By and  on September 21, 2006

PARIS — Once again drawing on its deep management reserves, LVMH Moët Hennessy Louis Vuitton has tapped an internal key player to head its vital and fast-growing Vuitton business in America.

Daniel Lalonde, president and chief executive officer in North America of LVMH Watch & Jewelry, is to become Vuitton's new North American president, effective in January. He will report to Philippe Schaus, Vuitton's international senior vice president.

"He has an excellent track record," Schaus told WWD Wednesday. "We were looking for the best candidate to continue growing a very strong business. We have had a great success story in the States over many years."

Lalonde succeeds Jean-Marc Gallot, who earlier this year left for Vuitton's Paris headquarters to become European president. Gallot helmed Louis Vuitton North America for three years, but a management shuffle was precipitated last March when Serge Brunschwig, Vuitton's managing director, was appointed ceo of Celine, another LVMH-owned fashion and leather goods house.

Schaus, who was promoted from Vuitton's European president, succeeded Brunschwig, and Gallot succeeded Schaus.

Philip Corne, Vuitton's president in Australia and New Zealand, will continue as interim North American president until Lalonde moves over. Ulrich Wohn, Tag Heuer's North America senior vice president of sales and trade marketing, will succeed Lalonde.

"I'm very excited with the appointment and look forward to beginning at Louis Vuitton in January after four and a half years at Tag Heuer," said Lalonde, who declined to comment on obstacles he may face at his new post. "Luxury [brands] with a strong heritage that give attention to details still have a bright future. At Tag Heuer, we're having out best year ever. The luxury goods industry will do well. I'm an optimist."

A Canadian national, Lalonde was considered a surprising hire in 2002 when he joined LVMH's watch business from Nespresso, a high-end coffee brand owned by the Nestle conglomerate. An MBA graduate from France's INSEAD business school, he has held positions at Häagen-Dazs and the consulting firm Deloitte & Touche.

LVMH's watch and jewelry business, while relatively small, has had dramatic improvements in recent years. Led by strong sales of Tag Heuer watches, operating profits in the division rocketed 164 percent in the first half, to 37 million euros, or $45.5 million, as reported. North America overall is a key market for LVMH. In the first half, 26 percent of the group's sales in watches and jewelry were generated in the U.S., which was second only to Europe in volume. America also accounted for 21 percent of fashion and leather goods revenues in the six months ended June 30, compared with 27 percent for Japan.Lalonde told WWD the Tag business has had triple-digit growth annually since March 2002, due in part to an increase in self-purchasing. The company is now emphasizing watches in steel and gold combinations such as the new Aquaracer watch, which tennis champion Maria Sharapova dons in the firm's new ad campaign that will hit magazines such as GQ, Elle, In Style and Vanity Fair in November. The campaign also features brand ambassadors Uma Thurman, Tiger Woods and Jeff Gordon wearing two-tone styles.

"You have to identify who your customer is. The mix of white gold and yellow gold in jewelry can easily match with [a steel and gold] watch," Lalonde said in August. "We're trying to capture a larger share of the market,"

In the first half, overall LVMH sales in the U.S. leaped 11 percent in dollars, with watches and jewelry rising 21 percent; perfumes and cosmetics, 15 percent; selective retailing, 14 percent; fashion and leather goods, 8 percent, and wines and spirits, 6 percent.

Vuitton, which operates more than 100 freestanding stores and leased corners in North America, continues to roll out new product categories like sunglasses and watches to more of its outlets, Schaus noted. This year, the company will celebrate its five-year anniversary in the watch business, a feat among staid Swiss brands and competitors like Cartier, Patek Philippe and IWC. Among key events for the balance of the year are the opening of an expanded Union Square location in San Francisco and the unveiling of a new Olafur Eliasson artwork and holiday windows at the Fifth Avenue flagship in New York, he added.

LVMH has recently relied on its own executive ranks, particularly from the cash cow Vuitton brand, to aid smaller firms within the group aiming for "star brand" status. Earlier this month, Nathalie Bader-Michel, marketing director of Sephora Europe since 2003, was appointed president and ceo of the jewelry house Fred Paris SA, effective Dec. 1.

Last June, Bertrand Stalla-Bourdillon, general manager of finance and administration at Vuitton, was named chairman and ceo of Marc Jacobs International to put a promising business on a fast track.

Christian Dior Couture has produced its own management standouts. In 2003, Michael Burke, Dior's managing director, was named president and ceo of Fendi. He was succeeded by Claus-Dietrich Lahrs, then president of Louis Vuitton North America.Concetta Lanciaux, adviser to LVMH chairman Bernard Arnault and LVMH's executive vice president of synergies, said internal recruitment does not represent any change in strategy, but reflects the fact that "we've created a sizable talent pool and have internal talent we can draw upon."

She also noted LVMH has beefed up its internal career planning. "The great thing about being with a group is, we are able to move people from one company to another," she said. "Our people don't need to go outside because there is opportunity inside."

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