Wednesday, 1 October, 2014

 
Published August 02, 2014
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High art & craft
As the most successful brands in the world cater more than ever to society's uppermost echelons, Louis Vuitton's CEO explains a strategy of hyper-exclusivity and craftsmanship to drive astronomical sales. By May Yip
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'We do need to stand out, and what that means is we do not want to bring to the market what already exists.'
CEO Michael Burke

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MICHAEL Burke may head one of the world's largest luxury brands, but he is as obsessed over the intricacies of an It bag as he is about sustaining the growth of a multi-million dollar fashion empire. The Louis Vuitton CEO, who was in town for the launch of the brand's fifth high jewellery collection, should, after all, be a leading connoisseur of nonpareil craftsmanship. How else would he be able to justify escalating price tags for products from the fashion behemoth?

"If it were easy to answer that question, many people would be successful in luxury," said Mr Burke, when asked for his definition of luxury. "The fact is, it is a very limited club, which means that there must be something more complex to it. But I would say there're a few necessary components: There is the artisan, and there is the artist. There's the creative side and then there's the making side. And basically it's a juncture of where art meets the artisan."

Picking up the brand's status tote du jour - the Capucines, Mr Burke explains why the "very, very high end bag" has been perennially out of stock since its launch over a year ago. While sceptics might attribute it to a shrewd, limited release to increase desirability, the LVMH Group veteran explains how a single detail - the "LV" initials on a flap of the bag, is painstakingly covered with leather by craftsmen and limits production. Using a delicate pencil-like tool made from the bone of a whale so as to avoid damage to the expensive hide, leather is seamlessly wrapped around the metal emblem.

"It looks deceptively simple but to create the 'LV' covered in leather - it's a very difficult craft to master," says the former CEO of Fendi and Bulgari, which are both under the LVMH group. "There are only about a dozen people who know how to wrap this leather around the metal 'LV'."

While it has been reported in the Wall Street Journal that Louis Vuitton's classic Speedy bag is 32 per cent more expensive in America now than it was in 2009, perhaps contributing to the brand's sales growth of 9 per cent this year, Mr Burke is careful to explain that Vuitton has not changed its strategy in going more upscale. Here, the Capucines bag is priced at S$6,000 for the smaller "BB" version and S$7,650 for the classic version.

"We've always had these very exclusive products but we had a tendency of treating them in such an exclusive way that nobody knew about them," adds the father of five. "I mean, it's great to have these fabulous, exclusive products but it also has to be known. So what we are ensuring is that we're better known, that we would be more better known also for that part of what we've always been doing."

At the top end of exclusivity is the high jewellery category, which the house has muscled its way into by opening a boutique at the famed Place Vendome in Paris, and unveiling traffic-stopping designs dripping with precious stones. The Genesis ring from its latest Art Deco-inspired collection, Acte V, for example, features a 20.94-carat blue-grey Burmese sapphire. And to launch the range to VIP customers here, the brand hired a fleet of BMW 7 series cars complete with "LV" licence plates, put up guests at the Fullerton Bay Hotel, and ferried them directly to its Island Maison at Marina Bay Sands - where they viewed the pieces in private salons.

"We do need to stand out, and what that means is we do not want to bring to the market what already exists," declares Mr Burke. "Nobody is waiting for another perfectly round-cut emerald. We will try to surprise you with innovative cuts and unheard of and unseen settings, unique combinations of colours and materials."

The French-born luxury honcho would know a thing or two about exclusivity, having worked alongside the lord of luxe, chairman and CEO of LVMH Bernard Arnault since 1979. Then, the student of EDHEC Business School in France was interning at Ferret-Savinel, a real estate company founded by Mr Arnault's father.

"So what actually led from Ferret-Savinel to LVMH is very similar, because you have to make something and start off with an idea. You have to deal with star architects and it is the same approach as working with (Louis Vuitton creative director) Nicolas Ghesquière," says Mr Burke, who is often regarded as Mr Arnault's protégé and joined the LVMH Group in 1986, before becoming deputy CEO of Christian Dior Couture (Worldwide).

"And the selling of residential real estate is very similar to the luxury industry. Because you're not selling square feet, you're actually selling who you are and who your customer wants to be perceived as."

When the 57-year-old was told he had met this journalist back in 2009 in Shanghai, during the opening of a Fendi store in upscale mall Plaza 66, he is perturbed when he does not recall the meeting - even though he would easily have been forgiven, considering the multitude of store openings and events he had to preside over since. But it is a sign of the value he places on the smallest of details.

Mr Burke, for example, takes pride in the minutiae of creating a luxury product, referring to a subtle nail design that adorn the rings that hold the straps of the Capucines bag.

"You see the nails on the trunk? That's where it comes from. These nails remind you of pieces of a trunk which protect it from being scratched," says the high fashion veteran. "Now if I had not pointed that out to you, you wouldn't have noticed it. But when you look at it, unconsciously you know that is Vuitton."

With a rich heritage and even richer coffers, Vuitton is capable of maintaining the luxury sector as a members-only club for the big boys. But when quizzed whether the company is on a warpath of dominating the entire industry, its chief replies: "If 'big' were the only criteria of success, the luxury market will become a very boring and poor market and uninteresting and we would lose the interest of our clients."

Instead, Mr Burke maintains that the support of young talent and small industries is crucial to the longevity of the business.

"We sponsor schools to train our artisans, so we invest heavily in the next generation. And a number of these people that we support and train will end up in other places. But it's ultimately good for the industry," adds the one-time head of Louis Vuitton's US business.

Just like how fashion thrives in fleeting trends and a constant flux of hemlines, palettes and silhouettes, Mr Burke believes in heterogeneity for a luxury market to remain relevant and enticing to an increasingly sophisticated consumer.

"We are absolutely adamant about new talent emerging, new companies emerging, new brands emerging, new houses emerging," says the long-serving executive. "If we only ended up with three (luxury) groups, and I shall not name them, we would lose."