Louis Vuitton Lures China's Super-rich with Custom Leather "art"
Louis Vuitton is courting China's wealthy with one-of-a-kind shoes and bags it is branding as unique works of art to reclaim its exclusive cachet in the luxury market.
The French luxury brand, a unit of LVMH (LVMH.PA), is set to open its largest China store in Shanghai on Saturday, complete with a gilded spiral staircase and an invitation-only private floor where big spenders can get their hair done while dreaming up designs for custom bags.
"The made-to-order concept is the ultimate luxury," Louis Vuitton Chief Executive Yves Carcelle told Reuters during a tour of the store, which the company calls a "maison".
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"It's the same with art. If you are interested in art, the ultimate is to commission an artist rather than buy a piece that is already done," Carcelle said.
Louis Vuitton routinely ranks among the most admired brands in surveys of Chinese consumers. But ultra-luxury names such as Hermes (HRMS.PA) are making inroads, and some top-tier consumers now look down on Louis Vuitton as too common.
The company hopes to cement its exclusive luxury status with the new Shanghai store, which boasts steel sculptures and carries a wide array of goods ranging from chic coats and hats to brightly coloured bags made from python or alligator skin.
It also sells carrying cases for tiles used to play the Chinese game mahjong and made-to-order trunks for tea sets.
China is the world's third biggest market for personal luxury goods, worth at least 160 billion yuan. In the next three years, it is expected to leapfrog over Japan and the United States to take the top spot, with the luxury segment expanding to 180 billion yuan.
The Louis Vuitton maison, one of 16 similar boutiques in the world, is located in Shanghai's address for luxury goods: the swanky Plaza 66 mall, where rival brands such as Chanel and Prada (1913.HK) also have stores.
Spanning four levels and with more than 100 staff, the store is currently the only one in China that offers custom bags and shoes. The company declined to say how much it spent on the boutique.
"Being in this made-to-order market needs sophisticated customers who know what they are talking about and own several bags, if not dozens of bags," Carcelle said.
"That's why the haute maroquinerie and made-to-order-shoes... are important to demonstrate in China," he said, using the French word for luxury leather crafts.
"As long as we didn't have this space to show them to our clients, in a world that is changing fast, we were missing our weapons," he said.
Louis Vuitton's timing, however, may be less than ideal.
Luxury spending is softening in China as the economy weakens. Economic growth slowed to its lowest level in three years last quarter. Britain's Burberry (BRBY.L) said last week its sales had been hit by the slowdown in China.
Carcelle declined to comment on the state of the Chinese economy or its impact on luxury spending, but said he sees more "maisons" opening up in the capital Beijing and Hangzhou, a thriving trade hub in eastern China.
He said Chinese consumers had rapidly matured into luxury connoisseurs, and the company needed to cater to both first-time buyers and sophisticated shoppers.
"Maybe in the West, this trend took 20 years but here it takes 5 years from the first purchase to the willingness to have more sophisticated products and services," Carcelle said.