THE GALLIANO FACTOR: DIOR LAYS GROUNDWORK FOR ‘EXCEPTIONAL’ 2001

Byline: Miles Socha

PARIS — If the Christian Dior fashion show here last October were a movie, it would probably get at least an NC-17 rating.
And that would be for the soundtrack alone.
The trailer-park-trash collection with shiny nylon tracksuits and handbags shaped like chunks of a car door was just the latest example of Dior designer John Galliano’s famous creative drive running at full throttle.
That’s fine with Bernard Arnault; in fact, the chairman of Christian Dior SA — parent of Christian Dior Couture and LVMH Moet Hennessy Louis Vuitton — finds that creativity is giving the French house more vital fuel as it heads into an ambitious year commercially, one highlighted by the opening of more than 20 boutiques and the launch of Dior Homme.
“John Galliano’s amazing talent has permitted a fantastic development of the brand,” Arnault told WWD. “Sales of ready-to-wear have tripled. His creativity, the constant renewal of our products and the arrival of Hedi Slimane at Dior Homme will assure an exceptional growth of Dior in 2001.”
Of all the labels in his sprawling luxury empire, Dior is Arnault’s most cherished brand and he’s not shy about boasting that “the best-known French name in the world is undoubtedly Christian Dior.”
In fact, Dior was Arnault’s entree into luxury goods. In 1984, he took $15 million in family money and bought a bankrupt textiles group called Boussac, which included Christian Dior, a cultural institution in France.
Since then, the house has been the subject of torrents of publicity, both positive and negative, thanks to outrageous shows of Galliano that typically land on the front page. Arnault waves off any criticism with ease, even quoting Christian Dior himself who, in 1948, after unleashing the New Look on an unsuspecting world, quipped: “I don’t care about what the critics say so long as it is on the front page.”
The house, a gem in international fashion with a storied history, has had only a few designers. After Dior died in 1957, at age 52, Yves Saint Laurent took over until 1960. Saint Laurent was succeeded by Marc Bohan, who designed the line until 1989, when Gianfranco Ferre took over. Galliano arrived in 1996.
In its newest chapter, the house is now being positioned for another level of growth.
“We are very ambitious about the brand,” stressed Dior president Sidney Toledano, in an exclusive interview during which he highlighted key avenues for growth, including fine jewelry and footwear. “The momentum is big. It’s now a matter of speed and quality of execution.”
Christian Dior lost money in 1998, evidence of the painful transition from a licensing-dependent business to one based on direct control of production and distribution. But the sales and earnings picture has been improving rapidly. As reported, Christian Dior Couture showed an operating profit of $5.2 million for the first half of 1999. Sales in the period reached $116.1 million, an increase of 41 percent, which the company attributed to the rtw and accessories designs of Galliano.
It’s just dessert for Dior, which can’t seem to put on a couture or rtw show without stirring controversy, protests or at least a fresh round of rumors about a possible Galliano departure. Last year, the couture house famously visited the themes of homelessness and kinky sex. Meanwhile, the spring 2001 rtw shows for Dior and Galliano, closely linked thematically this season, featured X-rated lyrics, clothes held together with packing tape and a parade of Jesus-like soccer players.
Indeed, when Galliano sits down for an interview and is asked to evaluate the progress he’s made in rejuvenating the Dior image, the first thing he says, even before having a chance to light the Marlboro he’s craving, is “I’ve quadrupled the sales.”
Not surprisingly, Galliano passionately defends the artistic statements he makes on the runway. His eyes widened and spine stiffened in recollection of the outrage some retailers and editors expressed over his soccer-player segment, which he said was misinterpreted and was not meant as any religious insult.
But Galliano became equally animated when talk turned to sales figures, merchandising, holiday deliveries and price points. Such terms pepper his conversation and underline the fact that he finds the commercial success of his designs extremely gratifying.
For example, he reported with great pride the commercial success of the Saddle bag, one of his first accessories designs and now a mainstay of the Dior handbag line. According to Toledano, the pace of sales for the Saddle in its launch year were comparable to the Lady Dior bag, which sold more than 100,000 units when it was introduced in 1996.
