By  on September 22, 2017
Claus Lahrs

MILAN — “Romancing the customer” has become one of Bottega Veneta’s priorities.Since joining the luxury company on Oct. 1, 2016, chief executive officer Claus-Dietrich Lahrs has been busy traveling to the group’s main markets, building a new team and setting the foundations for future growth, as he views the year 2017 as one of transition.“We all feel very confident the brand is up for another nice ride,” said Lahrs during an interview at the brand’s sprawling headquarters here. After a slowdown last year, with a drop of 9.4 percent in the fourth quarter, Bottega Veneta, which is controlled by Kering, showed encouraging signs in the first half of 2017, posting a 3.4 percent increase in revenues to 590 million euros.Referring to the decrease, the German-born Lahrs, who speaks flawless English and French, emphasized the label's strength in his measured yet assertive tones.“What made the brand so important and distinctive, its strong commitment to Intrecciato [woven leather] and its unique development in Asia, helped us grow the brand beyond the billion [euro] mark,” he said in his first interview since arriving at the company.Hailing from Cartier, Louis Vuitton and Christian Dior Couture before Hugo Boss, he said luxury industry players “have moments when certain combinations are recipes for success.” At Bottega Veneta, now is the time “to move into the next combination without saying bye-bye to what made the brand so successful. Sometimes it’s simply about communicating differently, with emotions, in a digital way, because what we own and share as DNA at Bottega Veneta is just right, there’s nothing to be changed. We want to make sure it’s understood. We’ve been very discreet on purpose, but with younger customers, it’s obvious we need to become more outspoken about what we are."This does not mean we won’t do Intrecciato anymore, there are a lot of developments, from the color, shape and crafts point of view, depending on the occasion, but we know loyal customers want to discover something which is different, yet carries the signature of the brand. This is what we believe is key now and 2017 is helping us to be perfectly positioned for the years to come. Sometimes you see a brand that needs to radically change because it’s not in tune with the market or the world. This is not our case.”Since his arrival, Lahrs has put together a new “competent" team, he said, that will focus on a range of areas, from marketing and communication to content production. The team includes Gerrit Ruetzel, ceo, Americas; Marc Le Mat, ceo, Europe, Middle East and Africa, who joined in July; Jon Strassburg, chief merchandising officer, who joined earlier in the month from Burberry; Lisa Pomerantz, chief marketing officer, who has a longstanding and close relationship with creative director Tomas Maier; Yannick Angelloz-Nicoud, communications director; Kristen Campbell, senior vice president, global marketing; Sebastian Saldarriaga, senior director, social media strategy; Beth Haubenstock, senior director, global advertising; Jonathan Braaten, vice president, creative content; Meenal Mistry, senior director of global editorial content and copy, and Alice Acciari, worldwide e-commerce director.Content is key, observed Lahrs, realizing that “whatever we want to do, we need to have appealing, strong, convincing and well-conceived assets. We are on our way, if you go on Facebook, Instagram, if you check social media now, you see that something has happened.” The executive believes the company worked fast in a focused way. The goal was to “make sure the brand is understood from a more emotional point of view. I’d like to call it romancing…to be understood by this group of customers in an easier and more appealing way.”Communication has to be in sync with the times, argued the executive, noting that when the brand was on its upward trajectory, “it was a moment when discreet luxury was very much in demand and customers were tired of bling, ostentatious luxury. [Discreet luxury] continues to be right and our core customer continues to appreciate this discreet branding, rather sophisticated communication. But there are ways to make it more understandable, easier to be approached from a consumer’s point of view. That’s what we are working on — to be more outspoken, communicate our values and what we feel is important.” This communication can target those customers who were not on the company’s radar in the past.The brand is also further developing its main markets and will open its biggest store in the world in Manhattan — its third Maison — in February, and for one time only, hold its fall 2018 runway show in New York. “We are not saying bye-bye to Milan, but we will inaugurate the store and hold the show the next day, but we can’t say where yet,” Lahrs said.Defining it a “stunning undertaking,” he said the new store combines three landmark stone houses into one, with 15,000 square feet of selling space over five floors. Located on Madison Avenue, it will be “a statement in itself,” he added. The company has been working on the project for four years. Upon the opening, it will close a temporary store on 59th Street that was established two years ago.Bottega Veneta opened its first store in New York’s Madison Avenue in 1972, listing customers such as Andy Warhol and Jackie Kennedy. “Bottega Veneta enjoyed very, very strong positioning in North America in the Seventies. It’s good to go back and to make a very strong statement. It is one of the few cities speaking to the rest of the world. For this reason, we believe it’s an important investment and statement in terms of size and visibility," the ceo said.In the first half of the year, North America represented 11 percent of sales. Lahrs emphasized the