Getting a Handle on Louboutin

Christian Louboutin is outfitting his business with a new platform of controlled growth.

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PARIS — Christian Louboutin is outfitting his business with a new platform of controlled growth.

This story first appeared in the February 4, 2008 issue of WWD.  Subscribe Today.

Key legs of the plan include a concerted push into handbags, a rollout of boutiques and more aggressive protection of the brand’s trademarks, especially Louboutin’s signature red soles. In an exclusive interview, Louboutin and Alexis Mourot, his chief operating officer and general manager, outlined a plan that includes:

– Building handbags, which represents less than 5 percent of sales today, to 20 percent of the business in three years.

– Expanding the company’s network of freestanding stores to 36 locations in the next three years, up from nine at present.

– Trimming wholesale distribution worldwide to give the brand maximum exposure in the best doors.

In recent years, Louboutin’s growth has been explosive and the designer — known for an exacting, hands-on approach to design and quality control — tapped Mourot from Marc Jacobs International to exert a tighter grip on various aspects of the business, from the supply chain and distribution to brand management.

Retail sales of Louboutin products reached 170 million euros, or $248.2 million, last year, according to Mourot, and revenues have been advancing in excess of 40 percent annually.

“The only thing that stops our growth is our production capacity,” said Louboutin, dressed in a striped blazer and vivid orange corduroy pants. Mourot said he’s streamlined the order-taking process, and negotiated a “number-one priority” status with all the brand’s factories in Italy. “It’s great to have a good product, but it’s even better to have great products delivered earlier and better,” he said.

On the distribution front, Mourot has been weeding out smaller doors in the U.S. and Japan, particularly apparel-driven boutiques where designer footwear gets little prominence.

“The sell-through is always better when you’re well represented and when you’re not mixed with the clothes,” Louboutin explained. “And when we’re in a shoe salon, we want to be the best one with the best representation.”

Wholesale represents 88 percent of revenues, a proportion that will change as Louboutin boutiques, both company-owned and with retail partners, open up around the world. Coming this year are new locations in Las Vegas; South Coast Plaza in Costa Mesa, Calif.; London; Jakarta, Indonesia; Singapore, and either Beijing or Shanghai, plus a second store in Moscow and a third in Paris.

Mourot said he envisions up to 10 stores in the U.S., “but no more.” An agreement with Hong Kong-based Pedder Group calls for 12 stores in the next four years in the Asian region, excluding Japan.

At present, the U.S. accounts for 52 percent of Louboutin’s sales; Europe, the Middle East and Russia, 30 percent, and Asia and Japan, 18 percent.

Louboutin introduced handbags about two years ago, and has even collaborated with a local graffiti artist on some styles. Recently, however, he assembled a dedicated team of designers, merchandisers and production experts to build the business and respond to growing demand from customers, especially for daytime styles.

Part one of his fall 2008 collection includes a range of functional bags — some with built-in pocketbooks, others with intricate passementerie embroideries — along with jewel-like evening clutches and pouches with chain handles. A coin-purse-style clasp with two heel-to-heel stilettos is a signature feature on many styles.

Mourot and Louboutin said existing stores would be expanded or reconfigured to better display the expanded bag ranges.

As for trademark protection, Mourot declined to give specifics on recent cases, citing confidentiality agreements, but he vowed to become more vigilant in protecting the Louboutin trademark, with the red soles now recognized worldwide as the designer’s property.

And, while it’s fast approaching big-league status, Louboutin’s company retains an informal and familial atmosphere — his headquarters a jumble of separate offices, showrooms and ateliers on Rue Jean-Jacques Rousseau that ensures a constant game of “Where’s Christian?” Louboutin said he’s keen to keep things that way: “It’s still a very young adventure.”

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