“If the sales have increased, it’s because the products are good and they’re different and people are buying them,” he said. “It’s an exciting time at Dior.’
Equally gratifying for Galliano is to see the Dior children’s wear licensee cull inspiration from his rtw collection — “I saw a camouflage teddy bear in the store. It’s so fabulous!” Some retailers have grappled with the new Dior image in the recent past, concerned that Galliano’s sometimes crazy couture streetwear doesn’t jibe with a house so closely associated with ladylike sophistication.
But now, the brand is making inroads into stores like Colette in Paris and expanding in Saks Fifth Avenue and Harrods.
“There’s been a whole new energy level at the house,” said Joseph M. Boitano, senior vice president and general merchandise manager of Saks Fifth Avenue. “We feel very strongly about the brand. We have a very important handbag business with them and our ready-to-wear business is very meaningful now.”
Boitano said the Dior rtw collection represents a “feminine, sexy approach to dressing” that is evolving in a younger direction.
In London, Harrods plans to soon expand its Dior shop by more than 50 percent, based on the brand’s performance. Andre Maeder, general merchandising director at Harrods, said Galliano has succeeded in attracting a new generation of customers to the brand with key items like the Saddle bag, funky eyewear, leather goods, belts and shoes.
For his part, Galliano insists that the image overhaul of Dior has been a gradual process at the product and store level. He said his Lauryn Hill-inspired collection for spring 2000 represented a “rupture visually as far as the press was concerned. But in the store, there was no real rupture. You didn’t walk in there one day and see a store full of pink boucle suits and walk in the next day and find a store full of denim.”
That’s why the multigenerational appeal of the brand is still a possibility, even though it was feared at the time of Galliano’s arrival at Dior that the old customer would be forsaken. Galliano said the daughter can shop for cool shades, hip bag and a jeans jacket in a Dior store and then report back to mom: “You know, there’s a really cute twinset for you.”
Toledano echoed the thought, saying if Dior lost some of its old-guard customers with images of hip-hop rtw and tattered homeless couture, “some of them are now coming back with their daughters.”
“We’ve introduced a new clientele, which is younger and more globally aware of what’s going on,” Galliano said. “Mr. Arnault has enabled me to be involved in the advertising and the windows — all that added up together has given the house more coherence.”
In yet another sign of Arnault’s confidence in the designer’s ability, he has given Galliano the new responsibility of overseeing advertising campaigns for Dior perfumes. Galliano said that he already shot the upcoming ad campaign for Dune with Nick Knight, with whom he collaborates for rtw ads. This month, Galliano will start work on a television commercial and print ad campaign for J’Adore, followed afterward by new spots for Dolce Vita.
Toledano stressed that the creative model at Dior has been completely overhauled in recent years and has been the key to its rejuvenation.
Under the old regime, there were separate design studios for various product categories such as handbags, footwear and jewelry. “They were not speaking to each other and no one was, from a design point of view, giving direction to them,” he said. “Today, you have one direction for all the feminine products.”
Galliano’s couture and rtw collections provide the “total inspiration” on which other design groups feed. “The creative force is John and his teams,” Toledano stressed. “Marketing is giving some input, on functionality, market needs and price points, but only after…once the ideas are developed.”
Like Galliano, Toledano makes no apologies for Dior’s potent runway presentations four times a year. He said they have been “very successful in terms of media coverage and inspiration. The purpose is really to give a moment of creativity.”
Indeed, Toledano warned other fashion houses to attempt to do the same at their peril: “This kind of show, to do it you need a John Galliano.”
Acknowledging the French have not been prized for their marketing flare in the past, Toledano said the Dior approach is proving otherwise. “We all have full respect for the creativity and we don’t want the marketing to interfere with design. We are not in a chocolate company where a product manager decides what to make.”
Still, Toledano talks about a “time to market,” delivery flows, optimum merchandising and a range of sales tools, from direct mail and Internet marketing to training programs for sales associates. “In New York, Paris and Tokyo, you now have the same new windows installed on the same day,” he said. “And within 10 days, you will have the same windows everywhere else.”
