Louis Vuitton CEO Sees Future in California
Michael Burke on the state’s strengths, streetwear and what’s next in retail.
LOS ANGELES —The past and future, California, retail and streetwear. They’re all seemingly disparate thoughts Louis Vuitton chairman and chief executive officer Michael Burke seamlessly guided a thread through as the luxury house celebrated its expanded South Coast Plaza store and atelier.
The executive was in Costa Mesa last week at the Louis Vuitton boutique, which underwent eight months of construction to emerge as the largest single-story Louis Vuitton store in its Americas region and boasts the brand’s first on-site atelier.
The nearly 14,000-square-foot space
(that includes selling space and back of house) and where it’s located represents many things.
“It’s the future. California is always the future,” Burke said, sitting in one of the store’s private client rooms during cocktails ahead of a dinner off-site at the
Resort at Pelican Hill in Newport Coast. “New Yorkers don’t agree with that but….”
As for the Peter Marino-designed store itself — likely to be number two this year after Rodeo Drive in terms of sales — and the atelier, the design provides a template for retail’s direction, the executive went on to say.
“That’s the future of retail; it’s not transactional,” Burke said. “The transactional part is actually very often not even in store anymore. It’s afterward. The actual aspect of paying is 1 percent of the relationship. Ninety percent of the relationship is everything else. It’s discovering, knowing, exchanging and of course it takes you upstream. It takes you to discovering the raw materials, discovering the craft, the trade. It cannot be digitized. It still requires a pair of hands, needles, thread and sewing.”
That’s all upstairs in the atelier where repairs and leather conditioning, among other services, are offered. One is immediately hit with the scent of leather once the elevator door swings open.
“You’re reconnecting with something very basic, and retail requires that,” Burke said. “People talk about engagement, they talk about entertainment, they talk about relationships. Concretely, it means upstream seeing provenance and the making [process] and then downstream is what’s going on tonight, your lifestyle after. What’s before the store, which is that atelier and then after, which is enjoying life. It’s having that thread throughout. It doesn’t start when you push the door and it doesn’t end when you leave the store. And that’s what the store needs to be in the future.”
Certainly, in just South Coast Plaza alone, there are stores that understand the idea and others perhaps not so much, Burke said. He added the market is becoming segregated between merchants that engage and others that, as he put it, “pile up objects.”
“This,” he said, motioning to the South Coast store, “is not about piling up objects.”
How the brand approaches the design of its doors is also not as two-dimensional as, say, being driven by a desire to speak to a specific market segment, such as the Millennial customer, Burke added. The stores instead, he said, are designed with the idea of inclusivity and permanence in mind. The ceo drew a similarity to the press and the difference between print and digital. Both are important for different purposes, he said, but a book or a magazine are keepsakes.
The one exception, of course, is short-term pop-ups.
“I think we’ve done them very well,” he said. “I think you know the Supreme pop-up. We came up with that and took it to the extremes but that is something very different than this. We do both. When we design, when Peter and I fight about it, it’s when you have these disagreements that you actually are able to make progress with the design. What we both want is a store that when you come back next year it doesn’t look outdated.”
The pop-up strategy is motivated by different drivers, but can serve to be just as inclusive as a regular door, Burke said, once again referencing the multi-city pop-up release of Vuitton’s collaboration with Supreme last year and how that launch was relevant to more than just the youth market.
“You’d be amazed at who is buying Supreme,” he said.
Certainly, it was mostly the young lined up and camped out during the pop-up hysteria.
“But they weren’t necessarily the end consumer,” Burke said. “Somebody who is 50 or 60 is not going camp in front of our pop-up store. Some do. But mostly they’ll pay three times retail the day after when somebody did it for them. You’d be amazed. Half of our high-watchmaking clients, men, bought Supreme. Their average age is about 60 and they were just as hooked on Supreme as the kids. It wasn’t as Millennial-centric as most people think.”
It’s very much why there is so much interest in street fashion in general, much of it born out of Southern California and their cousin brands in the surf and skate segments. It’s also partially why so much attention — whether deserved or not — has been granted to the fledgling ComplexCon, which takes place for the third year in a row this November in Long Beach.
“Very much, yes,” Burke said when asked if ComplexCon is something of interest to the brand. “That is absolutely important. The convergence of music, art, fashion, sport and design. All of those activities have become sociologically much more important than 20 years ago and they want to converge. They want to meet. Those artists or designers or musicians are very open to collaborating. There always were collaborations. The big difference is they’re publicized now.”
Does that mean ComplexCon attendees can expect a Vuitton booth at ComplexCon?
“Possibly, possibly,” Burke said smiling. “I’ll probably come in disguise. Before
I get involved with something, I’m very involved, but not publicly.”
Such was the case with Virgil Abloh, said Burke, who was introduced to the designer by Kanye West and A Bathing Ape founder Nigo (née Tomoaki Nagao). The two had been in touch with each other for 12 years before Abloh was tapped in March to lead men’s design at Louis Vuitton. The same went for James Jebbia at Supreme, Burke said, when the initial meeting was sparked by one of Jebbia’s backers who prodded the two to meet.
“Things mature. When they mature, they’re much more organic and you’re not pandering. It’s not marketing. It’s really two organizations, two individuals,” he said.
Careful consideration up until the point of maturity takes time and the discipline to be patient enough to wait. In a related thought, it’s discipline that will be the key for the next Supreme or other skate or surf brand looking to break through.
“Capital’s good; long-term capital’s better,” Burke said of whether the sector is to see more deals and the marrying of luxury with the street or board sports brands. “Streetwear is an American phenomenon. It started because of the skate and surf and extreme sports. It would be nice to see these streetwear brands become global, but not selling their soul. Going global does not mean selling your soul, contrary to what people say. Selling your soul is having a lack of discipline with distribution. If you look at Chrome Hearts, which is from L.A., very disciplined. James [ Jebbia] is super disciplined, which is one of the reasons why we did this thing together because we shared those common values.”
The Supreme pop-up in the Arts District was one of the reasons Vuitton did a store in that neighborhood, Burke said. It served as a litmus test for the brand and the prospects of a permanent door in the future.
“Typically, we do pop-ups where we’re not, where we think one day will be interesting,” he said. “Instead of coming in and doing a mainstream flagship, which is typically not what those up-and-coming areas are looking for, that’s when we do something out of the box.”
Still, Burke sees downtown being some 10 years off from a Louis Vuitton store there, in line with what some brokers and market watchers estimate. Evolution of neighborhoods, after all, takes time. It also takes a visionary developer, Burke said, adding there are a few making big bets in downtown.
There’s another reality that’s also proving a barrier to any major strides by the brand in California.
“The elephant in the room, of course, are the Chinese,” he said. “It’s [California] the number-one destination that the Chinese would like to go to but they can’t because of the amount of visas that are capped. But in every study, the Chinese say where they would like to go is California. It’s an El Dorado and they can’t...you have one of the most spectacular destinations in the world and the biggest tourism market in the world that are not meeting. They will meet and when they do it’s a game changer.”
When that happens, can California expect more Louis Vuitton stores?
“Of course,” Burke said.
Louis Vuitton’s first store boasting an on-site atelier at South Coast Plaza.
Louis Vuitton’s new store at South Coast Plaza is spreadacross a single floor.