PARIS — Never mind the 35-hour work week in France. Louis Vuitton has one factory, the only one in the country it says is capable of printing 93 colors on canvas, working around the clock, seven days a week.
It’s all to meet lusty demand for its multicolor monogrammed handbags, the product of the blockbuster collaboration between Vuitton creative director Marc Jacobs and the Japanese artist, Takashi Murakami, often described as the Andy Warhol of his generation.
According to market sources, sales of the Murakami bags are likely to reach at least $345 million this year, roughly 10 percent of Vuitton’s total revenues. Dollar figures have been converted from the euro at current exchange. Luxury giant LVMH Moët Hennessy Louis Vuitton declined to provide any sales figures, but luxury analysts described those estimates as credible.
The phenomenon has helped Vuitton defy gravity at a tough time for luxury. But it also begs the question: What can be done for an encore?
“It makes it very scary for my team. I don’t know what I’ll do to top this,” Jacobs acknowledged in a recent interview. “When we saw the first prototypes, we were all very excited….But the reach of it, we had no idea. I love that we’re involved in the creation of something that almost seems historic.”
Historic, indeed, and emblematic of the accessory market’s growing hunger for new products and new ideas, luxury firms and retailers agree.
“We are addicted to newness. It’s the rhythm of the company,” said Sidney Toledano, president of Christian Dior, which recently rushed to the market, several months early, its Hardcore Dior, a handbag made of silk jersey and loaded with metal hardware. “In a crisis period, this is even more important.”
Even luxury analysts, who tend to crunch numbers more than mull the merits of the latest shoulder jewels, are watching carefully.
Antoine Colonna, analyst at Merrill Lynch here, said he considers “critical” the percentage of sales a luxury firm derives from new products, as it highlights “the ability of a company to innovate, particularly vis-à-vis its competition.”“I think it is more important for a brand to have a good portion of its sales, around 15 percent, stemming from new products,” agreed Antoine Belge, analyst at HSBC in Paris. “Otherwise, the brand can start to be perceived as not dynamic and lacking innovation.”
He noted that Cartier, for example, blamed its declining momentum on the fact that new products represented only 5 percent of sales versus an ideal target of 15 percent. Likewise, “I see Hermès’ nomination of Jean Paul Gaultier [as its new women’s ready-to-wear designer] as an acknowledgement of a need to appear more trendy and innovative,” he added.
Retailers echo the sentiment.
“The newness factor is extremely important,” said Jaqui Lividini, senior vice president of fashion merchandising at Saks Fifth Avenue. “There’s a fashion customer who really wants that new hot bag.”
Saks doesn’t carry the Murakami bags, but feeds off the brand’s momentum. “There is also the core customer who just wants the Vuitton bag and it’s the name that she wants,” she said. “There’s status in the label and that’s enduring.”
Majed Al-Sabah, owner of the Villa Moda luxury emporium in Kuwait, said handbags represent almost three-quarters of his business — and the same old, same old won’t cut it with his clients.
“We have a reality that every client must own four to six new handbags a season and they must be changed every season to the new styles,” he said. “This is one of the reasons there’s no business for Hermès in this part of the world, since no one believes you can live with your handbag more than one season.”
That’s why Al-Sabah cautions against gimmicks like reintroducing or reinterpreting vintage pieces from past collections. “This will kill the industry if overused,” he warned. “What we need these days is creative retail environments.”
In interviews with luxury presidents about hot handbags, all put the accent on new products as a vital ingredient in driving business.
“It’s part of our way to always show new things to the customer,” said Chanel president Françoise Montenay. Apart from a limited number of classic handbags that are replenished continually, at least 80 percent of the Chanel offering in the category is new each season, she noted. Even staples, like quilted handbags with chain handles, are refreshed in new colors and materials.“Because we are in fashion, and we have very faithful customers, they come back to us often,” she said. “And they know if they don’t buy it now, they won’t get it in three months.”
