PARIS — As it marks its 120th anniversary, German luggage maker Rimowa is enjoying a second youth thanks to a new visual identity, a revamped product line and an online makeover — not to mention a raft of collaborations with brands including red-hot streetwear labels Off-White and Supreme.
The man breathing new life into the firm, known for its grooved aluminum cases, is Alexandre Arnault, who was instrumental in engineering its acquisition last year by LVMH Moët Hennessy Louis Vuitton, the luxury conglomerate headed by his father, Bernard Arnault.
The towering young executive was appointed joint chief executive officer alongside Dieter Morszeck, the grandson of the founder. Now aged 26, Arnault has taken over the day-to-day running of the company, bringing in key hires such as Hector Muelas as chief brand officer and Rocky Jacob as chief product officer.
To mark the anniversary, Rimowa earlier this year unveiled an understated new logo, monogram and packaging. Instead of the pill-shaped frame and rounded letters of its former logo, it has opted for a slim, utilitarian sans serif font. Now it is gearing up for phase two: the implementation of the visual identity across all products.
Personalities including Karl Lagerfeld, Martha Stewart, Virgil Abloh, David Fincher and Fan Bingbing are among fans of the brand, lending their luggage to be photographed for a campaign last year.
Now they are being joined by a generation of consumers who have snapped up Rimowa’s recent collaborations with Fendi and Supreme — the latter selling out online in 34 seconds. The brand is following up with an eagerly awaited tie-up with Abloh’s Off-White label, set to hit stores at the end of June.
On the retail front, Rimowa has streamlined its wholesale network and is putting the accent on pop-ups and store openings, in conjunction with an e-commerce push. It is relaunching its European web site this month, and will introduce online sales in the United States and Asia by the end of this year.
Arnault is confident the brand will hit 1 billion euros in sales in the medium-term, and is already plotting the next stage of the Rimowa lifestyle brand, which could include Rimowa-branded lounges and hotels.
WWD: This year, Rimowa celebrates its 120th anniversary. These landmarks are always a good time to take pause and map out the future, but I’d like to go back to the beginning. What drew you to the brand in the first place, and why did you think it would make a good fit for LVMH?
Alexandre Arnault: The first time I encountered the brand was probably 10 years ago when I bought my first suitcase. Back then, the notion of bringing it into the group seemed far-fetched. Nonetheless, ever since I had kept an eye on the development of the brand and its new products. I still use the suitcase I bought 10 years ago. It’s lived a little, obviously, but it’s still very resistant, very solid, and it travels with me wherever I go. During my studies, when I started to travel with my father and gain work experience at the different brands within the group, I began to look more closely at potential acquisitions and investments. Although I didn’t know a lot about this suitcase brand and its owner, I thought immediately that it could make for an interesting acquisition. Why? Because it produced the only suitcases that were also luxury products, that were desirable and aspirational, and had a strong following among tastemakers — influential people within the creative and cultural industries. That, to me, was a great asset that made me look at the brand much more closely.
WWD: When you started working for the group, you were very involved with start-ups and digital initiatives. Why did you choose a relatively old-school luggage maker as your first major management endeavor?
A.A.: Good question. I was very involved in our investments in start-ups. I saw through quite a few. Having been through all the steps of acquiring Rimowa, I wanted to bring it into the LVMH fold and oversee its development. I had built a very strong relationship with the former owner, who agreed to sell us the company provided I took it over. I felt like taking on the challenge and I’m very happy I did.
WWD: I see that your title has evolved to chief executive officer from co-ceo. Has there been a change in how the responsibilities are shared between you and Dieter Morszeck, who was running the company when LVMH bought it?
A.A.: Mr. Morszeck, with whom I get on very well, is still co-ceo, but he is no longer involved in the day-to-day running of the company.
WWD: Luggage makers in general are not seen as very sexy, but it represents a huge business.
A.A.: Of course. In absolute numbers, there were 80 million tourists in France in 2017. Estimates suggest that by 2021, that number will have risen to 100 million, which represents an increase of 25 percent in the space of four years. There are not many industries growing at that pace. In China, only 12 percent of people have a passport. So you’re looking at massive potential growth in the travel industry. If you add that to the fact that companies like Airbnb give people access to cheap accommodation, and that low-cost airlines are offering return tickets from Paris to New York for as little as 300 euros — all of this makes travel much more accessible, which means there is obviously a big opportunity in the luggage segment, since travelers need suitcases.
WWD: When you arrived at the head of the brand, what was your assessment, beyond the fact that Rimowa has great manufacturing capacities and a very specialized know-how? What were the brand’s other competitive advantages, and what were the areas that required a little dusting off?
