones responsible for their image. When the people react to the project, it becomes their project.”

JR’s work sells for tens of thousands and has garnered numerous fans, from sportsmen to political figures. As Banksy made a statement on the apartheid with the Walled-Off Hotel and Museum in Bethlehem, JR covers cities in portraits of Israelis and Palestinians staring at each in Face 2 Face; he has worked alongside activists to cover Russian Embassies with their portraits, and AIDS sufferers the same in townships throughout Johannesburg. “Image is part of the healing process,” he has said. His most recent work – a huge photo of a young boy pasted across the US-Mexico border – made interArt. “I want it to stay close to home,” Greif said. Grief’s interest national news. “These artists, of in Banksy was sparked during 2010 – when Banksy visited San course, are so good at managFrancisco and left his stereotypical mark on the city. The 2017 ing their careers,” says Lazarides. film, Saving Banksy, documents a variety of people’s desire to “I gave JR his first show in his save his work from the city’s seemingly relentless desire to remove early 20s and now he’s doing huge or paint over the pieces – Grief, of course, received a fair amount things. Deliberately.” of criticism for removing Haight Street Rat, but insists he will not Nowadays, street art has arrived sell it for profit. How, precisely, he went about taking the painting – and it’s not going anywhere. From from the wall is documented by the Save the Banksy foundation, the public to the private space, into which Grief put $40,000 of his own money. these once forgotten voices of the Replicas, then, become the thing. High quality prints tradpeople are now the most influened for reasonable costs. Legitimacy is earned through certain tial and important artists in the signs or marks of proof these came from the original artist. The contemporary world. “I’m amazed print runs are limited and are predicted to skyrocket in price by how worldwide this is,” says and value. The nature of prints makes the artwork appealing Lazarides. “The Middle East is a – the ability for a street artist to be inspired by a particular curhuge market. You can see street art rent issue, create their work in a public space and then have everywhere – in houses, hotels, even them available to purchase from galleries pretty much overon the street. These artists bring the night is deeply alluring. There’s an instantaneity to print that same creativity and energy for their other forms of replication cannot provide. But there is a serious gallery work to what they do on the issue with quality control. Stik recently had to stop the sale of street – it’s amazing.” Listening to 700 eggs printed with one of his images without his authority.

Lazarides speak with such passion Sometimes, the democratisation of art causes accidental rifts: it and love for street art’s rise to comis often impossible to know whether the artist intends for a piece mercial strength, it’s impossible not to be sold or to be seen only publicly. to get excited: street art may have There is a real audacity to urban art that appeals to the started on the pavement, but it’s at younger collector. In a world of dissolving, infirm boundaries its peak in the gallery.

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VA NI TY FA R E WE LL

Vanity Fair redefined the celebrity magazine.

Lauren Razavi looks back at 25 years of Graydon Carter’s reign

During the early ’80s, Vanity Fair was hopelessly out of touch with popular American culture

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fter 25 years as editor-in-chief of Vanity Fair, Graydon Carter announced in September that he would be stepping down from the role. Under Carter’s watch, the magazine evolved from a sedate society rag to a media juggernaut with editions all across the globe. Today, the publication enjoys notoriety and respect in equal measure. But for a long time, Vanity Fair was nothing more than a costly flop, struggling for its survival as part of the competitive media landscape. As the magazine finds itself on the cusp of a new era, we explore some key moments in its tumultuous history.

Condé Nast initially launched Vanity Fair in 1913 as a companion to Vogue. At the height of America’s Great Depression 23 years later, the company decided to consolidate Vanity Fair and Vogue into a single magazine in an attempt to combat falling sales. It seemed as though the increasingly impoverished citizens of the US no longer had time for the light-hearted glamour that filled Vanity Fair’s pages; articles like ‘How To Marry A Millionaire’ lost their appeal quickly in an age where former millionaires were beginning to declare bankruptcy in their droves.

It would be nearly half a century before Vanity Fair was revived, and the revival efforts were a disaster from the start. The first editor, Richard Locke, had never worked on a magazine before.

Locke’s Vanity Fair was plagued by delays, which led to the loss of a gossip column by none other than Truman Capote. The notorious best-selling author would later recall: “I didn’t hear from Mr Locke for weeks, and then one day this messenger boy shows up at my apartment with my copy, and there are red pencil marks everywhere! You can’t rewrite a stylist. So I just sent it over to Esquire.” It wasn’t long before rival publications like The New York Times were speculating that Locke wouldn’t last long – and indeed, he was replaced after just three issues.

Even in the glitz and glam of the ’80s, Vanity Fair remained a sober blot on the shelves of newsagents and supermarkets. The magazine

wanted to be a stylish and upmarket publication, but was hopelessly out of touch with popular culture. Readers were baffled by the inclusion of highbrow personalities like poet Elizabeth Bishop and author John Irving, to the exclusion of figures like Boy George. When Tina Brown – who would later go on to create online magazine The Daily Beast – took over in 1984, she described the magazine as “pretentious, humourless. It wasn’t too clever, it was just dull”.

