WWD.com/retail-news/retail-features/porsche-design-steps-on-the-gas-586113/
government-trade
government-trade

Porsche Design Steps on the Gas

BERLIN — Porsche Design is moving into the fast lane with plans to significantly expand its luxury accessories business.<BR><BR>Under the auspices of PLH (Porsche Lizenz-und Handelsgesellschaft), the new German company founded in late 2003 to...

View Slideshow

BERLIN — Porsche Design is moving into the fast lane with plans to significantly expand its luxury accessories business.

Under the auspices of PLH (Porsche Lizenz-und Handelsgesellschaft), the new German company founded in late 2003 to consolidate Porsche’s nonautomotive design activities, the Porsche Design Group aims to double its sales in the next four to five years, with 50 percent of the business coming in the U.S., said chief executive officer Siegmund Rudigier.

In 2004, Porsche Design’s global wholesale turnover, via 7,900 points of sale, reached 80 million euros, or $104 million at current exchange rates.

The Porsche Design brand goes back more than three decades. It was founded in 1972 by Ferdinand Alexander Porsche, grandson of the car company’s founder and designer of the famed Porsche 911. He and his team brought out the first black titanium and the first compass watches as well as the famous Porsche pilot sunglasses, of which 9 million pairs have been sold. A licensed business, Porsche Design products then and now encompass luxury leather goods, watches, eyewear, writing instruments, smoking accessories, golf equipment and lifestyle and sporting goods.

In 1974, F.A. Porsche established the Porsche Design Studio in Zell am See, Austria, the source of countless unbranded business-to-business design solutions for projects such as the Vienna S-Bahn or new medical equipment. In addition, 85 products including lighting systems, computer screens and stoves have been developed under the “Design by F.A. Porsche” name.

At the same time, the car maker, Porsche AG, offered accessories and items bearing the Porsche logo and lettering under the Porsche Selection brand at Porsche car dealerships. That’s a lot of Porsche product and a confusing number of labels. Indeed, over the years, five different companies with three different brands have been active in Porsche’s noncar business.

PLH now owns all rights to Porsche merchandise and will market all Porsche products under one umbrella brand — Porsche Design. The collections are aimed at consumers in the luxury segment, whereas Porsche Design Drivers Selection (formerly Porsche Selection) is a bridge collection targeting Porsche drivers and aficionados. It will be available only at Porsche dealerships and on the Internet.

This story first appeared in the January 31, 2005 issue of WWD.  Subscribe Today.

“We have a clear luxury brand strategy with Porsche Design, which is to be a credible player on Fifth or Madison Avenues,” Rudigier declared.

Porsche Design also plans to retain its decidedly masculine focus, although women do wear Porsche sunglasses, are sure to want Porsche luggage and, indeed, drive Porsche cars. “There will be some crossover,” he acknowledged. “Thirty percent of the watches are bought by women, and we know women are buying the glasses. But there will be no women’s clothing for at least the next five to 10 years.”

PLH is investing heavily in Porsche Design stores and recently unveiled its new retail format, designed by Matteo Thun, in Berlin. Hamburg is to follow soon and “we’re ready for New York, London, Boston and Frankfurt,” Rudigier told WWD. Porsche already has directly operated stores in Munich as well as two stores in Los Angeles and a total of six franchised stores in Dubai, Hong Kong, Taiwan and Bangkok.

The midterm plan, he continued, is to open 55 stores in the next four to five years. They will be company-owned in the major cities of Europe and the U.S., whereas in Asia and in smaller European countries, they will be franchised. “The investment will really be there,” he said.

Thun’s store design makes frequent reference to Porsche’s engineering and technical heritage. The 1,000-square-foot Berlin store, located next to Bulgari and Gucci on Kurfurstendamm, is a sleek and aerodynamic boy-toy paradise. A “dialogue between high tech and high touch,” according to Thun, the elegant space is constructed of Porsche titanium-covered wood, black slate, smoked oak, tone changing RGB lighting and Murano glass fronting floor-to-ceiling plasma screens.

Those screens, as well as the slate scanning table located in the front of the store, are an exciting new interactive element. Place an item on the scanning table and a three-way view is projected on the black screens to the front, left and right, with product information appearing on the table’s screen. Place a new item on the table, and the system visually drives through the product categories for a magical matrix ride, until the desired product is found and again projected left, right and center on the screens.

Even at night, consumers can access product information. Two arrows on the windows can be pressed to call up data on the items displayed on the wenge and coffee suede-lined trays atop slate banquettes. It’s a way of branding with product information, Rudigier suggested.

Porsche Design’s new shop-in-shop format will be a downsized version of the concept store, “but we won’t be able to incorporate all of the technical solutions due to the expense,” he said.

The Porsche Design range will remain a licensed business, with the number of licenses expected to “grow extremely,” Rudigier said. Although he wouldn’t name names, sources say the company is in final negotiations with leading European manufacturers of sports equipment, leatherwear and shoes and apparel. There will be additional accessories licenses “to round out our core [accessories] competence,” he added, plus high-quality clothing, lighting systems, fragrance and business electronics, including mobile telephones, PDAs and even laptops.

“Fragrance is extremely important for the development of the brand, but we need two years to prepare and haven’t signed with anyone yet,” Rudigier said. A Porsche scent launch isn’t expected before the first half of 2007.

With the subhead “engineers of luxury,” the Porsche Design ranges also make frequent allusions to the company’s technical roots. “A strong part of the brand is to have the metallic look of titanium, but more important, all our products have a technical or functional difference. It’s not just about branding,” Rudigier declared.

Prices are in the upper levels, with Porsche Design jackets targeted to retail at 1,500 to 2,000 euros, or $1,950 to $2,600; skis around 1,500 euros, or $1,950; cell phones at 900 to 1,000 euros, or $1,170 to $1,300, and most watches from 3,000 to 4,000 euros, or $3,900 to $5,200. There are dramatic exceptions, such as the Indicator watch, priced at 66,000 euros, or $85,800, and sold out for the next two-and-a-half years.

“We need one week per watch,” he explained of the complicated production process.

View Slideshow