PARIS — French billionaire Bernard Arnault’s decision this year to bring Christian Dior Couture into the LVMH Moët Hennessy Louis Vuitton fold crowned a long and successful tenure for Sidney Toledano, who has spearheaded the company’s modern growth phase since taking over as chief executive officer in 1998.
Back then, revenues totaled 200 million euros. This year, they are expected to break the 2-billion-euro mark for the first time, Toledano said.
Including the beauty division, retail equivalent sales will total around 8 billion euros in 2017, Exane BNP Paribas estimated in a recent report. The calculation applies a multiplier to wholesale and license sales to derive the retail sales value.
Toledano wouldn’t comment on that estimate, but said Dior still has plenty of gas in the tank.
“I am quite confident in the development of luxury over the next 10 years and in Dior’s capacity to continue growing,” said the executive, who believes tourism will continue to develop in Europe and Asia, and the United States will remain an important market, despite the challenges facing retail.
Toledano indicated Dior would stick to a slow and steady growth path. “I think we are going to gain market share in the next three to five years,” he predicted.
“We refuse to take shortcuts at Dior, because our shareholders’ vision is for the brand to become stronger and not simply to expand. The group is in good shape and his [Arnault’s] approach, ever since he acquired this house, has been to build it up. So we are about halfway, I think, and it’s good to be halfway.”
Toledano can take much of the credit for Dior’s stellar growth trajectory. An engineer by training, he combines strong financial and analytical skills with a passion for the fashion industry, sparked the moment he stepped foot into his grandfather’s knitwear factory in Casablanca at the age of five.
A right brain-left brain type, the executive has a knack for managing creative leaders — who at Dior include not only a couturier, but dedicated designers for men’s wear, fine jewelry and watches, home wares and Baby Dior.
Though he considers himself a demanding boss, Toledano is widely esteemed for his suave manners, knowledge and personal warmth. His professional achievements have earned him honors, including the inaugural WWD award for CEO/Creative Leadership last year.
LMVH’s acquisition of Christian Dior Couture in July for 6.5 billion euros made Dior the second-largest brand in the group’s fashion division, behind Louis Vuitton and ahead of Fendi, reuniting its fashion and fragrance activities under a single umbrella.
“The brand is very powerful, and in addition there is a coherence with Parfums Christian Dior,” Toledano said. “I think we are achieving a lot of consistency across our different activities, and I see a lot of potential in the development of men’s wear and jewelry.”
Toledano joined the French brand in 1994 from Lancel as deputy general manager and set about building a leather goods operation. The Lady Dior, introduced in 1995 and popularized by Princess Diana, was the house’s first “It” bag.
Since then, Dior has powered ahead in every category, as Toledano transformed the company from a licensing-driven operation to one centered on control of production and distribution. The brand now makes 95 percent of its sales through its own stores and has a single license left with Safilo for eyewear, he said.
In the 2016 calendar year, net profits at Christian Dior Couture, which encompassed all brand businesses except beauty, rose 5 percent to 252 million euros on revenues of 1.93 billion euros, up 3 percent year-over-year.
Dior’s bottom-line results could be boosted by its move to LVMH, according to Exane, which believes the house has overinvested, pointing to its rapid retail network expansion in recent years and sizable communications budgets.
“We have invested a lot in our store network, our manufacturing base, the workshops, the image and the perception of the brand,” Toledano acknowledged. “But I think we were right to do so.”
Indeed, recent history has proved the brand is able to maintain its momentum through delicate creative transitions, economic crises and human tragedies. Its performance last year came against the backdrop of yet another change in its women’s designer offerings, the global slowdown in luxury goods and the aftermath of the terrorist attacks in Paris and Nice, France.
If anything, the house is ramping up its activities for its 70th anniversary celebrations. “We did not stop to celebrate,” Toledano said with a smile. “The last few years have been busy, but this year feels like we are flying at top speed.”
Dior kicked off the year with Maria Grazia Chiuri’s debut haute couture show, followed by a masked ball at the Musée Rodin that featured horses with unicorn horns, extravagantly costumed performers and guests including A$AP Rocky and Kendall Jenner.
