Sidney Toledano, president and chief executive officer, Christian Dior Couture, equates his role at the fashion house to being a producer of a movie. The executive successfully leads a $2 billion luxury powerhouse and was recognized by the Harvard Business Review as one of the top 100 ceos in the world. He was also the first recipient of the WWD Honor for CEO/Creative Leadership.
In a wide-ranging interview with Edward Nardoza, editor in chief of WWD, Toledano provided insight into his upbringing in Casablanca, his management style, the balancing of creativity and commercialism, the importance of couture, the tourism slowdown, his reasons for naming Maria Grazia Chiuri as artistic director, and his handling of the ouster of John Galliano after he made anti-Semitic comments in a bar in Paris.
Edward Nardoza: Tell us where your business is now, and where the challenges and opportunities are? What’s your sense of the temperature in the industry right now?
Sidney Toledano: The company has been growing for the last 30 years. We changed the model of the company. Twenty years ago it was more license-driven. We stopped all the license business and converted into a fully controlled design, production and retail company. The business is 10 times bigger than 20 years ago. We’ve had constant growth, with a stoppage in 2008. The first part of this calendar year was flat growth. The last quarter — and I’m a magician by education so making predictions based on these remarks would be dangerous, but — we got some positive signs in China. We’ve had some problems in France with security. I hope this will change. Tourists continue to go to Japan but with currencies, they spend less. High luxury is doing really well thanks to a beautiful [fine jewelry] collection designed by Victoire de Castellane. The Chinese are buying fine jewelry. They’re buying [fewer] watches.
E.N.: Are you seeing some improvement in tourism? The tourism issue is a big issue in the States now. People are very concerned about security now. It’s seems it’s more than an economic factor. Would you agree with that?
S.T.: First of all, [tourists] may spend differently. The Chinese are not like what the Japanese were 15 years ago. The Japanese were coming to Europe just for shopping. They wanted logoed, branded product. The Chinese are looking for entertainment, and they may spend differently. Two years ago, we had a meeting, the numbers were great and we were doing extremely well. When things are going well, that’s when you have to watch yourselves. When the sky is blue, you say, where are the clouds coming from? I think if you want to have a steady strong business, you can’t ignore the tourist business.
E.N.: You seem to have really mastered the balance of the creative and the commercial. You’ve been through some quite dramatic changes with your creative directors and designers. How do you balance, and how do you manage that creative personality and creative psyche? Do you give them a lot of room, do you need to steer them in certain directions? This is an industry that has a famous penchant between art and commerce. You manage that better than most. What’s your secret?
S.T.: I don’t know. Frankly, every time I go to a business school or design school, I’m asked that question, how to manage a creative person. First of all, forget managing. The only thing I answer is, “It’s more a dance.” You need empathy, you need to have a passion for fashion and you need your creative director to share the same passion. You need to have in mind your business objectives, and to be sure your creative person has the same objectives as the company. Sometimes we’ve had periods with no creative person. I had it twice in my career, and people wondered if we could run the business without a creative person. The creative person is one who can change how the company’s growing. Only a creative vision can do that. I am like the producer of a movie, where I can manage the director. He has to feel that you’re definitely supporting him and that you’re in line with his vision. The vision of the trusted person has to respect the constraints of the business. Mr. Dior himself said, “There is no creativity without constraints.” If you make a wonderful dress weighing five pounds, then you have a problem. I’ve been with John [Galliano], with Raf [Simons], with Hedi [Slimane]. This is the most important moment. When you have your teams and when John left the company, and the same day you go to the studio, and say we have to do the show in two days. This is a moment where you need some experience and some skill. Maybe my family story has prepared me to deal with this situation.
E.D.: Tell me about the John Galliano experience. I was there when you had to give that speech before the ready-to-wear show (March 2011) after that terrible incident. In front of the room with 1,000 people, you had to explain how Dior goes forward. Was that the most difficult challenge you faced, and how much did that jeopardize the brand?
