GALLIANO’S OPEN-DIOR POLICY

Byline: Katherine Weisman

PARIS — On Oct. 27, Christian Dior hosted a cocktail party to fete the opening of the Fauvisme exhibit at the Musee d’Art Moderne here.
“It was filled with stiff, bourgeois Parisians, men and women, in bad suits,” one guest remarked. “That’s not what Dior should be doing.”
And it’s not. The bash that the couture house will throw Saturday for the opening of its New York flagship promises to be anything but dull — or stiff.
“There will be a funky nightclub vibe,” assured Dior designer John Galliano. “Think blue, as in the color of denim, and there will be laser projections of D-I-O-R all over. There will be no stiffs. It’ll be a real party crowd. Foxy Brown will give a performance, wearing Dior of course. Jeremy Healy, you know, he does the music for our shows? He’ll be doing the music for the party.”
The fete is being held in what’s called the “magic room,” a massive, space-age glass cube perched on the top of the new 24-story LVMH Moet Hennessy Louis Vuitton tower, on East 57th Street, which is being inaugurated on Tuesday. Both Dior and LVMH are controlled by luxury titan Bernard Arnault.
The store, the party and a newly revamped Web site at Dior.com are all key elements in the 53 year-old house’s quest to rejuvenate itself.
“This is a party where John Galliano is doing the inviting,” said Dior Couture president Sidney Toledano earlier this week. “It will be very fashion, very cinema, very arts. We want to send out the message that we’re repositioning Dior towards a younger, more fashionable and trendy clientele.”
Some retailers are grappling with the couture image, and the tailored, suited looks that the name Christian Dior traditionally evokes, compared with the somewhat crazy couture streetwear that Galliano sent down the runway in October to the hip-hop beat of a Lauryn Hill soundtrack.
“Who is the Dior customer?” asked one retailer, who requested anonymity. “What does the name mean? Have they lost sight of a brand name which is linked to sophistication?” The October ready-to-wear show was “too young, too casual” for the Dior label, the retailer argued.
Galliano makes no apologies. “We have to take this house into the 21st century,” he retorted, defending his last runway show. “My collections are rooted in the traditions of haute couture. They are incredibly sophisticated when you look how the pieces are structured, but they are younger, lighter. We’re doing this the right way. We have to inspire the house and all of the departments.”
This image conflict does not to appear to have hurt Dior Couture sales of rtw and accessories, which posted “strong double-digit growth” in August, September and October worldwide, Toledano said, declining to break out specific figures.
While Dior management is typically mum on numbers, financial analysts expect Dior Couture to have total sales this year nearing $225 million, an increase of nearly 10 percent compared with last year, and an operating profit of about $7.8 million, as opposed to an operating loss of $625,000 last year. It is believed that women’s rtw accounts for roughly 40 percent of total sales. Dollar figures are translated from the franc at current exchange rates.
Dior is now striving to show women that it has the capacity to provide both sophisticated dressing and young sportswear, desirable and suitable for the 25 to 35 year-old crowd. This message has to be transmitted not only through Galliano’s ready-to-wear designs, but through other products such as shoes, handbags, lingerie, beachwear and window displays, all of which now fall under the creative responsibility of Galliano under the new three-year contract he signed last spring.
The New York store, with its glass facade and shopper-friendly layout, is an expression of this strategy. The Peter Marino design is a modification of the concept unveiled at the house’s renovated Paris flagship in March 1997. It will serve as the prototype for all Dior stores to be opened around the world in the coming years, at a pace averaging 12 stores per year for the next three years, explained Dior Couture managing director, Michael Burke. He noted that next year, Dior has ambitious plans to open 19 stores.
“We want to make Dior stores more open, have the products more accessible to be touched by the consumer,” Toledano explained. He noted that the glass facade of the New York flagship will enable passersby to see past the window displays into the store’s interior. The layout and product groupings are linear and easier to navigate, in line with American sensibilities and their straight-forward approach to life, Toledano said.
