The Louis Vuitton workshop at Beaulieu-sur-Layon.

BEAULIEU–SUR-LAYON, France — Louis Vuitton on Thursday inaugurated its 16th leather goods workshop in France, the first to be built according to a new model that aims to improve agility and reduce waste.

The unit in Beaulieu-sur-Layon is the French luxury brand’s fourth in the Pays de la Loire region in western France. The 65,000-square-foot minimalist glass-and-wood structure, designed to let in natural light from the surrounding countryside, houses 135 leather goods craftsmen, but has a capacity for 300.

Michael Burke, chairman and chief executive officer of Louis Vuitton, cut the ribbon on the venue alongside French Labor Minister Muriel Pénicaud and local officials. Touted as modular, flexible and “built for high-energy performance,” the building was delivered a mere 12 months after it was approved.

Burke said it was all part of the dynamic production model introduced by Vuitton in the wake of the 2008 financial crisis in order to better meet customer demand. Today one of the house’s bags can be produced and delivered to stores in as little as two weeks, though he emphasized that was not the general rule.

“Being able to do it on a case-by-case basis, it’s a metaphor for what the culture of a luxury company needs to be: small runs, quick service, personalization. When you talk about personalization, it’s not finding out what each individual wants. It’s once they tell you what they want, how quickly can you get it to them?” he said.

“The ultimate destination of the luxury business is everything made-to-order. We’ll never achieve it, but that’s clearly where the market is headed,” Burke added. “You have to be able to trend in that direction, and that requires agility and quickness and speed.”

When it comes to inventory, he recommended erring on the side of caution. “It’s being able to be attuned to individual needs and not overproduce to have everything in stock at all times. It’s not good for the environment, it’s not good for your bottom line either,” the executive said.

The issue is particularly pressing in France, where the Senate is preparing to examine a draft law that would prevent companies from destroying unsold clothing, potentially setting standards that could become a blueprint for the industry.

“We will comply with the law, of course,” said Burke, although he noted it was not yet possible to recycle all products. “The great majority of all metal is recycled. The great majority of all leather is recycled. We need to get there on the fabric, because fabrics today are very complex materials.”

This called for a collective effort, he argued. “The solution is going to be for the entire industry to work together on a supply chain that will recycle products. That requires the producers of raw materials to be on board,” he said. “It will happen, but it’s not going to happen overnight.”

IA worker at the Louis Vuitton workshop in Beaulieu-sur-Layon.

A worker at the Louis Vuitton workshop in Beaulieu-sur-Layon.  Courtesy

Designed to maximize efficiency, the production line at Beaulieu-sur-Layon is split into three stages: leather cutting, preparation and stitching. The craftspeople, most of them women, sit at mobile work stations that can be wheeled around to accommodate fluctuations in orders, and they are encouraged to manage themselves.

“The aim is not to identically replicate 100,000 bags,” said Burke. “This is the first site to be organized this way from the start. Other sites have been retro-fitted, which involved tearing down walls to make space, reorganizing work flows and changing the management system.”

The workers are selected after passing tests for dexterity, coordination and 3-D vision — some of the trickier stitching work is camera-assisted — and around half have no prior experience in the leather goods industry. An employee named Sylvaine said she joined Vuitton in 2018 at the age of 53 after being a farmer for 25 years.

The brand counts around 50 to 60 permanent references — including the Speedy and the Capucines — and around 10 to 15 catwalk references, with four deliveries a year. The journey from validated prototype to store takes around three months on average.

The Beaulieu-sur-Layon site produces four styles: the monogram canvas NéoNoé bucket bag, which retails for $1,590; the Mylockme BB, which costs $2,370; the circular Petite Boîte Chapeau, which goes for $4,200, and the Trunk Clutch, starting at $3,300.

Valérie Dubois, Vuitton’s director of workshops, said initial training lasts six weeks, with mentors allocated to the newcomers. New recruits generally master the different steps of producing a bag within six to nine months.

