Small Family Firms Go Global

(Reuters) – Poupie Cadolle’s family has been making handmade lingerie in a workshop on Rue Saint Honore for five generations, with Qatari royals, American actresses and Swiss bankers’ wives all crossing her doorstep in search of the perfect bra or corset.

Now, with times tough and sales to French and American women sluggish, Cadolle, like many small French luxury firms, finds itself struggling to tap into a $191 billion global boom driven by customers from emerging markets.

“The last four months have been difficult,” said Poupie Cadolle, a small woman with a warm smile who spends her days fitting 5,000 euro ($6,300) bustiers and 600 euro bras.

“We thought hard about how to get clients, beyond word of mouth. It is not easy. We decided on going into Brazil, not China.”

Unable to wield the financial firepower of conglomerates such as LVMH, Richemont, or PPR, small family-owned enterprises are finding modest and innovative ways to attract new customers.

Some, like Cadolle, are choosing one country over another and relying on invitation-only trunk shows and other private events.

Others are opening stores in Hong Kong but not Shanghai, while for a few the focus is on still rich markets in Japan and the United States.

All are choosing carefully. The internet is not seen as a route to market – few small luxury companies feel comfortable selling goods online given the luxury experience is one where items need to be handled to judge the quality and design.

“China is definitely the big prize and, by and large, the customer there only wants big, recognizable brands,” said Pierre Mallevays, a managing partner at Savigny Partners, a corporate finance boutique specializing in luxury and retail.

“You cannot have a China-only market. For your brand to be credible, the travelling Chinese will expect to see your stores in Paris, Milan or New York.”

That kind of reach is difficult for smaller brands unable to afford a presence in several European cities and major Chinese cities where real estate prices are high, salespeople increasingly scarce and the best distributors already engaged.

LVMH and other luxury giants, meanwhile, are tapping into the Chinese market by scaling back in department stores and, instead, opening giant flagship stores in large and mid-size cities across the country.

Smaller European brands hope Chinese customers, as well as the newly rich from Russia and central Asia, see the appeal of a tasteful shop in Paris with an elite clientele in the French tradition of discretion and craftsmanship.

Many are bringing design inhouse, eliminating suppliers and ensuring clients know everything is handmade by French artisans.

“BIG, BIG, BIG”

This type of branding is vital to the appeal of French luxury, yet it is not always easy to convince emerging market clients that handmade is better. Many live in countries where goods are only made in small shops out of necessity.

Corthay is a bespoke men’s shoe shop in the 2nd arrondissement where Pierre Corthay works in the front room making crocodile and elephant skin shoes that take six months to complete and cost upwards of 3,000 euros.

It recently teamed up with Groupe Edmond de Rothschild to sponsor a road trip for select clients through the Alps in high-end sports cars. Chief executive Xavier de Royer said the event was expensive for Corthay but worth it because it created a sense of glamour around the brand.

“The Chinese do not always understand our store,” said Royer, who joined from Louis Vuitton. “Small is not good there. They want a big shop. Lots of options. Big prices. Big, big, big.”

Royer, planning to open shops in Dubai and Hong Kong in coming months, said he was in less of a hurry to go to China and will not open there until 2013 at the earliest.

In the United States, the brand is confining itself to department stores in New York, San Francisco and Beverly Hills for the moment.

“We counsel companies to go to Hong Kong first. Learn about the customer. Then go to mainland China,” said Ponsolle des Portes, head of Comite Colbert, a luxury industry lobbying group.

Chinese customers need to become acquainted with the notion of truly high-end luxury, and smaller brands can still make a lot of money from established markets, she said.

“It is hard to convince some Chinese women that she should have wonderful undergarments,” said Poupie Cadolle. “This is not a culture that even has nightgowns.”

Asia makes up 19 percent of the luxury market but is growing faster than any other region, Bain research showed. By 2014, it will be on a par with the Americas in size.

