By Claire Ferris-Lay
Christian Lacroix is benefiting from the Gulf's rising disposable incomes, and expensive tastes.
The Christian Lacroix brand is benefiting from the Gulf's rising disposable incomes, and expensive tastes. Claire Ferris-Lay speaks to company president Nicolas Topiol, and finds out why haute couture means big business.
Christian Lacroix's design credits have included the uniforms of Air France cabin crew and Christina Aguilera's wedding dress. Now the French couturier is eyeing clientele in the Gulf, where rising incomes are helping to boost profits at the exclusive label.
When a company announces a 40% increase in sales, it's usually something to shout about. That is, of course, unless you are Nicolas Topiol, president of French fashion house, Christian Lacroix.
"We don't like to give numbers," he tells Arabian Business. "The business today is in a much healthier state than it was three years ago in terms of strategy and brand positioning," he adds, without revealing details about the financial performance of the haute couture line, the exclusive custom-fitted clothing business Lacroix is most famed for.
"A few years ago it may have been considered a little old fashioned but it certainly isn't today. In fact it really is quite the opposite.
One region where haute couture hasn't lost any of its fashion appeal is the Middle East, where the Christian Lacroix stores are to be found in the UAE, Qatar, Lebanon, Kuwait, Bahrain and Saudi Arabia. The booming economies of the Gulf states has seen disposable incomes surge among the label's exclusive market, who can afford to pay between US$29,000 and US$58,500 for a single garment.
Topiol cites the company's recent successful sales as evidence of a resurgence of new clientele discovering the history behind the label.
"[The successful sales] are a reflection of our existing clientele and clients who are discovering haute couture for its heritage, craft and the exclusivity of the garment that Lacroix designs. We create an art," says Topiol.
The Lacroix president talks to Arabian Business just hours before Christian Lacroix's fashion show, the couture house's fourth show in Dubai and notably Topiol's debut visit in the city.
Surrounded by impossibly tall models, hair and make-up artists all flown over from Europe especially for the fourth Dubai Fashion Week show, Topiol says the region represents an important area of growth.
The fashion house currently has two company owned boutiques in Paris, one clearance outlet outside of Paris, a recently opened one in New York and one in Las Vegas. Of the 23 freestanding franchise boutiques around the world, seven are in the Middle East in addition to six in Argentina and five each in Japan and France.
Although the Dubai Fashion Week event represents the fourth time the label has shown in the region, Topiol does not consider the Middle East as an emerging market for the brand. Lacroix, established in 1987, has long been a favourite fashion house for women in the region who typically have the disposable income required to be buyers of haute couture garments.
We have had haute couture clients from the Middle East for some time and I think that's similar for other houses. We have found more and more clients and now we are dressing the daughters of our original clients which is really wonderful. We like the continuity of the relationship between our customers.
The increase in sales for the haute couture business comes as good news for Topiol, whose Florida-based company, Falic Group bought the Christian Lacroix business from luxury brand LVMH Moët Hennessy Louis Vuitton three years ago.
At the time, LVMH announced it wanted to focus on other brands with greater potential and Lacroix himself hinted at difficult relations with the company. "What I want is to finally be heard, which hasn't happened for the past 17 years, and for the right people to be given the right jobs," he told a reporter at the time.
"Our main interests are in Duty Free stores and [the group] is the largest operator of stores in the US and South America. We had already bought make-up brands Urban Decay and Hard Candy and when the company said they were looking to sell Christian Lacroix I went to Paris, negotiated the deal and took over the business. The acquisition price is not in the public domain. Even though our image is public, we manage to keep it quiet," says Topiol.
When the Falic Group took control, skeptics feared the brand, which is ultimately known for its exclusivity, would be forced to go down market to allow the company to start posting profits once again.
In fact, Topiol did exactly the opposite, almost doubling investment in the couture business. The CEO has worked hard to untangle the brand from its predecessor and take it back to its luxury roots. "It has been an interesting first three years. We've had to rebuild the business into a stand-alone entity because it was a very integrated structure. We've rebuilt the whole infrastructure from the computer systems up. Now that's done, we have good foundations."
It hasn't come without its ups and downs. Sales of couture may be up 40% but trying to encourage young blood to enter into the couture business has been difficult over the past few years. One of the biggest problems is that couture is so specialised.
There are two businesses in haute couture; the main atelier and the production units. In the production units, which are very specific and highly skilled I feel there are some good people emerging. The work inside the atelier is a little more challenging, it's not a disaster, we don't need thousands more people working there but it is something which needs to be addressed.
