Jean Cassegrain must be one of only a handful of executives based in Europe that isn’t too concerned about the impact the eurozone crisis will have on sales of luxury goods. While the CEO of the luxury French bag maker, Longchamp, admits it would be “irresponsible” not to be a little worried, he adds that with sales for his handbags continuing to rise from Paris to Dubai, he is bullish about the year ahead.
“As of today we are not seeing any sign of a slowdown in our sales; they are still very strong and are actually going up in most places,” he tells Arabian Business.
“We are fortunate that we are very diversified [geographically]. We are in many countries so maybe if it’s difficult in Europe, it’s better in Asia and here [in the Middle East],” he adds.
Global sales of luxury goods are expected to rise seven percent annually through to 2014, buoyed by a still growing Chinese market and barring any major economic crises, consultants Boston Consulting Group said in June.
Much of the reason for Cassegrain’s optimism stems from the fact that Longchamp, a company founded by his grandfather, Jean, in 1948, is so diversified geographically. Even as far back as the 1970s the Paris-based firm had boutiques in Japan and Singapore.
When Jean Sr’s son, Philippe, joined the family business, his grandfather sent him across the world in search of new markets, says Cassegrain. “My grandfather had a very international vision from the outset; he chose the name Longchamp because it works well in many languages, and it’s easy to say in different languages.
“Two years after my grandfather created the company, he created the export department and hired an export manager. He sent my father to Singapore and Hong Kong when he was seventeen by sea and the following year he went to a trade show in New York so the international aspect has been very present in the company from early on,” he adds.
Today, Longchamp has 1,800 points of sale across the world and generates around 40 percent of its ¤90m ($117m) turnover outside of Europe. Cassegrain expects business to increase up to seventeen percent next year as sales in Asia continue to grow amid increased demand for luxury goods. “Our turnover was up 21 percent last year and this year in 2012 we expect it to be probably at around sixteen-seventeen percent on 2011,” he says.
“Overall, I am rather confident because there are some very strong underlying trends that are not going to slow down. There are a number of people in certain countries like in Asia, for example, who are striving towards a certain level of prosperity [and want to buy] luxury goods.
“These people also have the means to travel; they shop and they are enjoying spending money. These are strong sociological trends that might be affected temporarily by something [like a downturn] but in the long run we are riding a very strong trend of development,” he adds.
Longchamp might be renowned for its handbags today but its roots are quite different. Jean Sr initially made leather pipe covers after inheriting the family tobacco shop shortly after the Second World War. The leather-covered pipes gained in popularity and quickly become a much sought-after item in Paris. Longchamp, which takes its name from the horse-racing course just outside Paris along which its founder liked to walk and still bears the logo of a jockey on a racing horse, then branched out into men’s leather accessories before launching its women’s collection.
Today, it is one of the last remaining independent family-owned leather goods makers in France with a global presence. The family that created the brand also remains very much involved in its day-to-day running with Cassegrain’s father, Philippe as chairman, he as CEO and his sister Sophie Delafontaine as the artistic director.
“The company has really evolved. One of the special things about the brand is that from pipes to today it might not look like it has much in common but there are some underlying values that are still there,” he says.
“The most important change in the last 20 years is that the brand has evolved more towards fashion,” he adds. “Thirty years ago handbags were primarily a utilitarian object and women bought them for their convenience, which is no longer the case. The handbag is not only part of the world of fashion, it is at the forefront of fashion so we have to adapt ourselves to the situation,” he adds.
Today, the brand is most famous for its Le Pliage line, a collection of foldable travel bags made of vinyl and leather trim, which it first introduced in 1993. The bag, which literally translates to “fold”, can be folded up into a small pouch making it ideal for travel. Its popularity allowed Longchamp to penetrate new markets abroad, including the United States.
Longchamp is also renowned for its collaborations with notable designers, artists and celebrities. The English designer Thomas Heatherwick designed the company’s SoHo boutique in London and Kate Moss partnered with the brand in 2010 to create a range of her own handbags after featuring in their advertising campaigns for several years. In March 2011, Cassegrain credited the British model’s designs as making up a significant portion of its overall sales.
Despite early expansion into Asia, Cassegrain admits Longchamp was late expanding in the GCC, where it currently has three stores. The brand, along with its local partner the Chalhoub Group, plans to open several new stores in Qatar and Abu Dhabi as it moves to boost its presence in the Middle East. “It is becoming more and more important. We weren’t very active in the GCC until about four-five years ago because as a medium-sized company you cannot do everything at the same time,” he explains.
“We are in expansion here, we just opened in Saudi Arabia, we have expansion plans for Abu Dhabi and Qatar in the coming year so it’s becoming significant. In the GCC, we have three stores in Dubai counting Galleries Lafayette, we have one in Kuwait, Riyadh and we are counting on at least two more next year. It’s not set in stone but we are looking at Abu Dhabi and Qatar,” he says.
The firm is also starting to see sales pick up in Egypt following the election of its new president, he adds.
“We are one of the very few luxury brands that is available in Egypt. It was a market that was doing very well until the revolution, which bought with it many difficulties, but after it stabilises I am confident that it will pick up again, we feel there is really an appetite for the product there,” Cassegrain says.
With ever-increasing sales abroad and a talent for seeking out new markets in the emerging world, it’s fair to say that Cassegrain’s grandfather would certainly be proud of his company’s current management.
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