There are several ways to judge the momentum of high-end brands. Of course, financial results are key, but store openings can also tell a story. Ferragamo launched 66 stores in 2003, but it’s important to remember that the company has seven brands in its stable. Escada added 56 locations, Bulgari opened 35 units and Coach launched 33. Ralph Lauren opened only three new stores, but one, significantly, is in Milan and marks the company’s entry into the Italian market. Versace opened 31 new stores in 2003, but warned that it may be closing locations or downsizing some existing flagships. Many companies see Asia as a fertile market, if not exactly a new frontier. Some firms are opening more than a dozen locations in China, Japan, Korea and Taiwan.
- MAX MARA
Max Mara Fashion Group SRL’s store count 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 Italy’s largest fashion firms. New product groups this year include resort, swimwear, hosiery and accessories. The firm will launch a scent with a division of Procter & Gamble’s Wella unit with first-year retail sales estimated at $15 million.
Escada Group seems to be back on track. Cost-cutting measures are proceeding according to plan with fixed costs to be slashed by 40 million euros ($49 million) by Oct. 31, the end of the company’s fiscal year. Escada is also growing its business. Sales for the third quarter rose 3.7 percent to 144.9 million euros or $177.6 million at current exchange. Another good sign: Orders were up 2 percent (in euro terms) for the first time in three years.
- POLO RALPH LAUREN
Polo Ralph Lauren Corp.’s newest flagship is in Milan and represents the company’s first foray to Italy. There are now seven Ralph Lauren flagships worldwide. The company’s financial results have been encouraging. In the three months ended July 3, Polo’s net income rose 165.1 percent as sales grew 24.1 percent. Net revenue jumped to $592.8 million from $477.7 million. There are plans to open 70 to 85 stores in the U.S. and Europe over the next five years.
The good times keep rolling at Coach Inc., which last week upped its first-quarter earnings and revenue guidance. The brand is launching new products while moving its image up the luxury ladder. At $42.44, Coach shares are under the 52-week high of $47.45 reached on July 2. The company is opening 10 stores in Japan next year. The latest opened in Sapporo late last month.
- LOUIS VUITTON
LVMH Moët Hennessy Louis Vuitton in July reported a 16 percent gain in second-quarter sales. Louis Vuitton contributed to the strong performance with sales growth in the double-digits. Vuitton had a 50 percent sales surge in the U.S. with blowout products such as the Theda bag, a jewelry line and the Bellaix luggage collection. New stores, which bowed in Shanghai and on Rodeo Drive in Beverly Hills, bode well for even stronger sales in the second half.
- GIORGIO ARMANI
Giorgio Armani SpA’s store fleet includes Giorgio Armani, Collezioni, Emporio Armani, Armani Jeans, Armani Junior, A|X Armani Exchange, Armani Casa and Armani Accessori. Despite a 3.5 percent decline in consolidated sales to 1.26 billion euros, or $1.42 billion in 2003, expansion continues. In April, Armani opened its first Shanghai store. Plans call for 20 to 30 stores in mainland China by 2008. There’s also a new a pact for a hotel chain with Emaar Properties in Dubai.
- SALVATORE FERRAGAMO
The Ferragamo family wants to rejuvenate the brand while appealing to a younger clientele and concentrating on its core accessories line. Ready-to-wear designer Graeme Black, who left the house in mid-April when his contract expired, is back in that role as a consultant . He’s working with Nathalie Gervais, who joined Ferragamo in March as creative director. Much of Ferragamo’s annual $46 million investment budget is going toward opening 66 points of sale this year.
Norbert Platt, credited with Montblanc’s aggressive growth over the past two decades, was named chief executive of Compagnie Financière Richemont SA’s luxury goods group, of which Montblanc is a unit. Platt replaces Alain Dominique Perrin, who retired last year. Platt’s replacement at Montblanc has not yet been announced. New Montblanc stores bowed in Dubai, Hong Kong, Shanghai and Singapore this year.
Versace’s store count includes Versus and Versace Jeans Collection. Allegra Versace Beck, Gianni’s niece, turned 18 in June and gained full control over her 50 percent stake in the firm. The remaining half is divided between her uncle, Santo Versace, with 30 percent, and her mother, Donatella, with 20 percent. A new ceo, Giancarlo Di Risio, is taking the firm out of the red. Versace, which wants to sell a minority stake, will close a few stores and downsize some flagships.
Cartier will boost the number of boutiques in its retail network with a unit in Casablanca, Morocco, bowing in December. Plans for stores in China and the Middle East are also under way. The jeweler expects to reach a total of 225 stores in 2005. At Cartier’s parent, Compagnie Financière Richemont SA, profits are up and debt is down. The company is flush with cash with 200 million euros ($236 million) in the bank.
The store count includes Prada and Miu Miu brands. Prada’s August annual report shed light on the factors that fueled a 34 percent jump in net profits last year — namely a $20 million tax benefit. Prada in March said 2003 net profit grew 34.3 percent to 36.3 million euros, or $41 million, as cost cutting boosted margins. The report flirted with the idea of an initial public offering, which the company considered in 2002, but pulled the plug on after three postponements.
All eyes are on Gucci in the post-Domenico De Sole and Tom Ford era. Parent company PPR installed Unilever alum Robert Polet as group ceo and the design team of Alessandra Facchinetti for women’s wear, John Ray for men’s wear and Frida Giannini for accessories. Giannini unveiled floral bags and shoes and Facchinetti showed short embellished jackets for resort. In the last year, Gucci opened 18 stores, more than half of them in Asia.
Bulgari Group opened its first hotel in Milan this year and plans to launch a second in Bali next year. The Roman jewelry firm unveiled an Astrale jewelry collection and is gearing up for acquisitions through its private equity group Opera. In June, Opera struck a deal with Bear Stearns Merchant Banking, which calls for the U.S. firm to contribute up to 200 million euros, or $240 million, for acquisitions in areas like home furnishings, wine, food and fashion.
- CHRISTIAN DIOR
Christian Dior Couture in July reported first-half revenue rose 16 percent to 274 million euros, or $336.2 million, driven by strong sales in the U.S. and Asia. Volume grew at double-digit rates across geographical zones led by the U.S., where retail sales in dollars bounded by 40 percent. The company has about a dozen stores in the works for the second half, including a flagship in Tokyo’s Ginza and stand-alone Dior Homme stores in Kobe, Japan and Shanghai.
- H. STERN
H. Stern backed away from a plan to open a store in SoHo in 2002, but the Rio de Janeiro-based jeweler has a lot on its plate. The company teamed up with Diane von Furstenberg, who is designing a jewelry collection. The firm in the Eighties created jewelry with Catherine Deneuve, and recently with Brazilian furniture design firm Campana Brothers and singer Carlinhos Brown. The company has started wholesaling its fine jewelry and watches.
SOURCE: COMPANY REPORTS