It was Tina Brown who began transitioning Vanity Fair to today’s incarnation of the title. She brought on photographers like Annie Leibovitz and began to focus on household-name celebrities as well as creative luminaries. During her premiership, Vanity Fair’s covers went from tame pictures of Ronald and Nancy Reagan to stark, intriguing portraits of the hottest stars. One cover gained particular notoriety for featuring a pregnant, halfnaked Demi Moore, fresh from her starring role in Ghost. The cover would become typical of Vanity Fair’s candid celebrity coverage.

After years of obscurity, Vanity Fair was finally coming into its own. But Tina Brown had only ever seen Vanity Fair as a stepping stone to something bigger. Following her departure in 1992, the magazine finally gained the spark it needed to reach its full potential. The catalyst? A man named Graydon Carter.

Carter knew a lot about failure. As an adolescent, he failed to graduate from the University of Ottawa, and then doubled down by falling a few credits short of a business degree from Carleton University. His first journalistic venture, The Canadian Review, was well received, but ultimately folded in 1978 with over $100,000 in unpaid debts.

After that, Carter had to start getting more serious about his work and his career.

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VANITY FAREWELL

Vanity Fair became a never ending party straight from the pages of The Great Gatsby

Carter finally took the media world by storm when he teamed up with Kurt Andersen to found Spy, a satirical magazine that had New York elites cowering for cover. The publication took the kind of risks no other magazine at the time could handle, poking fun at even the highest echelons of New York’s high society.

As one writer for New York Magazine put it: “Which of us hasn’t thought to himself before doing something wrong, ‘How would this look in Spy?’” Spy was much more than a gossip magazine; it was the face of rebellion in an industry that had been resting on its laurels for decades. Carter knew from experience that quaint, friendly little magazines – like his own attempt, The Canadian Review – were destined for failure. With Spy, he knew he needed to create something different.

Carter and Andersen were meticulous in positioning themselves as outsiders. They took offices in SoHo at the Puck Building – deliberately chosen for its history as the offices of Puck Magazine, one of the first satirical magazines to find suc-

cess in the US. Spy were known for throwing wild parties, at one point inviting their whole subscriber list to descend upon New York’s The Tunnel Club. Through these activities, Carter and Andersen marked Spy out as a rebel spirit that sought to dismantle the status quo.

S VF’s covers almost always focus on Hollywood

till, it’s clear that Carter had learned from his failures. Instead of trying to appeal to a national audience and having to adjust the price per copy as a result, Carter applied a simple formula.

Spy was a magazine about New Yorkers, therefore he focused on the New York subscriber base. The magazine retailed at $2.50, a happy medium between Vogue and Vanity Fair, which sold for $3.50 and $2.00 respectively. The price was affordable, but not so cheap that the magazine sunk to tabloid status. A perfect fit for the New Yorker about town.

In July 1992, Carter accepted the role as editor of Vanity Fair and set about infusing the magazine with the same edginess that had made Spy such a sensation. Still, his vision of the magazine wasn’t a complete overhaul: he soldiered on with the successes of the previous generations of Vanity Fair in mind, and sought to revitalise the publication for a modern audience.

Under Carter’s stewardship, Vanity Fair became a never ending party straight from the pages of

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The Great Gatsby. He famously compares finalising the layout of the magazine to creating a seating plan for an imaginary dinner party – a little satire here, a hard hitting celebrity tell-all there. If Carter designed Spy to be an industry bad boy, he turned Vanity Fair into a stunning debutante. Nothing was too ostentatious for a Vanity Fair party under Carter’s rule. Parties featured such delights as topiary shaped like Oscar statuettes, and guests were

Carter positioned the magazine with a mix of hard-hitting journalism and celebrity coverage

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frequently given lavish gifts, such as cigarette lighters engraved with the Vanity Fair logo. Vanity Fair had become the luxurious society magazine Condé Nast had always wanted it to be, but with its own unique, enticing and mischievous twists.

Gone were the days of flattery and pandering to the celebrities. Carter wasn’t interested in a vapid publicity machine, but he didn’t want Vanity Fair to become a satire rag like Spy either. Instead, he devised a potent mix of hard-hitting journalism and celebrity coverage. Carter focused on scoring celebrity exclusives but never shied away from portraying those same celebrities as human beings, with virtues and flaws in abundance. And alongside articles that covered topics like designer John Galliano’s addiction were pages dedicated to the crisis of growing income inequality among the everyday people of America.

Perhaps the most famous of Carter’s successes at Vanity Fair was the unveiling of the Watergate ‘Deep Throat’ source, three decades after the scandal itself shook American politics to the core.

In 2005, Vanity Fair broke their big reveal with the headline ‘I’m the guy they called Deep Throat’.

The article was a deeply personal portrait of the source, W Mark Felt, as an ageing grandfather living in anonymity in his daughter’s converted garage. The article was, of course, a sensation.

Even 30 years after Watergate, the mystery of the ‘Deep Throat’ source resonated with the collective consciousness of Americans everywhere.

But it wasn’t all plain sailing. The irreverence that had been lovable in Spy became an unforgivable faux-pas when utilised at Vanity Fair. Critics pointed out that there had been at least one article about the

Graydon Carter and Anna Carter arrive at the Vanity Fair Oscar Party

Kennedy family in every issue of Vanity Fair published between 2003 and 2011. Certainly, Carter had used publications to explore his own fascinations before – the best received being his frequent takedowns of Donald Trump, long before his election as US president – but most of the Kennedys were no longer even alive over those years.

