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Porsche Design Switches Retail Tactics

Porsche Design's small leather goods, sunglasses, writing tools, timepieces and smoking accessories take their inspiration from Porsche automobiles.

NEW YORK — Porsche Design’s small leather goods, sunglasses, writing tools, timepieces and smoking accessories take their inspiration from Porsche automobiles. They’re clean and masculine in style, and highly engineered.

But U.S. distribution of Porsche nonauto products sputtered like a backfiring jalopy. Six of the eight stores closed and wholesaling was haphazard.

Now Porsche Design has a new U.S. retail strategy. Two leases for high-profile locations have been signed: on the southwest corner of Madison Avenue and 59th Street in the General Motors Building here and in NorthPark Center in Dallas, which is being overhauled and expanded.

Siegmund Rudigier, president and chief executive officer of the Porsche Design Group, said in an interview that sites are being sought in Bal Harbour and Palm Beach, Fla.; Las Vegas; Boston; Honolulu, in the Ala Moana mall, and San Francisco. He said a second location in Manhattan is possible. Another person close to the company said the Boston lease could be signed soon.

The NorthPark door is to open by November and Madison Avenue’s a bit later, though in time for holiday selling. Madison Avenue will have slightly less than 2,000 square feet, while other locations will have 1,000 to 1,400 square feet. The Madison Avenue store is seen generating around $3 million in volume by the second or third year.

Renovations of the two existing Porsche Design stores in the U.S., on Rodeo Drive in Beverly Hills and in the South Coast Plaza in Costa Mesa, Calif., should be completed by the holiday season.

“It’s the right time for the brand,” Rudigier said. “Two years ago, we formed this new company to really develop the potential of the brand outside of the car business. Before, there were five different companies,” all developing Porsche products, though not necessarily acting in concert to maintain brand integrity. The former U.S. stores, he said, “were not doing too bad, but we had no long-term commitment to really develop them.” The product flow wasn’t steady enough to sustain shopper interest season to season, he said.

Outside the U.S., stores will open in London on Aug. 12; Florence in September, and on Tokyo’s Ginza in October. A Hamburg store opened July 22, and sites in Paris and Milan are being sought.

The Porsche Design Group opened its first “new generation” store in Berlin last January, and at that time said a total of 30 owner-operated stores would be launched; franchises and shop-in-shops are also planned.

The design group developed the concept with Italian architect Matteo Thun, Munich-based corporate design agency KMS and the Stuttgart-based architectural firm Blocher & Blocher. It’s unconventional, with unusual displays. When products are placed on a scan table, product images and information appear on three plasma monitors. Night browsing is another feature: Arrow-shaped cursors on the windows enable customers to surf the product range. Using touch control, selected products and information can be displayed in the window. The store also has mood lighting that changes as shoppers navigate the store. In 2004, Porsche Design’s global wholesale turnover, via 7,900 sales points, reached $80 million.

Bietigheim-Bissingen, Germany-based Porsche Design has been signing licensing deals to broaden the assortment. Among them, Adidas-Salomon AG will create a high-tech sports apparel brand, which will include men’s footwear, apparel and hardware for golf, tennis and running. Ferragamo will create footwear and accessories, with a men’s focus, including luggage, briefcases, belts and small leather goods, and Belfe was signed to do men’s outerwear, jeans, leather and knit sportswear with technical and functional fabrics.

Asked if a women’s collection was on the agenda, Rudigier said: “Yes, at some point in the far distance. But not now. We would not have the competencies to come up with a credible women’s collection. However, we are not excluding women,” as a target audience. Three quarters of Porsche Design customers are men; one quarter are women, he said.