potential of the market, which can be “much more important. In a controlled but dedicated way, we continue to increase our footprint in the U.S.,” he said. The company is well-positioned in the region, he added, noting continued investments in relocating and revamping existing boutiques, such as the Maison in Beverly Hills last year, which was expanded to two floors in a more visible location. While the concept is modeled after the Milan Maison on Via Montenapoleone, Bottega Veneta is aiming to differentiate each unit depending on the city.As of the end of June, there were 31 stores in the U.S. out of a total of 265 globally.In line with its new communications strategy, Bottega Veneta will present its craftsmanship and know-how at Chiswick House in West London, during an event called “The Hand of the Artisan”on Nov. 9 and 10. Built in a Palladian style, Chiswick House is a reference to the company’s roots in the Veneto region, which is rich in palazzi designed by Andrea Palladio, the 16th-century architect. (Bottega Veneta even has a family of fragrances called Parco Palladiano.)“We will bring Montebello [Vicentino, where the company atelier is located in the 18th-century Villa Schroeder-Da Porto] and its spirit to Chiswick House. It’s a mix between an experience and an exhibition for our customers and those that would love to understand more about the brand and the craftsmanship that is behind our products," said Lahrs, adding that he is looking for additional locations to replicate the experience.He also expects “superior growth in Asia,” due to the size and demographics of the region. “I found it interesting and very reassuring that the brand has a very important position in the mind of customers either shopping at home in South East Asia, or traveling to Australia, Europe or the U.S.”In the first half, the Asia-Pacific represented 42 percent of sales, followed by Western Europe (27 percent) and Japan (15 percent).Another store will open in Tokyo at the end of 2018. “We are very excited — Japan is the single most important market, and we want to make sure it remains so,” Lahrs said. There were 58 stores in Japan at the end of June. Bottega Veneta controls 80 percent of its business in Japan through its own stores in key cities, with the remainder wholesale, and leverages on its experience in the “ceremony of selling luxury items.”The brand's online store, operated by the Yoox Net-a-porter Group, allows “strong global visibility” and Lahrs believes it will be “an additional source of business in years to come,” targeting China in 2018. He also said the wholesale business is “very strong” with partners such as Net-a-porter, Mytheresa.com and Matchesfashion.com.“Our success story is built on three pillars: a very distinct product philosophy; a very strong commitment to craftsmanship [exemplified by] the very successful Intrecciato statement, and a tremendous success in the Asian hemisphere," he said. "We are very proud of this and we want to build on it for the next development. We believe that in the years to come, we need to invest in product innovation, product newness and solidify our relations with our existing customers. But we recognize the shift into digital, to reach customers groups we have not been able to speak will change the perception and the recognition of the brand. About the way the brand is communicated in general. Yes, we know that younger age bracket is in touch with digital platforms, but I would not limit it to this.”Upon Lahrs’ arrival at Bottega Veneta, Citigroup’s Thomas Chauvet cited “limited product diversification beyond the Intrecciato bag lines.” Asked to respond, the ceo said such diversification has been initiated.He said the “entire Knot line was presented in a very visible way” for the first time on the runway in September 2016. “You can see we are moving into alternative [although] Intrecciato is a cornerstone, full or partial [on the bags]. We have a big campaign running on the entire Knot line. It’s a very important element that speaks for the brand, it’s an alternative to Intrecciato and speaks directly to consumers, those that are looking for something different but associated with Bottega Veneta.”The Mini Montebello bag is also attracting a younger age group, or new customers that are approaching the brand from the price point of view, he added. This does not “water down” the brand, as Lahrs emphasized the need to remain in the luxury tier while “creating different avenues" of accessibility, whether fragrances or eyewear, before moving up to more expensive products.In the first quarter, women’s footwear drove demand, and, while admitting there is a wider range of shoes available, the company is committed to ready-to-wear and it continues to invest in both its men’s and women’s divisions. Maier has opted for the co-ed format of shows and Lahrs was positive about the decision, in view of the designer’s “very consistent” vision for the two lines. Lahrs said he met Maier before accepting the ceo position and that he was struck by the designer's deep commitment to the brand.As part of its product diversification, the furniture and home collection is an integral part, Lahrs said. The new collection will be unveiled at Milan’s furniture and design trade show Salone del Mobile in April. (Bottega Veneta holds presentations of this division every other year.) “We will use every important event to speak about the brand, we have a strong competence in this field and we strongly believe this entire world [of design] can differentiate the brand in the mind of the consumer even more.” Bottega Veneta’s furniture will decorate the fifth floor of the Madison Avenue Maison, conceived as an apartment or welcome area for VIP customers.

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