High-end brands with the most freestanding stores worldwide

Freestanding stores give designers a chance to shine. They can flaunt their wealth by building limestone and marble temples for their brands and show off new merchandising techniques. While the world’s luxury sales may be slipping, designers are still talking retail expansion. They’re opening new markets in Russia, China and the Middle East, banking on sunnier economic days. Still, few can afford to operate loss leaders that simply serve as giant billboards. Firms are maximizing locations that are performing well and cutting loose those that aren’t.

Includes Max Mara, Marina Rinaldi, SportMax, Max & Co.; and Persona, Marella, Penny Black and I Blues, sold outside the U.S. With more than $1 billion in sales, Max Mara is one of the largest — and most secretive —?fashion firms in Italy. Most of its business in clothing, but Max Mara isbuying other companies to produce more handbags and shoes. Its trendy Max & Co. line is growing with 40 to 50 stores planned for the U.S. over the next five to six years.

In an effort to become a leaner, more efficient operation in response to continued pressure on the international luxury goods market, Escada is tightening its belt. The German company plans to save $10.7 million this year through cost-cutting and improved performance programs. Escada is still targeting an increase in earnings and will raise its advertising budget.

The industry is watching to see if Polo Ralph Lauren can produce a Lauren by Ralph Lauren collection for spring, its first since Jones Apparel Group relinquished the license last month. Lauren by Ralph Lauren is a potential cash cow; it generated $548 million for Jones last year. But Polo’s luxury products aren’t chopped liver. They were partly responsible for a 52.5 percent gain in fourth-quarter net income. Company-owned stores carried more luxury items like the Blue Label.

Includes 150 regular-price, 75 outlet and 92 Japanese stores. Under the leadership of chairman and chief executive Lew Frankfort and president and executive creative director Reed Krakoff, Coach has successfully managed to turn its business around in recent years. Since its initial public offering in October 2000, Coach stock is up by 62 percent. This fall, the New York-based firm is getting ready to present its newest venture, sunglasses, and plans 100 stores in the next five years.5 LOUIS VUITTON
Momentum for the red-hot Louis Vuitton-Takashi Murakami handbags continues unabated. Some stores have waiting lists of more than 1,000 names and theTambour watch is also on back order. Perhaps the most tangible sign that things are going right at Vuitton is the brand’s 28 percent sales gain in the first quarter. Marc Jacobs knows how to start a buzz. He cast convicted shoplifter Winona Ryder in ads last season and has chosen Jennifer Lopez as his new muse.

Includes Giorgio Armani, Collezioni, Emporio Armani, Armani Jeans, Armani Junio, A|X Armani Exchange, Armani Casa and Armani Accessori. Giorgio Armani’s pretax profit rose 9.7 percent for the year ended Dec. 31, led by double-digit gains in jeans, fragrance and watches and cosmetics. The company plans to open 20 stores this year, including a multistore location on The Bund in Shanghai that will contain a Giorgio Armani boutique, an Emporio Armani store and an Armani Caffe.

Cartier, Richemont’s largest business, generates about 55 percent of sales; however, the jeweler ended the fiscal year with a decline in sales. There were highlights nonetheless, including last fall’s launch of the Divan watch and Le Baiser du Dragon, an Asian-inspired jewelry collection. A Le Baiser fragrance will launch in the U.S. in the fall. There’s also a new version of the Love bracelet, called Le Menottes, which looks like a handcuff.

Ferragamo returned to its classical roots after dabbling with artsy runway fare. The company is expanding its Fifth Avenue flagship to about 30,000 square feet and launching a high-end collection of clothing and footwear for kids in the fall. In addition, branded Ferragamo goods will be retailed across Southeast Asia under a new venture between the fashion house and Li & Fung Distribution Group.

Montblanc, a division of the 97-year-old Swiss-based Compagnie Financière Richemont luxury conglomerate, plans to open a 2,500-square-foot store on the corner of Madison Avenue and 57th Street in the fall. Monblanc boutiques average about 700 square feet, but the company needs bigger stores to accommodate its ever-expanding product range. Montblanc opened a similarly grand 2,000-square-foot flagship on the Champs Elysées last year.10 VERSACE
Includes 120 directly owned Versace, Versus and Versus VJC stores, and 61 franchised units. Currency fluctuations and a proportionally higher tax burden pushed the house of Versace into the red for 2002, yet Santo and Donatella Versace insist they won’t sell a minority stake in the company or pursue an initial public offering for growth. The company just opened two stores in Wenzhou and Harbin, China, and plans to open at least 13 more in that nation over the next three years.

Everyone’s wondering whether Domenico De Sole and Tom Ford will stay with Gucci or leave to start a business with Ford’s name on the label when their contracts expire in March 2004 and June 2004, respectively. During the first quarter ended April 30, Gucci brand sales declined 13.7 percent to $369.8 million as its margin before goodwill amortization dropped to 20.2 percent of sales from 25.3 percent a year ago. Besides overseeing Gucci and Yves Saint Laurent design, Ford’s been busy launching a home collection for Gucci.

Includes Miu Miu. Prada ceo Patrizio Bertelli made nice with Jil Sander in May, inviting her back into the fold. The two had a bitter breakup three years ago and Sander stepped downjust months after Prada bought control of her company. Prada continues to lust after land and operate under an “if you build it, they will come” philosophy. Its latest trophy location is a 28,000-square-foot flagship in Tokyo’s Aoyama district, which cost $83 million, including the cost of the land.

H. Stern, based in the upscale Ipanema neighborhood of Rio de Janeiro, spent its first 60 years building a network of stores. Its next initiative is to begin wholesaling its collection, first in Europe, the Middle East and parts of the former Soviet Union. The company opened a flagship in Munich in March and is building another flagship in Hamburg. A spokeswoman said any future flagships will be strategically placed to support its wholesale business by giving its image a boost.

Fewer customers in airports caused revenues from fragrance to drop 9 percent in the first quarter, but Bulgari is still bullish on scents. Omnia, launching in the fall, could do $60 million to $70 million in sales in its first year. Net profit for the three months ended March 31 rose 26.7 percent and revenue rose 3 percent to $185.2 million. Bulgari said growth would have been 9 percent at constant exchange rates, but margins were hit by a strong euro against the dollar and the yen.15 CHRISTIAN DIOR
John Galliano’s mix of theater, controversy and headlines has worked like a charm for Christian Dior, where sales were up 49 percent at boutiques last year. The fashion house is on track to become a $1 billion company in 2006 or 2007, according to LVMH Moët Hennessy Louis Vuitton chairman Bernard Arnault. Dior plans to open at least 20 more stores this year, including a $30 million flagship in Tokyo in December and a store on Peking Road in Hong Kong.

Source: Company Reports

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