More damningly, Vanity Fair has faced accusations of misrepresenting the factual content of stories to attract attention. The magazine described a sadistic ‘game’ used as part of the casting process for Angelina Jolie’s latest film, First They Killed My Father. Allegedly, the actress deliberately sought out Cambodian children who had experienced great hardship and had them ‘steal’ a small amount of money and then justify their actions. However, it became clear that in reality, this game was nothing more than an improvisational exercise. Vanity Fair had made headlines commenting on Jolie’s

VANITY FAREWELL

alleged cruelty, but at the cost of the magazine’s journalistic integrity. Still, Graydon stood by the article, perhaps knowing that it was only a blip in an otherwise almost spotless record.

In a world where print media is continually falling out of style, Vanity Fair has managed to retain its allure. There are five different international editions of the magazine, and it enjoys a total circulation of over 1.2 million – outselling other American heavyweight titles such as The New Yorker and Forbes.

Vanity Fair has been publishing articles online since 2006, and recently launched an online edition on the iOS App Store. Carter also helped Vanity Fair join the viral video trend with a new channel, ‘VF Hive’, on streaming site Cheddar, dedicated to bringing the magazine’s content to a medium that resonates with millennial audiences.

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lenty of magazines have been throwing ideas at the internet to see what sticks. Time Inc, for example, has already attempted to define its place on the bandwagon of new media storytelling with a video channel of adorable animals called Paws & Claws – a notable departure from their usual journalistic fare. Vanity Fair, however, has ensured that their online coverage offers the same mix of biting celebrity coverage and serious news articles that have made the magazine so successful in print.

Carter’s much hyped Greenwich Village restaurant, The Waverly Inn

Carter likes to run his restaurants just like he runs his magazines: with precision and a killer seating plan

Carter himself emphasises that the essential ingredients of the stories haven’t changed in the digital era, just the mode of consumption. In his words: “People are consuming more voraciously than ever.” It’s certainly true that in the age of the internet, Carter’s particular brand of celebrity lampooning is more relatable than ever. For example, after long-time target Donald Trump tweeted that Vanity Fair was “way down, big trouble. Dead”, the magazine gained almost 80,000 new subscribers overnight, and millions more readers tuned in online.

The modern Vanity Fair is everything Condé Nast dreamed it would be back in 1913, and a large part of that is thanks to Graydon Carter.

So what’s next for Graydon Carter? Well, he’s expanded his empire to include a whole cohort of different projects over the years, so he’s unlikely to find himself bored post-Vanity Fair.

One such project is his pair of successful Manhattan restaurants. Carter co-owns both the Waverly Inn and the Monkey Bar, two highly exclusive eateries that specifically cater to celebrity clientele. Carter likes to run his restaurants just like he runs his magazines: with precision and a killer seating plan. He jokes that one of his greatest achievements was the invention of the double-sided place card, because it means you’ll never have to ask the name of the person sitting across from you.

Carter has also made splashes in New York’s illustrious theatrical scene, most recently as the producer of I’ll Eat You Last, a play about talent agent Sue Mengers, legendary for her wit and brutal honesty. True to form, Carter managed to hook Bette Midler as the star of the show, and it debuted to rave reviews. There are rumours that Carter’s ‘third act’ might even take the form of another journalistic venture. He’s already been pitching stories to publications like The New Yorker, where his longtime friend David Remnick is the editor. Although, he jokes, he feels like he might get responses like ‘How do you spell your name again, Graydon?’

Whatever Carter’s plans for the future, we’re unlikely to hear something concrete anytime soon.

For one thing, Carter has to transition in the new editor of Vanity Fair – an appointment that has yet to be finalised. For his own projects, Carter is remaining uncharacteristically tight-lipped. His reasoning? “It’s best to fail quietly at the beginning of something than to make grand pronouncements.”

But then again, isn’t failure how the great Vanity Fair got started in the first place?

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UNEASY STREET Jesse Onslow Norton examines why the rich feel more anxious than ever before

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few weeks before Christmas in 2016, IrishAmerican businessman Chuck Feeney granted a $ 7 million donation to Cornell University in Upstate New York, the institution he’d graduated from back in 1956.

After building a fortune in duty free and luxury retail, the cheque Feeney wrote brought the amount he has donated over the last 35 years to $8 billion, leaving him with only $ 2 million to his name. The 86-year-old, who is famous for having said “nobody can wear two pairs of shoes at one time”, aspires to go broke in his lifetime – he once told The New York Times that he hopes the last cheque he writes bounces. He now lives a quiet life with his wife in a modest, rented apartment in San Francisco.

The case of Chuck Feeney is unusual, but it highlights an uneasiness that some have with the amassing of money. He’s not alone in these endeavours either – others have chosen to give away nearly all their fortune. In 2010, the late Welsh businessman Albert Gubay, founder of health club chain Total Fitness, made headlines when he gave away all but $13.1 million of what was then a $628.9 million fortune to charitable trusts. He opted instead to live as frugally as possible until his death in 2016.

