Issue 72 â– December 2011
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AMAZON BOOKS Changing the Industry
Are We Getting Closer?
Classics That Linger
Time is the Brand
Georges Kern emirates.com
E v Er y r ol E x i s m a d E for g r E atnE s s . thE Cosmog r a ph day ton a , i n t r o d u C E d i n 19 6 3 , w a s d E s i g n E d t o m E E t t h E d E m a n d s o f pr ofE s s ion a l r aCEC a r d r i v Er s a nd quiCk ly E a r nEd it s iConiC status. with its patEntEd Chronograph mEChanism and bEzEl with ta C h o m E t r i C s C a l E , i t a l l o w s d r i v E r s to p E r f EC t ly m E a s u r E E l a p s E d C i r C u i t t i m E a n d C a l C u l at E av E r a g E s p E E d .
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This issue December 2011
Exclusive to Emirates First Class and Business Class
Cover Story 34 The Evolution of Allure Georges Kern was an untested executive when he joined the luxury group Richemont a decade ago. Placed in charge of Swiss watch manufacturer IWC Schaffhausen, Kern has since transformed the company into a prestigious global brand.
Features 42 Flipkart Moves Fast in India
58 Germany Dims Its Nuclear Power
Online sales in India have held great promise but failed to
The accident at Japan’s Fukushima nuclear plant caused
deliver in the past. That is now changing, with flipkart.com
Germany to permanently shut down eight of the country’s
leading the charge.
oldest reactors and plans to retire the remaining nine by
46 Food: A Temperamental Star Why does the food on your plate never look as good as
2022. But sceptics argue that the decision was premature.
64 Profit vs. Risk
in the TV ad? That’s because there’s a huge advertising
Banks are targeting the rapidly growing emerging markets to
industry behind it.
keep profits flowing. But emerging markets are volatile and pose unique problems.
52 Amazon Takes On Publishing Amazon.com has taught readers that they do not need bookstores. Now it is encouraging writers to cast aside their publishers.
Exclusive to Emirates First Class and Business Class
69 Slow Boat Through Russia A cruise along the historic Volga-Baltic Waterway not only takes in St Petersburg and Moscow but also all the history and scenery along the route.
74 Yves Saint Laurent A massive retrospective exhibition covering famed
French fashion designer Yves Saint Laurent’s entire body of work is on show until January in Madrid.
80 The Art of Appraisal Knowing how much your collection is worth is essential for insurance purposes or when you want to sell. But make sure you get the right appraiser, otherwise it can be an expensive mistake.
84 Fusion Power: Is It Getting Any Closer? 84
For decades, scientists have been predicting that one day the same process that powers the sun will give us virtually unlimited cheap, clean electricity. But the technical obstacles remain huge.
88 That Man Smells Familiar Men are far more brand loyal than women, which is why classic men’s fragrances are still on the shelves. And now there is even a retro movement afoot.
92 Northeast Passage Dream Revived
Global warming is shrinking the Arctic ice pack, resulting in governments and companies scrambling to
exploit new opportunities in this previously inaccessible
World business in a nutshell.
96 Other Business
23 Observer Spotting and analysing business trends.
30 Column: Suzanne Goldenberg
Portfolio takes a light-hearted look at the latest business news.
Cleaning Up the Himalayas
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BUSINESS NEWS IN BRIEF
China Ready for Foreign Shares said it’s “basically ready” to let foreign
China’s capital controls. Foreign firms could benefit from listing
issuers sell stock, paving the way for
in China through higher valuations and it
companies from HSBC Holdings to Coca-
will give them access to Chinese currency
Cola to list in the world’s second-biggest
to fund their expansion in the world’s
Trading should start “as soon as
China is also seeking to revive investor
possible when the time is ripe,” Xu Ming,
interest in an equities market that
executive vice president in charge of the
has slumped the past two years as the
international stocks board, said in an
government raised interest rates and
11 November interview at the exchange.
imposed curbs on property transactions to
There is no set timetable but the exchange
tame inflation and prevent asset bubbles.
has finished work on technological and
Overseas companies are barred from
selling stock in China, though are allowed
The trading of foreign equities will mark the biggest change for China’s stock
Xu Ming, an executive vice president at the Shanghai Stock Exchange.
to do so in Hong Kong. The Shanghai stock exchange
The Shanghai STock exchange
an earnings history and strong corporate governance.
market in more than five years and add
has already been contacted by
impetus to Shanghai’s drive to become
foreign companies in the finance,
stock market with a combined market
a global financial centre by 2020. It will
telecommunications, consumer goods
value of $3.6 trillion for the Shanghai and
also broaden options for the nation’s
and manufacturing industries. Xu said
Shenzhen bourses as of November 2011.
85 million individual investors who are
the exchange is looking for companies
The US is the largest with a market value
restricted from buying shares abroad by
that already have operations in China,
of $15.2 trillion. n
China has the world’s second-biggest
Notebook Tokyo Office Rents Drop
billion is the whopping credit line readily available to HNa group, a Chinese financier in aviation, shipping and hotels, if it chooses to support acquisitions in europe and the Us. the company aims to boost its overseas assets from 10 to 40 per cent within the next five years with investments in ge seaCo, spain’s HN hotel chain and a turkish air-cargo carrier in the pipeline.
billion is the sum that British drug maker glaxo-smithKline will pay the Us government as settlement for the multiple civil and criminal investigations into the pharmaceutical firm’s marketing practices. the settlement is the largest in a federal case against a pharmaceutical company, surpassing the previous record of $2.3 billion paid by Pfizer in 2009.
Tokyo’s record-low office rents may post further declines in the next six months as landlords compete to fill space with supply expected to reach the highest since 2006.
plunge in Japan-based Olympus Corp’s shares sees its stock price hit the lowest since 1995 after revelations that its senior management admitted to have covered up investment losses by using Us$687 million paid to advisers on the 2008 takeover of gyrus group and other investments in the 1990s.
2006, according to a survey by Mori Building Co. JP Tower, a 38-storey office tower located in the city’s main business
will be built by January. Tokyo’s office vacancy rate
million, a world record price for any item of ming porcelain, was reached at a sotheby’s Hong Kong auction. Purchased by an anonymous telephone bidder,
year, matching the level in
Marunouchi Eiraku Building
the blue and white Chinese porcelain was formerly owned by swiss tycoons, the Zuellig brothers.
square metres in Tokyo next
the spring, while the 27-storey
12 per cent to 1.54 million
district, will be completed in
billion savings plan recently announced by the French government will be accrued by way of tax increases and spending cuts spread over five years. the big package of budget savings will help further slash its public deficit and aid countering fears of France getting dragged into the eurozone debt crises.
New office space will rise
billion is set to be spent on energy projects in the oil rich meNa region from next year to 2016 as per the arab Petroleum investment Corp. saudi arabia tops the list by committing investments of $141 billion, followed by the Uae with $76 billion.
rose to 8.8 per cent in October, the first increase in seven months, while rents slid to a record low of 17,011 yen ($219) per tsubo. The city’s office vacancy reached its alltime low of 2.5 per cent in November 2007, which drove the average rent to a new high the following year. A tsubo, a standard measure of property area in Japan, is 3.3 square metres.
million is the record price for Roy Lichtenstein’s 1961 comicstyle painting of a man looking through a peephole sold at Christie’s international at a New york auction recently. the sale is one of 13 records set at an auction of contemporary art by Christie’s and a world auction record for the pop artist.
billion, that’s how much venture capital was invested in start-up companies during 12 months, according to Dow Jones Venture source. the total climbed 29 per cent as funds raised by consumer internet companies more than doubled from a year earlier. the online ventures – including search, entertainment and social media – raised $1.3 billion.
Dubai’s sunny OutlOOk Dubai’s ever-expanding tourism
of hotels increasing by 20
industry has posted impressive
per cent and that of hotel
results. Dubai hotels hosted
apartments by 13 per cent. the total revenues of
three quarters of 2011, up
hotels and hotel apartments
by 11 per cent compared
during the first half of 2011
with the corresponding period
was over $2.19 billion, an
last year. the guest nights
increase of 18 per cent over
rose by 26 per cent to
the corresponding period last
reach 23.68 million, while
year. Of this, about $1.9 billion
the average length of stay
came from the hotels and
increased by 14 per cent
$290 million from the hotel
during the same period.
apartments. the number of
Revenues of hotels and hotel
hotels and hotel apartments
apartments increased by 19
also recorded a modest
per cent to cross $2.98 billion,
increase of one per cent to
with the share in revenues
reach the number of 573.
6.64 million guests in the first
Sasol Investment Spree Sasol senior group executive Lean Strauss said the company remained committed to its South African roots. Using noble metals to activate the catalyst, the catalyst manufacturing process has been described as the “heart” of the technology that makes its gas-to-liquids (GTL) process possible (converting gas to petrol). Before the commissioning of the new plant in Sasolburg, cobalt catalyst had been supplied from Sasol’s manufacturing partner, BASF, from the world’s first large scale cobalt catalyst manufacturing facility in De Meern, near Utrecht in the Netherlands. ReUteRs
Construction on the Sasolburg plant, based on the design philosophy of the second plant
A Sasol GTL plant in Mozambique, southern Africa.
in De Meern, began in February 2009 and its completion means
Sasol, the world’s largest producer of fuel from coal, is looking
Sasol now has its own 100 per cent held facility.
at spending an additional $5.06 billion in the southern African
Sasol has been actively seeking to grow the number of GTL
region over the next three to four years. This is after spending a
plants it operates globally and while the SA plant will initially
total of $5.44 billion in the region over the past few years.
be supplying its existing GTL sites in Qatar, Nigeria and
Speaking at the inauguration of Sasol Synfuels International’s $126 million cobalt catalyst plant in Sasolburg, South Africa, December 2011
Uzbekistan, it would later become a supplier to new plants as they were added.
Notebook DUBAI eVeNt Name: INDIAN PROPERTY SHOW WeBsite: INDIANPROPERTYSHOW.COM Date: 15-17 DECEMBER, 2011 VeNUe: AIRPORT EXPO Real estate in India currently has an astounding growth rate of 10 per cent per annum, which is why there’s been a huge demand for property shows from Non-Resident Indians in the UAE. Unitech Ltd, Hiranandani Group and Godrej Properties are some of the real estate juggernauts amongst the 60 plus exhibitors at this ninth edition of the Indian Property show. Connecting buyers with developers at a prime time the show intends to tap into the growing niche at the luxury end of the market by introducing an exciting new plan – Property Dhamaka! That earns buyers rewarding and profitable deals from participating developers by way of discounts, amazing holiday packages for families and free property registration. In addition, there’s plenty of opportunity to acquire a general knowhow of the different investment options, financing sources and legal guidelines for buying property in India.
eVeNt Name: Middle East Industrial Gas Conference 2011 WeBsite: gasworld.com/conferences/middle-east-2011 Date: 5-7 December, 2011 VeNUe: Jumeirah Beach Hotel The Middle Eastern Industrial gas community alongside international producers, distributors and end users converge at Dubai’s Jumeirah Beach Hotel for three days sharing perspective on this year’s theme ‘Balancing growth and investment’. The theme focuses on identifying drivers for growth in the region, current and future gas markets and gas supply options.
United Arab Emirates
eVeNt Name: World of Scada WeBsite: iirme.com/SCADA Date: 12-15 December, 2011 VeNUe: Mövenpick Hotel, JBR The MENA region’s leading SCADA conference presents a unique platform for diverse companies – including telecom, water and transport – to network and exchange valuable information and insights into the operations of SCADA systems.
eVeNt Name: Gulf Traffic WeBsite: gulftraffic.com Date: 12-14 December, 2011 VeNUe: Dubai International Convention & Exhibition Centre As part of the UN’s ‘Decade of Action Road Safety 2011-2020’, the Gulf Traffic conference is the largest event in the Middle East that covers road safety and ITS. Increasing road safety and reducing traffic congestion are some of the key issues addressed by global speakers at the two-day conference.
eVeNt Name: Future Concrete 2011 WeBsite: futureconcrete.com Date: 12-14 December, 2011 VeNUe: Ritz Carlton, DIFC More than 30 international experts will share insights on advanced construction materials, innovative practises and smart construction. The conference will feature the first Environmental Construction Exhibition that highlights products and technologies designed to make the construction industry environment friendly. Portfolio
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BUSINESS NEWS IN BRIEF
Reinventing Post Offices Due to decreasing mail volumes, European postal services had to adapt to the digital world in order to survive, reports Elisabeth Rosenthal.
shopkeeper or even a centrally located homeowner is given a sign and deputised as a part-time postmaster. At the same time, many European postal services have developed a host of
The DeuTsche PosT office across from the train station in Düsseldorf,
“We realised that being a national postal
electronic services that are increasingly making traditional post offices and
Germany, offers DVDs, umbrellas, phone
provider was an endangered business,
mailboxes obsolete. Bills and catalogues
cards and toys – with the processing of
that we had to redefine the role of postal
can go first to digital mailboxes run by
mail appearing nearly an afterthought.
providers in a digital world,” said Clemens
the post office on customers’ computers,
And the facility housing it is not a post
Beckmann, executive vice president of
and the customers can tell the post office
office at all. Deutsche Post occupies a
innovation of the German post office’s
what they want it to print and deliver.
corner space in a bank.
And while Americans are asked to send in
With mail volumes decreasing one to
© 2011 New York Times News service
on paper mail.
With the US Postal Service facing
suggestions for what celebrity should grace
two per cent annually in many countries,
insolvency, it is looking toward Europe for
the next stamp, Germans can buy virtual
European postal services from Germany
new operating models, even though US
postage from their cellphones.
to Sweden to Switzerland have reinvented
legislation currently precludes adapting
themselves over the past decade as
some of those innovations.
Deutsche Post has expanded package delivery networks to profit from the uptick in online shopping and has also
multifaceted delivery and information
After selling off all but 24 of 29,000
companies tailored to the virtual age.
post office buildings in the past 15 years,
progressively expanded its offerings into
Though Deutsche Post by law still delivers
the German postal service is now housed
completely new areas, like running online
to every address six days a week, it has
mostly within other business ‘partners,’
marketplaces for freelance writers similar
jettisoned tens of thousands of buildings,
including banks, convenience stores and
100,000 positions and its traditional focus
even private homes. In rural areas, a
Instead of watching its business be
Observer eroded by more aggressive marketplace competitors, as has happened in the United States, Deutsche Post completed its purchase of the logistics company DHL in 2002, meaning many Americans have been customers of the German post office. European postal services vary widely in their degree of adaptation to the digital age. “But the United States Postal Service (USPS) is probably the best example of a pure monopoly that has seen the least change,” said John Payne, the chief executive of Zumbox, a Los Angeles-based startup that offers virtual mailboxes for personal computers in the United States
Renate Weitz, a retiree, dispenses postal services from her home in the German village of Dorn-Assenheim.
on a private basis and that has sold the
largely a tenant, with tens of thousands
the websites of credit card companies
program to foreign postal services.
of counters lodged in other businesses.
and cellphone providers. While this free
Outsourcing has allowed it to trim staff.
service was slow to catch on in Sweden,
Payne has empathy for the failing
membership has spiked in the past year,
postal service and for all the regulation it must abide to, including not being able
AfTer DeuTsche Post closed the post
said Anders Asberg, head of product and
to close an outpost “solely for operating
office in the village of Dorn-Assenheim
market development for the Swedish
at a deficit.” He said: “They live under
seven years ago, it hired Renate Weitz, a
legislative restrictions on what businesses
retiree, to dispense postal services from
they can enter and are expressly prevented
her house each morning – though it
customers can choose to pick up items
from entering business unless it’s related
now has plans to close that ‘branch’ as
at automated banks of lockers in places
to physical mail.”
well. In Schmitten (population 10,000),
like train stations; the locker number
To close a projected $9 billion budget
Jens Kinkel took over postal tasks at his
and opening code are sent to their
gap, the USPS has proposed eliminating
stationery store. “I run the post office to
cellphones. Posten, the Swedish post office,
3,700 of its 36,000 post offices and is
get more customers,” Kinkel said. “Most
allows vacationers to transmit cellphone
selling off historic buildings that have
buy stamps and grab a paper as well.”
photographs that Posten prints as
anchored towns across America. The
Dr Julia Neu, a professor of sociology
For actual packages, Deutsche Post
postcards and delivers as physical mail.
