Richemont’s hippie-chic Chloe bags sell well
The Geneva-based luxury giant’s accessories brand outsells its watches
$10,000 watches are a tough sell for Richemont these days, but shoppers are snapping up $2,000 Marcie handbags and ruffled blouses from the company’s fashion and leather label Chloe.
For the Geneva-based luxury giant, which has been struggling through the longest downturn on record for Swiss timepieces, the Parisian womenswear and accessories house has been a rare bright spot. The company is ramping up investment in a brand known for its bohemian style, including eight new stores set to open this year.
“The last two years we had strong growth at a time when hardly any luxury brands were growing,” Chloe CEO Geoffroy de la Bourdonnaye said in an interview. “We really gained market share.”
Richemont Chairman Johann Rupert has spent years building a portfolio of fashion and leather brands ranging from Parisian couturier Azzedine Alaia to British suitmaker Dunhill, yet leather goods and clothing still account for only one-tenth of sales at a company better known for watch and jewellery brands like Cartier and Van Cleef & Arpels. The Swiss company this month sold Shanghai Tang, a Hong Kong-based dressmaker, to an Italian investor group in its first disposal of a luxury unit since 2007.
‘Starting to work’
Richemont’s sales of leather goods rose 11 per cent in the year ended March 31 as Chloe’s handbags found fans among younger women seeking more affordable alternatives to the $10,000-and-up Hermes Birkin or less ostentatiously branded options than accessories from the likes of Chanel or Louis Vuitton. Rupert underlined Chloe’s performance in a May conference call, saying the company’s leather division is “starting to work.”
Richemont’s overall sales fell 4 per cent in the year through March. Since then, watches have shown some signs of recovery, with Swiss exports rising in June and rival Swatch Group AG issuing a positive forecast Friday.
Exane BNP Paribas analyst Luca Solca estimates that Chloe’s sales have grown at double-digit percentages over the last three years. While Richemont does not break out the unit’s results, he calculates its revenue at around €450 million — roughly in line with Brunello Cucinelli SpA and about half as much as Tod’s SpA or Moncler SpA.