Chuck Feeney gave away $8 billion of his fortune. He said he hoped the last cheque he wrote bounced

It appears that super-rich billionaires such as Warren Buffett, Bill Gates and Mark Zuckerberg who pledge money are inspiring other high net worth individuals (HNWIs) to do the same.

According to a 2016 survey of 1,345 US households with a net worth of more than $1 million, carried out by Bank of America, 91 per cent of HNWI donate to charity each year, giving an average of $25,509. Thirty-nine per cent of respondents said that they were motivated by experiencing personal satisfaction, enjoyment or fulfilment. The study also found that 50 per cent of those surveyed had volunteered in the last 12 months, with 63 per cent citing the personal gain they got out of it as the reason for offering their time and services.

Rachel Sherman is the author of Uneasy Street: The Anxieties of Affluence, an examination of the struggles faced by New York’s liberal elite. She believes that the charitable behaviour of HNWIs in the US could be the result of them wanting to disassociate themselves with the fact that they’re wealthy, especially as the country continues to have increasingly public discussions about, and visible displays of, inequality. According to Census Bureau data released in September, inequality is persisting, despite household incomes climbing and poverty reductions.

“I think in the context of US society there is the argument that they [HNWIs] are trying to get past this discomfort and legitimise their wealth by interpreting themselves as morally worthy of privilege,” says Sherman. “That means showing themselves to be hard workers, that they’re reasonable consumers. So they’re not ostentatious and over the top; they give back to society in different ways, primarily through charitable contributions and some of them through volunteering.”

For her book, Sherman spent time interviewing fifty affluent New Yorkers, a mix of hedge fund financiers and corporate lawyers, professors and artists, and stay-at-home mothers. She examined their lifestyle choices and explored their understanding of privilege.

UNEASY STREET

Rachel Sherman

The rich often downplay their financial status to friends and family

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“The people I interviewed were relatively liberal New York elite. I found that affluent and wealthy people were more uncomfortable with their privilege than I’d expected them to be,” says Sherman.

“They were uncomfortable talking about it and they don’t like identifying themselves as affluent.”

It’s not an uncommon feeling. Wealth comes packed with plenty of intense emotions, or so found a 2014 global survey conducted by independent financial advisory organisation the deVere Group.

Sixty-one per cent of 1,125 clients with more than £1 million ($1.3 million) in investable assets, living across the UK, the US, the United Arab Emirates, Hong Kong and South Africa, said that their finances were a sore topic of conversation, even among family members and close friends. The results suggested that when attending dinner parties, HNWIs would even prefer to debate the oft-argument-starting subjects of politics and religion over discussing how they like to spend their money.

It seems like there’s no correlation between how much money an individual earns, or has invested, and how open they are about it.

Sherman also discovered this from discussions with her interviewees. Though her subjects weren’t willing to be open about their income status or wealth, she says they would still compare themselves to other people, be it friends, neighbours or colleagues. They would also downplay their own financial status and often see themselves as poorer than they actually were.

She adds: “It’s not so much that they’re hiding it from the world, because they do live in expensive homes and they mostly send their kids to private schools. But there’s a way in which they don’t want to talk about it, almost that they don’t want to admit it to themselves.”

One of the major reasons that HNWIs aren’t willing to be frank about their bank balances has to do with media portrayals, particularly those in reality TV shows like American show The Real Housewives of New York or UK series Made in Chelsea, where the cast are seen flashing their credit cards and splashing out on Chloé bags and Gucci sunglasses. This type of show indulges the public in a one-dimensional view of what it’s like to be wealthy.

UNEASY STREET

Some of the cast of the hit show Billions

Donations or volunteering offset the grubby image that can come with having a lot of money “We now have a lot of reality TV that is really focused on the lifestyles of the rich and famous. This presents many people with views of inaccessible and unattainable lifestyles,” says Sherman.

The public are drawn to reality TV because it offers them an escape from reality and the mundanity of day-to-day life. A life of wealth that viewers aspire to is often more within reach for the 45 to 60 minutes that it’s shown on-screen for, because those putting their lives on display appear to be regular people. What’s being shown is actually a glamorized and distorted representation of what it means to be wealthy: shallow, entitled and obnoxious.

“The media promotes a certain kind of fascination with wealthy people and especially with their consumption. It’s the

consumption habits of the wealthy that has become an object of fascination,” Sherman explains. “That contributes to an image of rich people as being over the top. So, when the people who I talked to said they would never want to be on one of those shows, it told me that they were really distancing themselves from those kinds of images of the wealthy.”

Along with reality shows, dramas have also created an illusion of how the rich live. Take the Showtime series Billions as an example. It was created to take a stab at Wall Street, where people dream of being successful, and its notorious ruthless streak leaves those who are unsuccessful in tears. Billions’ central character is hedge fund manager Bobby Axelrod, played by Damian Lewis, who spends $63 million on a beachside property in the Hamptons simply because he can.

Characters like Bobby Axelrod, portrayed as incredibly successful at the same time as being self-indulgent and narcissistic, prompt a high percentage of HNWIs – including those Sherman spoke to – donate to charitable causes or volunteer. It’s a way of offsetting the grubby image and connotations that come with having a certain amount of money.