1,579-square-metre neoclassical landmark
at the Niederrhein University of Applied
Surprisingly, perhaps, new postal models
post office in downtown Greenwich,
Sciences, said the loss of post offices had
have not meant the end of direct marketing
Connecticut, was recently sold to a
been particularly painful for older people
(aka junk mail), a lucrative business –
developer. Meanwhile, the post office will
in the former East Germany, where they
though executives say such promotional
move to a former pet supply store.
doubled as meeting places. “A lack of
material will be increasingly likely to arrive
post offices is mostly dealt with by people
via computers and cellphones.
European postal services started to think
PostNord – an umbrella company that
about new business models in the 1990s,
helping each other by sharing cars or
when the European Commission opened
dropping off mail for the ones who aren’t
includes both the Danish and Swedish
up postal monopolies to competition and
mobile,” she said.
postal services – now even helps smaller
liberalised regulation. But the subsequent
But overall, advocates say the expansion
companies develop direct marketing
changes have come in response to
into virtual services has improved
campaigns through its ‘Advertising
declining mail volumes and, to a lesser
customer satisfaction, saved money and
Planner,’ which boasts: “It’s just as natural
extent, pressure to reduce greenhouse
helped reduce carbon emissions.
for PostNord to ensure that your offer
gas emissions. While Deutsche Post was an owner of 29,000 post offices in 1990, it is now
Virtual mailboxes can receive, store
reaches the right customer at the right
and organise years of bills, sparing digital
time via satellite and cyberspace as via a
customers the need to check one by one
traditional postman.” n Portfolio
Creating watches for 200 years
Observer O N E 2 W AT C H TExT: HildA d’sOuzA
Oz Carbon Trading It has been an uphill struggle, but Australian Prime Minister Julia Gillard’s Clean Energy Futures plan is set to become law on July 2012, setting a cost of A$23 ($23.80) on each metric tonne of greenhouse-gas emissions linked to climate change. The carbon levy is fixed until 2015, when Australia begins a so-called cap-and-trade system to let the market set the price as emitters buy and sell permits. Australia’s emissions market is forecast to be as large as the one planned in California and the second biggest after Europe’s.
Virginia M Rometty
Miners, energy producers, utilities and others bound by the new law also have the option of importing emissions credits from lessdeveloped countries via the United Nations’ Clean Development Mechanism. UN offset, known as Certified Emission Reductions,
International Business Machines Corporation (IBM), the
have been trading in the US$9 range on the ICE Futures Europe
world’s largest computer-service provider, has selected its
exchange in London. That’s less than half of Australia’s fixed
senior vice president, Virginia M Rometty, as its new chief
price in 2012. That means Australian companies could get a good
executive officer effective from 2 January. Rometty, 54, will
buy if they are willing to move early.
become the first female chief executive to lead the New
Australia, which burns coal to produce about 80 per cent of its
York-based company in its 100-year history. She will replace
electricity, voted to put a price on carbon to help the country cut
Samuel Palmisano who will continue as chairman from early
emissions by five per cent as of 2020.
next year. Rometty, a graduate from Northwestern University with a degree in computer science, joined IBM in 1981 as systems engineer and steadily progressed to the top of IBM Global Services. Serving as the division’s strategy leader in 2003, she oversaw the successful integration of PriceWaterhouseCoopers Consulting after IBM bought the consulting firm for $3.5 billion. As senior vice president and group executive for sales, marketing and strategy in 2009, she spearheaded the company’s push into emerging markets such as China, India and Brazil. In this position she was responsible for IBM’s worldwide results, which exceeded $99 billion in 2010 and drove the company’s shares to the highest level since it went public in 1915. IBM’s five-year plan, which was initiated by the outgoing Palmisano, aims to enhance revenues by $20 billion by expanding in markets such as cloud computing and analytics. This is likely to flow smoothly with Rometty as chief and working closely with Palmisano, as she’s well versed in strategy and her experience in sales, service and acquisition is invaluable.
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India’s Solar Boom India expects to have 10 gigawatts of solar power capacity by 2017, more than double what it initially targeted, as the industry ramps up quicker than predicted. The Ministry of New and Renewable Energy plans to award permits for as much as 10,000 megawatts of grid-connected solar plants by 2017, up from its initial target of 4,000 megawatts, Bharat Bhargava, a director at the ministry, said at a conference in the southern city of Hyderabad. It’s also doubling its target for off-grid solar plants to 2,000 megawatts. Asia’s third-largest energy consumer provides a bright spot for solar panel makers facing plunging margins and slowing growth. Developers of projects that generate electricity from the sun in Europe, the world’s largest solar market, are unable to get bank financing to start new plants, leading demand for panels to fall 10 per cent short of expectations this year. Interest from solar power developers exceeded the amount of available capacity on offer by more than seven times for India’s next auction of permits, Bhargava said. The ministry has received 218 reuters
applications seeking to build 2,500 megawatts of solar plants. The plants are scheduled to be finished by January 2013.
Mitsubishi Buys $5.39 Billion Stake
AsiA-PAcific TrAde Accord 12 months, a deal that could create a model for expanded trade with more Asian countries.
Mitsubishi, Japan’s largest
based on Mitsubishi’s offer,
trading company, has agreed
will almost double the Tokyo-
to pay $5.39 billion for
based company’s copper
Australia, Chile, Peru and
a stake in Anglo American’s
output as supply of the metal
Singapore, all of which already
Chilean copper unit in the
used in wires and pipes
have separate free-trade
Asian nation’s biggest mining
drops. Rio Tinto Group, the
agreements with the US, as
world’s second-largest mining
Anglo sold 24.5 per cent
The current talks involve
company, expects global
well as Malaysia, New Zealand, Vietnam and Brunei. Two-way
of Anglo American Sur SA
copper demand to rise more
President Barack Obama has
trade between the US and
to Mitsubishi. The deal may
than 40 per cent by 2020.
received a commitment by
those eight nations totalled
eight other nations to join the
$171 billion last year, compared
producer Codelco from taking
will give it a share in Anglo’s
US in forging an Asia-Pacific
with $457 billion with China.
up its option to buy a 49 per
undeveloped Los Sulfatos
trade accord. Officials agreed
cent stake in the operation.
and San Enrique Monolito
on a blueprint that will lead to
together, the eight member
Buying the stake in the
assets, which Anglo says are
drawing up a formal Trans-
economies would be America’s
Pacific Partnership in the next
fifth largest trading partner.
stymie Chile’s state-owned
unit, valued at $22 billion
President Obama said taken
Observer The World
Citigroup Sells EMI in Parts
RANK 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
CITY London New York Hong Kong Singapore Shanghai Tokyo Chicago Zurich San Francisco Toronto
GFCI 10 RATING 774 773 770 735 724 695 692 686 681 680
TOp 10 GlObAl FiNANCiAl CENTrEs (According to the 10th Global Financial Centre Index)
Rank 1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
2011 Switzerland Denmark Sweden Ireland France Australia Germany Austria Belgium Canada
2010 Switzerland Denmark Finland Australia Ireland Sweden Canada Bahrain New Zealand Singapore
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
Hong Kong Singapore Australia New Zealand Switzerland Canada Ireland Denmark United States Bahrain
89.7 89.2 82.5 82.3 81.9 80.8 78.7 78.6 77.8 77.7
publishing businesses in separate transactions for a combined $4.1 billion. The breakup of London-based EMI, the 114-yearold music company that owns Abbey Road Studios, sells Beatles ends a nine-month bidding war. Citigroup, the New York-based
WOrld’s TOp rANkiNG NATiONs sHOWiNG HiGHEsT dEGrEE OF ECONOMiC FrEEdOM (2011 Index of Economic Freedom) Country
Citigroup agreed to sell EMI Group’s recorded music and
albums and publishes songs written by the late Amy Winehouse,
(Note: Japan and Finland have been excluded from the 2011 survey) SOURCE: ECHARRIS.COM
WOrld’s 10 MOsT ExpENsivE COuNTriEs FOr CONsTruCTiON (As per the EC Harris report)
lender, seized EMI in February after investor Guy Hands fell out of compliance with loan covenants. Vivendi’s Universal Music Group will buy EMI’s record labels,
Change from previous
home to Katy Perry and Coldplay, for $1.9 billion, and a Sony-led
0.0 +1.1 -0.1 +0.2 +0.8 +0.4 -2.6 +0.7 -0.2 +1.4
group that includes billionaire David Geffen will pay $2.2 billion for the publishing unit. The auction had a surprise ending, with the two winning bids outstripping rivals who had been in the lead for much of the process. Warner Music Group, owned by billionaire Len Blavatnik, offered $1.5 billion to $1.6 billion for EMI’s recorded arm, according to sources. Sony was vying with BMG Rights Management GmbH, the music company controlled by KKR & Co., which had bid $1.8 billion to $2 billion for publishing.
Cleaning Up the Himalayas The people who seT ouT To
equipment – in the hope that they will
climb Everest spend months dreaming
carry down everything they brought.
about reaching the summit. They pay
Repeat visitors to Everest see a difference.
$65,000 in fees to the Nepali government,
“It’s visibly and spectacularly better,” says
they train, trek for days, endure extreme
Jan Morava, an electrical engineer from
discomfort, even danger. So it should
the Toronto area who was attempting the
be a simple thing to get them to pick up
summit with his brother and a climber
from the UAE. “There were piles of rubbish in base camp before.”
Apparently not. Nearly 60 years after Edmund Hillary conquered Everest, and 30 years after climbing turned
BuT conservaTion groups say the
commercial, the region is still struggling
deposit is small compared with the other
to deal with mass tourism.
expenses associated with an ascent on Everest. They also argue the Sagarmatha
By the standards of the 70s, when the
Pollution Control Committee lacks the
discarded tents and food packets, Everest
resources to keep up with all the groups
is a lot cleaner, with just a smattering of plastic bottles and sweet wrappers on the rocky plateau that is base camp.
climbing Everest and to make sure that they do indeed carry all their equipment It’s difficult to tread lightly in the
back down to Kathmandu.
But a Nepali environmental coalition is
high-altitude environment, especially in
The committee says it brought back 25
pressing the government in Kathmandu
areas this remote. The first expeditions
tonnes of rubbish from Everest last spring
to adopt a new management plan to
to Everest were monumental in scale.
– including 12,000kg of paper and plastic.
safeguard the Himalayas in the age of
The 1953 attempt, which brought success
But conservationists argue that waste
mass tourism – and to make amends for
to Hillary, set off from Kathmandu
disposal is haphazard. There are rubbish
the environmental sins of the past.
with 1,200 porters for their equipment,
dumps with heaps of tuna cans and plastic
according to Kancha Sherpa, the last
bottles only a few minutes’ walk away
mountains but nobody talks about proper
surviving member of the team that made
from villages on the trekking trail.
solutions,” says Phinjo Sherpa, director
it to base camp.
“Everybody talks about waste in the
of Eco Himal. “Cleaning up Everest
© guardian 2011
main climbing routes were littered with
Even Hillary admitted to leaving
And, says Tshering, there is plenty more detritus of the past still out there –
every once in a while does not help.
equipment behind, and more than 2,500
rubbish discarded by climbers years and
The main thing is management, waste
people have made it to the summit since
even decades ago, preserved in ice and
management.” The group has lodged
his day. The heavy traffic left its mark.
snow. “Just above the ice falls at crampon
a plan with the government that calls
“People were careless. They would take a
point you can see cans from 10, 20, 30
for tougher penalties against litterbugs
rubbish bag but they would still leave stuff
years ago or even older,” Tshering says.
at Everest and the surrounding areas.
behind,” said Tshering Tenzing Sherpa,
“There’s a lot of old rubbish out there.”
They are also pushing for the installation
an official of the Sagarmatha Pollution
Other high peaks less famous than
of portable toilets at base camp and
Control Committee, the NGO charged
Everest are even dirtier, notes Tshering.
investment in waste treatment facilities –
with overseeing the Everest cleanup.
And with climate change, snow and ice on mountaintops is melting, exposing even
which currently do not exist in the region
Modern expeditions are much more
– with proposals for five incinerators and
conscious of their footprint. Groups must
more rubbish. “We are in a garbage race,”
sewage treatment plants.
pay a $4,000 (£2,500) deposit on their
he says. n Portfolio
The Evolution of Allure Georges Kern was an untested executive when he joined the luxury group Richemont a decade ago. Placed in charge of Swiss watch manufacturer IWC Schaffhausen, Kern has since transformed the company into a prestigious global brand. Nick Rice visited the IWC headquarters in Schaffhausen to ask how he pulled off one of the most remarkable success stories in the watchmaking industry.
Walking around the immaculate and imposing museum that was once the home of F.A. Jones, the American entrepreneur who founded the International Watch Company in 1868, it is immediately apparent that the IWC brand has a rich history.
The first watches with a digital hours
the present century, IWC was in need of
and minutes display were created here,
some rejuvenation. The injection of flair
almost implausibly, way back in 1885. One
required to elevate the company came in
of the world’s first known wristwatches
the form of current CEO, Georges Kern.
left Schaffhausen destined for the market
Although quick to acknowledge the
in the 1890s. Just a few years later, the
intrinsic, historical weight of the brand,
fascinating history of the company reveals
Kern nevertheless knew he had to
that the lauded psychiatrist and founder
shake things up. “At that time 10 years
of Analytical Psychology, Carl Gustav
back, IWC was a very regional-oriented
Jung, became a co-owner of IWC through
company. Well known in Austria,
marriage in 1903.
Switzerland and Germany, and very
Unique from the outset, IWC watches
well established, but dusty and old. A
were created when Florentine Ariosto
good brand, not a destroyed brand at
Jones selected this small, idyllic city
all – turning around a destroyed brand is
in Switzerland as the base to develop
always more difficult than developing a
and manufacture high-quality Swiss
dusty brand – but what we have managed
watches for the American market. The
to do over the years is to take a solid
company had a successful beginning
regional brand and make it truly global.”
and Jones flourished in his venture until
The son of renowned European jeweller
adversarial circumstances and fluctuating
René Kern, Georges Kern was born in
financial markets forced the sale of IWC
Düsseldorf in 1965 and grew up in both
to the Rauschenbach family in 1880.
