The next strategic moves by Vuitton’s new CEO, Jordi Constans
After the failed experiment, several years ago, by rival PPR Group (at the time Gucci Group) of hiring a luxury industry outsides, Louis Vuitton’s new CEO has officially taken over as CEO, form Yves Carcelle who will remain a board member and the President of the Vuitton Museum in Paris due to open last year. Born in Barcelona, 48 year old Jordi Constans, has been the Vice President of dairy French giant Danone. He is a graduate of Barcelona Central University, with speciality in marketing and sales.
Unlike most other Vuitton executives, Constans does not hold an MBA degree and he his career has been with only one brand, gradually in charge with Spain from 1998, then France and worldwide for retail marketing. Since September 2009, Jordi Constans has been Co-Executive Vice President of the Fresh Dairy Products division at Danone.
Of the same age, at the time of his appointment (48) as CEO at the Gucci Group (today PPR Group), Robert Polet has had a 28 year career at Unilever, the giant fast moving consumer goods company. Before joing Gucci Group, Polet was the head of Unilever’s icecream and frozen products division. Unlike Constans, Robert Polet holds an MBA degree, but not from a major ivy international school (Oregon University). Although during his tenure at Gucci Group, the company saw positive financial results, the merits were most attributed to the growingly involved Francois Henri Pinault, the owner of the Pinault family which owns PPR.
Unlike Constans who has had a typical corporate ascention within a large concorporation, gradually covering higher placed positions within Danone, there is very little information as to his achievements or expertize. In a statement for the Barcelona University alumni page, Constans said ”Innovation requires creating the right mindset and the right processes in a company”, adding ”that creating new versions of existing products does not reflect innovation. Instead, innovation is derived from following a blue ocean strategy (as described in the book by W. Chan Kim and Renée Mauborgne). This means focusing on truly new ideas that seek to solve problems, rather than cannibalize competitors.”.
Unlike the fast moving consumer goods industry, luxury is fundamentally different as luxury is not a need! Luxury is lifestyle, luxury is an tool for social differentiations and building status, creativity (uniqueness), investment, exclusivity, ultimate customer service, luxury shopping experience, rarity and quality of materials and craftsmanship. While maintaining high levels of customer service and crafstmanship through continuous investment in training craftsmen as well as sourcing the best quality materials, in the past 3 years Louis Vuitton has been losing out to direct competitors Prada, Hermes and Chanel in terms of:
- lifestyle (except America’s Cup, Vuitton is hardly associated these days to lifestyle)
- creativity – the recent collaboration by Vuitton with Japanese artist Yayoi Kusamato create the ”dotted” window displays and capsule collection made Vuitton stores around the world resemble any other mid level retail store
- in many countries of the world, carrying a Vuitton bag on a main shopping street is not seen a social status symbol
- over-expansion in several countries of the world, thus wide availability: ex in China, Vuitton has more stores than Apple
- Vuitton ‘s apparel has always been regarded as an ”accessory” to leather goods
- Marc Jacobs has been losing his celebrity clout and he is increasingly better praised for his own brand (also owned by LVMH, Vuitton’s parent company), hence the persistent rumours of Jacobs’ replacement as Creative Director
Constans who takes of from Yves Carcelle, who has been instrumental to Vuitton’s international expansion from mature markets to the emerging markets in their early days such as Mongolia, faces the following
- the need to possibly increase prices in Europe, to counter the influx of Asian shoppers to Europe
- diversification: wines (recently launched in China) and fragrances could dillute the brand
- a growing international trend – where stores are expected to be renovated and redesigned faster (Vuitton still have directly operated stores in countries such as Colombia or India – which are dusty and tired
- dilemma of logomania versus understated desigs recognizable from pattern, style, finishes
- reduce the number of stores which carry solely leather goods and accessories, versus developing more Maison store concepts
- brand communications – from celebrities associated with charities (Angelina Jolie, Mikhail Gorbachev etc) to the retro ambiance of a train ride (current fall winter campaign)
- the dilemma of producing parts of collections adapted to certain markets
- whether Vuitton should expand to airports, after, last year, opening its first store in Seoul Airport
- sluggish development in major emerging markets such as India
- introduce more bespoke services and products to smaller Vuitton stores
- restructure Vuitton’s growingly bureaucratic structure, which has been slowing down decision making at all levels
- further development of Vuitton’s fine jewellery and watches, after the successful opening of the dedicated store in Place Vendome
- collaborations with luxury brands of the same level, from different sectors
- Vuitton’s huge potential of developing a home collection and its expansion through branded Vuitton suites at luxury properties around the world
- improve Vuitton’s online presence, especially social media – where the brand, despite the staggering figures of traffic, still projects an insufficiently exclusive image, even in comparison with Dior, sister brand within parent company LVMH
- the Vuitton museum in Paris will be of utmost importance and if positioned successfully (based on heritage and craftsmanship)
- slow down expansion worldwide
What Constans can learn from Polet?
Polet was considered a very unpopular figure – his moving of the PPR Hq to London in away isolated him from the rest of the company, creating this ”unattainable” aurat, not to mention his inexistent relationship with the Creative Directors of each of PPR Group brands. When Polet took over from Domenico de Sole (Tom Ford revived both Gucci and Yves Saint Laurent), although financials were positive, mainly due to the growing economic climate in most international markets around the world (especially the ”BRICS”), some of PPR’s brands plunged into confusing business situations: the much too early e-commerce for Boucheron, Yves Saint Laurent did not recover from the days of Tom Ford, under the creative direction of Stefano Pilati – the brand losing positioning, especially from the point of view of creativity, not to mention the dull store concepts.
Constans and Bernard Arnaud
Given his background, Constans will never be able to develop the kind of business relationship and friendship that Yves Carcelle shared with Bernard Arnaud. The more ”behind the scenes” and focused on financials approach Constans will play, the better his chances of getting on with Arnaud. The less Constans will be involved with strategic creative direction decision, the better! Arnaud has built his empire based on his unique sense of long term view and his immense power to influence the business and operations direct of each and every brand from his group.
Constans and Yves Carcelle
There is no doubt that Yves Carcelle is not retiring ! He seems to be taking a well deserved break and from the Vuitton Museum, due to open next year, where he will serve as Chairman, he will closely watching Constans and will be on Arnaud’s side.
Oliver Petcu in Paris