Rive Gauche is the second-largest perfumery chain in Russia, with 118 stores. But that ranking will not last forever if the irrepressible Corinne Jacques, the company’s vice president, has anything to say about it.
This story first appeared in the June 11, 2010 issue of WWD. Subscribe Today.
Founded in Saint Petersburg in 1995 by Pavel and Larissa Karaban, the chain expanded into Moscow after Jacques joined the company as part of a national ambition. The 43 shops in Saint Petersburg now represent 46 percent of Rive Gauche; Moscow’s 11 shops amount to 17 percent, and the 64 regional stores account for the rest. Sales volume averages 11,122 euros, or $13,235 at current exchange, a square meter, according to Jacques.
“My goal is to have one-third of the turnover done in Moscow, one-third in Saint Petersburg and one-third in the regions,” Jacques said on Wednesday, the third day of the summit. Because the chain is so strong in Saint Petersburg, “sometimes suppliers consider Rive Gauche a regional [firm], which we are not. We are a national one,” she asserted.
Jacques wants to expand the 17 percent of the business now done in Moscow to 25 percent by the end of summer and reach one-third by the end of the year. “I should make it,” she said.
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She came to Rive Gauche in 2008 as a bit of a renaissance woman. With a background in diplomacy — she was commercial attaché at the French Embassy in Moscow — Jacques became an export manager for Givenchy in 1989, then a distributor in 1995 and then a part of the LVMH Group.
Although Rive Gauche claims the highest sales per square meter, the market leader in number of units is L’Etoile, with 621 stores open this year. But Jacques maintains that Rive Gauche, which she boasts opened the biggest perfume shop in Russia, is “eating” much of L’Etoile’s dominant market share as the rival chain suffers economic difficulties. Third place is occupied by Ile de Beauté, with 117 units.
Jacques sketched the evolution of the Russian market through the bearish Soviet times, when much business was done by barter, through the perestroika period from 1992 to the financial crisis of 1998 with the ruble devaluation to the formation of a structured market between 2000 and 2006. As more distributors entered the market, brands fought for space and more retail chains popped up, discounting became common and certain practices were established, such as the advent of fidelity cards and self-service retailing. The consumer continued to become more knowledgeable and more demanding.
Despite the Russian consumer’s addiction to cosmetics, the outbreak of discounting caused what Jacques described as a “disorientation” in the mind of the consumer as to what is the real value of the typical product.
“So Rive Gauche established a strategy of product of the month to really try to discount but to limit it,” Jacques said. Under the program, the chain and its suppliers pick one product each month and cut the price by as much as 50 percent. “We are sharing with the suppliers the loss of margin and this increases sales in volume,” she said.
Rive Gauche maintains a mix of 60 percent luxury products — 64 percent in Moscow — and 40 percent mass market brands. Of the total, fragrance and makeup each do 35 percent of the business and skin care 20 percent.
The chain’s top three luxury women’s fragrances are Chanel’s Coco Mademoiselle, Givenchy’s Ange ou Démon Le Secret and Chance Eau Tendre from Chanel. The best-selling men’s scents are Allure Homme Sport from Chanel, Dior Homme Sport from Dior and Pi Neo from Givenchy.