Germany and France before moving to
This initial change of ownership and all
Switzerland to attend the University of
subsequent inheritors has not stunted
St Gallen. After graduation, Kern decided
the American’s original vision though,
to stay in Switzerland and found work at
and the company has always stood on a
Jakob Suchard. Four years later he secured
solid foundation. However, at the turn of
his first position in the watch industry when he joined TAG Heuer – a role that would provide valuable experience as the company underwent rapid and expansive growth. When Kern sensed that TAG
The first IWC watch in the Portuguese family was released in 1939. The Portuguese Yacht Club Chronograph, which was released last year, is the first model to bring a sporting note into the family.
Heuer was to be acquired he set his sights on joining the Richemont Group. Nicolas Hayek, head of the Swatch Group, arranged for Kern to be contacted by Franco Cologni at Richemont and Kern made it into the Richemont Group and was appointed CEO of IWC two years later at the relatively young age of 36. Kern recalls how he secured the premier position with humility, in consideration of IWC’s current global status. “Well nobody else wanted to do it and, joking apart, when Richemont acquired Jaeger LeCoutre and A. Lange & Söhne back in 2001, the priority was on those brands. IWC was just in the package. The reality is that I was one of the few people at Richemont who could speak French, English and German and I was looking for more responsibility. I guess looking at the position of IWC today, they would never give me the job again
(L-R) Georges Kern, CEO of the International Watch Company, Tim Jeffries, Peter Lindbergh and Matthew Fox attended the IWC Presents Peter Lindbergh Exhibition at this year’s Cannes Film Festival.
considering the size of the company. But at the time the company was not in the focus and so they said ‘Okay, let the guy take care of it.’ Now we are one of most successful brands in the group.” So how exactly did he take care of it? What were the strategies, the creative ideas and the plans to implement them? “Well we had the right product, the right advertising, the right communication and the right distribution. We had the support and we changed the strategy, reworking the existing products.” Maintaining fidelity with the company’s six different lines of watches was crucial. As Kern elaborates, “We have not launched one single product which is totally new. Everything we have, be it the Pilot, the Portuguese or the Portofino, had been
The International Watch Company was founded in 1868 by the American entrepreneur F.A. Jones. The company’s rich history is displayed in a museum housed in Jones’ former home.
there as part of IWC. What we have done is
Clearly as sharp intellectually as he is
you die, this is Charles Darwin, you have
bring them up to speed in a contemporary
sartorially, Kern has a forensic knowledge
to always adapt. Today’s management
way. I don’t think we need to change that.
of the modern watch industry and knows
and challenges are totally different than
We can grow with what we have.”
what he must do to maintain the growth
from 10 years back. You have to manage
of the company.
growth. The pressure when you have a
Kern is clearly in his element when discussing the mechanics of brand
“We didn’t have boutiques or marketing
substantial size in the context of a big
building. He adjusts the cuffs on his
tools when we were developing, and
group is different. Ten years ago the
colourful lime green shirt and his eyes
many products were not in the portfolio,
question was ‘what shall I do, how do
sparkle as he extolls on the subject.
but you evolve. The brand evolves or
I build the brand?’ Today you have to
Renowned photographer Peter Lindbergh shot an impressive cast of IWC brand ambassadors in the Italian town of Portofino. The resulting photographic exhibition was unveiled with the launch of the Portofino watch collection earlier this year. Clockwise from top left: Oscar-winning Australian actress Cate Blanchett; renowned American actor Kevin Spacey; Japanese actor Hiroyuki Sanada with 80s supermodel Elle Mcpherson.
deliver all the financial results. If we want
a minute. The challenges in the watch
Ligurian coast of Italy was a famous
to become a classic brand – and you only
industry are different now. First of all,
enclave for the Hollywood glitterati of
have a few classic brands in the world
the world changed. Today when you buy
the 50s and 60s and has always been
– you have to act in a different way. To
a watch you don’t buy it to read time. You
associated with classical Italian elegance.
become a global brand you have to make
want a total emotional experience. So you
It was the obvious place to stage a
need a strong design and a story. And you
marketing masterstroke. A world-touring
It is with this brand evolution in mind
need high quality in terms of technical
exhibition by the celebrated photographer
and with a focus on creating the essential
features. You buy a package, an emotion,
Peter Lindbergh, featuring an extensive
myth around IWC that Kern approached
a brand, a story and a design.”
cast of brand ambassadors, too many
the recent revamping of the Portofino
to list, but that includes football legend
line. Kern knew that he had to produce
The STory for the new Portofino
Zinedine Zidane, actors Kevin Spacey,
collection came to Kern instinctively.
Jean Reno and Cate Blanchett, and
A recreation of the timeless, enigmatic
model Elle Macpherson (a particularly
has been invented in watchmaking. You
style epitomised by Portofino itself.
fitting choice given that Lindbergh is
cannot change physics – a minute remains
The seductively beautiful village on the
credited with creating supermodels and
“Over the last 250 years everything
Kern believes in ‘love brands’. These are brands that are so well-loved and known that they inhabit an exclusive realm.
she was the first of the ’80s supermodels.
of the Brand’ in attendance. In Dubai the
Macpherson’s first professional photo
appearance of the Lindbergh Portofino
session was with Lindbergh for Italian
exhibition will be on 10 December at the
IWC product that stands as an immovable
Vogue and he remained a mentor).
Dubai International Film Festival.
frame around which the fabric of the
Whilst creating a powerful brand
centuries to come. Ultimately it is the quality of each
brand can be weaved. This is central to
Kern lighTS up when he recalls
image is essential, there must be genuine
Kern’s continual striving to elevate IWC
the experience of creating the shoot in
substance behind the allure, and this
to still greater heights. “I believe in ‘love
late 2010. “You know that old perennial
is where IWC really triumphs. The
brands’ – meaning that, there are brands
question: ‘Who would you invite to your
dedication to form and flawless design
out there, and I hope IWC will be one of
perfect party?’ This was it. The question
is immediately evident the moment you
them, which you love so much that you
put into practice. Not as good as I had
see and hold an IWC watch. A tour of
just go for it.”
hoped for – better. Much better.”
the manufacturing plant in Schaffhausen
He continues, “I truly believe that
reveals the astounding levels of precision
wealth is growing, the wealth of humanity
job and he said afterwards that, “This
and the rigorous testing implemented
will grow – you see it every year in
was the sort of shoot I became a
throughout. Dedicated employees
statistics. The question is who can reach
photographer for. The sort of shoot I
demonstrate the production of tiny
these wealthy people? If you have that
dreamed of as a teenager.”
components barely visible to the naked
‘love brand’ quality, if you are able to build
eye, which can only really be appreciated
one of them, then you are fine. That’s the
compliment the launch of the new
with the aid of powerful microscopes.
art, that’s the magic.”
Portofino collection earlier this year at
Even then it’s only a partial insight into
the Salon International De La Haute
the intense scientific testing each part
future? “In the next decade we will turn
Horlogerie (SIHH) in Geneva with a
undergoes before it can be used in a
IWC into an institutional brand,” is his
star-studded array of celebrity ‘Friends
watch that will tell the right time for
confident reply. n
For Lindbergh it was also a dream
The exhibition was unveiled to
And what are Kern’s plans for the
flipkart is India’s answer to Amazon. It delivers books, phones and other consumer items, but with no delivery charge, and customers can pay cash on arrival.
FlipKart Moves Fast in india
Online sales in India have held great promise but failed to deliver in the past. That is now changing, with flipkart.com leading the charge, reports Vikas Bajaj.
© 2011 New York Times News service
hen Prabhu Kumar
phones and other items in as little as 24
with shopping on the web. Many of them
could not find a book
hours at no extra cost. Kumar doesn’t
remain unwilling to use credit cards online.
he wanted in Bangalore’s
have to pay flipkart a single rupee until
So the Indian retailers have gone to great
local bookstores, he found it online at
a courier bearing his books arrives at his
lengths to gain customers. Clients may pay
Amazon.com for $10. But he had to pay
door. He can then hand over cash or a
cash on delivery, and the company fields
more than $9 in fees to have Amazon
credit card. “I think it perfectly fits the
delivery squads to ensure shipments get to
ship it to him.
Indian mentality,” Kumar said.
Kumar, a software programmer, said
While dozens of electronic commerce
One recent afternoon, four flipkart
he would not be doing that again. He
firms have recently sprung up to capitalise
delivery men loitered at a bungalow in the
now shops on India’s answer to Amazon
on India’s growing internet use, they have
Koramangala section of Bangalore where
– flipkart.com – which delivers books,
a problem. Indians are not yet comfortable
the company started. When a small delivery Portfolio
Sachin Bansal, left, and Binny Bansal, founders of the Indian e-commerce company flipkart at the company’s head offices in Bangalore.
van arrived from the company’s warehouse,
“This time it is for real,” said Kishore
These sceptics find it difficult to justify
the men rushed to take out two large duffel
Biyani, the founder and chief executive of
the high prices venture capitalists are
bags filled with packages that they put onto
the Future Group, referring to an earlier
paying to invest in unprofitable Indian
two tables in the house. After scanning the
wave of e-commerce euphoria in the
e-commerce firms. For instance, VCCircle,
packages with hand-held computers, they
early 2000s. “This is the biggest thing to
a news site, recently reported that flipkart
put the boxes into large backpacks, which
happen in India.”
may soon raise $150 million, which would
they carried on their backs as they rode off
That rapid growth has drawn the
give it a $1 billion valuation. (Executives
attention of venture capitalists who poured
at the company declined to discuss its
Online sales still make up a small
$183 million into 20 e-commerce firms
portion of overall retail spending – one
within the last year, up from $61 million
estimate pegs it at $10 billion, a tiny
for 13 firms in the previous 12 months,
IndIa has 50 million to 100 million
fraction of India’s $500 billion retail
according to Venture Intelligence, a
internet users, according to various
market – but they are growing fast.
analysts, and the number is growing by
on motorcycles to deliver them.
flipkart says it had revenue of 500
The rapid growth has also attracted
about 30 per cent a year. JuxtConsult, a
million rupees ($11 million) in its last fiscal
the notice of American online retailers.
New Delhi-based research firm, estimates
year, and is now clocking sales of about
Amazon, which has a software development
that 17 million people bought something
10 million rupees a day. SnapDeal.com, a
office in Bangalore, is now building a
online this year, up from 10 million last
coupon and deals site similar to Groupon,
warehouse and hiring employees for an
year. The Indian government estimates
expects sales of 1.5 billion rupees this year,
Indian site, according to two industry
that household consumption has increased
up from almost nothing the year before.
officials. And earlier this year, Groupon
by more than two-thirds in the last five
The top executives of the Future Group,
bought an Indian website, SoSasta.com.
years, and most of that increase has come
India’s largest retail company, says its daily
But, like in frothy Silicon Valley, some
online sales are on pace to triple between
Indian analysts and investors are starting
now and March next year.
to question the frenzied deal-making.
in the purchase of nonfood items. “It seems to be more for real than a flash in the pan,” said Kanwaljit Singh,
Couriers with flipkart sort packages in preparation of their delivery, at a distribution hub in Bangalore.
who is a senior managing director at
its orders. It can also track packages
especially if Amazon starts an Indian
Helion Advisors, which has invested in
more accurately. And because labour
operation. “Today they are the best,” said
about a half-dozen Indian e-commerce
costs are relatively low in India, its
Ananth Padmanabhan, vice president for
sites, including MakeMyTrip.
delivery cost is a modest $1 a package.
sales at Penguin India. But, he asked, “If
But capitalising on India’s growth
“More than 90 per cent of retail
Amazon comes here next month, and they might, what will flipkart do?”
online will not be easy. Sachin Bansal
transactions in India are in cash,” Bansal
and Binny Bansal (who are not related),
said. “People like my dad and my uncle,
the founders of flipkart, have had to do
they are much more comfortable with
declined to comment on the company’s
things that their American or European
cash. If we want to increase our customer
plans for India, but Padmanabhan said
counterparts would never have. They
base, we have to accept cash.”
Amazon officials have been holding talks
An Amazon spokesman, Craig Berman,
with publishers, and another industry
have set up delivery operations in 13 big Indian cities like Bangalore, Mumbai
FlIPKart Is not alone in tweaking its
official said the retailer has begun hiring
and New Delhi because Indian shippers
model to suit Indian conditions. Myntra,
employees for an Indian site.
do not have the delivery and package-
an online retailer of clothes, has a delivery
tracking abilities that FedEx and UPS
staff in Bangalore and plans to hire
for competition from Amazon. Sachin
provide for its American customers.
couriers in other cities. SnapDeal offers
Bansal, who worked with Binny Bansal
They plan to expand flipkart’s delivery
customers the option of making partial
as a software developer at Amazon
network to 25 cities within a year.
payments online and paying the balance
before starting flipkart, brushed aside a
The Bansals say they are prepared
to merchants whose products and services
suggestion that the firm would make for
executive, said that by having its own
it sells, said Kunal Bahl, a co-founder of
an easy acquisition by Amazon.
staff, flipkart avoids paying courier
Sachin Bansal, the company’s chief
services’ commissions of more than
Consumers and suppliers laud flipkart’s
“We are very keen on going our own way,” he said. “The opportunity is so large
two per cent to accept cash on delivery,
service and execution. But they expect the
that we would want to grow it to a much
which make up about 60 per cent of
company to soon face greater competition,
bigger level before we think of anything.” n Portfolio
A TemperAmenTAl STAr Why does the food on your plate never look as good as the one in the TV ad? That’s because there’s a huge creative industry behind it, reports David Segal.
he sauce will not
staples of the American diet into luscious
behave. It is supposed to drip
objects of irresistible beauty.
twice, on cue, from the bottom
his work, and the work of the five or six
– first as the fork is lifted above the plate
other major players in this micro-niche
and, second, after the fork pauses briefly
of advertising. These men – yes, they’re
in the air and starts to rise again. Two
all men – make glossy vignettes that star
drips. A sequence that lasts a second and
butter-soaked scallops and glistening
a half, tops.
burgers. Their cameras swirl around fried
A dozen men at MacGuffin Films, a
chicken, tunnel through devil’s food cake
studio in Manhattan, are struggling to
and gape as soft-serve cones levitate
capture this moment. For more than an
hour one recent afternoon, they huddle
Few outside the business know their
Jimmy Furino lays a piece of chicken on a grill during a shoot for O'Charley's restaurants at MacGuffin Films in New York.
And you can sort of understand why.
around a table rimmed with enormous
names. But given the more than $4 billion
If you’ve ever been to a restaurant and
stage lights, fussing over a casserole as
in television air time bought by restaurant
thought, “This does not look like the dish
if it’s a movie star getting primped for a
chains and food conglomerates each year,
in the ad,” here’s the irony: The dish in the
these directors arguably have some of
ad doesn’t look like the dish in the
the widest exposure of any commercial
“Lights. Roll. Action. Drip!” shouts
© 2011 New York Times News service
If you watch television, you’ve seen
right-hand corner of a forkful of tortellini
Michael Somoroff, a veteran commercial
artists in the US. In a typical week, tens of
director who has shot television ads
millions of viewers see their work.
for Red Lobster, Burger King, Papa
“Aside from movie directors,” Somoroff
This casserole shot, for instance, is an elaborate tango of artifice, technology and timing. The steam wafting over the
John’s and dozens of other fast-food and
says during a break in shooting, “I don’t
dish comes not from the food, but from a
casual-dining chains. A specialist in the
know anyone with an audience as large
stagehand crouched under a table with the
little-known world of tabletop directing
kind of machine that unwrinkles trousers.
