A sense of place

WITH stints at Dior, Fendi and Bulgari, Michael Burke knows luxury. His elevation to run Louis Vuitton proves it.

Jewellery

MICHAEL Burke is the very model of a modern-day luxury goods executive.

He was born in France to a French mother and an American father, he grew up in Germany, speaks four languages and he has cut his teeth working for some of the world's best-known and most successful luxury brands such as Christian Dior, Fendi and Louis Vuitton (all owned by LVMH Moet Hennessy Louis Vuitton) riding the wave of the industry's unprecedented and phenomenal expansion in the 1990s.

Burke has worked for Bernard Arnault, chairman and chief executive of LVMH and France's richest man (14th globally according to Bloomberg), since 1980. As a result he is a key protege of Arnault's and one of his most trusted and accomplished deputies. That was made clear in December when he was plucked from his job as the chief executive at LVMH's newest acquisition, the Rome-based jeweller Bulgari - a job he had held for less than 12 months - to take the reins at the most precious jewel in the LVMH crown, Louis Vuitton, the world's biggest, most profitable and well-known luxury brand.

It was a sudden change. Jordi Constans, who had come from the dairy products company Danone rather than the luxury industry, had to step down as chairman and chief executive of Louis Vuitton after a month in the job for health reasons. Arnault needed someone he knew would be up to the job and could hit the ground running, so he naturally turned to Burke.

It's easy to see why Burke would be front of Arnault's mind for the job. Before his sudden departure from Bulgari, Burke sat down with WISH for a rare interview over a long lunch in Rome. He talked about everything from being a non-Italian running an Italian company, about his previous job as chief executive of the fashion and accessories brand, Fendi, the luxury goods industry in general as well as art, politics, history, fashion, you name it. Burke is unassuming and gregarious. He's a fast talker - 40 minutes goes by after we sit down before he asks "should we order?" - he's also fiercely intelligent and remarkably frank about his strategy at Bulgari. Put simply, it is based on the one he used to turn Fendi from a small family-run business with complicated internal dynamics into a professionally run, profitable major player in the luxury fashion world.

In 2011 LVMH acquired Bulgari in a cash-and-share swap valued at more than $US6 billion. Francesco Trapani -a nephew of Nicola Bulgari, who was a grandson of the company's founder - had been Bulgari chief executive since 1984 and under the terms of the deal he became head of LVMH's watches and jewellery division which, as well as Bulgari, includes brands such as TAG Heuer, Zenith, De Beers and Hublot.

After Burke's departure Trapani was placed back in change of Bulgari then last month LVMH announced that Jean-Christophe Babin, chief executive of TAG Heuer, would replace Burke at Bulgari "in the coming months". The decision to appoint Babin, according to Women's Wear Daily, was an indication that LVMH plans to "seize on [Bulgari's] potential in watches", which confirms what Burke told WISH late last year.

"I'm using what I did at Fendi as a metaphor ... and you can draw your own conclusions," Burke said back in November. "With Fendi we had to reconquer Rome. We had opened stores all over the world and in the process of doing that we had turned our backs on Rome, so we needed to go back to our roots." There are good reasons why Burke would apply what he did at Fendi to Bulgari as there are striking similarities between the two brands even though they make very different products: Fendi is a fur, accessories and ready-to-wear brand; Bulgari, on the other hand, is a watch and jewellery house.

First, they were both family-run businesses until LVMH took them over, they are both based in Rome, they both sell products that appeal to the very rich and are designed to be worn for generations (furs in the case of Fendi and fine jewellery in the case of Bulgari). And, as Burke soon discovered, they also have the same customer base. "I went through the archives at Bulgari when I first started, and I call this process being an archeologist and digging for things; looking at things and trying to figure out why and who ... and everyone is describing the jewellery pieces to me and saying, 'Look at those stones and how we put green and purple together', and I'm looking at these photographs and saying, 'I know this picture, that's a Fendi fur!' It's the same customer and they had never noticed it was a Fendi fur and I had never noticed it was Bulgari jewellery. It was like deja vu."

What Burke did with Fendi was to make it more Roman, so to speak. "I had this long conversation with the Fendi sisters when I first went there," he recalls. "They had bought this palazzo at the intersection of Via Condotti and Via del Corso [the busiest retail precinct in Rome] and they were going to put offices there and a small 150sqm accessories store [to cater to] tourists. And I said 'I don't think this feels right. This should be our coming out. We are a product of Rome, we are proud of our origins and we should state it and a 150sqm store is not a statement - it's hiding. Here is this opportunity; let's embrace it.' So now it is the biggest Fendi store in the world and it's spread over two floors and has all the products and it's a beacon for the brand."