PRESENT BUT PRUDENT

Yet it will still lag Europe, the largest luxury market. And while many customers in European shops may be tourists, small companies still see money in established markets.

Luxury brand Camille Fournet began with watch straps and has recently broadened out into handbags, wallets and pouches.

CEO Jean-Luc Dechery said opening a big store on stylish Avenue Montaigne in Paris would lend the brand instant credibility, but the cost was prohibitive.

Instead, he has invited well-heeled clients to a private showing at the George V hotel at the end of June. Items sold there, including a 34,000 euro alligator handbag, will not be available in the store.

“We are hitting that good time during fashion week but before Ramadan,” he said.

He remained mindful that half the brand’s clients in the Paris store were French, and that a Chinese business will be slow to start up. He is opening a store in Beijing this October.

“We want to be present,” said Dechery. “But also prudent.”

The advice is sound, say industry analysts, who note that any change to the tax regime in China or Hong Kong could quickly alter the dynamic and that the luxury market may be in a bubble that could burst if the Asian market ever slowed down.

“Whenever companies tell me they are going abroad I ask one question,” said Joelle de Montgolfier, a director in consultancy Bain Co’s luxury practice. “Are you absolutely convinced that French women have nothing more to spend?”

($1 = 0.7933 euro)

(Editing by Dan Lalor)

Share and Enjoy

It’s time for some confusion, comedy and romance

Bollywood film-maker Ajai Sinha, whose final message-oriented film, Khap, sank though a snippet during a box office, is now pinning hopes on his initial blurb film 3 Bachelors now set for recover in theatres opposite a nation this entrance Friday.

For a film, Ajai has roped in actor Sharman Joshi, whose work in a latest Ferrari Ki Safaari has been most appreciated by cinemagoers. Like in his 2001-released strike comedy film Style, Sharman is personification a fun-loving college guy.

Describing 3 Bachelors as a brew of comedy, intrigue and confusion, Ajai says it is a humorous take on adore stories of immature couples. The film stars Raima Sen, Riya Sen, Manoj Pahwa, Himani Shivpuri, Manish Nagpal and Nigar Khan. The song is by Daboo Malik.

Mischievous nonetheless clean-hearted, Amit (Sharman Joshi) and reticent Jai (Manish Nagpal) are dual tiny city boys who secure acknowledgment to a college in Mumbai. “However, on a initial day itself Amit gets into an nonessential evidence with Neha (Raima Sen) and Nisha (Riya Sen). His crony Jai also gets dragged into this controversy. The twin is told to explain a reason for this tasteless part before Principal Shalini Devi (Himani Shivpuri). Somehow they conduct to remonstrate a Principal that they are innocent.” Luckily for them, even a girls confirm to bury their hatchet.

“Though this film seems to be in a genre of Style it is not by any widen of imagination identical to a N. Chandra film since in that there was a murder mystery,” adds Ajai.

However, a dual boys are denied room in a college hostel. As they come from reduce middle-class families, they can't means to stay in a hotel or lease a flat. Since they are travel smart, they remonstrate an estate representative to find them a room. A room is accessible for lease though a owners lays a pre-condition that usually families and married couples would be authorised inside a premises. To surprise a owner, Jai gets remade into Jaya and Amit becomes a husband.

The executive would have been tempted to make a film with a summary though says his film Khap that highlighted a argumentative Khap Panchayats, that have been behaving as extra-constitutional management over a years, flopped. “Message-oriented films do not do good business. So we was tempted to make a regretful comedy this time round,” says Ajai.

According to Sharman, who done his entrance in 1999 in Shabana Azmi-starrer Godmother, his arriving film is a roller-coaster regretful float where he is again personification a solo hero. “To tell we a truth, Raima, Riya and we had a whale of a time sharpened for this film. The film’s genre is comedy. we am certain people will adore this purify humorous youth-oriented comedy,” he hopes.

As a film deals with romance, 3 eager marks have been picturised during Pattaya in Thailand and Mumbai. Nigar Khan has achieved an object number.

Share and Enjoy