“As well as bad portrayals of the wealthy, the media gives us images of good wealthy people.

Though the ones that come to mind are typi-

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UNEASY STREET

cally male entrepreneurs,” Sherman says. “These are businessmen who are often coded positively because they are, in the case of say Bill Gates, giving away vast amounts of money. In the case of someone like Buffett, it’s been noted that he has this very modest lifestyle given the fortune he has.”

Like any minority, the wealthy often strive for conformity and struggle to reconcile their social status with their self-perception. Philanthropy and charitable donations are one symptom of this uneasiness with their affluence, but often these activities necessitate even more unwelcome conversations about money. When it comes to relationships married couples often find that wealth impacts their outlook and perspective differently and changes the home dynamic.

“Those I interviewed who are stay-at-home mothers often have to negotiate a lot with their male partners, who are bringing in the money,” she says.

“The men think that they’re more entitled to decide what to do with the money and are often critical of their wives, even going as far as supervising spending or trying to control them in other ways.”

While some couples do split the responsibility of bringing money into the household, women who are stay-at-home mothers and whose partners are the primary breadwinners aren’t necessarily failing to contribute financially out of choice. But regardless of the reasons for the situation they are in, they can feel anxious and conflicted about the lack of money they bring to the table. It’s no surprise then that Sherman heard stories about women wanting to make renovations to their properties as an extension of their role in bringing up the children, with the hope of trying to make themselves a place that can be called home.

“Even their husbands saw them as a net drain on the family finances, rather than seeing that they’re actually doing all of this labour that makes our lifestyle possible, makes our home possible and helps our kids grow up and so on,” Sherman says.

Divorce rates across the US are falling and are at their lowest for 35 years, according to annual data released in November 2016 by Bowling Green State’s National Centre for Family and Marriage Research. Still, women knowing their place in a relationship and having a role to play is important, even if it means keeping up appearanc-

“They want their children to understand their lifestyle is different but that they are normal”

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Bill Gates and Warren Buffett

es to ensure that their home is a good environment in which to bring up a family. Not only might this help to keep divorce rates down, but it can help HNWIs address the anxieties they have about raising their children into a life of luxury.

Reflecting on her interviews, Sherman says that those she spoke to who had children were keen to stress that it is important they are raised not to be entitled.

“They want their children to understand that their lifestyle is not the same as most children, but then they also want their children to feel like they are normal. They want to manage their consumption habits and make sure they have some of work ethic that’ll help get them a paid job when they’re in high school and college,” Sherman adds. “This matters because it contributes to the public conversation around wealth and inequality.”

With a report published in May showing that money can buy happiness – but only up to a point – strong family bonds could also be key to keeping a smile on your face in the longterm. The study was published by Gallup and was the result of analysing 350,000 interviews to determine how income affects daily emotions. For residents in the New York metropolitan area, happiness was $105,000, while it came out at a more modest $54,000 in Washington, DC. From what Sherman heard, she believes some wealthy people are recognising that the pursuit of fortune isn’t the American dream it was once made out to be. They’re becoming more aware of their privilege – hence the giving back and volunteering – and believe that speaking about it and struggling with their wealth internally makes them morally better people than those who don’t think about it at all.

However, the $64,000 question is not so much whether these HNWIs are good or bad people, but what the consequences are for everybody when it comes to the distribution of wealth – and whether the public conversation can ever change this.

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NOVEMBER ISSUE 143

Tropic splendour A brave architectural collision of old and new converge in Singapore’s most unique luxury hotel

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LIVING / HOTEL

CAPELLA SINGAPORE

WHERE TO STAY

Singapore

PRICE Villas from $720 per night

capellasingapore.com

ďƒą SIN

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W

hat do you get when you cross an enormous Norman Foster-designed brutalist pavilion with a colonial-era army barracks and throw in a 30-acre tropical estate on a man-made island in the South China Sea? The mind boggles.

Yet the astoundingly elegant Capella Singapore is a masterclass in an architectural wonder, boldly combining the inimitable work of cutting-edge design studio Foster + Partners with a sentimental nod to Singapore’s colonial heritage that offers the most spacious accommodation in Singapore.

The 112 guest rooms comprise 15 suites and 38 private villas including two Colonial Manors and five Contemporary Manors large enough to host a family with an entourage in tow.

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The villas all have private pools and are kitted out with Bose sound systems and Pratesi linens, and private assistants are on call 24 hours a day.

Long-term guests have the option to stay at The Club Residences where, perhaps unsurprisingly, some have remained for years, no doubt charmed by the lifestyle benefits of living in a rainforest with cascading pools and a roaming bevy of peafowl; where your front garden becomes a conceptual art space to showcase gravity-defying sculptures by French artist Bernar Venet.

And while Sentosa Island has become a lifestyle landing-place in Southeast Asia – with its manicured beaches, rainforest walks and popular leisure destinations such as Universal Studios Singapore and Resorts Word Sentosa – its urban serenity is in a class of its own.

FROM THE CONCIERGE

SEE

Gardens by the Bay is a 101-hectare nature park in the city that showcases horticulture and garden artistry through a collection of climate-controlled constructions, including a Cloud Forest, a Supertree Grove and a Flower Dome, which is encased within the largest glass greenhouse in the world.

