Small luxury firms make modest way to global market
June 26, 2012 by admin
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PARIS |
PARIS (Reuters) – Poupie Cadolle’s family has been making handmade lingerie in a workshop on Rue Saint Honore for five generations, with Qatari royals, American actresses and Swiss bankers’ wives all crossing her doorstep in search of the perfect bra or corset.
Now, with times tough and sales to French and American women sluggish, Cadolle, like many small French luxury firms, finds itself struggling to tap into a $191 billion global boom driven by customers from emerging markets.
“The last four months have been difficult,” said Poupie Cadolle, a small woman with a warm smile who spends her days fitting 5,000 euro ($6,300) bustiers and 600 euro bras.
“We thought hard about how to get clients, beyond word of mouth. It is not easy. We decided on going into Brazil, not China.”
Unable to wield the financial firepower of conglomerates such as LVMH, Richemont, or PPR, small family-owned enterprises are finding modest and innovative ways to attract new customers.
Some, like Cadolle, are choosing one country over another and relying on invitation-only trunk shows and other private events.
Others are opening stores in Hong Kong but not Shanghai, while for a few the focus is on still rich markets in Japan and the United States.
All are choosing carefully. The internet is not seen as a route to market – few small luxury companies feel comfortable selling goods online given the luxury experience is one where items need to be handled to judge the quality and design.
“China is definitely the big prize and, by and large, the customer there only wants big, recognizable brands,” said Pierre Mallevays, a managing partner at Savigny Partners, a corporate finance boutique specializing in luxury and retail.
“You cannot have a China-only market. For your brand to be credible, the travelling Chinese will expect to see your stores in Paris, Milan or New York.”
That kind of reach is difficult for smaller brands unable to afford a presence in several European cities and major Chinese cities where real estate prices are high, salespeople increasingly scarce and the best distributors already engaged.
LVMH and other luxury giants, meanwhile, are tapping into the Chinese market by scaling back in department stores and, instead, opening giant flagship stores in large and mid-size cities across the country.
Smaller European brands hope Chinese customers, as well as the newly rich from Russia and central Asia, see the appeal of a tasteful shop in Paris with an elite clientele in the French tradition of discretion and craftsmanship.
Many are bringing design inhouse, eliminating suppliers and ensuring clients know everything is handmade by French artisans.
“BIG, BIG, BIG”
This type of branding is vital to the appeal of French luxury, yet it is not always easy to convince emerging market clients that handmade is better. Many live in countries where goods are only made in small shops out of necessity.
Corthay is a bespoke men’s shoe shop in the 2nd arrondissement where Pierre Corthay works in the front room making crocodile and elephant skin shoes that take six months to complete and cost upwards of 3,000 euros.
It recently teamed up with Groupe Edmond de Rothschild to sponsor a road trip for select clients through the Alps in high-end sports cars. Chief executive Xavier de Royere said the event was expensive for Corthay but worth it because it created a sense of glamour around the brand.
“The Chinese do not always understand our store,” said Royere, who joined from Louis Vuitton. “Small is not good there. They want a big shop. Lots of options. Big prices. Big, big, big.”
Royere, planning to open shops in Dubai and Hong Kong in coming months, said he was in less of a hurry to go to China and will not open there until 2013 at the earliest.
In the United States, the brand is confining itself to department stores in New York, San Francisco and Beverly Hills for the moment.
“We counsel companies to go to Hong Kong first. Learn about the customer. Then go to mainland China,” said Ponsolle des Portes, head of Comite Colbert, a luxury industry lobbying group.
Chinese customers need to become acquainted with the notion of truly high-end luxury, and smaller brands can still make a lot of money from established markets, she said.
“It is hard to convince some Chinese women that she should have wonderful undergarments,” said Poupie Cadolle. “This is not a culture that even has nightgowns.”
Asia makes up 19 percent of the luxury market but is growing faster than any other region, Bain research showed. By 2014, it will be on a par with the Americas in size.
PRESENT BUT PRUDENT
Yet it will still lag Europe, the largest luxury market. And while many customers in European shops may be tourists, small companies still see money in established markets.
Luxury brand Camille Fournet began with watch straps and has recently broadened out into handbags, wallets and pouches.
CEO Jean-Luc Dechery said opening a big store on stylish Avenue Montaigne in Paris would lend the brand instant credibility, but the cost was prohibitive.
Instead, he has invited well-heeled clients to a private showing at the George V hotel at the end of June. Items sold there, including a 34,000 euro alligator handbag, will not be available in the store.
“We are hitting that good time during fashion week but before Ramadan,” he said.
He remained mindful that half the brand’s clients in the Paris store were French, and that a Chinese business will be slow to start up. He is opening a store in Beijing this October.
“We want to be present,” said Dechery. “But also prudent.”
The advice is sound, say industry analysts, who note that any change to the tax regime in China or Hong Kong could quickly alter the dynamic and that the luxury market may be in a bubble that could burst if the Asian market ever slowed down.
“Whenever companies tell me they are going abroad I ask one question,” said Joelle de Montgolfier, a director in consultancy Bain Co’s luxury practice. “Are you absolutely convinced that French women have nothing more to spend?”
($1 = 0.7933 euro)
(Editing by Dan Lalor)
(This story has been corrected to change the spelling of the name throughout to de Royere, not de Royer)
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When choosing your wedding gown, stick to your style
June 26, 2012 by admin
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(Metro Editorial Services) — For most women about to tie the knot, the selection of a dress is one of the first and most important decisions about planning a wedding. Since there are thousands of options in a wide price range, finding the perfect dress can be a long and difficult process. But if you make some decisions before entering the store, the search will be easy and much more enjoyable.
First things first
Start by knowing your limits. To avoid disappointment, determine your maximum budget to invest in a dress, and don’t forget to include additional elements such as lingerie, shoes, jewelry, veil and/or hair ornaments. Then, take inventory of your personal style. If you know you don’t feel comfortable with low-cut or sleeveless dresses, for example, you can immediately eliminate those options. The key is to eliminate some style options before looking at magazines or visiting stores, and then be open to other possibilities.
Firm but flexible
Although you will get tons of opinions—from the mothers, sisters, friends or the store staff—regarding your selection of a wedding dress, ultimately the decision is the bride’s only. A good strategy is to be open to suggestions regarding the dresses you will try on, but to reserve the right to select the one you like the most. With so many potential options, you might consider using a camera to take pictures wearing the dresses that could become “rivals”.
A dress that will flatter your figure
Remember: Your goal is to find a dress that flatters your body and expresses your personal style, not to fit into a particular size. If you find your appearance in a white dress to be ghostly, don’t hesitate to select a creamier color, or a dress with decorative details of different color near the neck, shoulders and face. Also, there is no rule that dictates that a wedding dress should be floor length. If you have in mind a day wedding or an informal wedding, you might consider a cocktail dress (which falls a few inches above the ankles) or even shorter.
Comfort is vital
The style and fit should be the two most important factors when choosing a wedding dress, but comfort should not be ignored. Ask yourself if you will feel comfortable in a particular dress, according to the site where your wedding will take place. For example, if you have always dreamed with an outdoor wedding, you won’t want to use a long-tailed dress that could get tangled when walking to or from the altar. Even if you are planning a party indoors, having a dress and shoes as comfortable as they are beautiful will greatly increase the likelihood of enjoying your special day to the max.