Some things take time. Loewe’s entry into the U.S. retail fray, for example. On Tuesday night, the brand opened its first U.S. flagship, on Greene Street in New York’s SoHo.
The retail arrival only took 175 years (give or take a failed Eighties effort). It’s part of the plan installed by chief executive officer Pascale Lepoivre, who took the helm in 2016 after nine years at Celine. While much of Loewe’s business is done within its 130 stores — up by a modest count of 10 since her arrival — she sees that network as more than a series of transactional centers. “We ultimately consider physical stores as media, a communication tool…the best, most complete way to show what we are, because it’s not obvious,” she says.
Loewe is in an interesting position. Since his arrival in 2013, creative director Jonathan Anderson has created for it a sophisticated, craft-based artful identity. Yet while he and his exquisite work quickly achieved insider-fashion acclaim, according to the ceo, the brand “still has low awareness beyond the fashion circles,” particularly in the United States. Among her goals: increasing awareness without sacrificing Loewe’s distinctive cerebral quirkiness.
To that end, she has identified a handful of key cities around the world ripe for Loewe flagships — and the operative word is “handful.” Her premise is that outposts — Casa Loewe, they’re called — belong only in consumer “fashion capitals.” Since May, the brand has opened impressive stores in London, Beijing and now, New York. In addition, last month, a small shop in Ginza, Tokyo, was upgraded to flagship status. Next up: Paris.
Another expectation: breaking the billion-euro mark within four years, which should be “not too complicated” to achieve. Yet Lepoivre declines to use the word target, maintaining that smart growth and respect for the brand’s identity are more important than excessive focus on a number. Yet she acknowledges that a billion is a nice number. “It’s an ambition,” Lepoivre says. “It’s not an obsession.”
WWD: Why New York now? Loewe has been around forever and Jonathan has been there since 2013.
Pascale Lepoivre: Alors. So, it’s true, the brand has been around for a long time, 175 years, almost. Most of its life was as a quiet, very respectable leather goods expert and, I would say, with remarkable stability, even modesty, in size and ambition.
Jonathan actually began to reenergize the old lady, so there was a bit of growth triggered at the beginning mostly, I think, the interest of the fashion insiders. But there was no explosion. Most of what was happening was image- and product-related. There was a lack of internal alignment and, I think, no questioning of the supply chain processes, nor the distribution network.
So we’ve been basically trying to correct this, beginning at the end of 2016. With Jonathan, we set out with three priorities. The first one was this internal alignment, boosting the confidence of the people, both the existing and the newly acquired talent. The second one was to speed up the pace of innovation; we really accelerated newness and also adapted the supply chain, focusing on time to market, which had been a bit flaky.
The biggest thing, I would say, was modernizing the network, not so much adding stores or adding geographies, but, as the first phase, really pushing the walls of the existing network. This was mostly small leather goods stores, so it was very hard to tell a bigger story. In three years we have doubled in size, mostly…without expanding the network but just changing the stores we have.
WWD: You just said a great deal. Can we break down those points a bit? Fixing the internal alignment — what did that involve?
P.L.: I was not there at the time, but I think everybody was excited by the new product and the new image. But I don’t think the ambition was there or the belief that the brand could really grow much bigger. The retail network was mostly very small leather goods stores, because that was the identity of the brand before.
Basically, what was preventing more growth was the fact that the network was not aligned with the strategy. So, over the last three years, we have been really focusing on aligning the store network, making the stores slightly bigger to [accommodate] ready-to-wear, for example, just to be able to express the brand fully without yet adding new regions or a lot of new stores.
WWD: “Speed up the pace of innovation.” Innovation on what level?
P.L.: Basically more newness and also organizing the newness. That’s where supply chain is quite important….There were two collections a year, and everything was released in one shot. Then, there were three to six months sometimes without new injection. Now we are functioning, not quicker but let’s say we release novelty basically every month, whether it’s small, like color [groups] or much bigger drops such as capsules.
Internally, this was quite a complex procedure because you need to have a supply chain that is capable of dropping ready-to-wear and bags together at the same time.
WWD: “Modernizing the network.” How did you go about that?
P.L.: Alors, little by little. It’s not finished but we are quite well-advanced. Over the last two years, we’ve either renovated, relocated or expanded two-thirds of our stores. We didn’t increase the number of stores greatly; we went from 120 to 130, so only a 10 percent increase. But we increased square meters by more than 35 percent by enlarging the stores.