A.A.: One competitive advantage was a very strong retail network, with stores at fantastic locations such as Rodeo Drive, New Bond Street, Ginza Street and Madison Avenue, in addition to Germany and Hong Kong. Another was our customers’ unconditional love for the brand, with many celebrities among its fans. When we acquired the company, I received e-mails from the four corners of the planet from people in the worlds of art, gastronomy, music, fashion, design and finance, all telling me stories about their suitcases. Some have had theirs for years, or even decades. Lastly, one huge competitive advantage we have is that we’re vertically integrated, which is not the case for many other companies in this field. We have our own factories and we make everything 100 percent in-house. It’s an advantage that allows us to be much more responsive, flexible and authentic with our customers. There weren’t that many things that needed dusting off, but we had to put together a team to allow the company to reach the next level. Sales were very healthy, but the team in place had reached the limit of what they were able to deliver. With the help of the group, we were able to put together a team that will help the company reach the next stage in its development. In terms of communication and brand image, the language and vocabulary were very close to the somewhat elementary aspects of the brand DNA, namely aviation. It had a slightly literal way of looking at travel. We tried to give it a more aspirational spin with a strong lifestyle component. And lastly, we also had to add a bit of oomph to the creative dynamic, because the brand has always been at the forefront of creativity. We have invented a lot of things — suitcases made of aluminum, of polycarbonate, waterproof suitcases, four-wheel suitcases, etc. — but something we had never really done is give the suitcase a fashionable spin. While preserving all the functional aspects of the suitcase, we have brought in a fashionable dimension, initially through collaborations, and in the very near future, through evolutions in the design itself.
WWD: Do you plan to unveil a new suitcase to mark the 120th anniversary?
A.A.: It’s a little more complicated. In the run-up to the 120th anniversary, we thought a lot about the brand’s fundamentals. We unveiled our new logo and visual identity at the start of the year. Now we’re ready to apply it to our products. Our suitcases are great, but certain design elements look a little outdated. From June 1, all of our suitcases will feature the new visual identity. We will also be introducing some new features. For example, we wanted to get closer to our DNA, which is aluminum, the material we’re best known for. Going forward, each suitcase — even those that are not made of aluminum — will feature a plaque made of anodized aluminum, which will add a desirable element to the suitcase. We’ve also made some slight changes to the materials we work with, using different alloys. These aesthetic changes are not highly visible, but they make the suitcases even more robust, light and flexible, giving them a longer life span in a world that is moving faster and faster. We will also introduce new colors.
WWD: Introducing new alloys and making the product more robust is a bit of an anti-Apple approach. Does this mean you’re not relying on planned obsolescence to sell more suitcases?
A.A.: Exactly. We’re very proud of the extreme functionality and solidity of our product. Our product is functional, above all, which really sets us apart from our competitors and from many luxury brands. You’re looking at a functional product that’s desirable, rather than a desirable product that we try to make functional.
Going forward, we want to make sure that our products are extremely functional and highly desirable.
WWD: In that sense, they will align with the tech world, which has made efforts to make its designs increasingly desirable.
A.A.: Yes and no. They will align with the tech world in the sense that the design and the materials are hugely important. However, I don’t think technology itself has much of a place in suitcases, precisely because of the issue of obsolescence. If a suitcase is designed to last, say, 10 years — though there are people who have had theirs for 40 years — there’s no technology on the market today that will be relevant in a suitcase for the next 10 years. For me, it doesn’t make much sense to introduce obsolescence into a product that aims to be timeless.
WWD: Indeed, we have seen recently companies like the direct-to-consumer brand Raden fold because of a change in U.S. airline regulations banning lithium batteries in smart luggage. That means you’re exposed not just to technological obsolescence, but also to potential changes in the regulatory environment.
A.A.: Absolutely. What happened to Raden is a real shame, because the company was on a healthy growth track.
We’re also vulnerable to this kind of change. Tomorrow, a new low-cost carrier could decide to implement a new standard size for carry-on luggage, and suddenly, all the sizes we offer become obsolete. But we do have one advantage in that we’re vertically integrated, so we can react immediately. We can change sizes and fabrications to keep up with any changes in regulations. That’s extremely important, because the first question a customer will ask when they look at suitcase sizes is whether they can take them on their regular airline. We need to have those answers and cater to their needs, whether they’re traveling with a low-cost airline, in business class, by train, car or private jet.
WWD: Some of the newer brands, like Away, are very skilled at communicating with a Millennial audience. What sets you apart from those luggage makers?
A.A.: I admire these brands and I’m very happy they’re out there, because it helps to shine a light on the category. It’s not always easy to get people excited about suitcases.
Having said that, I don’t think we really compare to anyone else because we’re offering something quite unique. Rimowa is the indisputable icon in the category.