Toledano said Dior really hit its stride for the spring 2000 rtw collection, with signature denim looks reinforced by advertising, editorials and window displays. This consistency of image, product and retail presentation is the new mantra at Dior.
Indeed, the spring 2001 ad campaign showcases four different segments of the collection and will be timed to drop coinciding with deliveries and window displays.
But what about synchronizing the image of other Dior products, especially given the unveiling of the new Dior Homme line by Hedi Slimane on Jan. 28 during the men’s shows here?
When Slimane was named the men’s design director at Dior, the Paris rumor mill churned with speculation that Galliano did not relish the arrival of the design star, especially since his men’s clothes at YSL had built a small following among women and his arrival at Dior came with the suggestion that masculine haute couture by Slimane would be a service that would not be refused to women. For some, the grooms, gladiators and soldiers that paraded on Galliano’s couture runway last July were a not-so-veiled statement that two could play at the cross-gender game.
Toledano stressed there is no creative hierarchy at Dior, but rather “creativity in plural,” with Galliano in charge of women’s products, Slimane head of men’s and Victoire de Castellane the designer of fine jewelry. And he asserted that there will be no disunity in the brand image, given his role as president and the fact that all three designers are mining the same inspiration: the tradition, values and archive of Christian Dior.
“This will reinforce the brand,” he said of the Dior Homme launch. “We take the challenge that we don’t need to be monodirectional. In our business, a brand can be strong and have different sources of creativity. We give the means and we give them the input and it’s working well.”
Toledano said the three Dior designers talk to each other and “meet directly from time to time, face-to-face. But they don’t need a chaperone. They are very professional.”
Rtw and accessories each account for about 40 percent of Dior Couture sales. Men’s accounts for about 10 to 15 percent and the balance comes from products such as giftware and linens.
In 2001, the company is gearing up for expanding the main facets of the business through its growing retail network. While the company didn’t make a great deal of noise about it last year, Dior opened 19 stores worldwide, ending the year with a total of 92 freestanding, directly operated stores. Toledano plans to keep up the pace in 2001 with more than 20 stores set to open.
Confirmed locations include Brussels, Milan, Rome, Jakarta and San Francisco’s Union Square. A multilevel megastore in Tokyo should be ready by yearend or early 2002. In London, Dior plans to double its presence on Sloane Street. And in Beverly Hills, Dior plans to move to a larger location on Rodeo Drive this summer.
In tandem with the launch of Dior Homme, Dior plans to open men’s wear stores in Paris, Milan and possibly New York in 2001. Fine jewelry outlets will bow in Place Vendome in Paris, as reported, as well as Beverly Hills and, possibly, Tokyo.
The expansion of Dior’s retail network has been rapid. There were six directly operated stores in 1994 and, ultimately, Dior should have more than 150 locations, Toledano said. “The business we do in our own stores should represent 80 percent of our business. The rest will be wholesaling of men’s and women’s ready-to-wear+and a small amount of licensing.”
Toledano said sales as of September were up 39 percent in Dior stores, driven by spectacular results in accessories, whose sales grew in excess of 60 percent throughout 2000. Toledano noted that sales of new handbag styles like the Saddle and the Malice have not affected classic ones like the Lady Dior, which still accounts for some 23 percent of handbag volume.
With Saddle bags now swinging from many shoulders, Dior is turning its attention to feet. Toledano said he’s bolstered Galliano’s team in the shoe design area and plans to improve production capacity. “In 2001, we will be having a more significant market share in this business,” he asserted.
But perhaps the most far-reaching initiative for the year will be Dior’s plans to bolster the French essence of Dior and reinforce the “know how,” workmanship and artisanal quality that makes French brands desirable in the luxury world. This will be accomplished through training programs and investments in manufacturing capabilities, Toledano said.
In what was a clear reference to Gucci-controlled Yves Saint Laurent Rive Gauche, which has shifted some manufacturing to Italy, Toledano said: “To give the French taste, you can’t export manufacturing out of France. This we have to keep. This is what the customer is expecting.
“I’m not here to protect the French manufacturing jobs, but from a marketing approach, we need a very high level of differentiation. This is our key factor of differentiation and it has to be more than words.”

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