The following month, the brand marked the arrival in stores of Chiuri’s first ready-to-wear collection with a global retail push combining freestanding pop-ups, partnerships with key retailers including Saks Fifth Avenue and Colette, and special in-store merchandising.
In April, the house celebrated the opening of a flagship inside the Ginza Six luxury shopping complex in Tokyo — its largest store in the country — with a rooftop couture show featuring exclusive designs and a presentation of Dior Homme artistic director Kris van Assche’s pre-fall collection.
A few weeks later, the juggernaut moved to California, where guests including Rihanna, Brie Larson and Charlize Theron trekked to the Simi Hills to watch Chiuri’s cruise collection unfurl against a backdrop of desert and hot air balloons.
Then in June, it was off to Shanghai for “I Feel Blue,” a three-part exhibition consisting of a selection of vintage designs by Christian Dior himself, a display of porcelain Lady Dior bags created by Chinese contemporary artist Liu Jianhua and a hologram projection of Chiuri’s latest rtw collection.
The high point of the year so far came in July, when Chiuri staged her second couture show followed by the opening party for “Christian Dior: Designer of Dreams,” a vast retrospective at Les Arts Décoratifs in Paris covering not just the decade when Dior was alive, but the six designers who have succeeded him.
“When I see it, I am struck by the strength of the founder, his life, his creativity, his sense of excellence,” said Toledano, noting that the title of the exhibition combines the notions of craftsmanship and fancy.
“It’s not just beautiful clothes, as well-made as they might be. When you look at them, with haute couture at any rate, they have to make you dream. This dream is an essential dimension of the Dior house, and you have to find it in every product — and that is what I saw again in the retrospective,” he added.
The display includes designs by John Galliano, who was ousted in March 2011 in the wake of drunken outbursts during which he uttered racist and anti-Semitic insults. Toledano distinguished himself for his decisive and dignified handling of the crisis, which happened only days before Dior’s fall show.
“John transported us. Despite what happened, I always recognized his genius,” he said. “What happened with John was a shock, like a blow to the head, but it is hard to equal his creativity and I’m not sure that anyone has ever topped his level of theatricality and the great moments we lived with his shows.”
As the first female couturier in the house’s history, Chiuri has a more pragmatic approach. “She gets into the clothes. She makes you dream, but with her feet on the ground,” said Toledano. “She thinks about the woman who is going to wear it, even if it’s an haute couture dress.”
Cynics may view the Les Arts Décoratifs exhibition, which comes with a rumored price tag of several million euros, as an expensive brand-building event, but Toledano insisted the exercise runs deeper than that. “It’s about telling the underlying history of our core values and what makes us different,” he said.
He is pleased with the public reaction to the show, which is setting new attendance records for the museum. “There’s an incredible amount of buzz worldwide, but with a lot of content. It’s the kind of buzz I like, as opposed to just image,” he said.
The brand is keeping up the pace as the year winds to a close. In August, Toledano was in Melbourne, Australia to inaugurate “The House of Dior: Seventy Years of Haute Couture” at the National Gallery of Victoria, and in November, a third show, “Christian Dior,” will open at the Royal Ontario Museum in Toronto.
Closer to home, Dior has organized a special event at Galeries Lafayette to coincide with Paris Fashion Week. Until Oct. 10, the house has taken over 11 window displays at the retailer’s Paris flagship, which is also staging a show of original Dior designs at its Galerie des Galeries exhibition space.
In celebration of Chiuri’s blue-themed fall collection, the store is offering 23 exclusive products, including astrology-themed candles.
Retail is an important component of this year’s activities. Dior plans to open 19 stores in 2017, including women’s boutiques in Tokyo, Melbourne, St. Petersburg, Shanghai and Chongqing. A renovated store will bow in Madrid next month, with a boutique in Chicago set to follow in November.
The brand has accelerated the pace of men’s store openings, with new units this year in locations including Shanghai’s IFC and Plaza 66 malls, the South Coast Plaza mall in Costa Mesa, Calif., and the La Rinascente department store in Milan.
