with contributions from Teresa Lee
 on March 5, 2009

PARIS — Long before the economic crisis, Christian Dior started to further ramp up its luxury quotient, from installing thicker carpets in its boutiques and displaying more crocodile handbags on the shelves to dispatching direct-mail catalogues too sumptuous to consider discarding.

According to Dior president and chief executive officer Sidney Toledano, the crisis will only speed up a trend the French firm already spied: a widening gulf between ultraluxury players and also-rans.

“What we have done the last two years is consolidate our position at the summit of the luxury pyramid,” Toledano said. “It was the right choice. You either choose to be at the top, or down.”

Dior was prescient in another way: In marking its 60th anniversary last year, the fashion house and its couturier, John Galliano, tuned into the house’s codes — from the famous “bar” jacket to the cane-work print — and turned up the volume on its heritage via products and advertising. In the midst of a glut of “It” bags and shoes, “we were foreseeing that the customer might be saturated with the offer, and that they would at one point return to the strong players,” Toledano said in an interview in Dior’s stately gray offices on the Avenue Montaigne. “I think the crisis will accelerate this momentum.”

“In a time of uncertainty, it is a time for decisiveness and for conviction. It is the time to turn to brands you know and can trust,” Galliano agreed.

Toledano declined to divulge figures, but said the more luxurious store concept and upscale product offer has boosted the company’s “average basket” and that Dior has gained market share in handbags priced over 1,000 euros, or $1,250 at current exchange.

In May, the house will shoot a second batch of ads for the Lady Dior handbag featuring Oscar-winning actress Marion Cotillard, depicted in the first episode clutching the lace-like metallic grid of the Eiffel Tower, the purse slung on her arm etched with a similar pattern. (Also coming out soon on Dior’s Web site is a mini-movie with Cotillard devoted to the making of the campaign.)

Suggesting a trend back to “investment dressing,” the Lady Dior, first introduced in 1995, is now the company’s top-selling handbag worldwide, posting double-digit gains in recent years. The style, famously carried by the late Princess Diana, retails from $1,400 and never goes on sale.

Toledano said the bag has been among its top-three sellers since its introduction but moved into the top spot last year, ahead of the Cotillard campaign. His explanation? Customers are looking for iconic products, made with quality and with the “sure value” of buying into a top luxury brand, Toledano said. He also credited continued innovation with the style, which has appeared in “maybe 500 versions” since it was launched, from soft ones in woven leather to others in mink or crocodile.

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