Man about the maison

For two decades Yves Carcelle has overseen the incredible success of Louis Vuitton. There are few countries left to conquer.

Yves Carcelle

IT'S a fairly routine Monday morning and the start of yet another working week for Yves Carcelle, chief executive of Louis Vuitton, the world's biggest and most profitable luxury brand.

In his top-floor office near the Pont Neuf in Paris, with its sweeping views over the Seine, Carcelle has finished one meeting and is about to go into another. He briefly checks with his personal assistant for any important messages and then greets WISH magazine for this interview. Our presence immediately sets his mind to thinking about Australia.

“We have a date for the Sydney store opening now, I think?” he says to his assistant and a marketing executive, who have just shown us to his office. As they consider the question and search for an answer, he consults his diary and informs them both that, yes, there is indeed a date set for the opening party of the company’s new Sydney store, under construction on George Street.

“It’s December 3. Saturday,” he says. You get the sense he wasn’t actually asking his team whether there was a date earlier. He was informing them. So, naturally, to break the ice we ask Carcelle if he will be making the long journey to Australia for the opening. “Well, yes, it’s in my diary, so in theory I will be there. In theory, I will do Bangkok, Hong Kong and Sydney. The Sydney event is on a Saturday night and then I will leave for Paris on the Sunday to be at work on the Monday morning.”

Such is the life of a luxury industry leader today. While the company he manages might be as French as the Eiffel Tower, the business is global. So global, in fact, that according to Carcelle there are not many regions on earth left for Louis Vuitton to conquer. “I think we have achieved quite a good coverage of the planet today,” he says. “There are still a few more countries left – and this year we will open in Barbados for the first time. Last year we opened in Lebanon and the Dominican Republic, but altogether in the world we don’t think we will have many more openings. Rather we want to invest more in the countries and cities where we already are.”

One of those countries is Australia, where Louis Vuitton has had a presence for 25 years. It has recently opened stores in shopping centres in Sydney’s Bondi Junction and Melbourne’s Chadstone, but its new Sydney CBD store will be its most ambitious in Australia to date, with 1200sqm of selling space spread over three floors. “We were quite attached to the historic building that our Castlereagh Street store is in and we tried for a period of time to aggregate the neighbours,” says Carcelle. “It’s a strategy we have had forthe past 20 years but there is a moment when you realise that trying to keep the history and just adding and adding [will] never produce something that corresponds to our criteria today of space and of giving our clientele a great experience. Today our strategy in every market is not to open little stores in smaller cities but to consolidate our big stores and convert them into maisons [what the company calls stores that stock the entire range, from leather goods to ready-to-wear and watches and jewellery].”

Louis Vuitton, which was founded in the 1850s, is estimated to account for 60 per cent of the profits of its  parent company, LVMH. For the first half of 2011 LVMH reported revenue of €10.3 billion ($14.1 billion), 13 per cent more than in the same period last year, and net profit of €1.3 billion, a 25 per cent increase. In announcing the results, LVMH, which does not break down results for individual brands, said in a statement that the fashion and leather goods division had grown by 14 per cent, thanks in large part to the stellar performance of Louis Vuitton (LVMH owns Donna Karan, Marc Jacobs, Celine and Fendi, as well as its interests in cosmetics, watches and jewellery, wine and spirits and in retailers such as Le Bon Marche). “Louis Vuitton continued to register exceptional performance, confirming the brand’s strong appeal to both its most loyal and its new clientele,” the statement said.

Carcelle has been at the helm of Louis Vuitton since 1990 and has been the architect of the brand’s incredible growth. That makes him arguably the most powerful man in the global luxury business, apart from his boss, the chairman of LVMH and France’s richest man, Bernard Arnault. Carcelle, who speaks fluent English, attended the Ecole Polytechnique, one of France’s most prestigious universities, where he studied mathematics, and he later gained an MBA from INSEAD. Before working for Louis Vuitton he was running a household linen company called Descamps. Carcelle says that when he is in Paris he arrives at his office at about 6am – “before anyone else” – and leaves at 8pm. Unlike many global luxury bosses, Carcelle hasn’t merely been briefed on the Australian market by
an assistant for this interview; he knows it intimately.