WWD: That’s amazing. Where are those 130 stores concentrated?
P.L.: Historically the strongest countries in terms of network are Spain and Japan. Other than this, it’s a bit all around the world — except the U.S., where historically the brand has never really been present a lot. So we started with wholesale and now we believe it’s the right time to move forward.
We have found [interest from] Americans because we sell online. It’s not a huge part but it’s developing very quickly. Americans are now our second nationality on our e-commerce site, which is quite amazing considering we don’t yet have a retail network in the U.S. So, we took this as a real signal that it was time.
WWD: What’s your number-one nationality on e-comm?
WWD: How long has Loewe been in Japan and what is the appeal?
P.L.: It’s a distribution story that Loewe developed in Japan very early, in the Eighties. It was managed by the Vuitton regional team, and the network was developed very quickly.
WWD: The absence from the U.S. is surprising for a brand that’s been around for so long. Historically, the U.S. has been such a major market, case in point, with Dior, a relationship that goes back to Christian Dior himself. Why not Loewe?
P.L.: I must say I’m not sure I have the answer for this. I think there was an attempt that failed in the Eighties; there was one store in New York before that was not a success. After that, I think because the brand had such low awareness and probably not enough marketing power to develop awareness. So there was a bit of reluctance to go back. But now the brand is very, very different, obviously.
WWD: Is it the e-commerce that pushed you to open the store here? What made you decide now is the time for New York?
P.L.: The brand has been developing [in the U.S.] through wholesale, with the support of our wholesale partners. Clientele-wise, it’s quite a natural country to develop the brand. On top of it, we are Spanish, so we could have a nice attraction. And I think the originality, the uniqueness of the brand, could be something really successful.
Again, it is already developing without much of a network. And New York is an important step for our visibility, because we are present mostly through department or multibrand stores, but you cannot really see the full scope of what we have to offer, the breakdown between leather goods and ready-to-wear.
WWD: What are the other regions you’ve targeted for flagships?
P.L.: In terms of flagships, it’s not so much the regions. We are targeting fashion capitals worldwide. Because of the leather goods history and the small network, the brand didn’t really have flagships. We started with Madrid, with a big store that we just enlarged. Now I think it is almost 800 square meters [8,600 square feet], and provides a template to develop the other stores from.
We targeted a list of eight to 10 fashion capitals where people travel. We think the brand has to have a stronger representation and a full, holistic representation in these cities. We call them Casa — Casa Loewe. We opened London in May. We just opened a big store in Beijing, and last month, we transformed a smaller store in Ginza into a 400-square-meter [4,300-square-foot] Casa. So New York is next. It’s not so much about covering a region; it’s really covering each fashion capital, where the clients, wherever they come from, can see the complete statement of the brand.
WWD: What are the other fashion capitals on your hit list?
P.L.: We have Paris; we’ll have to tackle Shanghai. It’s really little by little. I don’t have an order because we need to find the right spaces. At one point, obviously, in the States we could go to L.A. But Paris would be the next priority. We have a fairly nice store but we feel we need a bigger space.
WWD: You talk finding right locations. Why SoHo in New York?
P.L.: The brand still has low awareness beyond the fashion circles. We thought SoHo was the best balance between natural traffic — we can’t go in a place where there is no traffic — and a coherent environment, a nice environment for us, with [proximity to] other brands and with a nice vibe.
WWD: Poorly phrased question. Loewe definitely retains its insider aura; fashion people love it. Has the awareness expanded beyond the insider realm? You said being in a well-trafficked area in New York was essential for exposure.
P.L.: In the U.S. [brand awareness remains insider]. In Japan, no. We can have stores in [different] spaces. But again, in the U.S., we are starting. We are not well-known yet so I think yes in the U.S., definitely we’re insider. In other places, less.
WWD: What is it about Jonathan’s work that has clicked so, that has struck such a nerve?
P.L:. Before I joined the company, because I spent nine years at Celine, what struck me is that he had this formula about a brand that can bring a surprise. This is what he brought and what we still are very attached to doing.
It’s a Spanish brand, which is quite unusual. Spain is not known for couture or for traditional luxury. It is known for a vibrant lifestyle, maybe for a bit of unconventional creativity. So all of this gives us very big freedom to design our own path, not to try too hard to fit with the trends, and also, we’re starting from a relatively discreet base.
Jonathan has quite a lot of freedom to develop a lot of interesting things, like this blend of impeccable craftsmanship but at the same time the whimsical creativity and a bit of the real-life aspect. I think the combination is quite amazing.