Burke also made the piazza in front of the store a central part of Rome's Christmas celebrations with a huge tree and snow machines working from the roof. He's quick to point out the store is now the most profitable in the company. "Sometimes families have an inferiority complex vis-a-vis where they come from," he says. "They always want to be something else. Many Romans want to be Milanese, Milanese want to be Parisians, Parisians want to be New Yorkers ... but that's not what our clients are looking for. Our clients are looking for something from Rome."

For Bulgari this approach means a major renovation of its flagship boutique on Via Condotti. The company has commissioned the New York-based architect Peter Marino to design the Bulgari flagship store in Rome. Marino was responsible for the redesign of the Fendi flagship store and has worked with other luxury brands such as Chanel, Christian Dior, Louis Vuitton and Ermenegildo Zegna.

The store on Via Condotti dates from 1905 and is the second store the company's founder opened (the first was on Via Sistina). Over the years it has been expanded and altered, although many original vitrines and shop fixtures still exist in the front part of the store. Marino's job, according to Burke, is to do a "psychoanalysis of Bulgari to truly understand what the company stands for now and how much is the past. It's a tango, a passionate embrace of the brand," he says.

Burke is reluctant to go into detail about what the refurbished store will look like, but does say that it will include a museum to showcase some of its archival pieces on the top floor. However, it's clear that his plan is for the Via Condotti store to become a landmark. That doesn't mean the brand's global expansion plans will stop; rather, it simply means that for Bulgari all roads will lead back to Rome. In a way it's about restoring the Via Condotti store to the iconic status it had in the brand's heyday which, arguably, was the 1960s.

Italy in the 1960s was leading the world in terms of design. "It was a design tsunami," says Burke. "Italy started to dominate the design world, whether it was in cars or lighting or furniture or jewellery or fashion. Fashion in the 1960s and 70s was Italian and when it came to jewellery it was Bulgari. They weren't just an innocent bystander; they were making and designing jewellery that was revolutionary."

The main difference was Bulgari's attitude to stones. Rather than stick to traditional colour combinations, as exemplified by what was happening on Place Vendome in Paris, such as emeralds and sapphires with diamonds, Bulgari embraced new, bolder mixes, producing combinations of violet, turquoise and green. They were using stones not just because of their intrinsic value but because of the aesthetic possibilities.

That all of this happened at a time when Hollywood had come to Rome only helped things. Elizabeth Taylor once said that a highlight of her time in Rome filming Cleopatra was Bulgari's shop, so much so that Richard Burton remarked: "The only word Elizabeth knows in Italian is Bulgari."

"I believe watches and jewellery are at a threshold of unmet demand," says Burke. "Watches are the biggest opportunity for Bulgari, which means that it is the least developed. It's our second-largest business at the moment and it should come to equal the jewellery business. A watch has all the attributes of true luxury. It has a sense of place - Switzerland - which means authenticity; it's something that you can't get from anywhere else. It is limited in the sense that we have problems being able to deliver to keep up with demand. And then you have desirability - all the key parameters of real luxury."

Bulgari was far from broken when Burke and LVMH took over. LVMH does not separate out figures for individual brands, but in 2010 when Bulgari was a partially listed company it reported sales of 985 million.

"Some journalists say they hate me because I won't give out numbers," says Burke. "Quarterly numbers are irrelevant in our business; what's important is knowing what you stand for, having a vision and sticking to that vision regardless of the whims of the market, regardless of recessions; stick with it, invest in design and invest in the product and your people. The program takes a few years and you don't have to go in and slash and burn and do it globally. You just do it with intelligence, so it's doing more of a number of things and doing less of other things and taking a long-term view of the house."

Masterpieces to dazzle
Bulgari is bringing some of its Roman magic to Australia next month with an exhibition of rare design studio drawings and heritage jewellery pieces. The exhibition has been curated by Mauro Di Roberto, head of the jewellery business unit at Bulgari, and is aimed at showcasing the creativity of the company from the 1970s to 1990s. In a rare move, clients will be able to select designs from the original drawings to be reinterpreted into bespoke jewellery pieces. The exhibition will run from April 2 to 16 at the Castlereagh Street, Sydney, store and then from April 17 to 30 at the Collins Street, Melbourne, store.