Mumbai: Although Yves Carcelle, chairman and chief executive of French fashion house Louis Vuitton Malletier, has been visiting India for the last 15 years, his current whirlwind trip took him to Hyderabad and Chennai, two cities he says “deserve Louis Vuitton stores”. The company already has four stores, two in Mumbai and one each in Delhi and Bangalore. Carcelle said the fashion label will open in more cities only when it is sure of the location and environment. He spoke in an interview about the change in consumer tastes and the company’s strategy for India. Edited excerpts:
Louis Vuitton has been here for several years now. How has the Indian consumer evolved?
We were in India many, many years before that. We’ve had clients in this country who were our biggest clients a century ago. So for us, it was always a return to India. Clearly Indians were not allowed to import leather goods until about 10 years ago. So they were forced to discover the brands abroad...while they were travelling.
The fact that we now have our own stores here does not prevent shopping abroad. It’s a trend and I think people like the two, to shop where they live and shop when they are abroad. What we see here in India, and we’re not surprised, because we also see this in every country, (is) a regular sophistication of the luxury customer. They are more and more knowledgeable about luxury in general and brands in particular. They want to know the last trend of the fashion week in Paris, and are very well aware...
Select circles: Yves Carcelle says Louis Vuitton has to be selective in its distribution, which is why it sells its products only in its own stores. Photo Chris Ratcliffe/Bloomberg
We have developed watches... They are more and more complicated and interest men. We have launched jewellery and find there is an interest in high-end jewellery. The business for shoes or high-end bags is developing. So, in that sense, the trend in India is not very different from other countries... Luxury (customers) want to sophisticate their pleasure. More and more unique products, personalized products and special orders, that’s definitely a trend we see.
Has the consumer graduated from products with high-badge value to more subtle items?
The big change in India as compared to the rest of the world is the fact that women still dress in saris to go out for great evenings. So it creates a different positioning of the women ready-to-wear (market) as compared to other parts of the world. But other than that, the same customer may want at one point a very subtle leather bag, to be very discreet in an evening outfit, and in another time want to be casual to travel in plain (clothes), which is why we have so much choice. As a leader of the industry, we have to satisfy these different moods.
After the financial crisis, most luxury brands are looking at expansion. But Louis Vuitton was looking at tapering growth. Why?
I have been running the company for more than 21 years, and if you look at it, as an average, we’ve always had double-digit growth, which is nice. The point I’m trying to make is that if you grow too fast, you are at risk at one point to not be able to respect the quality of your products or not respect the quality of your service. The luxury industry is an industry where we love to grow, but where, by essence, we are limited by our growth.
When you achieve double digit (growth) is very nice, and (there is) no brand that does it year after year. So we are on track. And more than efficiency, the focus is to increase the satisfaction of our customers. What we often prefer to do is to increase the size of our stores rather than opening smaller stores. This may not necessarily be true of the Indian market, where we need to open in newer cities. Increasing our service is more important than targeting growth by opening anywhere in any condition. We have to be selective in our distribution, which is why we sell only in our own stores.
What is your strategy for India? A lot of luxury brands seem to be opening in smaller cities.
Our strategy has never changed. There is a market in India for sure, at least in a limited number of big cities. I was mentioning Chennai and Hyderabad, where we spent the weekend. Clearly those two cities deserve a Louis Vuitton store. But we will open only, and only when we have found the right location and the right environment. And the assurance that this environment is not going to change or deteriorate within 18 months, which is why we are cautious, which is why we travel so much to make sure things are on track. But for the first time, I actually see real infrastructure moving, airports, roadways, streets. I think the movement is there. Three-four years ago, I would not even have mentioned these things in an interview about India. But today I come away from this trip more positive.
Your group has supported art in a big way. How does that fit in with the overall strategy?
We love art. We think there is a lot of communication between the two—we give to art and it gives back to us. We commission artists to do work which goes into our stores or our shop windows. Remember last year, all the (Louis Vuitton store) windows were celebrating Diwali through a collaboration with Rajeev Sethi. But collaborations on products, you can’t do that too often. Otherwise it then becomes a recipe which is not our philosophy, nor Marc Jacobs’ (creative director, Louis Vuitton). It’s very rare that you will find a match between the vision of an artist and the idea we have for the product and the brand. That may happen, once in five years, who knows. But at the same time we are happy to support artists. It’s important to build a strong collaboration with the artist based on trust and time and not to do a commercial coup.
With the earthquake and tsunami in Japan and geopolitical instability in some other regions, what will the group’s focus be? Where does India feature in your scheme of things?
Potentially, we could develop our business all over the world. What we see is that the world is changing very fast. And we don’t plan our long-term strategy based on short-term factors. You mentioned the tsunami. I’ve been twice to Japan since the tsunami, for the reopening of our store in (the) north of Japan. I can tell you Japan is back on track for us. Three months ago, what all of us were presenting as a disaster, it is still a human disaster, but economically and for us, (Japan) has recovered.
The Middle East, everyone was worried, at the same time I’ve just come back from Doha and Dubai and our business is booming. You must not be worried about short-term problems, whether it is a natural catastrophe, geopolitical instability or a social problem. In the long term, you have to do your work. In that respect, India has huge potential. It will take time, in terms of infrastructure, but we will never stop investing in India.