I think about it this way: There are not a lot of brands who can be a bit thoughtful, cerebral, or sometimes more than a bit, and at the same time very playful and approachable. To combine the experimentation and a bit of radical [design] with the effortless lifestyle that is legitimate thanks to the Spanish vibe. So I think it’s a combination of things, which usually don’t go together.
WWD: You come from Celine. Celine is a very, very different fashion animal now, under Hedi Slimane, than it was under Phoebe Philo. Given the characteristics you just described that I see clearly on the runway, I see Jonathan as someone who can speak clearly to Phoebe’s Celine woman. Do you?
P.L.: I’m sure that we have more than enough to tempt a few Philo-files. I know we do. But that being said, we’re not going after it on purpose. I don’t think it’s very wise or very exciting to go after the former Celine customers [so specifically]. But I think, yes, there are things in the brand, this craftsmanship, this bit of quirkiness, and the real-life angle that can very well attract former Celine customers. But again, this brand is a very different animal.
WWD: Who is your customer?
P.L.: We are not thinking in terms of target customers. We try to be quite open, quite approachable. Obviously, we try to make luxury that makes people interested or that makes them feel curious and excited. At the moment, even though we are growing, we are still appealing to a savvy, educated customer. But at the same time, we can sell something very whimsical, like baskets or a small animal bag to people who don’t know the full brand story.
WWD: The work that Jonathan is doing is quite remarkable. You describe it so well as a cerebral-craft-whimsy fusion. It’s very distinctive.
P.L.: It’s not one-dimensional. We are not trying to be based on one single aesthetic. At the same time, what Jonathan does and what we try and make the brand known for is quite articulated because we have these multiple facets to work with. The shows can emphasize the luxury side or the craftiness. Then, we have a capsule a few months later, which still expresses the craft dimension but in a very lighthearted way. I think he’s really good at that — to never be boring and to make sense.
WWD: Not boring while making sense. I don’t think I’ve ever heard someone put it that way before. Talk about the shows. Increasingly there is an art installation element. How did that evolve?
P.L.: Because we could pay for it.
P.L.: Jonathan has always been obsessed with art, and I think it fits with the brand. The stores as well, the art is a very good way to express the brand. We don’t go for institutional, corporate art. Jonathan curates himself, and finds what he likes or what the brand is about at this particular moment or one facet of it. It’s also for the staff. For all the people inside, it’s super interesting.
WWD: Sourcing must be an exciting process.
P.L.: It’s about full-fledged curiosity and identifying things. Sometimes we can’t afford it, sometimes we can. We are building little by little, which also contributes to building the brand identity.
WWD: Interesting that the art is considered part of the brand identity. The Lisa Brice screen in the SoHo store is pretty fabulous. What was the design goal for the store?
P.L.: Especially with these flagships, we ultimately consider physical stores as media, a communication tool. Of course it’s commercial and it has to work and productivity has to happen. But for a brand with strong product traction that still has low global awareness, the store is the best, most complete way to show what we are, because it’s not obvious. We are developing quickly but I think the concept is of an old brand. It is an old brand but also a very young one. So stores are the best media, the best way we can say who we are. And also not just through product and atmosphere but also through the people inside. Also, direct retail is the most unfiltered, real-time channel to get information from the client; we receive reactions in real time from real people. So with every store we open we learn a lot.
WWD: You’re just starting to do e-commerce now. What percentage of the business is your own e-commerce?
P.L.: Oh, it’s very small. It’s growing very fast. But it’s very small.
WWD: When did you launch e-commerce?
P.L.: E-commerce has been around for five years or something. But the product availability behind it was really not there, so this is a very important project that we have started with significant investment because the web site needs work. We are on it.
Most importantly, we are working on the channel capabilities and services, which is fairly technical actually. It’s about connecting our stock, our store and supply chain, which at the moment is not the case. From the client perspective, that means seeing something in store but ordering it from the store via the online site or vice versa.
These things need a lot of processes behind them, which we are really investing in. In less than one year we should be up to speed with our web site, which will be more aligned. We will build a seamless connection for the client. Whether she buys something in-store or online, it will be the same source of stock.
WWD: In New York, you’re in Neiman Marcus, Bergdorf Goodman, Nordstrom and Saks. As you build your e-commerce and as you develop the flagships in those essential fashion capitals, are you thinking of decreasing your presence in multibrand stores?
