In more ways than one Patrick Rasquinet sits on top of the world. Today, the president and chief executive officer of La Prairie Group is literally there—in Switzerland’s Interlaken, 1,864 feet above sea level with the majestic Alps rising up on all horizons. He is in town to present La Prairie’s latest skin-care innovation, Cellular Swiss Ice Crystal, launching early next year, to international distributors and journalists.
This story first appeared in the December 13, 2013 issue of WWD. Subscribe Today.
Since Rasquinet’s appointment three years ago, the executive has kept ratcheting up growth for the high-end La Prairie brand, which was founded in 1978 and is part of the German personal-care behemoth Beiersdorf AG. In the nine months to Sept. 30, the brand posted sales growth of 5.4 percent, and is expected to end 2013 with an 8 percent gain despite the current inclement economic environment worldwide.
WWD: La Prairie is celebrating its 35th anniversary. To what do you attribute the longevity of the brand?
Patrick Rasquinet: It’s the fact that we could evolve but still stay very true to what we stand for. We always talk about five big values within La Prairie. These are luxury, innovation, efficacy and the high-touch service—all this nicely wrapped into “Swissness.”
WWD: Luxury skin care continues to outperform the market, despite a challenging global economic outlook. Why? What is resonating particularly well with consumers?
P.R.: People understand that skin is one of the most valuable assets they have, and that’s why they want to invest in a brand that is able to preserve this agelessness or this youthfulness of skin. They are looking for products that are extremely [effective. There are also] emerging populations that can now afford to buy luxury items.
WWD: What is most challenging at the moment in luxury beauty, and how are you counteracting those challenges?
P.R.: It is the fact that today the environment is online. When you have brick-and-mortar it’s easy because you have a beautiful counter, you have a beauty adviser really providing high-touch services. But how do you translate this into the online world? We are relaunching our Web site starting in January and [as a consequence] we are redesigning our entire CRM program.
WWD: Another challenge is the global consumer—the luxury consumer is a traveling consumer. How do you keep track if you really want to have a qualitative relation with your consumer?
P.R.: At the airport [for instance] we try to register the consumers who are buying at the La Prairie store. It would be a dream to be able really to follow our consumer across the world, wherever she is and wherever she is in contact with the La Prairie brand.
WWD: What’s been most effective for you in developing China? Where do you see yourself on the continuum and how do you see the market evolving?
P.R.: We are currently very selectively distributed in China. [La Prairie will have 40 counters by the end of 2013.] It is mainly in the first- and some second-tier cities, and we are now opening new doors at a quite high pace. We just opened a new door in Wuhan. We are really starting to penetrate the second-tier cities and then maybe have a look at third-tier cities. In the coming 18 months, we should have between 15 and 20 new doors.
[Our in-store, culture-specific] “Diamond Service” has been tailored to Chinese specificities and consumer expectations. We really train our beauty advisers within the cultural setting of China.
China is one of the countries where we advertise the most heavily. Another important element is also to have [exclusives]; the Chinese love to buy for gifting, so we need to offer them duo sets or special kits.
What we call the affluent Chinese today is 120 million people, which is around 8 percent of the total population. We estimate that by 2020 that number will … be around 280 million. So you can imagine that potential.
WWD: What other emerging markets hold the most promise for the luxury sector and why? How do you think they will evolve?
P.R.: A market we observe very closely is Brazil, which is still extremely difficult because of the very high import taxes that turn luxury products into an inaccessible category there. The Brazilian affluent consumers are traveling. A big part of our sales in the malls in Miami—in Neiman Marcus, Saks or even Bloomingdale’s—are done by Brazilians. We need to be present in Brazil more as a communication vehicle than a selling place.
Russia is a very important market for us. We just opened a subsidiary there at the end of last year and plan to expand, but especially to increase the service we are providing. Russian travelers are also extremely important for us in some specific locations like Istanbul or Zurich.
India is for us still a watch market. A few [other] very interesting markets that sound extremely promising are Turkey and Thailand.
WWD: With skin care being such an arms race in terms of claims, how do you cut through the clutter and disseminate an effective message?
P.R.: Consumers go to La Prairie for performance. We would not be able to fight against the giants of the industry in terms of communication, so we fight and win the battles thanks to the products and the service we offer the consumer.
We are very selective in the communication we do and keep an extremely intense and engaged relationship with our consumer through a CRM program. It’s not only about addressing the specific need of the consumer, but we, as well, offer her the possibility to choose the texture with which she is the most comfortable.
WWD: La Prairie is particularly known for its skin-care business. What is the strategy for building the makeup and fragrance sectors?
P.R.: Skin care is what La Prairie is best at and the core of our business. We definitely want to continue to expand foundation, because we believe it is the perfect bridge between skin care and makeup. We do not have any focus on makeup. Our makeup range is more of a convenience we offer our consumers. Fragrance is not our core business. We do offer some, but this will not be the focus of coming years.
WWD: What is your assessment of the current retail scene? What excites you the most and why?
P.R.: Today, you can buy in so many different touch points. It forces brands and retailers to rethink the way they sell. I think we will see a lot of change in the coming years but I strongly believe that brick-and-mortar will remain. It will be [an issue] of being consistent in the way you address your consumer through the different channels.
There’s a trend of brands opening [their own] boutiques in strategic cities. Some are doing an amazing job; it’s offering a new consumer experience and is an inspiration for us. We have a few boutiques in Hong Kong, but we are rethinking this model and are looking into a new concept of retail for our brand, as well. This would be, of course, very selective in the sense that we do not intend to have hundreds of stores.
WWD: What does a luxury shopping experience consist of today? How are you evolving the experience?
P.R.: We developed Diamond Service. We try, as well, to address consumers in their own language. We give different options of products [to try] and don’t tell them what they need to buy. The second thing, which is essential for us, is facial services. Anywhere we open a new door we try to have the possibility of opening a [treatment] cabin. If we get the consumer in the cabin, she buys La Prairie.
WWD: How are you evolving La Prairie’s spa business?
P.R.: We have 36 The Art of Beauty spas in 15 countries. Our largest is definitely the U.S. We have a few locations in Europe. We want to work only with spas that are able to offer really the ultimate service to the consumer, and we want also to have exclusivity of distribution of the brand within these spas and fully trained therapists and aestheticians. La Prairie recently opened one spa in Australia. We plan to very selectively open more spots.
WWD: When you look ahead to La Prairie’s next 35 years, what do you envisage?
P.R.: We will remain true to our values and keep the consistency that drove our last 35 years of success. We want to challenge ourselves to always deliver the best. Always raise the bar in luxury.