Remy stays elite as its rivals look elsewhere
If China’s thirst for luxury goods is on the wane, nobody’s told Remy Cointreau SA.
The distiller has opened its first-ever store dedicated entirely to Louis XIII cognac, the most expensive variant of the company’s Remy Martin brand, which comprises 60 percent of its revenue.
It comes in crystal decanters ranging from tiny $600 5-centiliter miniatures to an $80,000 six-liter vessel dubbed a “methuselah.”
The boutique in Beijing’s Shin Kong Place mall also offers pairings of cognac with caviar and iberico ham.
“It’s a changing landscape in China,” said Louis XIII brand director Ludovic du Plessis, who expects slower but more sustainable growth after the government’s four-year campaign against graft dented sales.
“It’s now about self-indulgence, we need to reinvent the dialogue with our client and really get to know who can afford our product.” He declined to provide specific sales projections or data for the 142-year-old brand.
The move comes as ebbing demand for luxury goods — particularly in China — has forced companies such as Cartier owner Richemont, clothier Burberry and Kelly bag maker Hermes to abandon sales and profit forecasts. A slump in pricey cognacs and Scotch has sent Remy’s peers going in the other direction: Pernod Ricard SA, the maker of Martell cognac, said this month that China’s growing middle class offers better opportunities for growth.
Shipments of cognac to China began to decline from a record high in 2012 after the government crackdown on extravagant gifting, data from trade body BNIC shows. Volumes recovered last year as distillers promoted less-expensive variants.