– named for the piece of furniture where
On this particular afternoon, he is
The hint of Alfredo sauce that appears
most of the work is set – Somoroff is hired
filming a commercial for a chain that did
when the fork emerges from the pasta?
to turn the most mundane and fattening
not want to see its name in this article.
That’s courtesy of tubes hidden in the Portfolio
back of the dish and hooked to what
Somoroff after five or six takes, sounding
TV. The pasta appears moist, the steam
look like large hypodermic needles.
faintly annoyed. “I’m right on it,”
organic and the minuet of drip and hand
Moments before each take, Somoroff
DeRobertis says. “You’re on it, but it’s not
nothing more than a diner on the verge of
yells, “Ooze!” That tells the guy with
dripping when it has to drip.”
a blissful bite.
the needles, standing just outside of the
A break is called and a tube is attached to DeRobertis’ sauce injector, which is
“i make my living basically taking
then taped near the bottom tine of the
food and painting a reality with it,”
fork, it is the responsibility of Anthony
fork, in a way that’s invisible to Somoroff ’s
says Somoroff, leaning back in a chair
DeRobertis, a special-effects rigger who
immense Photo-Sonics camera.
in his office as the team preps another
frame, to start pumping. As for that quarrelsome drip from the
holds his own hypodermic of sauce and
Sauce and fork are finally in unison.
set-up. “And if I succeed in a given
is having a hard time synching with a
After a few more tries, Somoroff has a
moment, you’re going to go buy that dish
hand model, a young man with a military
take he likes enough to show to reps from
because you’re going to identify with
haircut who is clutching the fork.
the client and its ad agency, a group of
the experience we’ve created. To do that
“Anthony, the second drip is about
whom are waiting in a nearby room that
with something as banal as food is the
10 minutes after the shot is over,” says
is decked out with a large high-definition
challenge. I mean, it’s easy to go out and
Michael Somoroff, center, a tabletop director who shoots television ads for fast-food and casualdining chains, with his director of photography, Nick Fuglestad.
shoot a beautiful sunset or a beautiful
TV ads in 2010 than they did
girl. They’re beautiful, OK?” He gestures
in 2007, according to Kantar
toward the middle of the studio. “I’ve got
Media, a market research
a noodle over here.”
firm. If patterns hold, the
This is a good moment to be a tabletop director in the big leagues, particularly if you specialise in food. Low- and mid-
numbers will be even larger this year. “Generally speaking,
priced chain restaurants are one of the few
restaurant chains spend
segments of the economy that decided,
about three per cent of
during the recession and in its aftermath,
revenue on advertising,”
to spend as much or more on advertising
says Michael Gallo, an analyst at C.L.
than they did in the years before.
King & Associates. “Because these
Fast-food, casual-dining and pizza
restaurant systems are large and have
chains, as well as what are lumped
density, television is an easy way to reach
together as ‘doughnut and coffee
customers in a cost-effective way.”
restaurants,’ spent $300 million more on
And any restaurant chain that forswears
Ed Fountain, who builds food-tossing devices, next to a catapult in his workshop at Silvercup Studios in the Queens borough of New York. Fountain originally constructed the contraption for a Long John Silver's commercial that featured colliding shrimp.
TV ads is in serious trouble. “If you come off television, when your sales dip, it
“Because these restaurant systems are large and have density, television is an easy way to reach customers in a cost-effective way.”
takes a long time to get them back to where they were before they stopped advertising,” says Michael Branigan, vice president for marketing at Sizzler. “There are a tonne of studies that show this. You Portfolio
occasions, the food you see on screen is merely a facsimile of the product. “We used lard and Karo syrup for an ice-cream client,” says David Deahl, a tabletop director in Chicago. “The lights we have melt the product so quickly that it’s impossible to make ice cream look like ice cream. So we got permission from our client to fake it.” That’s a rarity. Deahl and other directors say they expend far more effort making the food look authentic than they do glamorising it. The risk is overpromising, a topic that comes up a lot on sets. Until the early 1970s, most TV commercials for food and drink were static, shot with a zoomed-in, wide-angle lens mounted on a camera that didn’t move. Then came Elbert Budin, a former still-life magazine photographer, who set up a studio not far from Penn Station in Midtown Manhattan; his pet finches had the run of the place. He used micro lenses placed five centimetres from the product, close enough to see individual droplets on a soda can. With the help of a mini jib, he would swing the camera in graceful arcs. If tabletop has a vocabulary, Budin coined many of the words. He popularised prep shots (a kind of back story for the product, typically ingredients being chopped), crave shots (self-explanatory) and hero shots (a glorifying farewell look grapheasT
at the product, usually in the last few seconds of the ad). And it is from Budin that we get one Food ads are carefully crafted and enhanced with gimmicks, such as using glue to keep everything on a pizza slice in place.
of the lasting visual tropes of American advertising: flying food. Ever since he
lose brain share of your customers, and
beverage might be made of acrylic and
launched an orange through a thin
it is expensive to get revenues up again.
cost $500 a cube. The frost coming off a
sheet of water for Sunkist – showing in
If I stopped advertising, Sizzler’s revenue
beer could be a silicone gel, mixed with
gorgeous slow motion the hole left by the
would be down, minimally, 10 to 15 per
powder and water.
fruit – everything that you can put in your
cent for the year.”
The difference between enhancement and fakery, though, becomes a little
mouth and store in a pantry has been hurtling through the air.
anything that flatters the food, of
murky, and some directors tiptoe right up
“Food has to be in motion to have
course, is fair game, and that includes
to, and well past, the marbles-in-the-soup
character,” says Alex Fernbach, another
gimmicks you’re unlikely to find in a
line. If the tomatoes in a client’s red wine
Budin acolyte, who now works at Arf &
fridge. Glue is used to keep spaghetti on
reduction aren’t visible, some fresh ones
Co, a studio in Hoboken, New Jersey. “It
forks and pizzas in place. The ice in a
may be sliced up and tossed in. On rare
gives food a personality.” n Portfolio
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AmAzon TAkes on Publishing Amazon.com has taught readers that they do not need bookstores. Now it is encouraging writers to cast aside their publishers, reports David Streitfeld.
mazon will publish 122 books by the end of the
Several large publishers declined to
and said publishers were in love with their own demise. “It’s always the end
year in an array of genres, in
speak on the record about Amazon’s
of the world,” said Russell Grandinetti,
both physical and e-book form. It is a
efforts. “Publishers are terrified and
one of Amazon’s top executives. “You
striking acceleration of Amazon’s fledging
don’t know what to do,” said Dennis Loy
could set your watch on it arriving.”
publishing programme that will place the
Johnson of Melville House, who is known
retailer squarely in competition with the
for speaking his mind.
New York and international houses that
“Everyone’s afraid of Amazon,” said
He pointed out, though, that the landscape was in some ways changing for the first time since Gutenberg
Richard Curtis, a longtime agent who
invented the modern book nearly 600
is also an e-book publisher. “If you’re
years ago. “The only really necessary
by a publishing veteran, Laurence
a bookstore, Amazon has been in
people in the publishing process now
Kirshbaum, to bring out brand-name
competition with you for some time. If
are the writer and reader,” he said.
fiction and nonfiction. It signed its
you’re a publisher, one day you wake up
“Everyone who stands between those
first deal with the self-help author Tim
and Amazon is competing with you too.
two has both risk and opportunity.”
Ferriss, a favourite with young men.
And if you’re an agent, Amazon may be
Amazon has started giving all
Recently it announced a memoir by the
stealing your lunch because it is offering
authors, whether it publishes them
actress and director Penny Marshall,
authors the opportunity to publish directly
or not, direct access to highly coveted
for which it paid $800,000, a person
and cut you out. It’s an old strategy:
Nielsen BookScan sales data, which
with direct knowledge of the deal said.
Divide and conquer.”
records how many physical books
are also its most prominent suppliers. It has set up a flagship line run
© 2011 New York Times News service
agents used to provide.
Publishers say Amazon is aggressively
Amazon executives declined to say how
they are selling in individual markets
wooing some of their top authors. And
many editors the company employed, or
like Milwaukee or New Orleans. It is
the company is gnawing away at the
how many books it had under contract.
introducing the sort of one-on-one
services that publishers, critics and
But they played down Amazon’s power
communication between authors and Portfolio
Amazon, the online retailer, has long competed with bookstores; now it is starting to make deals with authors, bypassing the traditional publisher.
When Penguin found out, it went “ballistic,” Davenport wrote on her blog, accusing her of breaking her contractual promise to avoid competing with it. It wanted Cannibal Nights removed from sale and all mentions of it deleted from the internet. Davenport refused, so Penguin cancelled her novel and has said it will pursue legal action if she does not return the advance. “They’re trying to set an example: If you self-publish and distribute with Amazon, you do so at your own risk,” said Jan
Constantine, a lawyer with the Authors
Jeff Bezos, the CEO and founder of Amazon, introduced the Kindle Fire in September. The device may allow Amazon to develop, promote and deliver its products directly to the consumer.
their fans that used to happen only on
Kindle Fire, a tablet for books and other
book tours. It made an obscure German
media sold by Amazon. Jeffrey Bezos,
historical novel a runaway best seller
the company’s chief executive, referred
without a single professional reviewer
several times to Kindle as “an end-to-end
service,” conjuring up a world in which
Publishers caught a glimpse of a future they fear has no role for them late in
Amazon develops, promotes and delivers the product.
September when Amazon introduced the For a sense of how rattled publishers
“Publishers caught a glimpse of a future they fear has no role for them late in September when Amazon introduced the Kindle Fire, a tablet for books and other media sold by Amazon.”
are by Amazon’s foray into their business, consider the case of Kiana Davenport, a Hawaiian writer whose career abruptly
Laurel Saville self-published a memoir about her mother after it was rejected by conventional publishers. It caught the attention of Amazon editors who offered to republish it, in essence becoming a business partner.
derailed in September. In 2010 Davenport signed with Riverhead Books, a division of Penguin, for The Chinese Soldier’s
Guild who has represented Davenport.
Daughter, a Civil War love story. She
Davenport knows her real crime:
received a $20,000 advance for the book, which was supposed to come out next summer. If writers have one message
“Sleeping with the enemy.” Penguin declined to comment. If some writers are suffering collateral
drilled into them these days, it is this:
damage, others are benefiting from this
hustle yourself. So Davenport took off
new setup. Laurel Saville was locked
the shelf several award-winning short
out by the old system, when New York
stories she had written 20 years ago and
publishers were the gatekeepers. “I got
packaged them in an e-book, Cannibal
lots and lots of praise but no takers,” said
Nights, available on Amazon.
Saville, 48, a business writer who lives Portfolio
in the upstate New York town of Little Falls. Two years ago she decided to pay for the publication of her memoir about her mother’s descent from California beauty queen to street person to murder victim. She spent about $2,200, which yielded sales of 600 copies. Not horrible but far from earth-shaking. Last autumn, Saville paid $100 to be included in a Publishers Weekly list of self-published writers. The magazine ended up reviewing her memoir, giving it a mixed notice that nevertheless caught the attention of Amazon editors. They sent Saville an email offering to republish the book. It got an editorial once-over, a new cover and a new title: Unraveling
Anne. It was published in November. Saville did not get any money upfront, as she would have if a traditional GeTTY imAGes
publisher had picked up her memoir. In essence, Amazon has become her partner. “I assume they want to make a lot of Amazon’s business model has already made severe inroads into conventional bookstores’ bottom line. Borders, a large chain, was forced to file for bankruptcy protection. Publishers fear they may be next.
money off the book, which is encouraging to me,” said Saville, who negotiated her deal without an agent. Her contract has a clause that forbids her from discussing the details, which is not traditional in publishing. The publicity plans for the book are also secret. Can amazon secretly create its own best sellers? The Hangman’s Daughter was an e-book hit. Amazon bought the rights to the historical novel by a firsttime writer, Oliver Potzsch, and had it translated from German. It has now sold 250,000 digital copies. “The great and fascinating thing about Amazon’s publishing programme is that there can be these grass-roots phenomena,” said Bruce Nichols of Houghton Mifflin Harcourt, which republished the novel this summer. Saville no longer even contemplates a career with a traditional publisher. “They had their shot,” she said. She is now writing a novel. “My hope is Amazon will
Author Laurel Saville is happy with her relationship with Amazon and is no longer prepared to work with conventional book publishers.
think it’s wonderful and we’ll go happily off into the publishing sunset,” she said. n Portfolio
ÂŠ 2011 NEW YORK TIMES NEWS SERVICE
Germany, which has not suffered blackouts since World War II, is now bracing for that possibility after shutting down half its nuclear reactors.
Germany Dims Its Nuclear Power The accident at Japan’s Fukushima nuclear plant alarmed Germany to such an extent that it permanently shut down eight of the country’s oldest reactors and plans to retire the remaining nine by 2022. But sceptics argue that the decision was premature and emotional, reports Elisabeth Rosenthal.
oT sInCe THe GrIm perIoD after World War II has Germany had significant blackouts, but it is now
“It’s easy to say, ‘Let’s just go for renewables,’ and I’m quite sure we can someday do without
bracing for that possibility after shutting down
nuclear, but this is too abrupt,” said Joachim
half its nuclear reactors practically overnight.
Knebel, chief scientist at Germany’s prestigious
Nuclear plants have long generated nearly a quarter of Germany’s electricity. But after the
Karlsruhe Institute of Technology. He characterised the government’s
tsunami and earthquake that sent radiation
shutdown decision as “emotional” and pointed
spewing from Fukushima, half a world away in
out that on most days, Germany has survived
Japan, the government disconnected the eight
this experiment only by importing electricity
oldest of Germany’s 17 reactors – including the
from neighbouring France and the Czech
two in the drab factory town of Biblis – within
Republic, which generate much of their power
days. Three months later, with a new plan to
with nuclear reactors.
power the country without nuclear energy
Then there are real concerns that the plan
and a growing reliance on renewable energy,
will jettison efforts to rein in manmade global
parliament voted to close them permanently.
warming, since whatever nuclear energy’s
There are plans to retire the remaining nine
shortcomings, it is low in emissions. If
reactors by 2022. As a result, electricity producers are
Germany, the world’s fourth-largest economy, falls back on dirty coal-burning plants or
scrambling to ensure an adequate supply.
uncertain supplies of natural gas from Russia,
Customers and companies are nervous
isn’t it trading a potential risk for a real one?
about whether their lights and assembly lines will stay up and running this winter. Economists and politicians argue over
how much prices will rise.
The International Energy Agency, generally a fan of Germany’s green-leaning energy policy, has been critical. Laszlo Varro, head of
on ourselves,” he said. “The politics are overruling the technical arguments.” Germany’s planners believed they could forgo nuclear energy in large part because of the country’s remarkable progress in renewable energy, which now accounts for 17 per cent of its electricity output, a number the government estimates will double in 10 years. On days when the offshore wind turbines spin full tilt, Germany produces more electricity from renewable sources than it uses, according to European energy monitors. Germany has “exceeded everyone’s GETTY IMAGES
expectations on renewable power,” said Varro, showing that it could be cost effective and reliable.