EAT

Designed by Hong Kong’s famed Andre Fu, Cassia is an awardwinning Cantonese restaurant that tops the list of fine dining establishments in Singapore and is located at Capella Singapore on Sentosa Island.

PLAY

Universal Studios Singapore is one of the island’s most popular family destinations, having received more than 25 million visitors since it opened in 2010. VIP tours and Priority Access passes can be arranged through the park’s concierge services.

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NOVEMBER LIVING / INVESTMENT

ISSUE 143

The Regency Desk A classic piece of furniture that is well worth investing in

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Check for flaws. Even a small flaw can have a huge negative outcome on the worth of a piece.

Understand the market. Furniture styles come in and out of fashion, so be aware of how fashionable (or otherwise) that piece is. You may have to wait 30 years for it to come back into favour.

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Buy what moves you. Don’t be afraid in trusting your gut. If you buy something you love and it doesn’t appreciate as expected, well, at least you are living with a piece of furniture you like.

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ntique furniture, when bought at the right time, can prove a very lucrative investment. If we look at the Antique Furniture Price Index, it has risen from 100 in 1968 to over 2,000, a rise of more than 20 times its original value.

Beware though that collecting antiques can be expensive: it’s not unusual for selling expenses to hover around the 30 per cent mark, a reflection of the unique nature of much of the antiques being sold. That applies to the Regency Desk, which is currently popular among collectors. Regency pieces are known for their Roman and Greek decorative elements and many had Chinese and Japanese themes. Built to last and with a sense of design flair, these desks will brighten up any home office.

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LIVING / STYLE

What to pack ...for winter weather in Hamburg and beyond

Average temp

5°c

Stockholm Milan Paris London

ALSO WEAR IN...

3°C 7°C 6°C 7°C

HAMBURG

NOVEMBER

Chance of rain: 40%

WHAT TO SEE

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THE CHILEHAUS The Chilehaus is possibly Hamburg’s most beautiful building, and it’s the highlight of the Konterhaus district.

Built in 1924, it’s a stunning example of the Brick Expressionism form of architecture that was popular in Germany. The whole district is fascinating: beautifully designed

offices and warehouses built to cater for Hamburg’s booming trade and manufacturing industries that exploded at the end of the 19th century. These days, the whole area has been revitalised and it’s the perfect place to spend a long afternoon, browsing the shops, galleries and cafes.

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ACCESSORIES

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Brunello Cucinelli contrast-trim cashmereblend scarf $672 matchesfashion.com

Luis Morais glass bead, enamelled gold and diamond wrap bracelet $887 mrporter.com

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Movado sapphire synergy chronograph watch $2,469 neimanmarcus.com

81 1. Tom Ford double-breasted shearling coat $16,133, mrporter.com 2. Fear Of God skinny-fit zip-detailed panelled selvedge denim jeans $1,139, matchesfashion.com 3. Aquascutum charlton polo knit $199, harveynichols.com 4. Berluti brunico venezia leather hiking boot $2,829, neimanmarcus.com

LIVING / STYLE

What to pack ...for winter weather in Johannesburg and beyond

Average temp

26°c

Melbourne Christchurch Buenos Aires Perth

ALSO WEAR IN...

20°C 19°C 24°C 21°C

JOHANNESBURG

NOVEMBER

Chance of rain: 22%

WHAT TO SEE

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THE APARTHEID MUSEUM A fascinating look at the history of apartheid in South Africa, the museum has become a tourist favourite since it opened in 2001.

It uses various media to tell the stories of the people affected, and it explains how the system worked in practice. It’s a chilling, although

very meaningful experience, and it’s a must-see if you are visiting the city and well worth the 8km journey out of the city. The building itself is stark and impressive, and the litany of large-scale photographs brings home the tragedy of apartheid. This is one of the best museums in Africa.

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1. Max Mara hooded cashmere and shearling coat $4,891, net-a-porter.com 2. Valentino ivory silk crepe shirt $2,588, harveynichols.com 3. Erdem perry embellished floral-embroidered tulle gown $4,922, matchesfashion.com 4. Jimmy chooKarima crystal 100mm sandal gray $2,635, neimanmarcus.com

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ACCESSORIES

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83 Coach X Selena Gomez nolita leather clutch $185 harveynichols.com

Maison Michel virginie straw sunhat $662 net-a-porter.com

Bottega Veneta intrecciato bi-fold wallet $599 matchesfashion.com

LIVING / FOOD

Seoul food James Brennan talks to two of South Korea’s hottest chefs and explores the increasingly popular world of Korean food

Mingoo Kang

SEOUL, SOUTH KOREA

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f you thought Psy’s Gangnam Style was South Korea’s greatest cultural export, think again. Despite almost three billion YouTube hits, there’s only so much lasting impact a frenetic music video of a man in a tuxedo doing a horse dance can have. Korean food, on the other hand, is massively on trend. It looks good, it tastes good and it does you good. And it’s in a neighbourhood near you.

