Louis Vuitton, the prominent brand under LVMH, is experiencing remarkable success and potential. Following the untimely passing of Virgil Abloh in 2021, the fashion house has found a new leader for its men’s collections. American pop star Pharrell Williams has been appointed to this role, bringing his diverse background as a musician, author, performer, producer, and stylist. This change signifies a shift in direction for the brand as it further solidifies its presence in the lifestyle sector. The decision made by the new CEO, Pietro Beccari, showcases his determination to propel the brand to new heights.
Beccari has taken over from Michael Burke and inherited a well-established and successful operation. Under Burke’s leadership, Louis Vuitton has achieved remarkable results. In January, Bernard Arnault proudly announced that the brand is expected to exceed 20 billion euros in sales for the first time. Within just four years, Louis Vuitton has doubled its sales and maintained record profitability, even amidst the challenges posed by the pandemic. The success can be attributed to a well-executed strategy, constant diversification, a widespread network of stores, and effective global communications.
Based on estimates by Bernstein, Louis Vuitton’s sales are projected to approach 22 billion euros in 2022, with an operating profit of over 10 billion euros and a margin of approximately 50%. The brand currently employs 33,000 individuals worldwide and plans to add 9,000 more employees within the next three years. With 460 stores in approximately 60 countries, including key markets such as France, South Korea, Japan, and the United States, Louis Vuitton has established a formidable global presence. Its production relies on 19 workshops in France and three sites in Italy, including a shoe factory.
There are several key factors contributing to the success of Louis Vuitton. One crucial element is the brand’s ability to create a sense of luxury and exclusivity. Luca Solca, head of the luxury sector for Bernstein, explains, “Luxury is a fixed cost business. The bigger a brand is, the more it can spend on doing things right: more beautiful boutiques, more communication, more prestigious initiatives.” Louis Vuitton’s scale and resources allow it to invest in high-quality boutiques, extensive communication efforts, and various prestigious initiatives, solidifying its position as a symbol of luxury.
With its omnipresent presence in campaigns and product launches throughout the year, Louis Vuitton has amassed nearly 90 million customers worldwide. The brand leverages its unmatched media prowess, utilizing channels such as stores, advertisements, and social media to reach its customers. Collaborations with influential artists, such as Japanese artist Yayoi Kusama, highlight Louis Vuitton’s ability to captivate audiences with impactful installations in luxury cities. Notable events like the concert by Rosalia, held in the Cour Carrée of the Louvre in Paris, have also showcased the brand’s men’s collection.
Over time, Louis Vuitton has built a comprehensive and cohesive brand universe. Starting as a trunk maker, the brand gradually expanded into various segments, including ready-to-wear, accessories, watches, eyewear, jewelry, and in-house perfumes. In 2012, Louis Vuitton ventured into furniture and continued to develop its lifestyle offerings, such as tableware, stationery, technological objects, and more. While maintaining its expertise in travel, the brand also explores new territories, such as opening restaurants in Japan and collaborating with renowned chefs. Additionally, Louis Vuitton has published famous “City Guides” and engaged in various artistic collaborations.
Apart from its cultural image, Louis Vuitton excels in commercial strategy and logistics. The brand boasts a wide and creative product assortment, with swift collection renewal in smaller volumes. This meticulous inventory management allows for the maintenance of rarity and creates a captivating aura of desirability. Louis Vuitton also maintains control over its direct sales network, with various store formats and prime locations worldwide. This control enables the brand to strategically manage its price positioning and provide personalized service and experiences to customers. Customer service is prioritized, and a loyal customer base has played a crucial role in sustaining the brand during periods of tourism decline.
Pharrell Williams’ appointment as the head of men’s collections marks a significant step for Louis Vuitton under the new leadership of Pietro Beccari. Williams, an executive and rapper, brings a wealth of experience and familiarity with the fashion industry. Having previously collaborated with Louis Vuitton and establishing his own streetwear labels, his appointment raises speculation about potential changes in the creative direction of the women’s ready-to-wear collections, currently led by Nicolas Ghesquière.
Looking ahead, Beccari aims to explore new avenues for Louis Vuitton’s growth. One possibility is the opening of a Louis Vuitton hotel, potentially at the brand’s Paris headquarters. Yves Hanania, founder of consultancy firm Lighthouse, suggests that a hotel and a tailor-made travel agency would align with the brand’s history and cater to the luxurious lifestyle of its affluent customers. The future holds endless possibilities for Louis Vuitton, a brand that has consistently managed and nurtured its potential to unprecedented heights.
Links:
1. Louis Vuitton Official Website
2. LVMH Official Website
