LUXE CRAZE TURNS VENDORS TO RETAIL
Byline: Wendy Hessen
NEW YORK — As the demand for luxury goods continues to surge, among those reaping the benefits are accessories manufacturers — especially those with their own stores.
Since the first wave of store openings about a year ago, a second crop of key players has initiated aggressive retail strategies. Many have kicked off their plans with flagships on Madison or Fifth Avenues — in close proximity to apparel megastars like Calvin Klein and Giorgio Armani — to resoundingly positive results.
The last two months of 1995 brought stores from Lana Marks, Montblanc and Seeger, the ultra-exclusive German leather goods firm. Scheduled to open the rest of this year and into 1997 are shops from Judith Leiber, Ferragamo, Louis Vuitton, Tourneau, Lalique and Piaget, with either first-time ventures or expanded locations.
Many of these firms already had considerable retail penetration in Manhattan, selling to retailers such as Bergdorf Goodman, Saks Fifth Avenue, and Barneys New York before deciding to open their own stores.
They believe the demand for high-end accessories by U.S. consumers is here to stay. As one vendor put it: “Luxury accessories are no longer a fashion whim.”
The reasons for the ongoing success of luxury accessories are threefold, according to Stanislas de Quercize, president of Montblanc and Seeger North America, who summed up what many company executives believe.
“The trend toward casual dress has forced people to search for new ways to set themselves apart and express their personality,” said de Quercize. “Now they are using accessories like handbags, belts, wallets and pens to display their individuality.”
He said a second reason for the continued growth is the demand for new types of accessories. At Montblanc and Seeger, new items like cellular phone cases, train-pass holders, multiple-currency wallets and computer cases are consistently top-selling pieces.
A third issue driving business is the realization by consumers that unlike most merchandise — like computers or apparel — luxury accessories can actually appreciate in value.
“The value relationship has become very important in accessories,” de Quercize said. “Consumers today may buy fewer items, but what they do purchase is of a higher value and are things that they believe represent an investment in quality and longevity.”
As an example, he pointed to Montblanc’s recent introduction of its limited edition “Semiramis” pen, which sold out in a month with a retail price tag of $2,100.
By the end of this year, Montblanc will have opened 10 more stores in the U.S., bringing its total to 16. Although de Quercize declined to give specific figures, he said business at each of the firm’s stores has consistently exceeded projections.
Judith Leiber, president of the multiclassification firm bearing her name, sees being close to her customers as a key reason for siting her first boutique, which is scheduled to open next month, at 987 Madison Ave., between 76th and 77th Streets.
“Many of my customers either live in the neighborhood, or when they visit, stay at the adjacent Carlyle Hotel or shop along Madison,” said Leiber. “People really want both luxury and longevity now. Many see accessories as a real investment, almost like stocks. When you buy an alligator handbag, you know you will have it forever.”
Lana Marks, chief executive officer and designer for her namesake firm, opened her first store — a 1,000-square-foot shop at 645 Madison Ave. — in December, and almost immediately had to revise her sales projections upward, as a result of stronger-than-expected traffic and sales. Sales at the store are now expected to exceed $5 million in the first full year.
“We have gotten a wider spectrum of international customers in the store than we’ve usually seen in our department store accounts, and many make multiple purchases several times a year,” said Marks. “The Madison Avenue and 57th Street area is a prime destination for our customers from Japan, Hong Kong, Singapore, Europe and South America.”
Marks said the fact that she had a developed business with high-end stores like Bergdorf’s, Saks and Neiman Marcus has given the company a certain level of consumer acceptance. The store has furthered that, she said, by raising brand awareness, in the process boosting business in both areas.
“With the store, we’re able to better showcase the full range of colors — our signature — and silhouettes and hardware options,” Marks said.
She attributes the ongoing success of the category as a whole to a more defined look among the various accessories companies, weak clothing trends compared with those of several years ago, and the investment quality of high-end accessories.
“Most of our customers feel luxury accessories really make a suit or dress stand out, and see it as more of a long-term investment, whereas clothing trends seem to come and go,” she said.
Based on the success of the New York store, Marks said the company is poised to open a second U.S. unit in the next six months.
Piaget is the latest luxury goods maker to stake claim to the neighborhood. As reported, the Swiss watchmaker will open a 3,750-square-foot boutique at 730 Fifth Ave., nestled between the Bulgari and Mikimoto shops, this summer.
Efraim Grinberg, president of North American Watch, Piaget’s exclusive U.S. distributor, said the company felt the timing was right for a U.S. store after a successful retail expansion in the last three years. Piaget stores have been opened in Geneva, Paris and Hong Kong.
“We knew we wanted to be on Fifth Avenue, and to be so close to 57th Street made it ideal,” Grinberg said.
In addition to increasing brand awareness, consumers will become more aware of the wide assortment of Piaget products available, and the store will be the launch site for Piaget jewelry in the U.S.
Although he declined to provide figures, Grinberg said Piaget would launch a “substantial” ad campaign for the new store this fall, in addition to the company’s ongoing retail ad campaign.
As reported, fine watch retailer Tourneau is among those expanding their presence. The company is slated to open a 15,000-square-foot store and watchmaking museum in the IBM building at 57th Street and Madison Avenue in April 1997. Tourneau has been in Manhattan for more than 60 years and has four stores in midtown.
“Part of our problem has always been that our stores are too small to tell the complete story of watchmaking and the fine watch industry,” said Anthony D’Ambrosio, executive vice president of Tourneau. “The new store will enable us to educate our clientele of international and national tourists, as well as our local customers about the art, craft and technology of fine watchmaking.”
He said the new store is expected to become a major tourist attraction, offering the latest technology in video walls and touch-screen kiosks, a museum and a library.
As to how three stores in a 10-block radius will affect business, D’Ambrosio said, “In 1990, we expanded from our original store at Madison Avenue and 52nd Street with a second store at Madison and 59th, with no effect on our business. The marketplace for fine watches has unlimited potential. Watch wardrobing isn’t common yet in the U.S., but if you compare U.S. sales of luxury vehicles, suits and other goods, we believe the market has significant growth potential.
“Add to that a shopping mecca like 57th Street, with its eclectic mix of retailers from Chanel to Warner Bros., and you have a situation that will benefit the industry as a whole.”
Other accessories makers are expanding their presence here. As reported, Ferragamo is scheduled to open a 14,000-square-foot store this fall on Fifth Avenue, between 52nd and 53rd Streets, which will replace some of its current space in Trump Tower, and Louis Vuitton will more than triple its retail space here when it moves into a 6,200-square-foot-space at 17-21 East 57th St. next year.
Lalique, known primarily for its fine crystal, has returned to its roots and is creating a full accessories line of jewelry, scarves and handbags. That has been a key factor for the company’s planned move from its 700-square-foot shop at 680 Madison Ave., between 61st and 62nd Streets, its home for about six years.
According to Yves Coleon, president of Lalique US, the company is close to completing a deal for roughly 1,500 square feet, which the firm will move into by the end of this year. Coleon would not disclose the location.