Louis Vuitton 2002 Annual Report Download - page 80

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THE PURPOSE OF THE SELECTIVE RETAILING ACTIVITIES IS TO CREATE A
SALES ENVIRONMENT THAT PROMOTES THE IMAGE AND STATUS OF LUXURY
BRANDS. THEY ARE LOCATED IN EUROPE, THE UNITED STATES AND ASIA
WHERE THEY OPERATE IN TWO SEGMENTS: TRAVEL RETAIL (THE SALE
OF LUXURY PRODUCTS TO INTERNATIONAL TRAVELERS), WHICH IS THE
BUSINESS OF DFS AND MIAMI CRUISELINE; AND THE SPECIALIZED
SELECTIVE RETAILING FORMATS REPRESENTED BY SEPHORA AND THE
DEPARTMENT STORE DIVISION, WHICH NOW CONSISTS OF LE BON MARCHÉ
AND LA SAMARITAINE, TWO PRESTIGIOUS PARISIAN ESTABLISHMENTS.
HOW DID THE SELECTIVE
RETAILING OPERATIONS
MANAGE TO STAY ON
TRACK, GIVEN THE VERY
DEPRESSED BUSINESS
CLIMATE IN 2002?
PIERRE LETZELTER: Our
priority was clear – to
return to the bla ck. We
succeeded because of the
strict cost cutting m ea-
sures taken by the DFS
teams a nd because of
Sephora’s growth, which
nearly doubled its ope-
ra ting margin in Europe
and improved its results
over and above its
objectives in the United
States.
HOWEVER, SEPHORA HAS
SLOWED THE PACE OF
NEW STORE OPENINGS.
P. L.: This is a delibe-
ra te stra tegy. Sephora is
not racing for size.
What counts is growth
with a comparable
number of stores; in
other words, growth
store by store. Our retail
concept requires a good
location that offers
quality traffic, a n
appropriate sa les space,
in a well-selected city.
Sephora opens stores
only when these criteria
are all met. In the
United Stat es, where
sluggish consumer spen-
ding sha rply impacted
depart ment stores,
Sephora’s sales rose
25% on a compa rable
store basis in 2002. This
illustrates the success
of our approach in
a country where we
only recently began
to operate.
WHAT ARE THE MOST
PROMISING COUNTRIES ON
THE EUROPEAN SIDE OF
THE ATLANTIC?
P. L.: In addition to
France and Italy, which
are our hist orical key
markets, we ha ve
outstanding prospects in
Centra l Europe. Our
business is growing ver y
well in Poland, where
we have 31 stores. We
just entered the Czech
Republic, with the
successful opening of
three stores in Prague
that confirms Sephora’s
potent ial in this region
of Europe.
ISTHE REFORMULATION
OF LA SAMARITAINE
GOING WELL?
P. L.: Our intention
is to reproduce an
approach alrea dy test ed
with Le Bon Marché,
while ta king into
consideration, of course,
the specific assets of la
Samaritaine a nd its
commercial environ-
ment. This is precisely
why we assigned the
same mana gement
team that succeeded so
brillia ntly in tra nsfor-
ming Le Bon Marché
to handle this ma jor
project. We can trust
them to be up to the
task.
WHAT ARE THE OVERALL
OBJECTIVES OF THE
SELECTIVE RETAILING
BUSINESSES OVER THE
NEXT FEW MONTHS?
P. L.: In an economy
that is still struggling,
particularly t he tra vel
retail segment, each
company cont inues
its efforts to boost
profitability, and ma ke
its organizational
struct ure more flexible
to meet new cha llenges
as well as new opportu-
nities. With these
efforts, the compa nies
will be considera bly
stronger and ready to
rebound when the
international business
climat e returns to
norm al.
PASSIONATE ABOUT CREATIVITY SELECTIVE RETAILING
SIGNIFICANT IM PROVEM ENT IN RESULTS
STRATEGY AND OBJECTIVES.
Interview with Pierre Letzelter, President of the Sephora Group
78 •79 ANNUAL REPORT 2 002