MILAN — Just days after the celebration of Bottega Veneta’s 50th anniversary, parent company Kering said Thursday that Claus Dietrich Lahrs had been appointed the Italian firm’s new chief executive officer, succeeding Carlo Alberto Beretta.
Lahrs, who will join the group’s executive committee, will officially assume the helm at Bottega Veneta on Tuesday.
Beretta will take on the newly created role of chief client and marketing officer at Kering, also on Tuesday. He will report directly to Francois- Henri Pinault, chairman and ceo of the French group, and will remain on the group’s executive committee.
In his new position, Beretta will monitor the equity of the brands in the group’s portfolio; help establish “a comprehensive, measurable and profitable customer culture” for each of them, and speed the development of the group’s omnichannel capabilities.
Pinault said, “I wanted to give our maisons exceptional support and expertise in what is their main challenge in the years to come: the ability to meet their customers’ needs and fulfill their desires. I am therefore happy to appoint Carlo Alberto Beretta, who has demonstrated the qualities required to realise our ambitious customer strategy.”
Beretta started his career in 1993 at the Italian department store La Rinascente as senior buyer. He spent over seven years there, winding up as merchandising manager for men’s wear. He was then appointed men’s wear brand manager at Valentino. In 2003 he joined the Ermenegildo Zegna group, working 11 years, eventually rising to retail development director. He was appointed ceo of Bottega Veneta in January 2015.
Lahrs stepped down at Hugo Boss in February after eight years. While at the German brand he oversaw its rapid expansion worldwide at both retail and wholesale, as well as the growth of its women’s division, appointing Jason Wu as creative director of the women’s collection. But Boss stumbled in the last few years and after poor results in 2015 and a profit warning for 2016, Lahrs exited by mutual agreement.
Prior to Boss, Lahrs held management positions at Cartier, Louis Vuitton and Christian Dior Couture.
Pinault said, “We are delighted to welcome Claus-Dietrich Lahrs to Bottega Veneta and to Kering. His outstanding experience and extensive knowledge of the luxury market will be crucial in the management of the exceptional maison that Bottega Veneta is. I am confident he will build on what has been accomplished so far within the house and accelerate its development.”
Beretta and Lahrs were not available for comment at press time.
Bottega Veneta remains one of Kering’s core brands although, like most of its peers, the company has been impacted by the luxury downturn. The brand reported sales of 571.2 million euros, or $637.4 million, in the first half, down 9.2 percent in reported terms and 9.1 percent at comparable exchange rates. Recurring operating income for the first six months of 2016 totaled 145 million euros, or $162 million.
“Revenue generated in directly operated stores was heavily weighed down by lower tourism in Western Europe, whereas sales to local customers improved in that region,” Kering said at the time.
It noted that in emerging markets, which accounted for 45.3 percent of the brand’s total revenue for the period, Bottega Veneta’s direct sales rose 3.2 percent on a comparable basis, with a significantly faster pace of growth in the second quarter.
“The upswing in business was mainly attributable to Chinese customers repatriating their purchasing to their domestic market and certain regional Asia-Pacific markets rather than buying in mature markets,” it added.
Commenting on Lahrs’ appointment as ceo, Luca Solca, managing director at Exane BNP Paribas, said Thursday that “there was an urgent need to do something at Bottega Veneta, as the brand sales are falling fast.”
Solca attributed the situation to “a lack of product innovation: Intrecciato is still most of what you see; however, it has now become boring. The same as you could not sustain Gucci on the bamboo bag — as much as I like it — you need powerful new product ideas at Bottega Veneta. The funny thing is that you had some — like Intarsia — but you could not find them anywhere.”
Solca wondered if Lahrs “will be able to bring execution and operations discipline to Bottega Veneta. He is certainly in for a challenge.”
He noted that Lahrs and Bottega Veneta creative director Tomas Maier both speak German. “Will that be enough to find common ground? We will see.”
Maier is marking 15 years of leading the creative direction of the brand. At the end of the spring show last week, which combined the brand’s men’s and women’s collections and saw Lauren Hutton close the event hand-in-hand with Gigi Hadid, Maier gave credit to his team, taking a bow with his group of designers.
Citi’s Thomas Chauvet underscored that Bottega Veneta accounts for around 15 to 20 percent of Kering luxury division’s sales and operating profit, respectively, seeing “a significant deceleration in revenue trends over the past 12 months,” in particular since the last quarter last year.
“With this appointment, the game of musical chairs of ceos and designers in the luxury industry seems to continue,” said Chauvet.
“Risks around Bottega Veneta’s future growth were more visible at the end of 2014,” before Beretta joined the company, when the brand was on an upswing and had reached revenues of 1.1 billion euros, said Chauvet. He cited issues then such as “limited product diversification beyond the Intrecciato bag lines, imbalanced pricing architecture/high price inflation, over-dependence on the Chinese and tourist clientele, lack of retail development in the U.S., under-investment in A&P and limited brand awareness in developed markets.”
Chauvet said he believed “the market will question whether Mr. Lahrs is the right person for the Bottega Veneta job, owing to the challenging situation Hugo Boss (Mr. Lahrs’ former employer) is currently facing in terms of brand positioning and retail execution.”
That said, Lahrs’ experience at Louis Vuitton Germany/North America and Dior Couture, will help address some of the issues the brand is facing, he added.
Chauvet observed that Bottega Veneta over the past couple of years had been trying to expands its customer base with lower priced categories, such as belts and scarves, as well as fragrances, “with mixed results.” If Lahrs will pursue that strategy, the company will need “larger stores (and greater retail presence in developed markets)” and a boost in spending to increase brand awareness.