“We are sticking with a very reasonable store network — we have around 200 boutiques worldwide. Our aim is not to open stores, but rather to enlarge and renovate them, improve service levels, and link up with digital in order to better drive the customers to the stores,” Toledano said.
Long cautious in regard to e-commerce, Dior has been dipping its toe in the water in recent years, with partnerships including a limited-run pop-up shoe shop with Bergdorf Goodman in November 2015.
The brand has offered online sales on its French web site since 2005, but has yet to roll out the service to other countries, though South Korea is in the test phase.
The company widened its online offer with the launch in June of 24 Sèvres, the global e-commerce platform of Paris department Le Bon Marché that is owned and managed by LVMH — the only multibrand online platform authorized to sell Dior and Louis Vuitton.
Meanwhile, Dior made waves in China last year by becoming the first pure luxury brand to sell on the WeChat platform. Though the campaign for the Qixi Festival, the local equivalent of Valentine’s Day, was scheduled to last five days, the limited-edition Lady Dior bags priced at 28,000 yuan, or $4,200, sold out in 20 hours.
“It’s attractive because we reach a new clientele,” said Toledano of the WeChat initiative. “When the bag sold out online, people headed to the store. We had anticipated that, so it was very positive for the boutiques and the wave carried through to Paris in September with Chinese tourists who came in to inquire about the product and ended up buying other things.”
As a result, Dior returned this year with a capsule collection dubbed Dior Amour, also launched on WeChat, which counts more than 800 million users. It included a red limited-edition Lady Dior bag featured on the social media accounts of Angelababy, the Chinese model, actress and singer who signed on as a Dior ambassador in April.
The house’s efforts appear to be paying off. A recent study by RTG Consulting Group found that Dior is the most relevant luxury brand for Generation Z consumers in China, defined as those between the ages of 15 and 24. By “relevance,” RTG refers to the ability of a brand to establish a strong and emotive relationship with consumers.
Nonetheless, Toledano said the label wants to maintain a selective approach to e-commerce. “We don’t want to be in a humdrum e-commerce system because we have our boutiques, our collections, our image, which always have some uniqueness, so we have to find our uniqueness in the digital world,” he said.
The executive, who began his career at market research firm AC Nielsen, is observing the rapid advances made by online giants like Amazon and Alibaba. “We have to arrive also at our own state of the art data analysis to continue servicing, showing, explaining and storytelling in our own way,” he said. “It will be a consistent business, I think, within the next three years.”
Even as other brands move a large chunk of their communications budget online and solicit content from online followers, however, Toledano prefers to remain slightly above the fray.
“It depends on how print evolves. Print magazines will have to be creative, too, and we are observing the digital world very closely, so our communications efforts will go toward those who will allow us to be in line with the evolution of our customers, both in terms of content and impact,” he said.
“Crowdsourcing design elements is not my approach. I’m not saying it will never happen, but it remains to be discussed. We prefer to collaborate with artists,” he said, citing the brand’s Dior Lady Art project, a collection of bags reinterpreted by acclaimed artists including Mat Collishaw and Marc Quinn.
The executive is paving the way for the future in other ways. Dior recently doubled the space dedicated to the workshops that produce its haute couture creations at the brand’s headquarters on Avenue Montaigne, and in February, it opened Dior Heritage, a new space nearby dedicated to the archives.
The purpose of both is to help perpetuate the aspirational, fantasy dimension he believes is crucial to Dior’s appeal.
“I think we are living through a period in time when people need to dream, and the young generations coming up are going to be touched by this dream, because a lot of things have become commonplace. They are looking for values, whether these are represented by singers, actors or athletes.
“Unfortunately, politicians don’t always deliver enough of that. I think fashion, if well done, if it contains this dream element, has the potential to seduce young people whether in Paris, Tokyo or Shanghai. So we have an intangible asset, which is this dream element at Dior that guides everything we create.
“You see it in everything we do, and that is what gives us the possibility to project this brand even further. Others have different ways of doing it, but I think this is the continuity and the strength of the Dior brand,” Toledano said.
With characteristic modesty, he compares his own role to that of the “petites mains,” or seamstresses, who work in the couture ateliers. “I am a ‘petite main’ among others,” he said.