The Chinese have a word for the phenomenon. Hallyu, or the Korean Wave. It describes the rapid spread of Korean culture, music, fashion and entertainment around the world. Since the late ’90s, K-pop and K-dramas have been all the rage in Asia. But just as Chinese food became a go-to cuisine in most western countries, a new breed of chef is doing the same for Korean food.

Mingoo Kang and Jungsik Yim are two of them. Mingoo’s Mingles restaurant in the hip Cheongdam-dong area of Gangnam in Seoul pushes the boundaries of Korean food with a

 ICN

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distinctly modern European slant. The restaurant currently stands at No 15 on Asia’s 50 Best Restaurants list, and was named best restaurant in Korea in 2016.

Meanwhile, at his Jungsik restaurants in Seoul and New York City, Jungsik Yim is credited with the invention of ‘New Hansik’, or what he calls an ‘upgrade’ of traditional Korean food, using cutting-edge western techniques and ingredients. Dishes such as bibimbap with raw sea urchin, or crisply charred octopus with tangy tomatoes are helping to redefine the possibilities of Korean cuisine. Jungsik’s Seoul restaurant has one Michelin star, but his Manhattan restaurant has two. That might say something about the enthusiasm with which Korean food is being embraced in the West, and particularly in New York.

Between Fifth and Sixth Avenues around West 32nd Street is an energetic cultural enclave known locally as Koreatown. It’s a flourishing hotspot for Korean businesses, bars, spas, karaoke clubs and restaurants dispensing everything from fried chicken wings to bibimbap. Cho Dang Gol offers Korean comfort food in the form of stews and soups that will ward off the worst of a Manhattan winter, while Kang Ho Dong Baekjeong is a barbecue joint popular with the likes of Anthony Bourdain and David Chang of Momofuku fame.

Further afield, in Hell’s Kitchen, is Danji, a small Korean restaurant-cumbar modelled on a Japanese izakaya.

It belongs to ex-medical student and classically trained chef Hooni Kim, whose yearning for high-quality authentic Korean food in New York drove him to take matters into his

NOVEMBER ISSUE 143

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Luigi Taglienti

LIVING / FOOD

Mingles

The Korean national dish, kimchi, is renowned for its superfood status, thanks to the enzymes and nutrients created in the fermentation process

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own steady hands. The result is a small (some might say cosy) eatery where guests budge up together on stools at bar-style tables. For Hooni, it’s all part of the wide appeal of Korean food.

“I think the eating culture and customs of Korean cuisine are very social in nature,” he says. “We like to share food with both close friends and new friends alike in a table setting.

Whether it’s a tableside barbecue or the multitude of banchans [small dishes], Korean eating culture is all about eating with other people. All over the world, these days, eating is becoming more and more social rather than just sustenance, so that’s one of the reasons Korean cuisine is attractive to many.”

At Danji, classic Korean dishes are given a contemporary North American twist with creations such as bulgogi beef sliders and kimchi poutine. You can also call in for a K.F.C. (Korean fire chicken wings), but be firmly assured that you are eating D’Artagnan free-range organic chicken, and not

some chlorine-washed bird.

“My philosophy in cooking Korean food is stressing the importance of natural ingredients,” says Hooni, who also owns Hanjan, a similarly mindful Midtown restaurant. “At both my restaurants we use meat with no hormones or antibiotics, and use as much local and organic produce as possible. Chemicals such as MSG, pesticides and preservatives, I believe, are harmful to our bodies, so they have no place in my kitchen.”

Korean food is already pretty healthy.

The Korean national dish kimchi is renowned for its superfood status, thanks to the enzymes and nutrients created in the fermentation process. The dish can take many forms, with napa cabbage and spring onions, to cucumber and radish, but the key benefits are the same. It’s low in calories, full of fibre, and packed with vitamins, amino acids and antioxidants that are believed to boost the immune system, promote digestion and reduce cholesterol.

But it’s not just kimchi that results from fermentation in Korean cooking.

Mingles chef Mingoo Kang explains: “I think the recent increased interest in fermented foods is from the desire to explore and study new flavours. Our fermentation processes involve various kinds of vegetables. The Korean mother sauce, jang, comes in two types, ganjang (liquid) and doenjang (paste), which are made from fermenting soybeans.”

“We use jang for most Korean dishes at Mingles. I try to apply jang sauce to western cooking methods or to desserts instead of using in regular Korean ways.

At the moment, I am developing desserts with various fermented ingredients.”

After working with Martín Berasategui in San Sebastian, and at Nobu in the Bahamas, Kang returned to Seoul with a very international outlook on Korean food. His signature dish of ravioli in Korean anchovy broth takes inspiration from the xiaolongbao steamed buns found in Chinese cuisine. “I always like to mix things up,” he says. “If the presentation

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rather looks like traditional Korean, I’d like to create flavours which are not expected as Korean, and vice versa.”

Mingoo recently cooked at a collaborative Korean dinner at the Gramercy Tavern in New York, an event attended by Hooni Kim and many more of NYC’s Korean cognoscenti. Such gatherings are further testament to the far-reaching appeal of Korean food, which according to Kim is due to a growing global interest in Korean pop culture. “Thanks to K-pop music and popular Korean movies and TV dramas, I think Korea has now taken the lead in Asian entertainment,” he says. “I remember 20 years ago, it was ChineseHong Kong movies by Wong Kar Wai and Ang Lee that represented Asian entertainment, but these days I see many more Korean movies in the cinemas.”