P.L.: No. We are betting on developing stronger and stronger partnerships with some of them as we grow, especially in terms of pop-ups — particularly in the U.S. It depends on the markets, really. In China you have almost no wholesale, so we are full retail. We adapt to each market. Historically, the brand was predominantly retail. Wholesale is fairly recent. It really started I would say six years ago, again.
P.L.: And for ready-to-wear, it’s very important. Because as much as we’re developing and pushing the walls of the retail network, the ready-to-wear really needs exposure. It makes it much easier to understand what the brand is about. Obviously, we are still predominantly leather goods, but we need exposure for the full offer for the brand to grow.
WWD: What percentage is leather goods versus ready-to-wear?
P.L.: Oh, it’s a big one. It was less than five percent before but we are growing very quickly. But the purpose of ready-to-wear is not so much in terms of share of sales; it’s really to present the brand, I mean, to be competitive and to present the brand in a fully understandable way. We don’t even have targets in terms of percentage. We have targets in terms of exposure.
WWD: In terms of exposure in the major capitals? How do you measure that exposure?
P.L.: With the number of stores. Three years ago, I think we had slightly more than 20 stores carrying something else versus leather goods, maybe 20 to 22 carrying ready-to-wear. Next year, I think will be at 70 stores out of 130 carrying ready-to-wear.
WWD: So even your own stores?
P.L.: I’m talking about our own stores. Even after Jonathan was here for one or two years, only 20 stores were carrying the full offer. That’s what I meant before when I said the network has not been adjusted. We’re moving, I think now we’re around 60, heading toward 70. Not all of them are flagships, of course.
WWD: What are the brand’s greatest strengths?
P.L.: I think the obsession and the expertise for things well-made, and the expertise in leather that we have and that we keep developing, combined with this energy and curiosity that Jonathan brings. And, I would I hope, quite a well-balanced approach to growth. We want to grow now. We have outgrown every plan or expectation so far. Now, considering the brand’s current size, reaching one billion euros in the next three or four years should not require a major stretch.
WWD: Reaching one billion euros within four years?
P.L.: Three or four years. This should not be too complicated, considering the size we are at and the fact that we have grown much more quickly than we originally expected.
WWD: Is that a hard target?
P.L.: It’s an ambition; it’s not an obsession. When we do projections and considering that the U.S. is not yet completely developed; we are not in the Middle East; we are hardly in Russia. We have still a number of untapped territories, and we have been growing very strongly in the ones where we were already present.
But the obsession is to grow in a qualitative way. The beauty of Loewe ideally would be to keep the outsider edge while we make the brand stronger and more resilient. Hopefully, we are growing in awareness. As we do, we want really to keep this quirkiness or this freedom to mix things that usually don’t go together [with significant growth].
WWD: Your marketing materials say that Loewe is a house focused on craft and culture. What does that mean?
P.L.: Craft is really a number of things. We started off as a collective of leather workers, we are completely obsessed with making things, inventing things, whether objects or clothes. There is an attachment to the fact of making things. From there you probably talk about this craft prize [Loewe Craft Prize], promoting and recognizing the importance of people who do creative stuff with their hands. So that’s craft. The thing about culture, that’s something that Jonathan really [highlighted] in the brand but it was there before. The brand has had a foundation for more than 30 years now, doing a poetry prize and promoting the idea is that luxury is very linked to culture. Of course, it’s about merchandising and there’s a pleasure in just buying stuff, but it’s not just this. We are not just creating merchandise. [What we make] has a background.
WWD: Is it ever difficult to reconcile the scale and dominance of LVMH to that very intimate personal expression of craft?
P.L.: The way LVMH proceeds, each maison is very autonomous, especially in terms of strategy and defining our identity. But there are a lot of resources to be shared and to learn from. The great thing is that we are supported, especially in terms of IT and in the markets. But on a day-to-day basis, to really feel like a house, like a maison, we function and evolve in a very autonomous manner. I mean the factory is in Spain.
WWD: How much is produced in Spain?
P.L.: Almost all the leather goods, including most of leather garments. The ready-to-wear is more classically produced — Italy, a bit of France, in a variety of origins. But leather goods are really Spanish.
WWD: Let’s wrap up back on Greene Street. What do you want people to feel when they walk in the store?
P.L.: I want them to feel comfortable. To feel a sense of discovery. That you can’t see everything at once, that there are interesting things to discover before you even think of buying a thing. And warmth, a homey feeling. This sense of warmth is really important.