PARIS (Reuters) - From New York’s Fifth Avenue to Paris’ Place Vendome, Louis Vuitton sells its handbags at some of the world’s swankiest locations - but the brand is increasingly betting on “pop-ups” in off-beat spots as one way to keep shoppers hooked.
The label, which drives the bulk of sales and profits at French luxury group LVMH, plans to hold 100 temporary events to sell its wares this year, up from 80 last year, the conglomerate’s financial director said on Thursday.
“This is the privileged way and the main way to drive innovation,” Jean-Jacques Guiony told analysts after the conglomerate posted a pick-up in first-quarter sales, beating analyst forecasts.
“This trend in pop-up stores is extremely important, and we will continue to develop that because it enables us to be talking in a different way to our clients ... important and it adds flexibility with our network.”
Vuitton’s retail shake-up comes as luxury brands experiment with ways to attract younger shoppers, who are increasingly propelling sales growth in a sector that has long been notoriously rigid in its approach, and slow to move into selling online for instance.
At the lower-end of the fashion scale, high street labels like H&M are grappling with shifting shopping habits, albeit often taking a different tack, such as sprucing up cluttered stores with a more luxurious feel.
At Vuitton, recent “pop-ups” include one in London’s exclusive Mayfair neighborhood to highlight its menswear line, with a Wizard of Oz themed space featuring a yellow brick road staircase, and which shoppers had to book tickets to attend.
With revenues of over 10 billion euros ($11.27 billion), Louis Vuitton is the world’s biggest luxury brand by sales, with privately-owned Chanel clipping at its heels, and Kering’s star brand Gucci on a mission to overtake it.
In its bid to stay ahead, Vuitton has also invested in new designers, betting on Virgil Abloh, a DJ and founder of high-end streetwear label Off-White, to help jazz up its mens’ clothing lines.
LVMH, which is notoriously tight-lipped about Vuitton’s performance, said on Thursday that the sales’ growth rate in men’s and womenswear was at a “very, very high level” in the first quarter.
“It’s a small part of Vuitton’s total business but it creates a lot of buzz and is important to drive store traffic and to help Vuitton sell more accessories,” RBC Capital Markets analyst Rogerio Fujimori said of the men’s collections.
Clothing only represents around 5 percent of the brand’s sales, the brokerage estimates, with three quarters of revenues coming from high-margin handbags and luggage. ($1 = 0.8875 euros)
Reporting by Sarah White and Pascale Denis