At a practical level, we’re vertically integrated, whereas a lot of these other brands rely on third-party manufacturers in Asia. Thanks to this, we can offer unparalleled quality control.
On top of that, we have 120 years of history, experience, production, craftsmanship and control over our products, which means that we have a de-facto competitive advantage that I think is quite hard to match, because we have developed a unique know-how in this field. Nonetheless, we do pay close attention to the direct-to-consumer segment, especially in the U.S., whether for Rimowa or other brands at LVMH, because we see it as a rapidly growing sector. That growth is sometimes a little too dependent on Millennials, which is a concern for me. You see a lot of brands today, especially in fashion — though fortunately not at LVMH — which set out to court Millennials. I think that strategy is extremely dangerous, because being a Millennial myself, I see them coming a mile off. There’s a lack of real content, and on top of that, you alienate the generations above by making them feel old.
Whenever my teams suggest making something for a Millennial customer, I always tell them: if Millennials like it, great — but we’re not going to make products exclusively for them, because I think it’s dangerous.
WWD: You teased the Off-White collaboration last September, but you didn’t confirm it until after Virgil Abloh was named creative director for men’s wear at Louis Vuitton in March. Were you holding off because he was in the midst of contract negotiations?
A.A.: There was no link with his contract negotiations with Vuitton.
The idea came about because I had sent him a gift, and he posted an image on Instagram showing an Hermès bag alongside two Rimowa suitcases with the caption: “Personal belongings.” So I told my team, let’s write those words on two suitcases and send them to him, because he’s been a Rimowa customer for years and he’s a friend of mine. I posted them on Instagram and the response was phenomenal, so we decided to work on a bigger project.
We decided to do more than just write the words “personal” and “belongings” on two suitcases, so we’ll be unveiling a project soon that’s a little more holistic and impressive. It took a little time, because it required a lot of research.
WWD: You’ve produced very limited drops for each collaboration, when presumably you could have sold three to 10 times the amount. Can you explain the strategy behind that?
A.A.: In the case of Supreme, obviously, we could have produced a lot more, but I think the point of these collaborations is that they’re limited. That’s what makes it desirable and creates excitement around the brand.
It also creates pent-up demand. People who were frustrated that they didn’t get the Supreme suitcase may want to buy one from Off-White or from one of our other upcoming collaborations. It allows us to build up a following.
The information is not official, but we heard it sold out in 34 seconds on Supreme’s web site. In our stores, it took a little longer because obviously, we had a certain amount of stock and you need time to process the transactions.
WWD: There’s still a big difference between that and having enough for, say, five days. These flash product drops are common in the streetwear segment, but they remain quite rare on the luxury end.
A.A.: Obviously, streetwear popularized the concept of the drop. In the luxury segment, the collaboration between Louis Vuitton and Supreme was the first that did it on a large scale. You can still find our Supreme suitcases on resale sites. They sell for four times the price, but they’re out there. And what’s great is that we didn’t just sell 100. Unfortunately, I can’t give you exact figures, but we sold enough that you see them in airports. People use them, and that’s very gratifying, too.
WWD: So these collaborations actually generate significant revenues? They’re not just a marketing exercise?
A.A.: When you add them all up, they generate significant revenues. Not to mention the media impact, which is quite phenomenal. For the Supreme collaboration, and even the one we did with Fendi before that, we got a huge amount of coverage that would have been difficult to achieve with our existing ranges.
WWD: How much extra do these suitcases cost on average?
A.A.: It depends on the project. For Supreme, the suitcase cost 1,050 euros in Europe, compared to 700 euros for the non-Supreme version. That’s purely due to additional manufacturing costs. My dream would be to sell them for the same price. The reason we couldn’t do that is because it was a limited run, so the parts are more expensive. The suitcase itself was made of red aluminum and consisted of 202 parts from 80 or 90 suppliers. They all have to be the same shade of red and to arrive at the same time. That’s why this collaboration took us a year.
In fact, we apply the same profit margin as on the existing suitcase, just with the extra manufacturing cost.
WWD: Some people thought you were charging extra just because Supreme is so hot right now.
A.A.: I really don’t want to do that, because that would be taking advantage of the customer. I’m against that.
WWD: On the retail front, what changes are you planning for your stores?
A.A.: We’re working on a lot of initiatives to soften the look of the stores and open new points of sale in great locations. On June 1, for example, we opened a shop-in-shop on the ground floor of Le Bon Marché.
We’re working with all the European department stores to review distribution. In the U.S. and Asia, we’re looking to relocate some of our flagships.
We did two pop-ups for the Supreme launch in Asia: one at The Landmark in Hong Kong and one at Isetan in Tokyo. We have others planned to celebrate upcoming collaborations and exclusive partnerships.
