On top of LVMH’s recent slowdown in overall sales, it seems that Louis Vuitton’s big “hyper-luxury” plan is off to a sluggish start. If you remember, in late September, the fashion house embarked on a new plan to offer really expensive and very exclusive leather goods in an effort to jump start slowing sales. And nearly a month later, not much has changed.
According to WWD, during yesterday’s third quarter anaylst call with LVMH, the conglomerate revealed that fashion and leather goods from LVMH’s other brands, including Céline, Fendi and Givenchy, basically performed better than Louis Vuitton. Guess the $4,730 handbags (that’s the LV Capucine style at left, priced at current exchange rates) weren’t quite resonating with exclusive handbag hunting shoppers. (Maybe they should have marketed to these guys?) However, it has only been a few weeks.
“Moving the [needle] in such a large company takes time,” chief financial officer Jean-Jacques Guiony said on the call.
Another obstacle in Louis Vuitton’s efforts to sell such high-end leather goods, the supply of natural materials. “The big challenge is mostly on the supply of quality leather, which is a scarce resource,” explained the CFO. Hence $1,700+ canvas bags?
Interestingly enough, while Louis Vuitton saw a decrease in sales from 10% last year to 5 to 6% this year, LVMH sibling Dior isn’t sharing the same experience. For the third quarter this year, Dior’s overall sales increased 13.5%. Guiony still hedges on making any Marc Jacobs successor confirmations for Louis Vuitton, saying it’s “too early.” But maybe the next LV creative director should call a brainstorm meeting with his Dior counterpart, Raf Simons, on luxury industry best practices.