The anti-nuclear movement has always been strong in Germany and the accident at Japan’s Fukushima plant gave it added impetus.
Until it closed the reactors, Germany was Europe’s leading energy exporter. With a total of 133 gigawatts of installed generating capacity in place at the start of this year, “there was really a huge amount of space to shut off nuclear plants,” Harry Lehmann, a director general of the German Federal Environment Agency and one of Germany’s leading policymakers on energy and environment, said of the road map he helped develop. The country needs about 90.5 gigawatts of generating capacity on hand to fill a typical national demand of about 80 gigawatts a day. So the 25 gigawatts that nuclear power
contributed would not be missed – at least within its borders.
German chancellor Angela Merkel inspects a commercial offshore wind farm in the Baltic Sea. Merkel extended the operating licenses of Germany's nuclear plants last year, but she had to do an about face earlier this year due to public pressure.
To be prudent, the plan calls for the creation of 23 gigawatts of gas- and coalpowered plants by 2020. Why? Because renewable plants don’t produce nearly
the agency’s gas, coal and power markets
prepared to make huge investments in
to capacity if the air is calm or the sky
division, called the plan “very, very
improving energy efficiency in homes and
is cloudy, and there is currently limited
ambitious, though it is not impossible,
factories as well as in new clean power
capacity to store or transport electricity,
since Germany is rich and technically
sources and transmission lines. So far,
energy experts say.
sophisticated.” Even if Germany succeeds
there have been no blackouts.
New coal and gas plants will use the
in producing the electricity it needs, “the
Juergen Grossmann, chief executive
nuclear moratorium is very bad news in
of the German energy giant RWE, which
not aggravate climate change, government
terms of climate policy,” Varro said. “We are
owns two closed reactors here in Biblis,
officials said, because they will operate
not far from losing that battle, and losing
about 64 kilometres south of Frankfurt,
within the European carbon-trading
nuclear makes that unnecessarily difficult.”
expressed scepticism. “Germany, in a
system in which plants that exceed the
very rash decision, decided to experiment
allowed emissions cap have to buy carbon
The government counters that it is
cleanest technology available and should
Angela Merkel, herself a physicist, decided last fall to extend the operating licenses of Germany’s nuclear plants over concerns that innovation alone would not satisfy the country’s energy appetite. Fukushima changed everything. That Japan is a technologically advanced country made the nuclear accident more alarming to the German people than the Chernobyl disaster, at an old Soviet reactor. Despite that, industry experts and residents of reactor towns like Biblis and nearby Philippsburg were stunned by the suddenness of the about-face. Both towns will lose hundreds of jobs and millions in tax revenue. German energy companies, however, say they have been handed a national energy template that looks good on paper but is technically challenging. Although the country’s production of energy is bounteous, they say it is not always available where and when it is needed. Northern Germany has offshore wind Stefan Martus is the major of Philippsburg. The town will lose hundreds of jobs and millions in tax revenue when its nuclear plant is closed.
and coal deposits, but southern Germany – a manufacturing epicentre that is home to Mercedes, BMW and Audi –
But sceptics consider government
has no plentiful local fuel source other
are environmentally beneficial, thus
assumptions overly optimistic. Stefan
than nuclear. Germany’s current grid is
evening out the environmental ledger.
Martus, the mayor of Philippsburg, says
highly decentralised, lacking high-voltage
credits from companies whose activities
he believes energy costs could rise more
transmission lines to move electricity over
by 35 to 40 euros ($50 to $60) per
dramatically than government estimates;
long distances. “Now, with the nuclear shut
household each year, or less than five per
the price of permits to offset dirty power
down, we have a very difficult task,” said
cent, the government estimates. Although
plants is highly unpredictable and
Joachim Vanzetta, head of transmission
nuclear energy generally costs less than
variable, like the value of stocks. And the
system operations at Amprion, the largest
newer options, German law has long
International Energy Agency does not
of the country’s four grid operators.
stipulated that renewable energy must be
think Germany – or any other country –
purchased first even if it is costlier.
will be able to reduce its emissions at a
grid will have 84,000 megawatts of
reasonable cost without nuclear power.
electricity at its disposal, to provide 81,000
Electricity prices are expected to rise
“The country has become the world leader in wind power and a master at squeezing more energy efficiency out of appliances and homes, having built tens of thousands of self-heating ‘passive houses’.”
This winter, Amprion predicts its
megawatts needed for consumption – an even before Fukushima, nuclear
uncomfortably slim margin of safety,
energy’s days in Germany were numbered.
Vanzetta said. In prior years, electricity
Biblis had been the site of giant national
was readily available for purchase on the
antinuclear demonstrations, and Germany
European grid if the price was right.
was already enacting a plan for slowly phasing out nuclear energy by 2023. The country has become the world leader
But exported German power is what helped keep France glowing in winter. “At the moment, we have a stressed
in wind power and a master at squeezing
system, but it’s under control,” Vanzetta
more energy efficiency out of appliances and
said. “If we have days with no wind and no
homes, having built tens of thousands of
solar and can’t buy energy from abroad,
self-heating ‘passive houses’. Still, Chancellor
then there is the risk of blackouts.” n Portfolio
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Banks are targeting the rapidly growing emerging markets to keep profits flowing. But emerging markets are volatile and have unique regulations, report Susanne Craig and Ben Protess.
all Street loveS
profits is often filled with mistakes
Such places also represent an
to crow about its
untapped client base, with a growing
© 2011 New York Times News service
Vikram S. Pandit, the head of
“A lot of big banks are looking to developing markets, but historically
middle class and a large number of wealthy individuals. As profits wane on the home
Citigroup, boldly promised in 2009
it’s tended to be a volatile move,”
that “we will be the single largest
said James Sinegal, a bank analyst
front, Wall Street firms are
emerging markets financial services
at the research firm Morningstar. “It
increasingly dependent on the
company.” Goldman Sachs’ chief
might not be as easy as they expect.”
emerging markets to bolster their
Banks like Citigroup, Goldman
bottom lines. Citicorp, a division
executive, Lloyd C. Blankfein, said at a conference last year that one
Sachs and Morgan Stanley are
of Citigroup, draws about half
of his firm’s big goals was “to be
chasing the potential payoff abroad.
of its revenue from emerging
Goldman Sachs in more places.”
The economies of countries like
countries, up from roughly 25
But there’s a quiet truth to success
China, India and Brazil are growing
per cent in 2005. International
in those risky markets: The path to
faster than that of the United States.
markets account for 47 per cent Portfolio
of Goldman’s profits. Morgan Stanley
“Financial firms have also realised that they need to commit to a market, because it can take years if not decades to build up local relationships and understand the country’s customs.”
generated nearly a third of its net revenue from outside the Americas. “With the United States slowing down, it is not surprising that institutions are looking in the emerging markets,” said Hamid Biglari, a Citicorp vice chairman and chief of emerging markets. But the perils can be plentiful, with economic, political and regulatory challenges. Foreign regulators have scolded banks, fined them and even banned their activities in various countries. Citigroup twice ran into problems with Japanese authorities. In turn, Wall Street says it has cleaned house at overseas offices, taken greater control of foreign ventures and tapped local bankers to lead new projects. Local knowledge is especially critical, as firms try to navigate the regulatory and political environment that is crucial to a bank’s business. Earlier this year, Citigroup regulators. After an investigation into suspected embezzlement by an employee and the death of a client after meetings with the bank’s outside debt collectors, the country’s central bank imposed sanctions
found itself in hot water with Indonesian
Vikram Pandit, CEO of Citigroup, promised in 2009 that the bank would be the largest emerging markets financial services company.
on Citigroup, including a one-year ban on
While Goldman says on its website
opening new branches.
that it has had a presence in Russia since
In June, the bank removed its top
1998, the firm has had its troubles in the
country officer, replacing him with a
country. Not long after opening in Russia,
native Indonesian, Tigor Siahaan, a
Goldman downsized its operations,
seasoned banker experienced in dealing
concerned about the financial crisis that
with local regulators and government
prompted the government to devalue the
officials. Now, the bank is tweaking
ruble. It closed the Moscow office and
its internal controls, bringing its debt
reassigned staff members. Christopher
collecting in-house and regularly rotating
Barter, co-chief executive for Goldman’s
back-office personnel. The bank said it
Russia business, said the investment bank
was also working closely with Indonesian
should not have left the country. “We
authorities. “How to behave responsibly
missed out on years of a footprint there,”
in these markets comes with experience,”
he said. “When you go into a country, you
Biglari said. “You have to figure out how
have to maintain your commitment.”
to work with the cultural norms.”
It took years to build up the business
Financial firms have also realised that they need to commit to a market, because it can take years if not decades to build up local relationships and understand the country’s customs. December 2011
in Russia again. Goldman reopened the Hamid Biglari, a Citicorp vice chairman and chief of emerging markets, stresses the importance of understanding the cultural norms of different markets.
Moscow location in 2001, but it didn’t fully ramp up there until 2006, when it obtained a brokerage license. Today, the firm has 140 employees in Russia, up from
“It’s one of the industry’s few options as banks deal with costly new regulations, sluggish economic growth in their home markets and a volatile market – all of which are weighing on profits.” more management oversight of overseas investments. Morgan Stanley was one of the Stephen Roach, non-executive chairman of Morgan Stanley Asia, has valuable local knowledge thanks to having lived in Tokyo, Hong Kong and Singapore.
The chairman and CEO of Goldman Sachs, Lloyd Blankfein, wants to expand aggressively in emerging markets.
first investment banks to establish a joint venture in China. In 1995, it teamed up with China Construction Bank to form the China International Capital Corp. But the Wall Street bank was a passive investor, owning just one-third of the business, the limit for foreign securities firms under Chinese rules. It also ceded management control to its partners. In 2010, Morgan Stanley sold the stake to a group of private equity firms. Since then, Morgan Stanley has forged a new relationship with Huaxin Securities. While it still owns a one-third stake in the venture, called Morgan Stanley Huaxin Securities, it has seats on the firm’s board and plays a role in the day-to-day management of the firm. A Morgan Stanley managing director, Yang Kai, is the chief executive of the company. While foreign business is hardly a guaranteed win, financial firms are willing
Not everybody succeeds in emerging markets. Barclays and Banco Santander SA are among western lenders who abandoned retail operations in Russia as state companies gained market share and expanded into investment banking.
to take the risks. It’s one of the industry’s few options as banks deal with costly new regulations, sluggish economic growth in their home markets and a volatile market
PhoTos oN This PAGe: GeTTY imAGes
30 people five years ago. The company has established stronger
several times a year. And Blankfein, along with other Wall Street chiefs like
– all of which are weighing on profits. “These guys are hurting and it gets
ties in the country since it has returned.
Jamie Dimon of JPMorgan Chase, has
worse by the day,” said Michael Driscoll, a
In 2008, Goldman held a board meeting
joined a committee set up by the Russian
professor at Adelphi University’s business
in Russia, a nod to its re-emergence
government to help bring more foreign
school and former senior trader at Bear
there. Michael Sherwood, vice chairman
money to the country.
Stearns. “You can only squeeze so much till
at Goldman Sachs, now visits Russia
Firms have also realised they need
you go looking elsewhere for a return.” n Portfolio
The besT of leisure and lifesTyle
sLOW BOaT ThROugh
Russia A cruise along the historic VolgaBaltic Waterway not only takes in St Petersburg and Moscow but also all the history and scenery along the route, reports Christina Pfeiffer. December 2011
n ethereal calm
that connect the Volga River to the
day there is a shore excursion in a village,
fills the air as the MS
Baltic Sea. Cruising is one of the most
town or city, accompanied by a team of
AmaKatarina cruises past
comfortable ways to travel through
attentive young English-speaking men
fishing boats towards
Russia, where few people speak English
a landscape of onion-
and reading the Cyrillic alphabet is next to
domed churches, spires,
impossible. Then there is also the luxury
there is a daily programme of cultural
monasteries and colourful
of only unpacking once and having your
and educational activities such as Russian
belongings float with you.
language lessons, history lectures, doll-
villages, towns and cities. Slicing across Lake Ladoga, the ship creates ripples of
After a $14 million refit, MS
When passengers are not exploring,
painting, balalaika-playing and cooking
liquid gold to match the colour of the
AmaKatarina began cruising Russia’s
lessons. The informative talks about
sky. It is past 11pm at night and the sun
waterways in May 2011. By Russian
Russian costumes, tea and vodka were
is a fiery ball sinking slowly behind the
standards, the ship is luxurious with 10
particularly well attended.
forested shore. Yet it feels like it is still early
stateroom and suite categories. Many
afternoon as I stand on deck, marvelling at
of the staterooms have balconies and
St PeterSburg is the perfect place
the Russian white night. Even after the sun
amenities such as new ensuite bathrooms,
to embark as this historic city is spread
has set, magic lingers in the purple-pink
satellite television, internet access and
over 101 islands and 66 canals, meaning
sky, leaving me with vivid memories of
a nightly turndown service with
that water is never far from your mind.
midnight sunsets that flood my mind long
chocolates on your pillow.
From St Petersburg the Neva River
after I have left Russia. The cruise between St Petersburg
The ship accommodates 212 passengers
flows into Europe’s largest freshwater
and it is the most spacious vessel on the
lake, Lake Ladoga (it’s the world’s 14th
and Moscow travels along a picturesque
Volga-Baltic Waterway. There are two
largest lake), then into the Svir River,
section of the Volga-Baltic Waterway,
restaurants, the Opera on the second
where the MS AmaKatarina cruises past
which flows through 1,367 kilometres
floor and the cosier Symphony above it,
colourful timber houses and jewel-box
of lakes, rivers, reservoirs and canals
and two bars. The atmosphere aboard
churches. After touring grand palaces,
is convivial and the
golden-domed churches and museums
open seating policy
in St Petersburg, cruising through the
makes it easy to make
countryside is a relaxing contrast.
new friends. Each
At Svirstroy, a small town with around
Kizhi island is a unesco World heritage site, famed for its wooden buildings. The Church of the Transfiguration is russia’s oldest wooden church.
Valaam is an archipelago of islands in lake ladoga, which is the largest lake in europe. Portfolio
Essentials Travel 1,000 residents, we stretched our legs
dozens of historical wooden buildings were
among villagers dressed in colourful
moved to the island from various parts
Russian costumes selling toys, lace,
of Karelia (a federal republic of Russia)
hand-carved timber eggs, dolls, lacquer
for preservation purposes. Nowadays, the
bowls and crochet tops. The shopping in
entire island and the nearby area form
Svistroy is much cheaper than in Moscow
a national open-air museum with more
and St. Petersburg, which makes it a good
than 80 historical wooden structures. Our
place to buy souvenirs.
walking tour of the island took us in and
“It’s at this point, as one gets closer to Moscow, that the cruise enters one of the most fascinating regions in Russia known as the ‘Golden Ring’ of cities.”
