Louis Vuit­ton CEO Sees Fu­ture in Cal­i­for­nia

WWD Digital Daily - - Front Page - BY KARI HAMANAKA

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.

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