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India enthralls Louis Vuitton

Kishore Singh | July 09, 2005

Philippe Schaus is no stranger to India, and on his visit to Mumbai and Delhi last week, the general manager of Louis Vuitton's European zone did what he does best: he networked.

Beginning his day at a time when even kids haven't got to school, he wrapped up performance meetings with Louis Vuitton staff, mall owners and managers, and important customers, without losing his sang froid. "I did tell the mall managers not to lose focus," he said.

Actually, what he shared with them was his experience in the luxury trade, though not too many were willing to listen -- they were too busy doing the telling, he says.

They should have listened. Schauss brings with him a great deal of experience (including stints at Villeroy and Boch, and Arts de la Table), and has been with Louis Vuitton Malletier since 2003 which, at last count, totted up 340 stores in 52 countries and 10,000 employees.

More than his experience, Schaus brought with him to India Louis Vuitton's distinct vision of the luxury retail trade and India's unique positioning in this market. Already, since its launch in Delhi in 2003 (with another store in Mumbai in 2004), he says, "there's a new level of maturity in the market" and "experienced staff is easier to find".

But India is still way off the radar when it comes to growth, stymied, as Schaus says, by three factors: the lack of appropriate infrastructure ("today our distribution is in hotels but in the long term we can't limit ourselves and so have been talking to developers of shopping malls"), FDI restrictions in retail ("we're here to build presence for luxury products") and, of course, high import duties.

But Louis Vuitton is willing to commit to the time when luxury retail in India comes of age. "It's not a scientific way of looking at investments," he admits, "but this is the business model that works in India, and it's important for us to find the right pace to do things here."

That means curbing the urge to grow in a market that "overperforms on fashionable products as compared to the rest of the world".

But India does not have Louis Vuitton's entire range as yet, certainly not jewellery, or ready-to-wear, two of its prime categories.

That's because store sizes are small, even as the company itself is gearing itself for larger stores worldwide, with a Paris showroom, scheduled to open in October, which, at 20,000 sq ft, will be its largest anywhere.

In fact, it is in the new categories that LV is finding increasing growth. "Our highest penetration among new categories is in shoes, where we're among the largest four or five luxury brands in the world," says Schaus, "and watches is becoming sizeable in terms of the numbers sold".

But with players in the jewellery and ready-to-wear segments being huge, "we're small there," says Schaus.

Louis Vuitton's history is the stuff of books (one is being compiled): the company was founded in 1854 in Paris, soon established itself in London, but remained a handmade, luxury travelling bags brand for seven decades before its diversification into bags and other leather goods.

"It was all about selling a dream," shares Schaus, the company continuing to personalise bags even now for those who want, for instance, a case for their violin, or polo sticks, or perhaps even a personalised laptop bag.

Ever since the 1990s, though, the introduction of fashion and accessories to its product range, and the entry of designers Marc Jacobs and Takashi Murakami, has changed the limited profile of the brand to one of "functionality and fashion, of things long-lasting but fashionable".

"The diversification," explains Schaus, "reinforces the brand image, widens its appeal, gives its existing customers another entry point, and attracts new customers to the brand".

Having filled the void in India with its presence, Schaus says in 10-15 years the Indian market should be similar to the mature European markets, if a little smaller. This is not dissimilar to Asian economies such as Korea, Taiwan and, to some extent, Thailand that have progressed significantly. Where they score over India is in mall expertise.

Worldwide, Louis Vuitton's business is "more or less evenly split" between four zones: Europe, North America, Asia without Japan, and Japan.

To tap into India's potential this fall, it will introduce its range of eyewear (only recently introduced in New York) designed by Jacobs. As for apparel, it'll just have to wait a few more years till the retail high street is born, so "Louis Vuitton can establish its global shop in a mall".



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