One of the highlights of the cruise is
out of chapels, belfries, log houses, mills,
Kizhi Island, which is a UNESCO World
bath houses, barns and the jaw-dropping
Heritage site of timber buildings and
18th-century Church of the Transfiguration
River via the Volga Baltic canal, which is
home to the oldest wooden church in
with its 22 silvery onion-domed cupolas
a series of locks that rise 80 metres (about
Russia – the 14th-century Church of the
glittering in the sun.
the height of a 30-storey building). The
Resurrection of Lazarus. In the 1950s,
Lake Onega is connected to the Kovzha
river then flows into Lake Beloye and Sheksna River where we docked at Goritsy and toured the nearby Kirillo-Belozersky monastery. The monastery is a massive complex of 15th to 17th century churches surrounded by fortress walls on the shore of Lake Siverskoye. Inside are some of the most intricate and beautiful historic icons I’ve seen while just outside, along the shores of the lake, is the local swimming spot. It’S at this point, as one gets closer to Moscow, that the cruise enters one of
the most fascinating regions in Russia known as the ‘Golden Ring’ of cities. The
The rostov Kremlin state Museum is a major attraction in the yaroslavl region, which forms part of russia’s famed ‘Golden ring’ of cities
main currents of history ignored these cities, leaving towns such as Vladimir, Suzdal, Sergiev Posad, Rostov Velikiy and Yaroslavl as quaint and perfect as when they were first constructed. The ‘golden’ refers to the historic and architectural wonders preserved in these towns. Some of them, like Yaroslavl, were centres of powerful principalities subjugated by Moscow during its rise to power. Others, like Uglich, have never been large or powerful but have still played important roles in Russian history. The MS AmaKatarina calls at two of these towns. First is Yaroslavl, which is one of Russia’s oldest cities and traces its roots back to the Vikings. The historical part of the city, a World Heritage Site, is located at the confluence of the Volga and
Passengers on the MS AmaKatrina can participate in daily cultural and educational activities. December 2011
the Kotorosl Rivers. Besides the unique architecture in the old town, the Yaroslavl
yaroslavl’s Museum of russian art is housed in the former governor’s residence. Museum guides in ball gowns teach visitors the intricacies of ballroom dancing.
Museum of Russian Art – in the former
dotted with stars. Here, our guides regale
governor’s residence – has a unique
us with tales of treason and murder; this
collection that includes Russian icons and
is where Ivan the Terrible’s 10-year-old
masterpieces of ornamental art. Museum
son Dmitry had his throat cut in the
guides dressed in beautiful silk ball
palace courtyard. Suspicion immediately
gowns lead visitors through the grandly
fell on the tsar’s chief advisor, Boris
opportunity to experience modern life by
furnished rooms. The tour ends in the
Godunov. Official investigators concluded
having breakfast in a local home. Some of
ballroom with a recital of chamber music.
uglich, another Golden ring town, is full of architectural wonders. of particular note are the historic wooden houses with their ornate trim.
however that Dmitry’s death was an
us got a taste of life with poor families in
Uglich is a small town with a bloody
accident. The officials cut a ‘tongue’ from
the countryside while others visit Soviet-
history but you wouldn’t think so looking
the cathedral bell that had rung the news
era apartments in town. Many of the hosts
at the picture-book Church of Prince
of Dmitry’s death and ‘exiled’ it to Siberia.
speak little or no English but we were all
Dmitry on the Blood with its blue domes
In Uglich, we were given the
served the same food: millet porridge, blini and home-made jam. the next and last stop is Moscow, where the various tours naturally include Red Square and the Kremlin, the Tretyakov Museum, an optional visit to the Moscow Circus, and Moscow’s famed Metro. Tourism in Russia is still in its infancy and the overall standard of cruise ships is not in the same league as the luxury cruise ships in Western Europe, where companies compete to launch more luxurious ships every year. Keep this in mind when travelling through Russia and you’ll enjoy the amazing history, culture and architecture that the country has to offer. After 12 days aboard MS
svirstroy, a small town of around 1,000 inhabitants, is known for its handicrafts, especially wooden carvings.
AmaKatarina, I know for sure I’ve fallen in love with Russia. n Portfolio
YVES SAINT LAURENT A massive retrospective exhibition covering famed French fashion designer Yves Saint Laurent’s entire body of work, from his early days at Dior to his final spring/summer runway collection in 2002, is now on show until January at the Mapfre exhibition galleries in Madrid, reports Scott Adams.
“He wAs THe ABsoluTe
during his time at Dior that Saint Laurent
Laurent’s creations. “He was neither a
embodiment of the French couturier,” says
met Pierre Bergé, who was to become his
minimalist nor an extravagant baroque
France’s First Lady, Carla Bruni-Sarkozy,
astute business partner, and his friend for
type. He achieved a balance,” says Bergé,
who modelled his creations during her
life. Bergé now runs the Yves Saint Laurent
describing what makes Yves Saint Laurent
years on the catwalk. “He turned art into
Foundation in Paris. Together, in 1961,
so quintessentially French. One hundred
fashion and fashion into art and gave
Saint Laurent and Bergé, with the help of
and fifty pieces of haute couture and
women strength, beauty and freedom,” she
an American backer, opened the first Yves
prêt-a-porter are displayed in a number
adds. But one shouldn’t think of Yves Saint
Saint Laurent fashion house in Paris.
of galleries with low lighting and the feel
Laurent as solely French as he proved that
Yves Saint Laurent understood that
beauty had no borders. He was inspired by
power lay with men, so he used men’s
showcase how he redefined the female
the burning sun of the Mediterranean and
clothes to dress women. “It was a transfer
silhouette by introducing the trapeze line,
it was that fire that was always alive within
of power,” says Bergé. Saint Laurent’s
how he produced runway travelogues
him and pushed his work forward.
pantsuits, jumpsuits and safari jackets were
that borrowed from Russian, Chinese
men’s clothes, but when he made them for
and Moroccan native dress, and how he
in 1936 in Oran, Algeria, which, at the
women they became sensual, seductive
made the perennial fashion motifs of
time, was a French colony. As a child he
and feminine. “Yves Saint Laurent spent
flora and fauna his own. A keen art lover
made costumes for paper dolls and later
his life thinking about women and how to
and collector, Saint Laurent also took
designed dresses for his mother and sisters,
make their bodies look beautiful,” Bergé
inspiration from classical masters such as
which his mother had made-up by a local
confides. “So many designers stay in their
Vermeer, Goya and Velasquez, as well as
dressmaker. Saint Laurent moved to Paris
ivory towers, but Yves Saint Laurent helped
contemporary artists including Picasso,
in 1954 after winning top prizes in the
women move ahead and create a new
Mondrian and Jean Cocteau as can be seen
dress category of a design competition. The
identity for themselves.” An entire wall of
in the 1965 cocktail dress with blocks of
editor of French Vogue introduced him to
the Madrid show is devoted to variations
Christian Dior and history was made. Dior
of Saint Laurent’s 1966 Smoking Suit,
took him on as an assistant in 1955 and
inspired by the tuxedo.
Yves Mathieu-Saint-Laurent was born
two years later, at just 21, Saint Laurent
The spectacular exhibition succeeds in
of a giant catwalk. The show’s 11 themes
Numerous pieces stand out above the rest – a 1988 Van Gogh Irises jacket embroidered with 40 pounds of sequins
became the house’s top designer after Dior
synthesising an enormous body of work
and beads; a 1997 garden party gown
began suffering from ill-health. It was
in order to show the harmony in Saint
with a thicket of pink and green organza Portfolio
Yves Saint Laurent with American actress Raquel Welch in 1975.
“With my imagination and through books with photos I travel to faraway lands.” Morocco was the only country Saint Laurent visited regularly. It was there that he had a second home, Le Majorelle, in the colourful city of Marrakesh. Today the house and gardens are a museum dedicated to his work. Many of the pieces on show in Madrid are inspired by journeys, either real or imaginary, which connect the designer with foreign people. There are garments with direct influences from China, Japan and Russia. Then there are six African-inspired pieces from the 1967 spring/summer collection beginning with a silk organza column gown with wood beading. It’s inspired by textiles from 28 loft suites and one Royal Loft Suite that boasts a baby grand piano.
the Congo and is combined with a raffia coat as big as a wigwam.
Colours were essential to his work and he particularly loved gold and red. In the last room of the exhibition visitors Yves Saint Laurent started his career at Dior. In this 1957 picture he is working on a new collection.
are treated to a series of gowns in a wide
flowers, leaves, semiprecious stones and
the exhibition displays some of the most
from his last collection in 2002, show his
satin ribbons; a 1990 coat flocked with
luxurious gowns you’ll ever see all made to
brilliant use of colours, either as a singular
flame-coloured rooster, pheasant and
order for the richest women in the world,
tone or in amazing combinations.
vulture feathers; and finally the black wool
including Lauren Bacall, The Duke and
dress with satin collar and cuffs worn by
Duchess of Windsor, Nan Kempner, Marisa
acclaimed by the press and his summer
Catherine Deneuve in the 1967 film Belle
Berenson and Princess Grace.
1971 collection was harshly criticised
de Jour. Reminding us of a by-gone era
Torero look from 1979.
“I hate travel,” Saint Lauent once said.
Iconic Le Smoking tuxedo suit from 1966.
variety of brilliant hues. The muslin gowns,
Yves Saint Laurent wasn’t always
by the fashion magazines. Although
The 1965 homage to Piet Mondrian. Portfolio
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Saint Laurent has been the inspiration for many across a number of decades and his influence and inspiration is still being felt. This year saw the film L’Amour Fou (Crazy Love) released. It tells the story of the designer’s dramatic life from rags to riches. A flurry of books and new editions of biographies are also hitting the shelves, such as Laurence Benaim’s emotional chronicle Requiem pour Yves Saint
Laurent or Alice Rawsthorn’s biography titled Yves Saint Laurent. The designer is also the subject of an album of 16 songs by Alain Chamfort that is set to open as a full-scale musical in 2012 at the Parisian Chaillot National Theatre. It’s an interesting moment to think about Saint Laurent’s work, now that
fashion is so important in women’s politics.
Yves Saint Laurent designed two haute couture and two prêt-àporter collections annually.
seemingly inspired by the 1940s and the
would find at almost
war years in Paris, Yves Saint Laurent’s
any department store
real inspiration came from the type of
in the world today.
women he imagined living in that time.
Even from a young
Yves Saint Laurent with Carla Bruni in 1996. Bruni married French president Nicolas Sarkozy in 2008.
age, Saint Laurent
woman who wanted to provoke a reaction.
was hugely involved
The bad press had no effect on sales
in marketing and
and the public adored the new style and
maintaining the image
Hillary Clinton’s pantsuits and Sarah
flocked to the boutiques. Perhaps that’s
of his own label. In 1971 he posed naked,
Palin’s sexy secretary look are all inspired
why the most provocative pieces in the
albeit discreetly, for photographer Jeanloup
by Saint Laurent’s work over the decades.
show are the ones that changed the way
Sieff for an advertisement for his first
“Saint Laurent thought that if you took
women dressed, back when haute couture
perfume for men. In Madrid visitors can
the male garment and you passed it to the
really was a design laboratory for ideas
contemplate 14 other art-inspired images
women’s shoulders, you pass the power
that filtered out to the world. There’s a
from the same shoot for the first time.
from men to women,” Bergé says. “For
wool pea coat from 1962, a cotton safari
There are also photos of the designer at
Saint Laurent, fashion was a dialogue,
jacket from 1968, and the first le smoking
work, his models and portrait photos such
a rendezvous between a designer and a
from 1966. These are so basic, and yet so
as the informal shot taken by Andy Warhol,
woman.” And according to Bergé, much of
groundbreaking. And they’re looks you
which provide a glimpse of the man.
fashion today is out of touch. “Designers
The pieces were aimed to be worn by the
are telling women what to do, not listening
“So many designers stay in their ivory towers, but Yves Saint Laurent helped women move ahead and create a new identity for themselves.”
to what they want.” n The Madrid exhibition will be on show at the Mapfre Exhibition Gallery until 8 Jan 2012. More information at exposicionesmapfrearte.com.ysl Portfolio
The ArT of ApprAisAl Knowing how much your collection is worth is essential for insurance purposes or when you want to sell. But make sure you get the right appraiser, otherwise it can be an expensive mistake, reports Ann Carrns.
hether it is fine
code of ethics. That means, for instance,
said John Cahill, a lawyer in New York
that they charge only fees based on
or abstract paintings, some
who specialises in art. “And even the good
an hourly rate, or a negotiated project
ones are not good at everything.”
rate, rather than on a percentage of the
people spend a great deal of time and money compiling collections of valuables.
You can, of course, ask for referrals
appraised value. You can search for an
Even if they’re collecting out of personal
from lawyers or wealth management
appraiser by name or expertise, and
passion, rather than as an investment, it
advisers. But even then, you should check
review information about his or her
makes sense to keep tabs on how much
the appraiser’s qualifications. Personal-
background, on each group’s website.
the collection is worth.
property appraisers aren’t licensed, but
“If an appraiser says they know it all,
reputable professionals are affiliated
run as fast as you can,” said Jane Jacob,
to know the value of what you own,” said
with at least one of the three major
an appraiser who specialises in American
Nancy Harrison, a fine art specialist with
appraisal organisations: the Appraisers
and European fine art from the 19th
Emigrant Bank’s fine art financing unit
Association of America, which focuses on
through 21st centuries.
in New York and the president of the
personal property; the American Society
Appraisers Association of America.
of Appraisers, which includes specialists
getting pricing information for artwork,
in real estate and other areas; and the
collectibles and wine at online sites that
International Society of Appraisers.
primarily track sales at public auctions.
“You need to know what you own, and
© 2011 New York Times News service
“All appraisers are not created equal,”
wines, vintage movie posters
Whether an appraisal is done for tax purposes, for an insurance policy or to divide property in a divorce, the most
These groups require members to keep
Collectors have a variety of options for
Appraisers consult those sites too – but
important first step is finding someone
up to date with appraisal practices, called
only as a first step. Gayle Skluzacek, a New
who has broad, deep knowledge about the
the ‘Uniform Standards of Professional
York appraiser who evaluates both artwork
kind of pieces you collect.
Appraisal Practice,’ and to adhere to a
and wine, says a knowledgeable expert can Portfolio
Essentials Art interpret the nuances of a given sale. Why
valuations, too low). Last year, the panel
from my experience in the art world,”
did it sell above or below the estimate? Was
reviewed 475 items valued by taxpayers
he said, “that they’re a well thought of,
it offered before? Only a professional, she
at a total of nearly $235 million and
responsible and reliable organisation.”
said, knows “what questions to ask when
recommended adjustments on more than
half, according to its 2010 report.
Susan Brundage, the director of that group’s service, said it focused primarily on appraisals of fine art for tax purposes.
