Longchamp bets on China and the USA to boost its growth
by Pascale Denis and Sarah White
PARIS (Reuters) - Longchamp is investing in China and the United States to step up the pace in 2019, betting in particular on collaborations with celebrities and the deployment of its e-commerce after two years of slow growth.
The French leather goods maker famous for its nylon "Pliage" bags saw "less vigorous" growth in 2016 and 2017 compared to the previous 10 years, when sales tripled thanks to store openings, Jean Cassegrain told Reuters , managing director and grandson of the founder of the family business.
With 1,500 points of sale worldwide, including 300 of its own, "the distribution network is almost complete today," he said.
The turnover of the rider brand, which was 560 million euros at the end of 2015, is estimated today between 500 and 600 million.
To speed up the pace, Longchamp is banking on Chinese customers, the brand's second behind French customers, and on the United States, "where we can do better", added the manager, saying that his objective was to do better than the luxury market.
According to Bain & Co, the appetite of young Chinese consumers and the acceleration of online sales should continue to boost the global luxury goods market, which it estimates to be growing at between 6% and 8%.
Longchamp, which has been selling online in China since 2016 via WeChat messaging - owned by Chinese giant Tercent - plans to open its own e-commerce site in the country in 2019, following in the footsteps of Louis Vuitton (LVMH group) and Gucci (Kering), which launched theirs in 2017, or Hermès which is preparing to do so in mid-October.
COLLABORATIONS
The brand has 18 stores in China and like many of its competitors, it invests in collaborations with celebrities to attract an ultra-connected and increasingly young clientele.
His collaboration with Mr Bags, a Chinese star blogger, for a capsule collection, was a "great success".
Longchamp, which is celebrating its 70th anniversary this year, is also investing in the American market.
The brand, which launched a few years ago in ready-to-wear and shoes, has just paraded with great fanfare during New York "fashion week", opened a new store in May on the 5th avenue, has taken on the muse of the American model and influencer Kendall Jenner and is about to open a store in Beverley Hills, California.
In France, Longchamp is preparing to inaugurate its sixth workshop, in Vendée, which will integrate the 70 employees of a former site. In total, the company employs 900 people in France who provide half of its production.
The rest is made in its own factories in Tunisia and Mauritius, as well as by third-party manufacturers in Romania, Morocco and China.
The brand, whose leather bags are sold between 300 and 1,000 euros, is positioned in the so-called "accessible" luxury niche, between the American Coach or Kate Spade, at slightly lower prices, and luxury brands like Gucci or Vuitton, whose bags oscillate around 2,000 euros.
(Pascale Denis, edited by Jean-Michel Bélot)
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