THIERRY MUGLER ON THE MOVE
Byline: Miles Socha
PARIS — Thierry Mugler is ready for liftoff — in more ways than one.
Not only is the French fashion house decamping from its submarinelike, icy-blue-walled fortress in central Paris to bright new digs in the suburbs, it’s also forging ahead with an aggressive retail rollout and an ambitious plan to build an accessories franchise.
After a year of reflection and behind-the scenes reorganization, the company has emerged with a strategy as sharply defined as the shoulders on a Mugler suit. Company president Vera Strubi, dressed in just such a number, outlined in an exclusive interview with WWD key facets of the plan . They include:
Expanding the network of company-owned Mugler boutiques and corners to 50 from 10 within three years, focusing on Europe and North and South America.
Launching licensed collections of handbags and silver and costume jewelry for wholesale distribution in the second half of 2001.
Expanding the Mugler name into such areas as lingerie, footwear, hosiery, scarves and home accessories.
Unveiling a new fragrance later this year to add to a list of hits that includes Angel and A-Men.
Strubi, who has headed the Clarins-owned Mugler perfume business since 1990 and its apparel business since 1999, was apologetic about the company’s incommunicado status for the past year. But she said it was with good reason.
“We had to make sure not to jump into a new strategy, but to think about what is our main business and how can we develop the company,” she said, seated behind a Starship Enterprise-type semicircle of a desk. “We really needed to come up with a plan. We have to concentrate on what we know best.”
Strubi concluded that luxury ready-to-wear for men and women should be the main focus of the business. She acknowledged that the company stretched its capabilities with ventures like the MTM sportswear line for women, which was discontinued in 1999.
“We were a small house in the past and we always did things in an artisanal way,” she said.
Now the idea is to “activate” the top rtw lines with improved production, logistics and marketing. For example, last year the company put a new focus on its relatively small and untended men’s wear business and saw sales catapult 88 percent. Strubi attributed the improvement to better, more classic styling and a stronger commercial and marketing effort.
As for the high-margin accessories category, which many major fashion brands are keen to develop, Strubi said, “The view of this house is that if we do something outside of ready-to-wear, we have to do it with partners with production and distribution expertise.”
Unlike many French brands, Thierry Mugler has largely resisted licensing as a strategy since it was founded in 1974. Indeed, Strubi took pains to characterize all future ones as partnerships wherein the house controls design, communications and, in some cases, distribution.
She disclosed that Mugler recently signed licenses with three French firms: Carre Royal for leather goods, GL Group for jewelry and Rousseau for men’s dress shirts. The first output of these new partners will reach Mugler stores this spring and summer, with wholesale distribution added in the second half. Since 1999, Mugler has had an eyewear license with Berthet Bondet.
At present, accessories, produced in-house and only for Mugler boutiques, account for perhaps 2 percent of the fashion house’s sales, Strubi said. Women’s apparel accounts for 80 percent of sales, with the balance, 18 percent, generated by men’s wear.
Strubi asserted that accessories have the potential to account for up to 30 percent of volume in three years. Collections of leather goods and jewelry will be presented to the trade later this spring. Strubi said Mugler’s success in an intensely competitive category would hinge on bringing “authenticity,” and not just fashion, to the segment.
“We will develop something very practical for women,” she said. “Our customer is expecting something special, something more than just style.”
Despite the brand extensions, Strubi stressed the importance of controlled distribution. The perfume Angel, for example, is carried in only 350 doors in the U.S., where it consistently ranks among the top three bestsellers.
“We want to concentrate on a few points of sale and to do it right,” she said. “We want that rarity. In the United States, our customers are happy that their neighbors don’t know about Thierry Mugler.”
Nevertheless, they may have a Mugler store coming to them soon.
Strubi said the company aims to control more than half of its sales directly and should easily achieve that goal once it reaches 50 directly owned outlets, a mix of freestanding stores and leased shop-in-shops. That will bring it into line with the Louis Vuittons and Pradas of the world, who operate vast networks of boutiques.
“It’s part of a buying trend today,” she said. “The sales of our products in our boutiques are good. Of course, if you have your own boutique, you need to offer a total environment, not just clothing.”
Strubi said Mugler envisions Mugler boutiques in all major centers in Europe and the Americas, but immediate priorities include New York, Los Angeles, Miami, Milan, Zurich, Munich, Berlin and Madrid. At present, there are no boutiques in the U.S. or Italy, for example. Men’s-wear-only shops are also a possibility, she added.
At present, there are 10 company-owned Thierry Mugler boutiques and eight franchised locations accounting for roughly 25 percent of the fashion house’s sales. Current locations include Paris, Dusseldorf, Hamburg, Barcelona and Geneva. Last year, the company bought back franchises in London and Brussels and opened a new location in Frankfurt.
Strubi acknowledged that the investments required to expand the retail network will further delay the fashion house’s ability to turn a profit.
“It’s no secret that the couture has had some financial difficulty,” she said. “[Clarins] needed to see we could turn things around. The [fashion house] is still operating at a loss, but it’s not because we haven’t been performing, but because we’re already on an investment plan.
“Yes, it will cost money [to open stores], but we have enough knowledge with our own boutiques that we can quickly come to a break-even point and then make money,” she said. “We know how to sell our merchandise.”
As reported, Groupe Clarins saw its sales climb 21.4 percent in 2000 to $782.2 million. Sales at Thierry Mugler Couture slipped 3.3 percent to $38 million, while the fragrances advanced 15.6 percent. Clarins’ earnings are expected to be announced March 29.
Worldwide, the Mugler brand, in fragrance and fashion, generates sales of about $140 million at wholesale. Currently, Europe accounts for 80 percent of the firm’s volume, North America for 16 percent, and other regions, including the Middle East, 4 percent. Women’s ready-to-wear is sold in some 570 doors.
Among the behind-the-scenes changes last year were the appointment of Gilbert Deininger as general manager, who was charged with helping reorganize the company and improving the efficiency and profitability of Mugler’s high-tech factory in Angers, France. Also, Sylvie Elles, Mugler’s longtime international communications director, assumed marketing duties.
Strubi said she plans to further beef up executive ranks this year, especially given the growth in retail and licensed products.
She also did not rule out having Mugler resume its couture spectacles, stressing that such “pure creativity” is important for a house. In November 1999, Mugler announced that it would suspend its couture showings while it conducted its reorganization.
“It’s a question of time. We think couture is part of the dream,” she said. “But this house needed to clarify its priorities.”
Meanwhile, Strubi couldn’t restrain her glee at moving from Rue aux Ours, where Mugler’s fashion business has been for seven years. The building is a dimly lit warren of offices that were hardly conducive to communication and company spirit.
The new headquarters, in Plaine Saint-Denis, spans some 55,000 square feet of “open, modern space” for Mugler’s 120 employees and for the showrooms, design studios, sample production and all other key functions.
“It’s part of our new outlook,” she said. “The year 2001 is about development and action.”