The 6,000-square-foot store, which is slated to open to the public Sunday, was still in the throes of construction on Thursday, with dozens of workers scrambling to ready the store’s milky walls and hazy purple and gray animal-print carpets. But its modern layout was already obvious.
Shoppers enter the store off 57th Street into the first of a row of four square rooms. The first is devoted to handbags, small leather goods, eyewear and other accessories. Women can help themselves to the handbags and “try them on” in front of large floor-to-ceiling mirrors.
The second room is devoted to cosmetics, fragrances, jewelry, evening bags and more classic handbags; the third to china, porcelain and other giftware, and the fourth to footwear, a fast-growing category for Dior with more than 170 sku’s.
The decor and fixtures are sleek and luxurious, yet discreet enough to allow the merchandise to shine.
Marino described the new flagship as a “total” departure from the old Fifth Avenue site, “more modern and clean, and more suitable for the contemporary architecture it’s sitting within.”
But the store also has touches of “whimsy and fantasy,” keeping with Galliano’s romantic and decadent spirit. These include speckled metal chairs; an ornate, hand-wrought handrail in silver leaf, and the plush, inch-thick “animal tinted” carpets.
A dramatic, angular staircase, which will ultimately feature a mirrored wall that graduates to opaqueness, leads up to the ready-to-wear floor. That floor is organized into a series of three rooms: one devoted to more casual items like denim and knitwear, another to more formal daywear and a third to eveningwear and furs. A woman on a mission can zero in easily on what she is seeking.
This is not the case at the Dior flagship on the Avenue Montaigne, whose interior is completely obscured from the outside, and where certain products, such as leather goods, are kept behind glass shelves or in drawers, requiring a sales person to intervene should a shopper simply want to sling a sack over her arm. And while service is extremely open and friendly at the Avenue Montaigne shop, its off-limits exterior represents the Ivory Tower reputation Dior is trying to shake.
“We have kept some of the codes of Christian Dior in New York, like the color gray, but we have left out the boudoir aspects,” Toledano explained. “For example, the New York store doesn’t have any molding — a kind of decor that works in Paris, but is just too bourgeois for New York.”
Of course, should Gwyneth Paltrow want to drop some serious money, she can be discreetly whisked up an elevator off the LVMH Tower lobby to the second floor, where the fur and eveningwear salon can be converted into a giant private closet.
But overall, Dior is in an open mindset, reaching out to customers in new, modern ways. To wit: the house launched a revamped Web site, Dior.com, on Nov. 26, adding fashion and accessories to a home page that already boasted beauty and cosmetics. (See related story, this page.)
And direct mail is also being used to lure young female professionals into the stores. The house recently invited some 10,000 career women aged 25 to 35 to the Christian Dior Avenue Montaigne store from Nov. 27 through Dec. 4. The women were invited to come in and discover the Pearl line of handbags — including the City Pearl, whose model is Paltrow — featured in a mini-catalog included in the mailing. The carrot? The chance to win a Pearl bag of the customer’s choice and a chance to see the January haute couture show, along with a fragrance door gift. Toledano already declared the promotional campaign a success and noted that the store sold out its stock of Malice bags — oblong numbers with the Christian Dior logo in a demi-lune — that day.
Bringing the couture house into cyberspace and nailing potential new clients at home with mailers is one way to attract the young and the restless to the brand. But Galliano and Toledano both know that Dior must present a consistent image to the public. Galliano will be helped in this mission by Thomas Lenthal, 35, formerly the creative director of Paris’s edgy fashion glossy Numero, who was just named the director of visual communication at Dior. Lenthal is Galliano’s in-house ambassador. His role is to make sure that Galliano’s creative statement is transmitted to Dior’s product and advertising departments to insure that a clear and identifiable image is presented.
“I cast a big net and got Thomas Lenthal. He’s here to keep Dior in line with everything that I establish with Mr. Arnault and Mr. Toledano,” said Galliano.
Several industry pros praised Lenthal’s arrival, saying that he’s a good match for the designer and the house.
