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The Louis Vitton Story

With Fine Craftsmanship and Steep Prices, Louis Vuitton's Leather Goods Are De Rigueur for the Status Conscious
Stewart Toy
From the Print Edition:
Demi Moore, Autumn 96

(continued from page 3)

Promotional sponsorships are a key element in Vuitton's marketing strategy. The goal is to identify the brand with an upscale lifestyle. In the America's Cup yachting competition, the French company organizes the defender's qualifying races, which are named the Louis Vuitton Cup. Another favorite sponsorship are automotive concours d'elegance. For the past eight years, Vuitton has put on the most important such event in Europe, in Septemberat the Bagatelle gardens of the Bois de Boulogne in Paris. Every June, Vuitton organizes a smaller concours in London at the Hurlingham Club.

A new Vuitton concours d'elegance is coming to New York. During the last weekend in September, some 60 vintage cars will be exhibited at Rockefeller Center. The company intends to make this an annual event, having realized that the East Coast lacks a classic-car show on a par with the concours at Pebble Beach in California.

A luxury profile plus savvy marketing has made Louis Vuitton the crown jewel of the LVMH empire. Its profits are as fancy as its products. Some customers might be stunned to learn that Vuitton made a 49 percent pre-tax profit on its sales last year. And that's after the high cost of its fancy stores, lavish advertising and promotions.

Given such success, it's no wonder that leather goods makers the world over churn out ripoffs of Vuitton's famed monogram design. Imitations of Epi leather are growing, too, many of which are blatant counterfeit copies of the real thing. Sometimes the copiers do excellent work. One former headquarters staff member of Vuitton says she has seen counterfeit monogram handbags from Morocco that in her opinion are as well made as the originals, except for an occasional sloppy stitch inside.

Protecting the brand against rogue ripoffs has become a consuming mission at Vuitton, which spends $10 million a year on this battle. Part of the sum goes for lobbyists, who try to persuade governments to protect brand rights. For example, when the prime minister of Turkey visited Brussels not long ago to discuss a trade deal with the European Union, Vuitton's EU lobbyist was able to bend his ear about policing exporters of counterfeit leather goods. Turkey is among the biggest sources of counterfeit goods, according to Vuitton, along with Thailand, China, Morocco, South Korea and Italy.

Warning: If you should buy a fake Vuitton on your travels, don't take it with you to France. The company, in concert with other French makers of luxury goods, has successfully lobbied the French parliament to make the import of even one counterfeit article a criminal offense. No tourist has been jailed yet, but one importer caught with 10 bogus Vuitton products is doing time in a Gallic cell.

Vuitton employs agents who comb the world looking for counterfeiters' factories and export operations, and then report these sites to local authorities. "Almost every month, we get a government somewhere in the world to destroy canvas, or finished products," says Carcelle. Late last year, Vuitton scored a coup in the United States: it helped the U.S. Customs Service seize 100,000 Vuitton fakes that were being imported from South Korea.

Maintaining Louis Vuitton's special cachet in the years ahead will take considerable marketing flair. During the 1989 takeover battle for Vuitton, Racamier was convinced that Arnault of LVMH would end up destroying the brand by milking the new-product possibilities too quickly, thereby watering down the posh image.

Thus far that hasn't happened. Carcelle and his colleagues have cooked up new lines at a sedate pace. Three years ago, Vuitton introduced its Taiga collection, the company's first full line for men. Briefcases, suitcases and desk accessories are made of forest-green cowhide embossed with a cross-hatch design. Vuitton's stores are slowly adding scarves and other accessories. Toward the end of the year, they'll start selling pens. However, "we're in no hurry," says Carcelle.

Carcelle is wary of broadening the product line too much. Clothes, for example, have been ruled out. He sees specialization as a way to preserve cachet. "Our competitors are trying to do everything," he says. "Leather companies are doing fashion, and vice versa." He believes that causes confusion in customers' minds.

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