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Portfolio

Issue 72 â– December 2011

Exclusive to Emirates First Class and Business Class

AMAZON BOOKS Changing the Industry

FUSION POWER

Are We Getting Closer?

MALE SCENTS

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

Portfolio

11

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.

46

42

52


Portfolio

12

Exclusive to Emirates First Class and Business Class

Essentials

69

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

74

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

Departments

Global warming is shrinking the Arctic ice pack, resulting in governments and companies scrambling to

17 Notebook

exploit new opportunities in this previously inaccessible

World business in a nutshell.

region.

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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Printed by Emirates Printing Press, Dubai, UAE

Portfolio


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Las Vegas

Dubai

Moscow


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Notebook

17

getty images

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

equity market.

second-biggest economy.

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

regulatory requirements.

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

getty images

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

December 2011

China has the world’s second-biggest


Notebook Tokyo Office Rents Drop

Numbers Game

$8.4

$6.3

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.

$3

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.

29%

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

$525

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.

$21.6

square metres in Tokyo next

the spring, while the 27-storey

In Figures

$89

12 per cent to 1.54 million

district, will be completed in

The World

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.

$43.2

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.

ReUteRs

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.

getty images

18

Portfolio


Notebook

19

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.

getty images

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.


20

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.

DUBAI

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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Observer

23

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.

mail division.

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

to eBay.

100,000 positions and its traditional focus

even private homes. In rural areas, a

December 2011

Instead of watching its business be


24

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

post office.

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

chaumet.com


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.

reuters

26

Portfolio


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Observer

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

acquisition.

world’s second-largest mining

Anglo sold 24.5 per cent

The current talks involve

GettY IMAGes

28

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

Mitsubishi’s investment

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

“world-class.”

Pacific Partnership in the next

fifth largest trading partner.

stymie Chile’s state-owned

unit, valued at $22 billion

President Obama said taken

Portfolio


Observer The World

Top 10

29

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

GettY IMAGes

TOp 10 GlObAl FiNANCiAl CENTrEs (According to the 10th Global Financial Centre Index)

SOURCE: ZYEN.COM

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

Freedom score

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

SOURCE: HERITAGE.ORG/INDEx/RANKING

December 2011

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

Rank

GettY IMAGes

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.


Commentary

30

Suzanne GoldenberG

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

after themselves.

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

geTTY iMageS

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


34

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.

December 2011

Profile

35


Profile

36

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.

Portfolio


Profile

37

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

December 2011


Profile

38

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

it evolve.”

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,

something special.

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

Portfolio


Profile

39

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

December 2011

And what are Kern’s plans for the


Retail

42

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

W

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.

customers quickly.

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


Retail

43

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

financial plans.)

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.

research firm.

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.

December 2011

in the purchase of nonfood items. “It seems to be more for real than a flash in the pan,” said Kanwaljit Singh,


Retail

44

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

the service.

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


Advertising

46

Food:

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.

T

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

and spin.

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

close-up.

these directors arguably have some of

ad doesn’t look like the dish in the

the widest exposure of any commercial

ad, either.

“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

as mine.”

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


47

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

December 2011


Advertising

48

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


Advertising

50

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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Media

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, reports David Streitfeld.

A

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.

December 2011

GeTTY imAGes

Media

53


Media

54

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

GeTTY imAGes

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

weighing in.

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


Media

56

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


Š 2011 NEW YORK TIMES NEWS SERVICE

GETTY IMAGES

58

Germany, which has not suffered blackouts since World War II, is now bracing for that possibility after shutting down half its nuclear reactors.

Portfolio


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.

N

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

December 2011

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

Energy

59


Energy

60

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

GETTY IMAGES

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

Portfolio


Energy

62

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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Banking

64

VS.

PROFIT

RISK

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.

W

all Street loveS

profits is often filled with mistakes

Such places also represent an

to crow about its

and setbacks.

untapped client base, with a growing

overseas conquests.

© 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

GeTTY imAGes

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

Banking

65


Banking

66

“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


Essentials

Essentials Travel

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

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70

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

and women.

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.

corbis

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

corbis

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

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Travel

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.

GETTY iMAGEs

72

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


74

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

primary colours.

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


Essentials Fashion

December 2011

GETTY IMAGES

Yves Saint Laurent with American actress Raquel Welch in 1975.

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Fashion

“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.

GETTY IMAGES

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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Essentials

78

Fashion

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

GETTY IMAGES

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

GETTY IMAGES

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


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grapheasT

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.

W

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

discrepancies appear.”

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

grapheasT

reuTers

“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.

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82

Art

reuTers

“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,

grapheasT

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

Portfolio


Essentials

84

Technology

Fusion Power:

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.

A

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

© Guardian

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

Portfolio


Essentials Technology

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

85


86

Essentials

Technology

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

higher temperatures.

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

Portfolio


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

87


Essentials

88

Style

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

perfume enthusiasts.

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.

marketing opportunity

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

makers. Christian

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


89

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.

December 2011


90

Essentials

Style

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,

their boyfriends.”

“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 world’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.

Newspix/News Limited

To the renegades. To those who do things for love not money. 160 years of winemaking.


Essentials

92

Environment

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.

“become imminent.”

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

eight days.

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


Essentials Environment

93

GeTTY imAGes

A decade ago it was rare that the Northeast Passage was ice-free, necessitating the use of expensive icebreakers to move shipping.

December 2011


Essentials

Environment

The Northeast Passage Opens Up

MAP KEY

Northeast Passage

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

Dudinka

Khatanga

Dikson Island

Anadyr

Pevek

Arkhangelsk

Bering Sea Nome

FINLAND

Kirkenes

International waters Beaufort Sea

UNITED STATES

Murmansk

Barents Sea

Chukchi Sea

Observed ice extent in September North Pole 2011

SWEDEN

Median ice extent in September, 1979-2000

NORWAY

CT

IC

CI

RC

LE

ALASKA

Thule

Baffin Bay

CANADA

AR

94

GREENLAND (DENMARK)

ICELAND Reykjavik 40%

Atlantic Ocean

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.”

30

Portion of the Arctic’s international waters ice-free in September

’00

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


Essentials Environment

GrApheAsT

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

GrApheAsT

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

December 2011

95

hubs for Arctic shipping. Alaska’s lieutenant governor, Mead


96

Essentials

Other Business

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

buying season.

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

The German

appraisers and

government has

auction houses

been scathing about

into a storage

the accounting

space where

practices of some

more than

Eurozone countries,

8,000 bits of

so it was particularly

Americana

embarrassing when a

have been

¤55 billion accounting mistake came to light.

gathering dust

Federal Minister of Finance Wolfgang

for years. Reed

Schaeuble said it was “an extremely annoying

began buying

mistake” for the nationalised mortgage

the artefacts

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

through undetected.

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

$1.66 million.

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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Portfolio December 2011  

Portfolio | Demeber 2011

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