The Hindu Business Line : Slow and steady

As the largest luxury group brand in the world, French brand Louis Vuitton sees great potential in India. “Young executives here are treating themselves and others and that’s all about luxury,” says Yves Carcelle, CEO and Chairman,Louis Vuitton. With over 400 stores dotting the globe’s most prominent cities, the LV brand is now indulging the extravagant Indian. Four stores in India now - two in Delhi, one each in Mumbai and Bangalore - and Carcelle says there’s no reason for Louis Vuitton not to be in Chennai, Kolkata and Hyderabad if these cities offer the right location, the market and the environment.

Though Louis Vuitton was one of the first to land in the country, in New Delhi with a quick follow-up in Mumbai in 2004, it did take some time to open its third store in Bangalore (which was last week). Carcelle justifies the hesitation: “Other cities couldn’t give us the location we wanted. Now we have found the UB City in Bangalore and the Emporio Mall in New Delhi and know of certain projects in other cities and are following them carefully.”

With a combination of hotels and luxury malls as locations for its stores in the country, which way would luxury distribution for the brand go here in future? “If certain cities cannot offer us luxury malls, we may have to look for retail arcades. When we began here in India, hotels were perfect because they provided us the environment and there are a limited number of customers who like to shop in hotels. But these people also like going to malls, and so the two (hotels and malls) have a role to play in luxury distribution.” For instance, Louis Vuitton stepped into Hong Kong, through the Peninsula Hotel, more than 29 years ago. Today it continues to be in the Peninsula and has five other stores in malls. Ditto with Singapore and Hanoi.

“Luxury hotels provide an environment that is Louis Vuitton-compatible. Let’s see how it develops in India.”

Louis Vuitton is not too keen on a presence in airports, he says. “This doesn’t mean I’m judging people who are present at airports, but we like the idea that people take time to shop.” A brand that needs to attract customers needs to be in airports, he justifies. “A brand like ours has high desirability and now that we have 400 stores across the world, it makes it easier for them to come to our city stores.”

The launch of luxury retail malls means entry of other big names such as Armani, Cartier, Tod’s and Canali. What would be Louis Vuitton’s strength in India where the market is limited?

In his opinion, the arrival of new brands will only enlarge the market and it’s good to give people a choice. “We have been here before any other luxury brand and in both the malls now we are in prominent positions.”

But there could be competition from other Asia-Pacific locations such as Singapore, Hong Kong and Malaysia which are hot destinations for Indian shoppers? “India could pose some challenges in terms of infrastructure and FDI laws. But in our opinion there are no first and second markets and we will make sure Louis Vuitton bestsellers are exactly the same all over the world,” says Carcelle. The only delayed launch that he foresees in India is in the luxury ready-to-wear segment because women here prefer saris, which go very well with Louis Vuitton shoes, bags, jewellery and watches.

Pricing points too are the same across the world, starting at 100 euros and going up to 500,000 euros. Even when there is a limited edition launch, Louis Vuitton tries to split one or two products at each store. In fact, every Louis Vuitton store in the world would look the same because the luxury brand owns every one of them. “It’s too bad we don’t believe in franchising and own every one of our 409 stores,” he laughs. And that’s why his wish is to be in India 100 per cent as quickly as possible, though the law demands otherwise. Louis Vuitton invests around 200 million euros in building stores across the world every year. “We have our own subsidiaries in Russia, China, Vietnam, and are waiting to do that in India,” says an eager Carcelle.

About 209 of the 402 LV stores have North American and European addresses. Fifty-six are in Japan, 20 in Latin America and the rest in the Asia-Pacific region. Sales too are equally split between the two halves of the world. And Louis Vuitton’s expansion too will happen equally across the world, he says.

Dismissing the dreaded ‘R’ word as having had ‘no impact,’ Carcelle says, “Maybe we’ll escape recession. In fact, at our shareholders’ meeting last week, our chairman mentioned that we have achieved double-digit growth in the first quarter.” But then that’s because when things are uncertain, Louis Vuitton is of eternal value, he declares.