He is also very well acquainted with the brand’s fastest growing market, China. He visits China about six times
a year and when we meet him he is nursing a broken leg from a recent trip there. But even that doesn’t get in the way of his globetrotting. “I broke my leg about 6½ weeks ago, I continued on to Shanghai and then to Tokyo and then went back to Paris,” he says, as he recounts the accident. A week later he was back in China.

While Japan is the brand’s biggest market, industry analysts estimate China will be the biggest luxury market by 2020. “I think it will be before that,” says Carcelle. “I read a study this weekend that said it will be more like 2015. Japan seems to be recovering quite well from what has happened there but the rate of growth in China is bigger and we will see the two [converging] very soon.”

Despite the brand’s growth in new markets – which incidentally is not a new phenomenon; Vuitton opened its first store outside France in 1885, in London – Paris remains home base. In 2005, the company opened its biggest store in the world, on the Champs Elysees. It was, says Carcelle, a gamble. “There was really no foot traffic on that side [the southern side] of the road then. And on the other side it was mainly restaurants and fast-fashion stores. It’s always a gamble when you open a new store but we were lucky in a way. The building had been empty for many years, so we didn’t have to pay any key money as no one was betting on this side of the Champs Elysees.”

The Champs Elysees store originally opened in 1998 and when the opportunity arose to take over the entire building Carcelle made the decision to close for two years and re-open a vastly expanded store that would stock every product in the Louis Vuitton universe. It was then that the idea of a store as a maison was born. But it was the move to include a “cultural space” – or art gallery – on the seventh floor of the building that proved a masterstroke.

Sunday trading is banned in France, thanks to the French Christian labour union. But there’s a loophole. “In tourist places, if you have a cultural dimension to the store, then you could apply for a deregulation of the law,” says Carcelle. “We applied for the deregulation and we got it. There were some people who were against us at the time but I think eventually everyone realised that we had created 70 jobs and we were playing a big role in the animation of the Champs Elysees and the tourists were certainly very happy about it.” Louis Vuitton was instrumental in getting seven-day trading laws in France changed and now if a store is in an area that is classified as a tourist precinct, then it can open on Sundays.

The Champs Elysees store is unlike any other Louis Vuitton store in the world. For a start, it’s estimated that in busy periods as many as 5000 people visit the store per day. “It’s true that the store’s clientele is mainly tourists, whether they are from provincial cities in France or from Europe or from all over the world. When you enter that store, it’s like the Tower of Babel, you see all nationalities and you hear all languages.” A company spokesperson says that staff for the Champs Elysees store are carefully chosen. More than 25 languages are spoken by the team, and most staff can speak at least three.

Leather goods – handbags, accessories and luggage – are Louis Vuitton’s mainstays but the introduction of a ready-to-wear collection in 1997, designed by Marc Jacobs, set the company on a path to being a complete luxury brand. Like most fashion brands, it is stronger in women’s wear than menswear. But Carcelle says the men’s business has grown “fantastically in the past few years”.

Earlier this year, Louis Vuitton showed a collection in Paris by its new menswear designer, Kim Jones, that was praised by fashion critics for its daring and wearability. “For the past five years we had Paul Helbers and did quite
a bit of growing,” says Carcelle. “But from time to time you need fresh blood. With Kim’s first collection, you felt the energy. From the music to the quite short show, it was all there. He really understands that the modern man who wears Louis Vuitton needs to dress for work, for safari, for party, for travel ... [the show] had everything.”

Carcelle is the quintessential French businessman – bilingual, impeccably dressed and almost always in a suit and tie. While he looks like he runs a very successful business, upon meeting him you wouldn’t immediately think this is the man responsible for running one of the world’s leading fashion houses. However, those looks are deceiving. Carcelle clearly has a passion for fashion and admits to buying at least one pair of the more fashion-forward shoes from each men’s collection.

Part of Louis Vuitton’s success is that Carcelle and Arnault respect the creativity of their people. “It’s quite important to give the designer or studio director a certain freedom when it comes to the collection shows. If you start discussing bits and pieces, you might not end up with the unity and the vision. If you don’t trust the people you’ve hired, you don’t get that creativity. Of course, you have to apply the principles of profitability. You need a balance between being dreamy and being logical.” And it’s in the balance where you get profit. Plenty of profit.