Pop into the Christian Dior flagship on Avenue Montaigne in Paris on a Saturday afternoon, and you have a pretty good chance of running into Sidney Toledano, the fashion house’s tireless and charismatic chief executive.
While Toledano has spearheaded the company’s modern growth phase — characterized by an aggressive retail rollout, a major push into leather goods and the appointment of a trio of creative directors — he’s also a passionate retailer and product person, eager to chat with boutique regulars and show off small, but crucial details inside a handbag or wallet.
He insists that rigor, discipline and attention to little matters — coupled with formidable creativity — is the combination that will push the French fashion house past the $1 billion mark this year, with its global store count approaching some 230 locations.
When Toledano arrived at the company in 1994 from leather goods firm Lancel, Christian Dior had been a global brand for aeons. But its transformation into a modern luxury player can be traced back to 1984, when Bernard Arnault, then a builder and real estate developer, acquired the bankrupt Boussac Saint-Frères textile conglomerate, whose disparate holdings included a furniture chain, a children’s park and Dior. The latter became the cornerstone upon which Arnault built the sprawling luxury empire that would become LVMH Moët Hennessy Louis Vuitton.
Up until the mid-Nineties, Dior had more than 100 licenses — including an American women’s suit line made by the Jones Apparel Group and another with Warnaco for shirts, ties and men’s small leather goods — and Arnault “started the cleaning,” Toledano recalled. His broad mission, guided by Arnault, was to bring Dior’s business model into the modern luxury age, transforming it from a licensing-driven company to one centered on control of production and distribution. That not only meant rebuilding the organization, and launching into the lucrative accessories category, but reenergizing the house and making it relevant to a new generation.
“You cannot turn around a fashion brand without talking to the younger generation,” Toledano said, sitting in the hushed, neo-18th-century Dior offices on Avenue Montaigne, the brand’s historic home since 1947. “We needed to bring fashion energy to the house.”
Initially, as Dior’s deputy general manager, Toledano set about building a leather goods operation, working under then-ceo François Baufume. (In 1993, Dior sales totaled around $160 million.) The Lady Dior, introduced in 1995 and carried by the likes of Gwyneth Paltrow and Diana, Princess of Wales, was the house’s first runaway hit in the category. Priced at more than $1,000, the Lady Dior proved the brand could attract customers for high-end leather goods — and the style continues to sell strongly today.
Best known for its fashions, Dior did not have a deep heritage in leather goods and had licensed them for years. Toledano estimated the category accounted for about 3 to 4 percent of the total business at that time, a pittance compared with today’s total of 45 percent.
Footwear also has kicked in strongly during Toledano’s reign, from less than 1 percent of the total business then to roughly 10 percent today.
Early success in high-margin leather goods allowed Dior to finance its growth without ever incurring big losses, according to Toledano.
Last year, net profits at Christian Dior Couture, which encompasses all brand businesses except beauty, rose 5.7 percent to 56 million euros, or $70.3 million at average exchange, on a 10 percent increase in sales to 731 million euros, or $918.3 million.
Toledano credits John Galliano’s arrival at Dior in 1996 — he showed his first couture collection in January 1997 — for bringing the creative spark that ultimately set the house alight. Using a flight analogy, the executive said: “When the plane is taking off, you have to have speed, but with speed only, you just go straight ahead. To take off, you need the creativity of John, first, and [jewelry designer Victoire de Castellane and men’s wear designer Hedi Slimane].”
Dior reached cruising altitude in 1999 with Galliano’s breakthrough Matrix couture collection, followed by a hip-hop, logo-driven ready-to-wear collection that launched the Saddle bag and propelled Dior sales ahead 35 percent. Although the terrorist attacks in America had a dampening effect in 2001, the next year saw growth of 45 percent, the first of several with big, double-digit increases.
Toledano acknowledged Galliano’s appointment at Dior was a gamble, and his arrival delivered a culture shock at Avenue Montaigne. “This company was very conservative. The culture of the house was a typical French ambience, très bourgeoise,” he said. Yet, despite Galliano’s outlandish personal style, his kindness and humility had a calming effect and won over the employees.
“He was not arrogant. He did not come in with a rock ‘n’ roll attitude saying, ‘I’m the best!’ We could see that he was impressed being in the salon of Mr. Dior. He has shown a lot of respect from the beginning,” Toledano said. “He was very sweet. He knows how to seduce people.”
Dior set the couture as the ultimate creative expression for the house and for Galliano’s creativity. “For him to be inspired, he needs a personage, a landscape — he’s like a painter,” the executive explained. “Couture, for him, it’s the way he shapes his feelings. He cannot do it right away, from that to a bag or a pair of shoes, or jewelry or a skirt.”
For example, Galliano showed a jacket in the Matrix couture that resembled a saddle, which eventually translated into the Saddle handbag, which went on to sell more than a million units, establishing the designer’s creative virtuosity with accessories, too.
That Dior has three strong design personalities — de Castellane has been at the head of fine jewelry since 1997, and Slimane at the helm of Dior Homme since 2000 — has been among the more controversial moves of Toledano’s reign.
“I remember people criticizing and saying that three designers for one name would be a disaster,” he recalled. “But I think it’s given a lot to the house. If you go to the Avenue Montaigne store, people love to go from the one universe of Hedi, to the different universe of John, to the different universe of Victoire….We are not monolithic.”
Toledano cited Dior’s long history of housing many strong talents simultaneously. Pierre Cardin, for example, was among Mr. Dior’s assistants, and Roger Vivier was in charge of shoe designs from 1953 to 1963.
Today, rtw represents about 25 to 30 percent of the Dior business, and Toledano insists the potential is much higher. “The objective is really to develop the rtw even more in a luxurious way,” he said. “It’s the best way to make the customer loyal, to come back three times a year in the store. It’s so important.
“Fine jewelry also has huge potential,” he continued. “And frankly, men’s can double. We should double in the next three to four years.”
Men’s wear represents about 10 percent of Dior’s business globally, but is as high as 20 percent in Japan.
Dior plans to continue building and improving its retail network, adding more locations in China and the Middle East this year. “The network is strong. We’ll be adding at least 10 to 15 stores per year…so I have a fantastic edge against my competitors,” said the ceo. “In terms of marketing, we’ll continue to be aggressive and creative.”
Looking ahead, Toledano spies many new regions into which Dior can expand, including China, India, the Middle East and even Europe, its fastest-growing territory last year. “You have Moscow, you have Prague, you have the Eastern [European] countries,” he added.
Given all those factors, Toledano said he’s plotting double-digit sales growth for the next three years, barring unforeseen disasters. Having broadcast its “Madame Butterfly”-themed couture show live at an event in Japan, Dior plans to step up its high-tech communication methods, on the Internet, mobile phones and future technologies.
As for achieving the $1 billion threshold, “It’s not the end of the story,” he chuckled. “When you reach $1 billion, you look for $2 billion. And the potential is there….The engines are full speed: 2007 is going to be a super year.”