NEW YORK — Luxury today is about more than just a high price tag and exclusive distribution.
“Luxury is attention to detail and quality, backed by superior service,” said Jeffry M. Aronsson, the new chief executive officer of Donna Karan, when asked how he defines the elusive word. “After that, it’s all emotional.”
Aronsson was speaking as part of a panel discussion last Thursday night with four ceo’s from divisions of LVMH Moët Hennessy Louis Vuitton.
The event, held at the penthouse of the LVMH Tower on 57th Street here, was moderated by Stefano Tonchi of The New York Times magazine and organized by LVMH Watch & Jewelry USA president Daniel Lalonde. The four panel participants were Aronsson and Lalonde, along with Pamela Baxter, who was recently named president and ceo of LVMH Perfumes & Cosmetics for the U.S., and John Esposito, president and ceo of Schieffelin & Sommerset Co., a joint venture between LVMH and Diageo, the wine and spirits company.
“I don’t think luxury is about scarcity,” Esposito said. “I think it’s about how you make consumers feel about themselves and our challenge is to maintain relevancy to consumers.”
When asked how it’s possible to enlarge a brand without diluting it somehow, Aronsson spoke about Marc Jacobs International, where he had been ceo, and how that company has been able to achieve significant brand expansion through its fast-growing accessories division, as well as its secondary line, Marc by Marc Jacobs, which carries lower prices than the core collection.
Lalonde noted that the Tag Heuer watch brand is introducing a slightly lower-priced collection, with retail prices starting at about $700.
“Our average price had gone up to about $2,000 and we felt we had left behind a niche,” he said. “We feel this won’t take down our image, but will resonate as well with 16-year-olds as with 60-year-olds.”
Responding to a question about luxury retailing, Baxter spoke about how many consumers today shop “high and low,” which is hurting certain segments of the business.
“People shop at high-end stores and at chains like Wal-Mart and Costco,” she asserted. “Department stores are caught. They are not offering luxury brands and they are not giving service. They are stuck in the middle and the middle is where everyone is having problems.”
The executives also shared their advice about how to manage and lead luxury companies, a particularly welcome theme for the 120 audience members, since many hold MBAs and are embarking on careers in business.
Lalonde said the most important thing in leading a company is “knowing what you want to achieve.”
“It’s about setting a vision and making sure that is communicated very well to everyone in the company,” he said. “I also believe people have to take risks and you need to foster that kind of environment.”
Aronsson, who enthused about the potential for Donna Karan, spoke about how he is looking to build the brand while developing relationships built on integrity. At the end of the discussion, the panel members shared their advice for departing Gucci Group ceo Domenico De Sole.
Aronsson’s recommendation? “Take the time, enjoy the wine and smell the roses.”