Expertise is especially important with appraisals that are submitted for tax
Arthur fleischer, a New York
It draws on the records of its member
purposes, because the Internal Revenue
lawyer and arts patron whose collection
dealers, she said, to supplement data on
Service has detailed requirements for
includes prints by the artist Elizabeth
prices for works sold at public auction.
appraisals submitted as documentation
Murray and images by the Dutch
for donations or estate tax calculations.
photographer Hellen van Meene, said
always – examine an item or collection
The IRS requires a written appraisal by a
he didn’t spend much time worrying
physically to determine its condition,
qualified appraiser for any deduction taken
about the value of his collection because
before conducting research into previous
on items valued at more than $5,000.
his motivation was not to make money.
sales of similar works to determine a
When he has made gifts to museums,
value. Personally examining an object
reviews valuations, and some appraisals
including the Whitney Museum of
allows for a thorough assessment of its
are subject to further review by its Art
American Art and the Solomon R.
condition, but sometimes appraisals
Advisory Panel, a group of 25 volunteer
Guggenheim Museum, he has worked
are done from photographs and other
experts. The panel meets periodically to
with the appraisal service of the Art
documentation although that must be
review appraisals and may decide they
Dealers Association of America, for the
disclosed on the appraisal report.
are too high (or, in the case of estate tax
documentation the IRS requires. “I know
The agency’s own appraisal staff
The appraiser will often – but not
“You have more gravitas if you’re
The ivory-pleated ‘Subway’ dress worn by actress Marilyn Monroe from the 1955 film The Seven Year Itch was expected to bring up to $2 million at auction. It sold for $4.6 million. December 2011
“Expertise is especially important with appraisals that are submitted for tax purposes, because the Internal Revenue Service has detailed requirements for appraisals submitted as documentation for donations or estate tax calculations.”
A staff member holds a costume worn by Michael Jackson when he performed in the Jackson Five group. Record amounts have been fetched recently at movie and music memorabilia auctions, which has led to higher appraisals.
“Because markets can change quickly, insurance companies encourage collectors to have works reappraised periodically to make sure coverage is adequate.”
of costumes owned by Debbie Reynolds,
The value of the Ferrari 250 LM has risen and fallen with economic cycles. $2.5 million is the record price for a 250 LM in this decade, but it is well below the record price of $5.5 million paid in 1990.
for instance, increased the value of outfits worn by Marilyn Monroe, Audrey Hepburn, Grace Kelly and others. BecAuse mArkets can change quickly, insurance companies encourage collectors to have works reappraised periodically to make sure coverage is adequate. Mary Sheridan, assistant fine arts manager for Chubb Personal Insurance, said collectors with extensive inventories typically worked with professional curators and kept their appraisals current. Those with smaller or lower-value collections – say, less than $10 million – are sometimes reluctant,
however, to spend the money for regular appraisals, which can cost as much as
Chinese art collectors are pushing the prices of Chinese art to record levels. Slave and Lion by Xu Beihong sold for $6.9 million in 2006, way above the estimate of $4.1 million. If it came on the market today it might sell for double.
$300 an hour, along with the higher premiums an increase in valuation might bring. “They do not see a need – until there’s a claim,” she said.
Chinese artworks. Von Habsburg’s firm
seen in person,” said Elizabeth von
was asked to appraise a collection of 20th-
prove risky. Sheridan recalled an owner
Habsburg, managing director of the
century decorative jade and porcelain
who had a painting by the French artist
Winston Art Group.
pieces from an estate. Previous sale
Raoul Dufy, illuminated by a picture light
records led to an estimated maximum
attached overhead. The screws came loose
fluctuations in the art markets can
price of roughly $124,000, but they sold
from the light, allowing the bulb to fall into
lead to surprises. Collectors must
for more than $1 million on the online
the painting and burn a hole through the
understand that there is not “one
auction site iGavel.
canvas. “It was a total loss,” Sheridan said.
Even with a thorough appraisal,
phoTos oN This page: geTTY images
Failing to keep up with rising values can
substantiating something you’ve
mammoth market” that determines a
The market for collectibles, like
The painting was insured on the
work’s value, said von Habsburg, adding,
Hollywood or sports memorabilia, is also
collector’s homeowner’s insurance policy,
“There are many submarkets, and they
volatile; prices can surge when there is
for $18,000. The market for Dufy’s work
move at different rates.”
a “landmark” auction taking place, said
had grown, she said, and the painting’s
Leila Dunbar, an appraiser who specialises
value at the time of the damage was close
in such items. The auction earlier this year
to six figures. n
Lately, for instance, Chinese collectors have been bidding up the prices of
Is It Getting Any Closer? For decades, scientists have been predicting that, one day, the same process that powers the sun will give us virtually unlimited cheap, clean electricity. But the technical obstacles remain huge, reports Leo Hickman.
star is born. and, less than a second later, it dies. On a drab science park just outside the
technology as fast as possible. Without it,
some of the world’s leading physicists stare
our species will be in “very deep trouble
change negotiations have stalled; targets
at a monitor to review a video of their
indeed” by the end of this century.
to ramp up renewable energy production
wondrous, yet fleeting, creation.
If only it were that simple. Fusion
seem hopelessly unrealistic; and the
energy – in essence, recreating and
Fukushima disaster has cast a large
one,” observes starmaker-in-chief Professor
harnessing here on Earth the process that
shadow over the future of fusion’s nuclear
Steve Cowley. Just a few metres away from
powers the sun – has been the goal of
cousin, fission energy, which has been
his control room, a ‘mini star’ not much
physicists around the world for more than
providing electricity since the 1950s.
larger than a family car has just burned,
half a century. And yet it is perpetually
But today, Cowley seems upbeat.
momentarily bright, at temperatures
described as ‘30 years away’. No matter
After an 18-month shutdown to retile
approaching 23 million degrees centigrade
how much research is done and money is
the interior of the largest of the centre’s
inside a 70-tonne steel vessel.
spent attempting to commercialise this
two ‘tokamaks’ – ring doughnut-shaped
‘saviour’ technology, it always appears to
chambers where the fusion reaction takes
be stuck at least a generation away.
place – he is bullish about the progress
“Not too bad. That was quite a clean
Last year, when asked to name the most pressing scientific challenge facing humanity, Professors Stephen Hawking
it is a “moral duty” to commercialise this
Oxfordshire village of Culham in England,
Cowley hears and feels these
being made by the 1,000 scientists and engineers based at Culham.
and Brian Cox both gave the same answer:
frustrations every day. As the director of
producing electricity from fusion energy.
the Culham Centre for Fusion Energy,
“By 2014-15, we will be setting new
The prize, they said, is enormous: a near-
he has spent his working life trying to
records here. We hope to reach break-
limitless, pollution-free, cheap source
shorten this exasperating delay. Fusion
even point in five years. That will be a
of energy that would power human
energy is already a scientific challenge
huge psychological moment.”
development for many centuries to come.
arguably more arduous than any other we
Cox is so passionate about the urgent
face, but recent events have only piled on
parity when the amount of energy they
need for fusion power that he stated that
further pressure: international climate-
extract from a tokamak equals the amount
Cowley is referring to the moment of
Fusion is the process that powers the sun. But replicating this process on Earth poses huge technological challenges.
of energy they put into it. At present, the best-ever ‘shot’ – as the scientists refer
could also just say damn to the cost of
to each fusion reaction attempt – came
the electricity required to demonstrate
in 1997 when, for just two seconds, the
this. But we don’t want to do something
known as deuterium and tritium)
JET (Joint European Torus) tokamak at
that cannot be shown to be commercially
combines to form a super-hot plasma
Culham achieved 16MW of fusion power
viable. What’s the point?”
which produces, alongside the helium,
from an input of 25MW. For fusion to be
At the heart of a star, fusion occurs
neutrons which have a huge amount
commercially viable, however, it will need to
when hydrogen atoms fuse together under
of kinetic energy. The goal of plasma
provide a near-constant tenfold power gain.
extreme heat and pressure to create a
physicists such as Cowell is to harness the
denser helium atom releasing, in the
release of these neutrons and use their
so, what are the barriers preventing
process, colossal amounts of energy. But on
abundant energy to drive conventional
this great leap forward?
Earth, scientists have to try and replicate a
turbines to generate electricity. The
star’s intense gravitational pressure with an
JET tokamak has been shut down for
right now, but the costs would be huge,”
artificial magnetic field that requires huge
the past 18 months while the interior
says Cowley. “The barrier is finding a
amounts of electricity to create.
has been stripped of its 4,500 carbon
“We could produce net electricity
material that can withstand the neutron bombardment inside the tokamak. We December 2011
The fusion reaction occurs when the
tiles and replaced with new tiles made
fuel (two types, or isotopes, of hydrogen
from beryllium and tungsten. The hope
The fusion reaction takes place inside a ‘tokomak’ – a ring doughnut-shaped chamber that has to withstand temperatures up to 23 million degree centigrade.
is that these new tiles will be far more
arguing that the money could be better
neutron resilient, allowing for shots to be
spent building offshore wind turbines.
conducted for longer periods and at much
Meanwhile, there is criticism from some
plasma physicists that the design of ITER is wrong and alternative designs might
last year, bulldozers began clearing
produce better results for much less money.
land 60 kilometres north-east of
Francesco Romanelli, the Italian director
Marseille in southern France. By 2019,
of the European Fusion Development
it is hoped that the world’s largest and
Agreement, the European agency that
most advanced experimental tokamak will be switched on. The ¤15 billion International Thermonuclear Experimental Reactor (ITER) is being funded by an unprecedented international coalition,
funds JET, rejects this analysis. We simply Professor Steve Cowley, a plasma physicist, is the director of the Culham Centre for Fusion Energy. He believes electricity from commercial fusion is still 30 years away.
including the EU, the US, China, India, South Korea and Russia. Everything
must make this investment, he says: “The prize on offer is too tantalising to ignore. Fusion doesn’t produce greenhouse gases, it is intrinsically safe and it leaves no burden on future generations. And the
But ITER’s projected costs are already
fuel is virtually unlimited. All you need
learned at Culham will be fed into
rocketing, and politicians across Europe
is lithium and hydrogen. Sea water alone
improving the design and performance of
have expressed concern, demanding that
could fuel current human consumption
ITER which, it is hoped, will demonstrate
budgets be capped. Fusion energy also
levels for 30 million years.”
the commercial viability of fusion by
has its environmental detractors. When
producing a tenfold power gain of 500MW
the ITER project was announced in 2005,
prompts the question why the world isn't
during shots lasting up to an hour.
Greenpeace said it “deplored” the project,
concentrating much harder on delivering
If fusion offers such glorious bounty, it
Essentials Technology it as fast as possible. Yes, ¤15 billion is a lot of money to be spending building ITER. But, by comparison, the global cosmetics and perfume industry is worth some $170 billion a year. If the motivation was there, the global community could find the money to fund 10 rival fusion projects to fast-track the process of finding the optimum design. So, why haven’t we seen a Manhattan Project-style push for fusion? “People – and particularly politicians – still remember fission’s early claims that it would produce electricity that was ‘too rEuTErS
cheap to meter’,” says Cowley. “We scientists have to be honest, too: we thought it would be easy to crack fusion. But there’s no other comparable challenge. There is no model for this technology. We’re having to start from the very beginning.” Cowley says a Manhattan Project for fusion would, of course, greatly speed up
Wu Bangguo (L), Chinese National People’s Congress Standing Committee chairman, and Kaname Ikeda of Japan (R), general director of the International Thermonuclear Experimental Reactor (ITER), look at a model of the ITER site in southern France.
its delivery. “ITER will cost around ¤15
“This is why there needs to be, in my mind, a 10-fold increase in fission power by 2050. We still need fission because it is a bridging technology until fusion becomes commercial. By 2100, fusion could be producing 20-25 per cent of all our energy.” to be, in my mind, a 10-fold increase in fission power by 2050. We still need fission because it is a bridging technology until fusion becomes commercial. By 2100, fusion could be producing 20-25 per cent of all our energy.”
billion, but that is not expensive when
fusion and scream: “We need this right
you consider the prize. At present, all
now!” But Cowley says we still face a
what Cowley is admitting, though,
we can hope for is, if oil prices are still
30-year wait for the magic day when we
is that as long as fusion research remains
high in 2015 and we pull off a big shot
flick a switch and electricity generated
underfunded (a term he doesn’t utter,
demonstrating parity of power, this gets us
from fusion flows from the socket.
but the implication is there) then it
the international attention – and therefore
“After ITER, we will then have to build
will never save humanity from climate
the funding – we need to really push on.”
a demonstration plant. We hope to have
change, oil wars and the poverty and
that built by 2040. This is why there needs
underdevelopment caused by ever-higher
It’s hard not to look at the potential of
energy costs. As if to prove his point, he admits that on occasion he has even turned to eBay to buy spare parts for the smaller UK-owned tokamak at Colham, which is known as Mast (Mega Amp Spherical Tokamak). But such things do not deter him from pushing forward as best he can, he stresses. He is first and foremost a plasma physicist. “Saving the planet is a nice thing to do,” he laughs. “Doing something that no one else has ever done is attractive, too. But, ultimately, this is fascinating. Every night on the train home I prefer to do a calculation rather than a sudoku. I try to work out things such as how a 200million-degree-celsius plasma behaves in a magnetic field. Such things are critically Scientists have to replicate a star’s intense gravitational pressure with a magnetic field to enable the fusion process. December 2011
important for the future of our world, but they’re really good fun, too.” n
ThaT Man SMellS FaMiliar Men are far more brand loyal than women, which is why classic men’s fragrances are still on the shelves. And now there is even a retro movement afoot, reports Michael Walker.
As nostAlgiA for the eArly 1960s persists, a handful of men’s
These classic men’s fragrances “left
fragrances from that period are getting
very long-lasting impacts on how people
a second look. Their names evoke two-
develop perfumes,” said Eddie Roschi,
button Botany 500 suits and drinks sipped
a founder of Le Labo artisanal
in a 707’s front cabin: Eau Sauvage, Habit
perfumery in New York. “You
Rouge, Pour Monsieur. And although sales
look at what Guerlain did with
are a fraction of the overall market for
Vetiver, and so much of it has
fine men’s fragrances, experts in the field
been copied. In some countries
acknowledge their lasting relevance.
you can smell it in the subways
“They’re like benchmarks – anything
because everyone wears it.” (In
that comes after is almost always a direct
Europe, the classics still sell
descendant,” said Grant Osborne, founder
as if it’s 1969; last year
and editor of Basenotes, a website for
Eau Sauvage was the
third best-selling men’s
Chanel Pour Monsieur, introduced
fragrance in France,
in 1955, “should by all rights be sitting
according to the NDP
under a triple-glass bell jar next to the
Group, a market research
metre and kilogramme at the Pavillon
company that tracks sales
de Breteuil as the reference masculine
in department stores.)
fragrance,” wrote Luca Turin, the
The vogue for
biophysicist, olfactory scholar and an
all things retro is a
author of Perfumes: The Guide.
Christian Dior’s Eau Sauvage,
© 2011 New York Times News service
iterations like Grey Vetiver, by Tom Ford.
not lost on perfume
introduced in 1966, revolutionised the
men’s category as the first perfume to
Dior promoted Eau
make heavy use of hedione, a synthetic
Sauvage with a print
analogue of jasmine. Guerlain Vetiver,
and television campaign
based on the aromatic grass native
built around a 1966
in India and introduced in 1961 after
photo of French actor
similar scents by Givenchy (1959) and
Alain Delon. (The music
Carven (1957), continues to beget modern
for one commercial Portfolio
was a snippet from the theme of Mad
Last year, the flagship Old Spice
1936 and still in production).
