Louis Vuitton 2003 Annual Report Download - page 64

62 LVMH ANNUAL
REPORT 2003
selective retailing
DESPITE BEING UNUSUALLY
HARD HIT BY THE 2003
ECONOMI C DOWNTURN,
SELECTI VE RETAIL COMPANIES
MANAGED TO MEET THEIR
OBJECTIVES. WHAT WERE THE
KEY FACTORS I N THI S I MPROVED
PERFORMANCE?
PIERRE LETZELTER : We
owe these results to the
strong responsiveness of
our teams and to dynamic,
disciplined management.
The hard work we devoted
to the strategies implemen-
ted over the past several
years is bearing fruit. Our
brands have more efficient
organizations, more
attractive merchandising
and a higher quality
of service in the different
markets in which we
operate. Whether in the
competitive world of travel
retail or in specialized
selective retailing, we
made strides in both pro-
ductivity and competitive-
ness. We are maintaining
our course. Improved
profitability was our
number one priority and
will remain so in 2004.
WHAT ARE SEPHORA’SKEY
BENEFITS IN THE US
FRAGRANCE MARKET, TRADITI O-
NALLY DOMI NATED BY
DEPARTMENT STORES?
P.L. : This is a new marke-
ting concept, involving
unheard of openness and
freedom. It attracts a
young, educated customer
base. In addition, it is very
selective. In cosmetics, for
example, we focus on
retailing creative, imagi-
native brands that offer
new services and real
skincare qualities, while
driving the latest trends.
These brands are riding
a wave of popularity; and
we are helping to expand
them by selling them
and holding special product
demonstrations for them.
HAS SALES ADVI CE AND
SERVI CE BEEN DEVELOPED
IN THE UNITED STATES?
P.L. : This was one of our
major initiatives in 2003.
We created an in-house
school in the United States.
Our employees receive
extremely thorough trai-
ning on products, customer
service, and sales tech-
niques. This approach is
an integral part of our phi-
losophy. The objective of
each Sephora store is to be
the best in its area with
the best location, the most
attractive product offering
and the best customer
service. Sephora’s goal
is not to be the biggest but
the best.
WHAT IS THE OUTLOOK FOR
SELECTI VE RETAILI NG IN 2004?
P.L. : DFS is expected to
benefit from the travel
recovery, particularly from
the rapid expansion of
Chinese tourism, which
is a major growth driver.
Miami Cruiseline is in the
best position to solidify its
presence in the cruise ship
market. Sephora will
continue to expand its pro-
fitable business model on
both sides of the Atlantic
and will continue to grow
in Central Europe, where
it has met with extremely
promising success. Le Bon
Marché is enhancing
its appeal and has sound
prospects for regular
growth. La Samaritaine,
which is in an investment
phase, will complete most
of the work required for
its new store design
by September 2004.
STRATEGY AND OBJECTIVES
I nterview with Pierre Letzelter,
President of the Sephora group
HIGHLIGHTS
■In line with objecti-
ves, DFS posted a
profit in 2003 despite
the decline in interna-
tional tourism in the
first half of the year
resulting from the war
in Iraq and the SARS
epidemic.
■Sephora had
an excellent year. In
Europe, the brand’s
profitability improved
dramatically. In the
United States, it pos-
ted positive operating
income and cash flow
for the first time.
■Sephora developed
its store network
in Poland by teaming
up with the oldest
selective perfume
chain in the country,
and opened its first
store in Moscow
thanks to a local
partnership.
■Le Bon Marché
increased its market
share in Paris depart-
ment stores and began
the renovation of
its women’s fashion
department.
■Within the context
of its new positioning,
la Samaritaine conti-
nued to convert its
sales spaces and
to revamp its product
offering.
EUR million 2001 2002 2003
Net sales 3,493 3,337 3,039
I ncome from operations (213) 20 106