WWD: At last count, you had around 150 stores, including 13 in the U.S. Has there been any evolution?
A.A.: We have two very big openings planned in the U.S. before the end of the year: Bal Harbour in Miami and the Wynn in Las Vegas. We believe both locations have incredible potential. Those openings are set for September and November.
WWD: So the idea is not necessarily to add stores, but to bring them in line with your brand image?
A.A.: Yes, and also to have a real multichannel approach with the launch of e-commerce in Europe in June and in the U.S. in September. We want our customers to have access to us everywhere they are, and to have a presence in digital marketing to secure our share of voice. There are no big barriers to selling a suitcase online: it’s extremely easy to buy, and logistically for a seller it’s easy to ship, because you’re dealing mainly with single-product orders. There’s nothing more awkward for a customer than to leave a store with a 100-liter suitcase.
WWD: What’s the status of e-commerce at present?
A.A.: At the moment, it’s available only in Europe. Our revamped web site will be unveiled in mid-June, and we have totally upgraded the back end. We’re launching online sales in the U.S. in September and in Asia before the end of the year.
In a way, being a little late to the game plays in our favor, so we can learn from the mistakes of those who have gone before us, while being ahead of those that are only just now adopting e-commerce. We really want to develop an omnichannel approach with permanent access to all stocks, whether in warehouses or in stores, in order to avoid any friction in the customer experience, whether on mobile, iPad or in physical stores.
WWD: In your first pop-up store in Los Angeles last December, you sold third-party products such as travel-friendly cosmetics from Austria-based brand Susanne Kaufmann and T-shirts from German brand Merz b. Schwanen. Is this something you plan to extend to your permanent stores?
A.A.: Yes, we plan to extend that to other locations, but before that, we’re working on widening our own product offer. We have no intention of becoming a book publisher or a cosmetics manufacturer. On the other hand, it strikes me that right now, the customer’s only link with the brand is through their suitcase, which is with them during the unpleasant parts of travel when they’re in transit. During the pleasant portion of the trip, the suitcase stays in the hotel room. That’s the reason we want to develop products that will be with them for the entire experience, such as travel accessories and small leather goods. That will be the first step, and then of course we’ll continue to curate products with a link to travel for our stores.
WWD: For your new products, will you be working with the same materials, or will you be looking at softer textures?
A.A.: It’s going to be softer. We’ll be looking at materials like leather and canvas.
For the moment, our only leather products are luggage tags, but the advantage of belonging to the group is that we know who to call. We have good suppliers who can give us an insight into the material, and I think we’re legitimate in this field, as long as we include an element of the brand DNA and above all, functionality, which to me is the key element in all of our products.
WWD: Could there be Rimowa hotels in the future?
A.A.: Not in the immediate future but one day, perhaps. I’m more interested in the concept of lounges, rather than hotels. Our customers travel constantly and if I take my own example, there are many moments when I’d love to enjoy advantages linked to owning a Rimowa suitcase, such as being a member of a club. If I’m spending the day in Berlin, for example, it would be great to have a place where I can go make some calls and have a cup of coffee with other people who belong to the same club. That’s quite easy to set up and it would bring a lot of added value to serial travelers. We could also open hotels, but we would really need a competitive edge. I have some ideas: for example, a hotel that stores your Rimowa suitcase with all your belongings for you between stays, so you can travel without luggage.
That’s an interesting proposition for the frequent traveler. Is it doable? I don’t know. I’m dreaming out loud, but why not?
WWD: Rimowa had annual sales of 440 million euros at the time of the acquisition. Do you have a target for medium-term revenues?
A.A.: Unfortunately, we don’t really share numbers, but we expect to see good growth and a significant increase in profitability. I’ll be able to tell you more in 18 months.
WWD: I imagine you’re already eyeing a target of 1 billion euros in sales?
A.A.: The group sets ambitious targets, and I am ambitious, too, so I have my own targets. I think that number is achievable.
In a rapidly developing industry like travel today, if we can’t meet that target, then we’ve failed, clearly.
WWD: Would you say that is a reasonable five-year target?
A.A.: My vision is to achieve very good profitability within three years. That profitability will allow us to reach the target of 1 billion euros in revenues. So I don’t expect to see a very strong rise in sales, but we will have an increase in profitability, together with a healthy increase in sales through our own stores and e-commerce sales, rather than wholesale. Those are very important steps in brand-building, because the brand today is very strong, but I want it to be stronger still. The advantage of belonging to the group, and not having to answer to shareholders or a private equity owner, is that we can take our time. So we plan to take the time and we aim to grow organically by reinvesting our profits, rather than asking the group for money.