Shandong Ruyi may be eager to call itself the “LVMH of China” and with the acquisitions of Bally, Trinity and SMCP padding out its portfolio, the comparisons are not coming entirely out of left field. But Sidney Toledano, chief executive officer of LVMH Fashion Group, cautioned that luxury by far remains a European game.
“We’ll see. We like challenges,” Toledano said, responding to a question from the audience at the WWD Global Fashion and Beauty Forum. “I see companies, obviously Chinese companies, buying in Europe or in the U.S. — Fosun bought first Lanvin and also St. John. They will discover also the European market, European rules, European constraints. They may succeed because of their financial potential, but the European companies are really strong in terms of finance, in terms of know-how.”
He also remarked: “What would be interesting for me is to see what would happen in China with local brands, local designers, how they will develop.” Japanese designers have risen to the world stage, but done more so outside of Japan than within the country, he pointed out. Or could China follow the U.S. in terms of developing talent on its home turf?
In conversation with WWD editor in chief Miles Socha, Toledano also detailed his business philosophy, which took him on an incredible run at Dior. During his tenure as its ceo, Dior’s revenues rose from about 200 millions euros to 2.2 billion euros, transforming a couture house reliant on licenses to a hands-on retail operation with a strong accessories business.
“The key is to anticipate what would be your team, what would be the next market, and in advance,” he urged. “You have to do that when you are successful. Don’t wait until you have the problem to solve the problem.”
“Sometimes people say, why are you not excited by your success? This is when you’re up. The transition, the most important, is to know what will be the team. Ready to face a new situation, sometimes you have to make some changes.”
That philosophy played out in two major ways with Toledano and Dior in the Nineties, when the brand was making its first inroads into the Chinese market.
“We started in 1995 when China was not obvious. We were all in Japan, looking at the Japanese market,” Toledano said. “We opened the first store in the Palace hotel basement. The vision for the company was to do men’s wear because all these people from the [Communist] party were starting to visit Europe and they wanted to be well-dressed and we started with men’s.”
The second step after picking up on the potential of China as a whole was to know to expand away from men’s. “To look for the women, not only selling wallets but ready-to-wear, [and] expensive,” he said.
Borrowing from the sports playbook, Toledano added he was always impressed when he saw a coach swapping out a strong athlete.
“They take the very best player and [get them] to leave the field and they’re replaced by someone else,” he said. “The good coach has to think about times that are changing. It doesn’t mean you have to get rid of the people, the human side, but change the role. Anticipating, on which market am I going to [deploy] the effort.”
Toledano, who is praised in nearly every profile for his way with mercurial designers, also had advice for finding the right creative partner, a process that starts with meticulous screening, and said that past success at a different house is not a sure sign it will continue.
“You can have a genius for a given brand that will not work for another brand. This is the assessment, this is where you need some experience,” he said.
He also recommended going through the job scope in as much as detail as possible before signing.
“The more detail in advance the better the relationship after,” Toledano said. “Sometimes you’re happy to sign, then the next day they discover you have many collections. You have pre-fall, you have cruise, then you do pop-ups. Then they say, ‘Oh, it’s too much work.'”
Once the designer is found, he describes the working relationship as a permanent dialogue of respect and trust, and warns against usurping creative control.
“Your role is not to be the creative person,” he said. “If you say, ‘Look, last night I had an idea. Why don’t you do this and like this and like that?’ He will hate you, that is definite. Now if you say, ‘What is your idea now and how do we produce it? How do we deliver it on time, to organize a show that is perfect?’ Then it is a partnership and a kind of communication where you have to listen. This is why I call it a dance, it’s not easy all the time.”