In fact, Chanel now introduces eight collections of ready-to-wear and accessories each year, underlining the importance of “newness” in today’s market. Montenay noted that even classic Chanel footwear styles, like the ballerina slipper, are redesigned every few years to reflect subtle changes in fashion.
Dior’s Toledano also mentioned the importance of permanent products, like its Lady Dior and Saddle bags, which are refreshed in new proportions, colors and materials regularly. “We just presented a new jeans version of the Lady Dior,” Toledano said. “But then you still have people willing to buy it in black.”
Still, new products represent about 20 to 30 percent of Dior’s handbag business.
“For me, luxury doesn’t only mean quality and tradition. It’s also the mood of the moment,” Toledano said. “Even in retail, you have to come up with new ideas.”
At Fendi, about 4 to 5 percent of sales in 2002 were generated by new products, according to chief executive Giancarlo Di Risio. But he said this number grew to 10 percent in the first months of this year, “and we expect a 20 percent growth in the second semester because we added new appealing products that created a lot of interest,” he said. “Consumers must always be stimulated, and it is very important to reawaken their interest.”
Among the new styles expected to garner interest this fall is the Chef bag, which Di Risio said “plays with volumes, softness and unexpected ruches, in different variations.”
Prada, where handbags and leather goods accounted for nearly a third of its sales last year, is banking on a structured rectangular handbag to drive sales this fall, according to a spokeswoman. The bag, which bowed on the Milan catwalk last March, comes in anything from crocodile to hammered leather, with interchangeable handles.
Meanwhile, Yves Carcelle, president of Louis Vuitton, characterized the Murakami craze as a “reinvention of the monogram” and “not a marketing coup.”“For the first time in history, we authorized the monogram to change because it was a strong creative approach,” he said in an interview. “I’m sincerely proud that, thanks to Marc, we can associate our name with someone of [Murakami’s] talent.”
Vuitton shipped the first of its Murakami styles, including a limited-edition style with eyeballs mingling with Vuitton icons, for spring retailing. The multicolor monogram with a black background began arriving in stores last month and fall will see the arrival of new versions mixing the monogram with animal prints, and others interpreted in silk jacquard for evening.
Vuitton has a multiyear contract with Murakami and considers the multicolor monogram a permanent part of its line.
Carcelle said Vuitton’s new styles have a six- to seven-year life span and some styles, like its Keepall travel bag, introduced in 1924, remain top sellers.
“We have the right balance between eternal products and eternal values and very creative products each season,” he stressed.
When Jacobs arrived as Vuitton’s creative director in 1997, one of his first “bags of the season” was in pastel Monogram Vernis, a glossy patent leather with Vuitton icons in relief. Carcelle noted that two new colors last season, lavender and fuchsia, were sufficient news to lift overall Vernis sales 50 percent.
Carcelle said ventures like the Murakami collaboration “create an excitement about the brand.”
Louis Vuitton first discovered the power of a strong creative collaboration last spring, when Jacobs enlisted New York designer Stephen Sprouse to cover the sacrosanct LV monogram with his signature graffiti. Although produced in limited numbers, it created a buzz around Vuitton and unleashed a torrent of counterfeits and a trend in accessories still reverberating in the mass market.
And so, will the next excitement come from another artist?
“If we do three times the same, it becomes boring,” Carcelle said with a laugh and a sly smile. “The excitement can come from other things — for example, having Jennifer Lopez in our advertising campaign next season, which is a totally different excitement.”
He also noted that 2004 marks the 150th anniversary of Louis Vuitton, and cited the appearance of its brown monogrammed canvas on the men’s wear runway for spring 2004 last month as a significant statement.For his part, Jacobs balked at the suggestion another collaboration might be looming.
“We made a creative decision to collaborate with artists on our bags,” he said. “But it doesn’t mean we always will….I hate the idea of something becoming a formula. If we do it again, it’s not because it’s a formula, but because it’s something I believe in.”
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