What Groupe du Louvre has achieved over the past year is remarkable for a retail business – and even more remarkable for one in the depressed luxury goods market.
According to a recent report, sales …
What Groupe du Louvre has achieved over the past year is remarkable for a retail business – and even more remarkable for one in the depressed luxury goods market. According to a recent report, sales of its French crystal company Baccarat have grown so rapidly since the company took control of its local sales and distribution, that it is on target for a 200% increase in turnover on the business within 18 months. The success is partly a reflection of how the 235-year-old glass business had been allowed to languish, the report said. Set up by France“s King Louis XV, the Baccarat glassworks has been part of the Groupe du Louvre run by the Taittinger family, famous for its champagne, since just 1992. Its crystal champagne flutes have been raised in toasts by royalty since the 18th century, but sales had fallen to their lowest point in five years when the group took over the Compagnie des Cristalleries de Baccarat. In 1994, patriarch of the champagne dynasty and chief executive of Groupe du Louvre, Jean Taittinger, put his eldest child, Anne-Claire Taittinger-Bonnemaison in charge of the business and it is her touch that has helped the share price rise consistently since 1996. Two years ago, she turned her attention to Asia, revamping the distribution and sales in the region. “We have closed numerous accounts in Hong Kong and opened three new boutiques,” said Ms. Taittinger-Bonnemaison, chief executive of Baccarat and chairman of the board at Groupe du Louvre. “It“s a completely new presence for Baccarat.” The first new shop was opened in the Ocean Terminal in January, followed by a second in the Peninsula Hotel in Hong Kong in July and in Prince“s Building in August. Three new outlets have been set up in Lane Crawford in the same time period. Despite the investment in setting up the shops, the company expects to reach three-times its previous turnover by August next year. Ms. Taittinger-Bonnemaison said that taking on the sales operations from in-store crystalware departments had proved effective. “Margins made through the stores are better than those through department stores,” she said. The same approach had been taken in Japan, with equally dramatic results. “Japan was not a booming economy last year and we had double-digit growth,” she added. Overhauling the distribution had led that growth, she said, but sales had also been helped by an equally radical overhaul of the product line. Her first priority on taking over the crystal manufacturer was to modernize the lines and make them more accessible. At HK$ 680 for a champagne flute, the new range is not exactly cheap, but it is more accessible than the old range, in which a single stem could cost US$ 125. The glass factory also began turning out new products, including vases, light fittings, corporate objects, clocks, ornaments, candle holders and a complete line of jewellery, which has become one of the most popular product lines. In Japan, where traditional tableware made up 65% of sales three years ago, it now accounts for just 35 to 40%. Vases now make up 25%, decorative objects 15% and accessories 12%. Hong Kong is expected to develop in a similar way, with potentially more interest in lighting products.