Hair and makeup by Regina Harris at See Management.

Not one to let a tough economy deter her, Dior’sPamela Baxter has drafted a bold blueprint for growing the next generation of luxury goods companies.

Appeared In
Special Issue
Beauty Inc issue 12/11/2009

In October of 2007, Pamela Baxter crossed the great divide.

This story first appeared in the December 11, 2009 issue of WWD. Subscribe Today.

 

The veteran beauty executive assumed command of the Christian Dior fashion business in the U.S., adding it to her duties, which already included oversight of the beauty portfolio of parent company LVMH Moët Hennessy Louis Vuitton.

 

Historically, the fashion and beauty businesses couldn’t be more different. Baxter, though, has harnessed the particular strengths of each to create a cohesive whole that has enabled Dior to withstand the turbulent times brought on by the global recession.

 

When Baxter first took the job, they were heady times in the luxury goods universe: First-half sales at Christian Dior Worldwide that year were said to have increased 12 percent, to $489.2 million; only one month earlier, Dior had unveiled its revamped Paris flagship, complete with silk carpets handwoven in Tibet and fitting rooms wallpapered in embossed metallic leather.

 

Eleven months later, Lehman Brothers filed for bankruptcy and the Dow Jones index dropped 500 points, sparking the worldwide recession that has held the country in its grip for the better part of two years.

 

This story has an unexpected ending, however. Baxter, a South Dakota native who got her start behind the counter, cut her chops at the Estée Lauder Cos. and re-energized Dior’s beauty business when she took the helm in 2004, isn’t one to let tough times get in the way of her dream job.

 

By crafting a clear vision—“To make Dior the premier luxury couture house in America”—and hewing closely to it, Baxter has managed to gain ground rather than lose it and redefine the post-recession luxury landscape.

 

“The recession has truly separated the aspirational customer from the affluent market,” says Baxter. “The new client is much more discerning in her buying habits. In fashion, special pieces sell out no matter what the price. She wants service and uniqueness and to feel personally connected to the brand.…It’s not that she’s trading down from the brand that she loves, but she’s not buying as much. Before, she might buy a handbag four times a year, whereas now she’s buying one.

 

“In luxury going forward,” Baxter continues, “we’re all going to have to work much harder.”

 

For the executive, hard work ranges from sweating the small stuff (a client who recently purchased 24 DiorShow mascaras at Saks Fifth Avenue received a thank-you call from Baxter herself ) to finding the synergies between the fashion and beauty sides of the business and creating big-picture strategies.

 

Fashion, for example, has historically been driven by seasonal collections, whereas beauty is more sales and marketing driven, with core products that can stay in a line for years. “Fashion spins at such a rapid pace,” says Baxter. “When I got here I asked myself, ‘What’s the one thing that, no matter what, I can sell day in, day out?” She homed in on the Lady Dior bag, a favorite of the late Princess Diana, which features the house’s iconic cannage pattern and a cascade of charms spelling out Dior. Baxter charged her public relations team with amping up the bag’s buzz, and soon it appeared on the arms of style influencers and the hit TV show Gossip Girl—in five different iterations.

 

The result? “The handbag business has been very difficult in the U.S.—down double digits for months in some retailers,” says Baxter. “I’m happy to say our Lady Dior business is flat, and has risen to about 25 percent of our total business in bags. When I got here, it was less than 20.”

 

On the flip side, Baxter has applied clienteling techniques gleaned from Dior’s ready-to-wear business to the beauty side. “If you don’t clientele in fashion, you don’t have a customer base,” she says. “It’s more haphazard in beauty, so we’ve focused on teaching and guiding and following up.”

 

To wit, the aforementioned thank-you call, during which Baxter invited the client to come in with her friends for a private shopping event. Eventing, overall, is another key element of the strategy on both sides. Recently, Dior tapped top customers from its Madison Avenue boutique to have their pictures done by the famous fashion illustrator Bill Donovan, which proved so popular that the brand named Donovan a beauty ambassador, too, enlisting him for events, face charts and even holiday cards.

 

Although he won’t visit the majority of Dior’s 800 beauty doors, in-store events have become a key means to achieving growth, particularly in the color sector. The number of traveling makeup artists has been increased from six to 10. “Women still want to feel good, they still want to shop, they still want a little piece of luxury and they want to be entertained,” says Baxter. Although she declined to reveal figures, industry sources say the average sale triples during a DiorShow makeup event, from $50 to $150.

 

Everything circles back to Baxter’s vision of Dior as the premiere luxury couture house in the country. So, for example, when the marketing group proposes reinstating a gift-with-purchase program to answer the consumer clamor for value and provide a short-term boost to the business, the answer is an immediate no.

 

“If a store calls and says we want to give away a full-sized product with the purchase of two products, you go back to the statement and we wouldn’t do that,” says Baxter. “If we stick to it, beauty will benefit from that. For Dior, it’s one Dior. Not two,” she continues. “When I came here, nothing was consistent between the two—our stores were gray and silver and white, while the beauty counter was royal blue. Now everything is Dior. They were separate. And now they’re one.”

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