“One of the reasons is because Koreans put so much emphasis in

visuality. Music videos and movies are very polished in Korea. Also, the way we tell stories via music or movies is very distinct in our culture, and it is fortunate that style is catching on.”

The sensual richness of Korean popular culture is perfectly suited to a world that thrives on constant stimulus.

And as long as Korean cuisine remains adaptable to all the many cultures that embrace it, perhaps the more it will evolve and surprise us.

“I think both Mingoo and Jungsik have such distinct styles and visions of what Korean food means to them that rather than cooking Korean food, they are cooking ‘their’ food,” says Kim. “I cook more traditional Korean food than they do, but each dish on my menu has a creative flair or personal touch that makes my traditional Korean food ‘personal’ also. I think every chef in any cuisine should approach cooking this way.”

The colourful story of Korean cuisine has many chapters to go, but whether the setting is Seoul or New York, the leading protagonists are equally captivating in their own way.

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LIVING / ART

Basquiat: Boom For Real The New York legend remembered

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ean-Michel Basquiat is one of modern art’s biggest names, a man who revolutionised New York’s art scene in the 1980s.

He worked with icons of the time such as Blondie, Keith Haring and Andy Warhol, and his star has only burned brighter since his death in 1987.

Basquiat’s work took on issues such as poverty, racism and the nature of the self, while he utilised everything from drawing, painting, text and spray paint to express himself. In the years since his death, his paintings have sold for tens of millions of dollars, and last year, one of his untitled works sold

for more than $110,000,000. This exhibition in the Barbican showcases more than 100 works from private collections and museums. It features a rare film of the man at work, archive material and photography, and is a must for any fans of his work.

Barbican; barbican.org.uk

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Clockwise from top left: Various art works, photographs and screenings of Jean-Michel Basquiat’s work, spanning more than a decade. Artworks: © The Estate of Jean-Michel Basquiat. Licensed by Artestar

NOVEMBER ISSUE 143

LIVING / COLUMN

Hit Refresh

By Satya Nadella

T

here was an audible gasp and more than a smattering of chuckles in the auditorium when I reached into my suit jacket and pulled out an iPhone. No one in recent memory had seen a Microsoft CEO showing off an Apple product. Especially not at a competitor’s sales conference. “This is a pretty unique iPhone,” I told attendees at Salesforce’s annual marketing event as the crowd quieted down. Salesforce both competes and partners with Microsoft in online services. “I like to call it the iPhone Pro because it’s got all the Microsoft software and applications on it.” On the giant screen behind me, a close-up of the phone appeared.

One by one, the app icons flashed into view – iPhone versions of Microsoft classics such as Outlook, Skype, Word, Excel and PowerPoint, as well as newer mobile applications such as Dynamics, OneNote, OneDrive and Sway.

Seeing me demo Microsoft software on an iPhone designed and built by Apple, one of our toughest longest-standing competitors, was surprising and even refreshing. Microsoft versus Apple has been such a prominent and even contentious rivalry that people forget we’ve been building software for the Mac since 1982. Today one of my top priorities is to make sure that our billion customers, no matter which phone or platform they use, have their needs met so that we continue to grow. To do that, sometimes we have to bury the hatchet with old rivals, pursue surprising new partnerships and revive long-standing relationships. Over the years we’ve developed the maturity to become more obsessed with customer needs, thereby learning to exist and compete.

A few years back Apple had a concept they felt would benefit from a renewed partnership with our capabilities and culture. Shortly

after becoming CEO, I decided that we needed to get Office everywhere, including iOS and Android. We had these versions in the works for some time, just waiting for the right moment to launch. I wanted to declare, both internally and externally, that the strategy would be to centre our innovation agenda around users’ needs and not simply their device. We announced that we would bring Office to iOS in March 2014, two months into my new role.

Soon Apple sent a cryptic note to our Office team asking for an engineer to sign a nondisclosure agreement and come to Cupertino for a meeting. This is standard operating procedure in our secretive industry where intellectual property must be guarded. After a few meetings it became clear that what Apple wanted was for Microsoft to work with them to optimise Office 365 for their new iPad Pro. Apple told us that they felt there was a new openness at Microsoft. They trusted us and wanted us to be a part of their launch event. There was passionate debate internally about whether this was a good idea. Some product-line leaders within Microsoft about partnering with their competitor; I definitely heard some resistance behind closed doors. Partnering is too often seen as a zero-sum game – whatever is gained by one participant is lost by another. I don’t see it that way.

When done right, partnering grows the pie for everyone – for customers yes, but also for each of the partners. Ultimately the consensus was that this partnership with Apple would help to ensure Office’s value was available to everyone, and Apple was committed to make its iOS really show off the great things Office can do, which would further solidify Microsoft as the top developer for Apple.

“Seeing me demo Microsoft classics such as Outlook, Word and Excel on an iPhone was surprising and refreshing”

90 From Hit Refresh by Satya Nadella © 2017. Reprinted courtesy of Harper, an imprint of HarperCollins Publishers

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