A first view of the new communication strategy will break in February with an ad campaign shot by Nick Knight, Galliano said, declining to give away any details of the shoot. Knight did the Dior fashion campaign for fall-winter 1997 and for the Boudoir collection in spring-summer 1998.
Image also is strengthened by wholly-owned stores, and Dior has been very aggressive on the retail front. This year, 16 Dior stores will have been opened or renovated, Burke said. This includes a Dallas store opened just over a week ago; new units in the Hong Kong Landmark mall and Peninsula hotel; one store each in Kuala Lumpur and Taipei; two leased departments at Korean department stores, and moving the London shop to Sloane Street. There are negotiations under way for several openings next year in the U.S., but Toledano refused to provide any details.
The store strategy is not only key for controlling Dior’s image, but it is also a way for the house to reap all the rewards of retail. Today, Dior’s 76 wholly-owned stores generate 80 percent of Dior Couture’s annual consolidated sales compared with only 15 percent five years ago.
The retail program, coupled with the financially painful and costly elimination of most license agreements, the reduction of franchised units and some integrated leather goods production at a Dior factory in Florence, is helping Dior Couture restore operating profits after last year’s operating loss and a sharp profit drop in 1997. Retail sales plus sales from diverse activities rose 23 percent last year to $139.6 million.
Wholesaling to department stores, specialty stores and upscale multibrand shops is also part of Dior’s plan to expand sales and exposure. Toledano is enthusiastic about new multibrand stores in the U.S., such as Jeffrey, which bought Dior for the first time for spring 2000. Wholesale partners for Dior include smaller specialty retailers Hirschleifer’s and Ultimo, as well as larger chains such as Nordstrom, Neiman Marcus and Saks Fifth Avenue. Beginning with fall 1998, Dior has opened leased accessories corners on the main floor of nine Saks Fifth Avenue units.
“We have an excellent partnership with Christian Dior,” said Sue Patneaude, vice president of designer apparel at Nordstrom. “This fall’s sales are strong. All the knits, cardigans, items with the popcorn fringe or the cashmere blankets are all selling very nicely. We’re very happy with our relationship.”
That being said, other retailers said Dior has a ways to go toward establishing its ready-to-wear. Ironically, Christian Dior himself was a pioneer in establishing his French couture label in the U.S. In 1948, he opened Christian Dior Inc. on Fifth Avenue. This was followed the next year by signing two licenses, for ties and hosiery, with American partners.
The label’s enormous popularity garnered more and more licensing deals around the world. But the myriad of licensed products, in fact, contributed to diluting the strength of the Dior name.
Cleaning up the licensing and distribution has been a major task for current Dior management and the team that preceded it, and it has come at a significant cost. Last year alone, royalties nearly halved to $18.3 million, according to the Christian Dior SA 1998 annual report. The wholesale volume of the brand also fell sharply to $421.9 million compared with $656.3 million in 1997.
The company was particularly hit by its decision to wind up its license with Japanese partner Kanebo at the end of February 1998, which translated to a drop in wholesale volume of nearly $218.8 million to $22.5 million last year. The U.S. saw its licensing volume drop $31.3 million due to discontinued licenses for rtw, watches, children’s wear, scarves and other goods.
These initiatives, combined with the adverse effects of the Asian crisis on business, caused Dior Couture to incur a net loss last year of $5.2 million, compared to a net profit in 1997 of $6.3 million. Yet, volume was able to hold steady at $205.4 million, thanks to increased retail sales.
“The label certainly has prestige, especially among those who remember its glory, but it hasn’t had a strong fashion presence in a long time,” one retail executive noted. “On the other hand, that gives the house a clean slate. They now have the ability to create whatever image they want.”
Galliano is certainly ready to rise to the occasion.
“For the first three years, we’ve been consolidating sales, merchandising. Now, our method of working is younger. There’s a fresher vibe here, not at all ‘old school’,” Galliano said. “We have the product, the sales are great and now we have to work the image.”

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