Men.) In an age when hip young people
line, including the original aftershave
transformed the flat-lining Pabst Blue
in a buoy-shaped bottle, grossed $33
Be and body sprays like Axe, retro
Ribbon and Parliament brands into
million at mass-merchandise outlets
scents aren’t necessarily an easy sell. At
winking fashion statements, it makes
excluding Walmarts, according to
Beverly Hills Perfumery, which stocks
sense that artefacts like Eau Sauvage
Symphony IRI, a Chicago-based market
a comprehensive collection of vintage
and Habit Rouge might follow.
research company. Meanwhile Brut,
perfumes, the owner, Alan Berdjis,
But for a generation raised on CK
which was introduced in 1964 and
sprayed a test card with Pour Monsieur
indeed, the venerable Old Spice has
endorsed by quarterback Joe Namath
and took a long sniff. “It’s kind of a thin,
been brand-extended so deftly that most
during his heyday, grossed $9 million.
creamy citrus,” he said approvingly. But
younger users are probably unaware that
“Brut is an amazing fougere,” said Roschi,
Berdjis, 30, added, “If you introduced
the formula dates to 1938 or was derived
referring to the lavender-based fragrance
this today and it did not have the Chanel
from a women’s perfume.
family also including Canoe (introduced in
brand recognition, I don’t think it would do well.” Why? “You smell it and just know,” he said. “This is an old fragrance.” Epitomising the new is Acqua di Gio, introduced by Giorgio Armani in 1996
As nostalgia for the early 1960s persists, a handful of men’s fragrances from that period are getting a second look.
The Old Spice ad, starring actor Isaiah Mustafa, makes fun of men’s fragrances that smell too feminine. The ad went viral on YouTube with millions of hits. Old Spice has been around since 1938.
and the No. 1-selling fine men’s fragrance for the past 10 years, according to the NDP Group. Acqua di Gio popularised the light, quiescent ‘aquatic’ accord that dominates men’s fragrances today and has inspired countless imitators – “a slew of apologetic, bloodless, grey, whippetlike, shivering little things that are probably
“Epitomising the new is Acqua di Gio, introduced by Giorgio Armani in 1996 and the No. 1-selling fine men’s fragrance for the past 10 years.”
Christian Dior is promoting Eau Sauvage, which was released in 1966, with an ad campaign centred around a 1966 picture of famed French actor Alain Delon.
Men are far more brand-loyal than women when it comes to fragrance, Grant said, “which is why when something becomes a top scent it continues to be a top scent – it’s hard to break into that ranking.” She added that in survey after survey, men say the No. 1 consideration
impossible, and certainly pointless, to tell
when they buy a fragrance is that it appeal
apart,” Turin said.
to their partners.
CompAred to the breezy aquatics,
fragrances for men are a little too
certainly, the classic ’60s scents – with
feminine,” Berdjis said, a sentiment
their base notes of musk, oak moss,
hammered home in the recent ‘The Old
sandalwood and leather – can seem
Spice Guy’ campaign, which pointedly
leaden, especially to younger noses.
mocked “lady-scented body washes” with
Nevertheless, sweet, unisex aquatics are
the tag, “smell like a man, man.” Female
ceding market share to scents redolent
customers at his store, Berdjis added,
of woods and spices. Of the top four
“buy the older-type fragrances to give to
men’s fragrances introduced in 2010,
“A lot of women feel the newer
“two were woods, one was a woody
“Their preference on a man goes back
oriental and only one was a water,” said
to the more masculine type of smell,” he
Karen Grant, a beauty industry analyst
continued. “That might speak to how
with the NDP Group.
society has changed – you didn’t have
The introduction last year of Bleu de Chanel, which despite its sport-aquatic-
metrosexuals in the 1960s.” Indeed, what constitutes a masculine
sounding name is considered a woody
fragrance today, said Roschi, who himself
aromatic, was a sign that the pendulum
wore Chanel No. 5 for several months, “is
is swinging toward earthier accords; it
going to be much more diverse than it was
became the No. 3 best-selling men’s scent
in the ’50s and ’60s, because masculinity
in the United States.
has evolved so much.” n Portfolio
Max Schubert Winemaking legend and creator of Penfolds Grange Dreamed of making a truly Australian red with such balanced complexity it would mature and develop for at least 20 years and rival the worldâ€™s finest wines. First vintage maligned and misunderstood. Ordered to stop making it, he persisted (with the support of Jeffrey Penfold-Hyland). Penfolds Grange is now one of the most sought after red wines in the world.
To the renegades. To those who do things for love not money. 160 years of winemaking.
Northeast Passage Dream reviveD Global warming is shrinking the Arctic ice pack, resulting in governments and companies scrambling to exploit new opportunities in this previously inaccessible region, reports Andrew Kramer. Rounding the noRtheRnmost
sector of the Arctic Ocean. But shipping,
is smallest, has been only about two-
tip of Russia in his oceangoing tugboat
mining and fishing ventures are also
thirds the average during the previous
this summer, Captain Vladimir V. Bozanov
looking further north than ever before.
two decades. The Arctic Monitoring and
saw plenty of walruses, some pods of
Assessment Programme, a Norwegian
beluga whales and in the distance a few
Grimsson, speaking at a recent conference
group studying the Arctic, forecasts that
icebergs. One thing Bozanov did not
on Arctic Ocean shipping held in the
within 30 or 40 years the entire Arctic
encounter while towing an industrial
Russian port city of Arkhangelsk not
Ocean will be ice-free in the summertime.
barge 3,702 kilometres across the Arctic
far south of the Arctic Circle, called it
And so business plans are being drawn
Ocean was solid ice blocking his path
“paradoxical that new opportunities are
up to capitalise on changes in a part of the
anywhere along the route. Ten years ago,
opening for our nations” at the same time
world that for much of seafaring history
he said, an ice-free passage, even at the
that the threat of carbon emissions has
was better known for grim final entries in
peak of summer, was exceptionally rare.
diaries of explorers like Hugh Willoughby
But environmental scientists say there
At the same forum, Prime Minister
of England. He died with his crew in 1553
is now no doubt that global warming is
Vladimir V. Putin of Russia offered a
trying to navigate this shortcut from Europe
shrinking the Arctic ice pack, opening new
full-throated endorsement of the new
to Asia, known as the Northeast Passage.
sea lanes and making the few previously
business prospects in the thawing north.
navigable routes near shore accessible
“The Arctic is the shortcut between the
coast, have been sailing the Northeast
more months of the year. And whatever
largest markets of Europe and the Asia-
Passage for a century. They opened it to
the grim environmental repercussions
Pacific region,” he said. “It is an excellent
international shipping in 1991, after the
of greenhouse gas, companies in Russia
opportunity to optimise costs.”
breakup of the Soviet Union. But only
The Russians, by travelling near the
This summer, one of the warmest on
recently have companies begun to find the
Ocean are mining that dark cloud’s silver
record in the Arctic, a tanker set a speed
route profitable, as the receding polar ice
lining by finding new opportunities for
record by crossing the Arctic Ocean in
cap has opened paths further offshore –
commerce and trade.
6∏ days, carrying a cargo of natural gas
allowing larger, modern ships with deeper
condensate. The previous record was
drafts to make the trip, trimming days off
the voyage and saving fuel.
and other countries around the Arctic
© 2011 New York Times News service
Iceland’s president, Olafur Ragnar
Oil companies might be the most likely beneficiaries, as the receding polar ice cap opens more of the sea floor to exploration.
Scientists say that over the last 10 years
In 2009, the first two international
The oil giant Exxon Mobil recently signed
the average size of the polar ice sheet
commercial cargo vessels travelled north
a sweeping deal to drill in the Russian
in September, the time of year when it
of Russia between Europe and Asia. This Portfolio
A decade ago it was rare that the Northeast Passage was ice-free, necessitating the use of expensive icebreakers to move shipping.
The Northeast Passage Opens Up
The Arctic ice cap has been shrinking, opening up new shipping lanes. This has given access to oil and gas fields, as well as fishing in international waters that were not accessible before.
Shorter, more northern routes now accessible RUSSIA Tiksi
Bering Sea Nome
International waters Beaufort Sea
Observed ice extent in September North Pole 2011
Median ice extent in September, 1979-2000
ICELAND Reykjavik 40%
Sources: The National Snow and Ice Data Center; Pew Environmental Group; [Russian] Partnership of Northern Sea Route Users; Natural Earth (map terrain)
Hudson Bay ’79
THE NEW YORK TIMES
“The voyage to Lianyungang in China took 21 N.Y. Times News Service Date: 10/25/11 days in 2010, compared with the 37 days typically Graphic Slug: ARCTIC-KRAMER-BSPR required Size: to sail 7.2 xto 7.2China through the Suez. Tschudi Withestimate Story: (BC--ARCTIC-KRAMER-BSPR--NYT) executives they save about $300,000 a trip. “Very few people in the shipping community know about this route,” Felix Tschudi, the chairman, said in an interview.”
Portion of the Arctic’s international waters ice-free in September
20 10 ’11
Japan, via the Northeast Passage, for example, is about 7,162 kilometres shorter than the currently preferred route through the Suez, according to Russia’s Transportation Ministry. (Of course, the Arctic route has far to go before catching up to the 18,000 ships a year sailing through the Suez Canal.) But the primary use of Arctic Ocean shipping so far has been to support other industries heading further north, like
year so far, 18 ships have made the now
as abandoned Russian polar stations,” the
mining and oil drilling, according to
mostly ice-free crossing.
Australian operator, Aurora Expeditions,
participants at the Russian conference.
The voyages included a scenic cruise
noted in its promotional literature.
Tschudi, a Norwegian shipping company, has bought and revived an idled iron ore
through the Northeast Passage, the first ever, departing from Murmansk and
on some routes, the trip over the top of
mine in the north of Norway in order to
arriving in Anadyr, a Russian port in the
Russia is now competitive with the passage
ship ore to China through the Northeast
Pacific Ocean across the Bering Sea from
from Europe to Asia via the Suez Canal.
Passage. The voyage to Lianyungang in
Alaska. “The voyage offered attractions such
The voyage from Rotterdam to Yokohama,
China took 21 days in 2010, compared with Portfolio
Hong Kong flagged Nordic Barents, carrying 40,000 tonnes of iron ore, leaves Kirkenes in the north of Norway on route to China via the Arctic Northeast Passage.
the 37 days typically required to sail to
frozen year round. Now, large portions
China through the Suez. Tschudi executives
north of Alaska and eastern Siberia are
estimate they save about $300,000 a trip.
usually ice-free in the summer.
“Very few people in the shipping
The spectre of hungry southern nations
community know about this route,” Felix
fishing the newly navigable doughnut
Tschudi, the chairman, said in an interview.
hole prompted a recent report by the Pew
The Russian company Norilsk’s nickel
Environment Group to warn that without a
and copper mine can now ship its
new set of regulations for the region, Arctic
metals across the Arctic Ocean without
cod populations might be decimated.
chartering ice breakers, as in the past,
Meanwhile, because ice floes still menace shipping even in the otherwise
In northwest Alaska, the Red Dog lead
open sea lanes, authorities in the United
and zinc mine moves its ore through the
States, Russia and Norway are studying
Bering Strait, which is less often clogged
the business potential of overhauling
with pack ice than in past decades.
ports on both sides of the Northeast
saving millions of rubles for shareholders.
Citigroup’s Moscow office has identified five Russian companies well positioned to benefit from global warming in the north, where temperatures are rising about twice as fast as the global average. Besides Norilsk, they included Sovcomflot, the state shipping company,
Passage to transfer containers from
Russian Prime Minister Vladimir Putin (R) shakes hands with the President of Iceland, Ólafur Ragnar Grimsson, during a meeting in Arkhangelsk to discuss the Arctic.
ordinary freighters to ice-class vessels that
Union’s nuclear submarines to make ice-
ports like Kirkenes in Norway or Adak in
capable oil and gas drilling platforms.
Alaska, south of the Bering Strait, might
and the nation’s two largest natural gas
would ply the Arctic Ocean, serving Asia, Canada, the US West Coast and Europe. Under this plan, now hopelessly remote
be transformed into bustling logistics
companies, Gazprom and Novatek. The
FoR the international fishing industry,
fifth is Rosneft, the state oil company that
the target is the so-called Arctic Ocean
has entered the joint venture with Exxon
doughnut hole – the millions of square
Treadwell, was one of the attendees at the
Mobil to drill in the Kara Sea, a part of
kilometres in the ocean’s centre that
Russian conference. He noted that about
the Russian sector of the Arctic Ocean.
are beyond the 322-kilometre exclusive
$1 billion worth of goods passed through
Russia is retooling a military shipyard
economic zones of the coastal nations.
the Bering Strait last year. “The ships,” he
outside Arkhangelsk that built the Soviet
Until 2000, the entire doughnut hole was
said, “are coming.” n
hubs for Arctic shipping. Alaska’s lieutenant governor, Mead
Rock Replaces Carols Times are economically tough in Europe
crowd-pullers all the more important,
and shoppers aren’t feeling very festive.
even for upmarket stores that can count
In France household spending dropped
on a large tourist contingent in the
1.3 per cent in September versus the
heart of the French capital.
same month a year earlier and spending
Galeries Lafayette get the show on the
to France’s statistics office.
road, posing for photo fliers in red Santa
That’s why live rock and roll is
hat and matching shoes. The opening
replacing recorded Christmas carols
weeks include nightly live shows in the
in the windows of Galeries Lafayette
window by a variety of major-label rock
as the famed Parisian department
and folk bands.
store seeks to drum up curiosity, and
Galeries Lafayette, which first
client numbers, for this year’s gift-
started doing its Christmas window
shows after World War II, says that
With a debt crisis forcing much of
German Accounting Blunder
Rock legend Iggy Pop has helped
on clothing fell 7.3 per cent, according
this year’s show was inspired by the
Europe into austerity, consumption
increasingly close relationship between
has dropped in recent weeks, making
rock and fashion.
Wild West Cash
been scathing about
into a storage
practices of some
8,000 bits of
so it was particularly
embarrassing when a
¤55 billion accounting mistake came to light.
Federal Minister of Finance Wolfgang
for years. Reed
Schaeuble said it was “an extremely annoying
mistake” for the nationalised mortgage
bank Hypo Real Estate (HRE) and the PwC
with tax dollars
accountancy firm to have let such an error slip
Harrisburg, the cash-strapped capital of
more than five years ago. Two city
Pennsylvania, USA, has enough muskets,
auctions of some of the Wild West
stage coaches, sheriff's badges and
pieces in 2007 and 2008 have netted
by more than ¤55 billion, and Schaeuble and the
ammunition to see off creditors. Nearly all
government were lampooned by cartoonists and
of the artefacts were collected by former
pilloried in editorials.
Mayor Stephen Reed, who dreamed of
said about nine companies have taken
building a Wild West museum in
a recent look at the artefacts and gave
Harrisburg that never materialised.
the city hope some of the $8 million to
The blunder briefly raised Germany’s total debt
As a result of the corrected debt, Germany now expects its ratio of debt to gross domestic product to be 81.1 per cent for 2011, 2.6 percentage points less than previously forecast.
Desperate to climb out of a $300 million debt crisis, Harrisburg has allowed
Harrisburg spokesman Robert Philbin
$15 million Reed spent to buy them will be recouped. Por tfolio
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Published on Nov 28, 2011