“Some might be able to switch between styles after six, eight, or nine months, but in general, you need a year in order to be fully self sufficient,” she said. “The aim is to feel no pressure when you’re machine-stitching.”

Burke said that represented a departure from the past. “Before, there were set workstations in the workshop. That was your workstation, and for five, 10 years, you never switched. You always performed the same gestures and you always sat in the same spot,” he said. “It made the whole chain extremely rigid.”

Bernard Arnault, chairman and ceo of parent company LVMH Moët Hennessy Louis Vuitton, has said it deliberately restricts the size of its cash-cow brand, which crossed the threshold of 10 billion euros in sales last year, in order to maintain its desirability.

“All we would need to do is produce more in order to double revenues. I don’t think that’s the right strategy. We want to provide our customers with an experience,” he told the group’s shareholders last year.

Yet Vuitton has steadily ramped up the pace of workshop openings to keep up with strong demand, especially from Asia. Shrugging off ongoing trade tensions, LVMH reported overall revenues were up 15 percent in the three months ended June 30 to 12.54 billion euros.

Sales in its key fashion and leather goods segment jumped 20 percent on a like-for-like basis, zooming past consensus estimates, with Vuitton seeing a “noticeable improvement” in demand from Chinese consumers versus the first quarter.

Burke reported that demand has continued to rise as civil unrest in Hong Kong has prompted Chinese shoppers to buy more on the mainland — but Vuitton is clearly banking on sustained demand from all regions of the globe.

Last summer, the company opened its first new site since 2011 in a converted logistics center in La Merlatière, an hour from Beaulieu-sur-Layon, and it has also filled existing sites to full working capacity. Another site is set to open soon in the small town of Saint-Pourçain-Sur-Sioule, famous for its vineyard.

Vuitton employs 4,300 craftspeople in France, with Burke estimating it hires around 1,000 a year.

The heritage luxury giant, which opened its first atelier in 1859 in Asnières on the outskirts of Paris, has a workshop dedicated to developing prototypes located on Rue du Louvre in the French capital, and two workshops specializing in exotic skins, based in Asnières and Issoudun.

In addition to the 16 French sites, Vuitton owns a workshop in Florence, which is also dedicated to prototypes; four in Spain, handling mainly small leather goods and accessories, and two in California, dedicated to supplying the U.S. market. The house is also bringing on stream a workshop in Texas.

Michael Burke, Muriel Pénicaud and local officials cut the ribbon on the Louis Vuitton workshop in Beaulieu-sur-Layon.

Michael Burke, Muriel Pénicaud and local officials cut the ribbon on the Louis Vuitton workshop in Beaulieu-sur-Layon.  Courtesy

However, Burke ruled out establishing other production sites across the world, noting that most Vuitton clients want handbags that are made in France.

“Secondly, we have a civic duty to maintain these jobs in France. There are only two of us left,” he said, referring to rival leather goods maker Hermès. “It’s no accident that France continues to produce the best leather goods in the world, and the only [fashion] manufacturing left in France is leather goods.”

The political dimension was underscored by Pénicaud. The minister noted the Vuitton inauguration came on the first anniversary of the law for the freedom to choose one’s future career, introduced by President Emmanuel Macron’s government, which has made it easier to gain access to vocational training.

Between January and June, close to 59,000 youngsters have entered vocational training, representing an increase of 8.4 percent versus the same period a year ago. “The number of people in vocational training in France now stands at a record level,” she said.

Previously viewed as a sign of educational failure, becoming an apprentice is increasingly seen as a desirable career path, Pénicaud said, adding that France hopes to make a strong showing when it hosts the WorldSkills Competition in 2023.

Burke went a step further, arguing that the creativity of Vuitton’s design teams depends on having its manufacturing units nearby. “When you have a hollowing out of your production, invariably within 10 or 15 years, you have a hollowing out of development and creativity. The two need to rub shoulders daily,” he said.

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