How a New Designer at LVMH Could Shift the Luxury Landscape
(Bloomberg) -- Hedi Slimane will show his first collection for LVMH’s Celine label on Friday. Under the star designer, who’s returning to fashion after a two-year hiatus, the French conglomerate wants to double or triple Celine’s sales within five years, adding new product categories to transform it into a megabrand on the scale of Christian Dior or Prada.
Here’s how the most anticipated show of Paris Fashion Week could affect the luxury sector’s bottom line.
Slimane is best known for setting the menswear agenda when he brought back skinny suits and jeans at Dior Homme in the early 2000s, prompting men around the world to retire their flouncy trousers and pay a premium for form-fitting looks.
During a subsequent four-year tenure at Kering SA’s Yves Saint Laurent, he turned the floundering French fashion house into a commercial force. He put in place an ultra-branded, black-and-white aesthetic for marketing campaigns while mining the house’s archives to pull together retro, rocker-chic looks that put a California spin on French luxury. Slimane filled Saint Laurent’s shelves with biker jackets, sleek handbags and easy-selling $450 low-top sneakers.
Celine, a Parisian accessories brand founded in 1945, was elevated by designer Phoebe Philo, who left last year after a 10-year stint. While star products like the $3,000 Phantom handbag and $500 Edge sunglasses increased revenue to roughly 1 billion euros ($1.16 billion), Philo remained committed to niche positioning, shunning e-commerce and social media.
Slimane’s mandate is to scale up the brand, expanding into menswear, fragrances and haute couture.
The move by LVMH Chief Executive Officer Bernard Arnault to tap a star designer at Celine could be seen as a riposte to archrival Kering, which reported 25 percent growth last year, with its hip Gucci and Balenciaga properties outpacing competitors.
For LVMH to meet its revenue target of 2 billion to 3 billion euros for Celine, the label will need to grow as much as 15 percent a year. That’s at least three times the pace of the global luxury market, according to consultancy Bain.
Sector experts seem unconcerned. LVMH -- whose other brands include Louis Vuitton, Dior and Fendi -- is the world’s largest luxury goods maker and France’s most valuable company, and has unrivaled investment firepower to promote Slimane’s Celine.
“He’s a brand in himself, and anything he touches makes money,” said Gachoucha Kretz, marketing professor at HEC Paris business school.
Since Slimane’s departure from Saint Laurent, that brand’s growth has continued. New designer Anthony Vaccarello has made his mark on ready-to-wear collections with a sexed-up, 1980s aesthetic and cinematic runway shows against the backdrop of the Eiffel Tower. But the brand has largely remained within the broad outlines of Slimane’s monochromatic, youth-focused template.
“If Celine is going to grow significantly, and I believe it will, the question is from which brand it will take market share,” said Mario Ortelli, a luxury consultant. Saint Laurent is one label that could be affected “due to its price point as well as its recent heritage with the designer.”
Slimane has teased his debut by unveiling his first handbag -- classic, structured, black -- via a gift to singer Lady Gaga, who was photographed wearing it in the Louvre. He’s unlikely to follow the trends of recent seasons with oversized parkas at Balenciaga and protective foam sheath dresses at Prada. In an interview with French newspaper Le Figaro this week, he declared his continued devotion to the skinny look.
“I found my style more than 20 years ago, unless it’s the other way around,” he said. “It passes through a line, a stroke, an appearance, a silhouette that I have been obsessively pursuing since.”
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