"Other couture houses have already started to address the problem and so are we. We are hiring younger workers but it really takes three to four years for a hand to reach the right level. It is not something that someone can come into and two months later they are operational, it takes time, it's a craft."
One of the biggest decisions Topiol made when he first took over Christian Lacroix was to phase out the Bazar and Christian Lacroix Jeans diffusion lines, which were launched in 1994 and 1995 respectively.
"The way we were set up before with three lines was extremely confusing and there wasn't enough distinction between the two. If you looked at a Bazar product, for example, which retailed at a third of the price of a Christian Lacroix product, you wouldn't be able to tell the difference visually," he explains.
"It was a pretty bold move to stop doing the diffusion, but the ready-to-wear line has similar price points to the diffusion line so not everything is expensive. We just wanted to reconnect the garment part of the business and bring it closer to haute couture, which is the image of the company," he says.
In addition to the haute couture and ready-to-wear lines, Christian Lacroix boasts an accessories line as well as bags and jewellery collections, wedding dresses, lingerie and bath products. The menswear range, which was introduced four years ago, has been an important addition to the company and Topiol describes it as an area in which he will be focusing on further in the coming months.
Most notably, Topiol has launched two Christian Lacroix fragrances through an exclusive deal with Avon. The products have done so well, Andrea Jung, chief executive of Avon recently attributed around half of the Avon fragrance business growth to the Lacroix scents.
Topiol, who likes to place the brand where it is least expected, believes the collaboration between Avon and Lacroix was a way to take the brand further afield without exposing it to the masses and losing the essence of Christian Lacroix.
"Avon is a company run by women, for women and we're about women. So we really felt it was a great opportunity to carry the message of the brand into places where people didn't know who we are," explains Topiol.
Christian Lacroix Rouge, for women and Christian Lacroix Noir for men are Avon's two most expensive fragrances but Topiol believed the price was an important factor in order to maintain the brand.
"We told Avon to test as high as they think they could go and they did. The result has been way beyond our expectations, it's been a great surprise and a great partnership," he adds.
Doesn't Topiol think it unusual to focus on the higher end of the market for the clothing but sell the brand's fragrances to a catalogue company? Far from it. "I don't see Avon as a mass product. It's not as if we are selling the perfume in Wal-Mart. We went into a very specific arena that has a very specific distribution channel."
Following on from the success of the two perfumes, Topiol hints that further collaborations may be just around the corner but only if the right deal came along. "It is possible. It's been hugely successful and went way beyond our expectation. I am fortunate enough to work with a designer who allows us to do a lot of things and do it well.
"We are looking at opportunities but we say no a lot more than we say yes. We have a couple of things we would like to explore outside of fashion," he says.
France remains the company's biggest market, but the Middle East, Japan and America all hold roughly equal weight in terms of sales and therefore the brands presence is an important one at Dubai Fashion Week.
"We try to do a number of events in foreign markets so we recreate what we have done in Paris. It's my first time in Dubai. We like being here because people really like Lacroix," says Topiol.
We are looking at a couple of other projects in the region - not Dubai - but it's not fully finalised yet," he adds. Topiol likes to keep things close to his chest, but just a week after Dubai Fashion Week, American trade title, Women's Wear Daily reported planned boutique openings in Bahrain and Kuwait during 2008.
The magazine also hints Lacroix may be looking to seek an investor to further fund the brand's growth. "I want to make sure what our options are, and if there's an interesting proposal out there, we might consider it. If not, we'll just continue," Topiol told the magazine.
It is estimated, rather than confirmed that Lacroix has a wholesale volume of US$58m. But withholding information about sales isn't the only aspect of business Lacroix does differently. Many fashion houses employ celebrities to be the face of the brand; they appear in adverts, they are photographed wearing the clothes and invariably talk publicly about the brand.
On the contrary, Lacroix likes to rely very little on celebrity endorsement and unlike other fashion houses does not pay celebrities to wear his clothing. "Mr Lacroix is very true to himself so he'll never pay someone to come to a fashion show for example. If they want to come and if they would like to be dressed by us then it's our pleasure."
"We dressed Helen Mirren when she won the Oscar for best actress. She was then selected as best dressed which was wonderful for us," he adds. Other celebrity fans include Kirsten Dunst, Christina Aguilera and Eva Longoria.
"We didn't dress Christina Aguilera, she came to us. We don't usually expect that from a star but she came as anyone else, looked around and we ended up making her dress. It was pretty phenomenal for us," he adds.
A new-found celebrity status, increased sales, new profitable concession lines and a number of new deals in the pipeline. Lacroix may not have been happy with his last partnership, but it would seem this one could be the answer.