S.T.: The brand is highly resistant and the DNA and the history of the brand. Don’t forget that Mr. Dior himself stayed only 10 years. He passed away rather young. They had to decide what to do and they appointed a young designer called Yves Saint Laurent. He was appointed by the owner at the time, Monsieur Boussac. What I know from the history, the appointment came from the atelier. Those ladies said, “We want him.” At that moment when this happened with John, the whole company was like a family. This was why I could go on stage. I felt backed by all the people. They wanted to go on stage at the end of the show. All the atelier, haute couture and prêt-à-porter came on stage and said, “Here we are.” It was an important moment. That year, we had a good year. We had the determination. After Raf left, we had almost a year [before naming Chiuri].
E.N.: Personally, it was tough for you. Would you say it was one of the toughest moments as ceo in your career?
S.T.: I couldn’t tell you that it was fun. No, it was not fun. We’ve all been with the same company for years. You have a happy history. You can tell stories. You have to have this kind of nerve. If you deal with a fashion company, every morning, when you read the papers and see what’s happening, you need good nerves, and a very good personal life to balance that…My father said, “If you have many troubles in life, it’s OK. The day you have only one problem, then you should be concerned.”
E.N.: A lot of designers, including Raf and Alber [Elbaz] have complained privately and publicly, that the system is too overheated. There’s too much being demanded of them. There’s too much product, there’s too many shows. There’s too much volume. Do you agree with that? And how did we get to this point where there’s so much intensity? Or, is this how it’s always been?
S.T.: Depends on your life, your own personality and how busy you are. If you’re in charge of several brands, you may have a problem.…I won’t mention someone from the group, I’ll mention someone else. You see Karl Lagerfeld, he works for several brands and does so many shows and still sends a manually written card the day before a show. It depends how much energy you have. One of the reasons I decided to appoint Maria Grazia Chiuri is her energy and dedication. You have to be organized, work in advance. In a company like Dior, you don’t work alone in the studios. You have to have teams — right hand, left hand — and they have to be organized. The market is asking for that. We didn’t wake up in the morning and say, “We have to do pre-fall, we have to do cruise.” People are looking for new merchandise. They want to see something new in our stores. So it’s a demand. It doesn’t mean you lack creativity. The more you work, the more ideas you have.
E.D.: Tell us about Maria Grazia. That was quite a coup. This was the hottest, most directional fashion duo (with Pierpaolo Piccioli at Valentino) in the business. How did you get her? Was she at the top of your list? Which direction will she take Dior?
S.T.: She was the top of my list. Why? I don’t do a portrait, saying, “I want a woman, I want her to be like this or like that.” You meet people. I met her many years ago. She was at Fendi. I proposed her a job to design handbags. She said, “No, I want more than that.” I said no, I just have a position for bags. She said “no” and we had a five-minute discussion. We met later. She has the same passion for craftsmanship, she understands factories, she understands organizations, she understands atelier and she understands couture. And she’s fast. And the fact that she’s a woman. When she sees a pair of shoes, with high heels or short heels, she will try them, and she’ll feel the comfort and the sizing and she understands that. She’s also very connected to the young generation. We’re talking Millennials, Internet, whatever, social media. Because she has young kids, she understands that.
E.N.: Tell us what it’s like to work for Mr. [Bernard] Arnault [chairman and ceo of LVMH Moët Hennessy Louis Vuitton]. He’s obviously a great businessman, but he seems to have great engagement with the creative process and respects the creative process. And yet, he must be a very demanding boss.
S.T.: He’s demanding. A person like that has both sides of the brain. I call him the helicopter. He has the big picture and then you see him in the store, and he’ll see something is wrong. He lets you make the decisions. At the end of the day, he’ll tell you, “This is what I think, but do what you want.” But it’s better to listen. This guy has vision, he travels a lot, he understands. The way you work with him is a continuous flow of information. I do the same with my team. I try to keep them informed of what’s going on. The day they have a problem, I know where they are. I don’t like people swimming and then there are some big waves, and they call you and say “hello, SOS.”
E.N.: We understand [Arnault] has more than a passing interest in Dior. What explains that passion? Is that French pride? Or French heritage?
S.T.: No, he started everything from Dior. Don’t forget, he bought the company in 1984, and from Dior, he developed the whole group. This is why the holding company, Christian Dior, controls LVMH. He started everything from there. He likes the spirit of Dior. We do presentations in China and Japan and we plan to do one in Paris next year. With Christian Dior, he likes to be sure the values of the company are kept.