Longchamp to invest in China
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French handbag label Longchamp sees the China and US markets as key in boosting its global sales.
Facing sluggish traditional European markets, the company is looking to celebrity endorsements and online opportunities to drive growth, according to CEO Jean Cassegrain.
“We’re entering a different phase of growth, it’s no longer about store openings but about improving the performance of our current network,” Cassegrain said in an interview.
China is already Longchamp’s second biggest market, behind France, where turnover took a hit as tourist numbers dived in the wake of terror attacks on Paris in 2015.
However Cassegrain said in the interview he expected the privately owned company would outperform the wider luxury industry by next year.
While the firm does not traditionally reveal sales or profit data, it did report sales of US$658.11 million in 2015 and independent analysts estimate turnover remains close to that.
Longchamp China currently sells products through Tencent’s WeChat social media platform with the brand planning its own direct e-commerce platform soon.
In the US it plans to open several more stores within the next 12 months, but beyond that believes its global retail footprint is relatively mature.
Questions & Answers
Q.What specifically is Longchamp doing to boost its presence in the Chinese market?
What specifically is Longchamp doing to boost its presence in the Chinese market?
Longchamp is already selling products through WeChat and plans to launch its own direct e-commerce platform soon. This is part of a strategy to use online opportunities and celebrity endorsements for growth in key markets.
Q.How will Longchamp address the US market, given its focus on China?
How will Longchamp address the US market, given its focus on China?
Longchamp plans to open several new stores in the US within the next 12 months. Beyond this period, the company believes its global retail presence, including in the US, is relatively mature.
Q.Why is Longchamp shifting its focus away from traditional store openings?
Why is Longchamp shifting its focus away from traditional store openings?
The company's CEO, Jean Cassegrain, stated that Longchamp is entering a new phase of growth. The current strategy is to improve the performance of its existing store network rather than expanding it further through new openings.
Q.What was the reason for the decline in turnover in Longchamp's home market of France?
What was the reason for the decline in turnover in Longchamp's home market of France?
Turnover in France was negatively impacted by a significant drop in tourist numbers. This occurred in the aftermath of terror attacks that took place in Paris during 2015.
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