Thursday, September 29 2022

Tucked away on the top floor of the townhouse where Christian Dior founded his fashion house in 1946, is a jewelry box-like apartment with a marble bathtub, lacquered walls and a living room overlooking a private garden on the roof.

Dior’s most privileged clients will soon be able to stay here and take advantage of the newly renovated 30 Avenue Montaigne for a night for a meal cooked by a celebrity chef or a tour of the workshops where bespoke dresses and jewelry are made.

The suite is the most over-the-top part of a two-and-a-half-year renovation of the complex of buildings that not only form Dior’s spiritual home, but have long housed its most profitable store.

The renovation also symbolizes the unbridled ambition that Dior owner LVMH, the world’s largest luxury group by sales, has for its second most valuable brand after its powerhouse Louis Vuitton. Although the group declined to disclose how much it spent.

“Dreams are priceless!” says general manager Pietro Beccari in an interview at Dior headquarters. “We have to create something to stand out that no one can ever copy or imitate.”

That’s the speech the 54-year-old Italian executive says he gave to billionaire LVMH owner Bernard Arnault shortly after taking up his post at Dior in 2018. He made the revamp of Avenue Montaigne a key to his bold plan to increase Dior’s market share. in all its categories: women’s and men’s fashion, leather goods, jewelery and decoration.

Such ambition is typical of the kinetic Beccari, who has earned a reputation in the luxury sector as a rainmaker. LVMH recruited him in 2006 from consumer goods maker Henkel, where he sold consumer shampoos and hair dyes, and appointed him head of marketing and communications for Louis Vuitton. In 2012, he was promoted to head of Fendi.

“Don’t think big, think huge,” he often tells his staff.

This philosophy paid off for Dior’s fashion and accessories business, which experienced heartbreaking growth under Beccari. Although LVMH does not disclose the results of individual brands, investment bank Stifel estimates that it more than doubled its sales from 2.9 billion euros in 2018 to 6.2 billion euros in 2021. The separately managed Dior perfumes and cosmetics business generated 3.2 billion euros in revenue. last year, about the same as before the pandemic, according to Stifel.

Combining beauty and fashion, Dior is now on the verge of reaching “mega-brand” status, which in luxury means annual sales of more than 10 billion euros. This has only been achieved so far by Louis Vuitton and the private company Chanel, although Gucci and Hermès de Kering are close.

A look from the Dior Fall/Winter 2022 show, designed by Maria Grazia Chiuri. . . © Frederique Dumoulin

Kim Jones' take on Dior menswear for Fall/Winter 2022

. . . and Kim Jones’ take on Dior menswear for Fall/Winter 2022

Working in tandem with Maria Grazia Chiuri, the artistic director of womenswear, and Kim Jones for menswear, Beccari took a label long considered the epitome of French haute couture and transformed it into something stronger, faster and more profitable. “Dior has become bolder and more aggressive both aesthetically and commercially,” says Bernstein analyst Luca Solca.

When asked what drove Dior’s recent success, Beccari said it was “a combination of many, many things”, chief among which was taking e-commerce seriously and investing in technology.

The products have also been reviewed. Under Chiuri, Dior has incorporated feminist messages into its – not always critically acclaimed – garments and expanded its line of handbags to rely less on the iconic Lady Dior bag. It now sells several models, including the laptop-sized Book Tote and the rebooted, curvy Saddle Bag, expanding its presence in accessories as the most profitable luxury brands have long done.

Meanwhile, Jones brought a more modern vibe to Dior menswear via collaborations with Nike and high-profile artists such as Amoako Boafo and Peter Doig. This helped multiply the size of the company “many times over,” Beccari says.

“The basis of our success is the creative side,” he enthuses. But there’s no doubt that it’s also down to Beccari’s skills as a manager and a salesman.

“We have to create something to stand out that no one can ever copy or imitate,” says Beccari © Elliott Verdier

Born in a village of around 1,200 inhabitants in the Parma region, he has the discipline and ethos of an athlete. As a young man he briefly played professional football in Italy’s second tier and says the experience shaped the way he dealt with people. “You have to be a team, no one wins alone, you never give up, you fight, you have to take risks,” he says.

People who know him say that Beccari goes to the office every day around 7 a.m. and, contrary to Italian stereotypes, he doesn’t drink coffee and usually has lunch at his desk. He met his wife Elisabetta when they were in elementary school, and they have three children together.

Beccari’s stint in the consumer goods industry grounded him in consumer sales techniques honed at dairy group Parmalat in the United States and at Henkel in Germany. “It taught me a lot of things not to do in luxury,” he says wryly.

“In consumer marketing, you have to hammer the same message in different ways and inconsistency is not allowed. Luxury brands are more complex, like a multi-faceted diamond, so some inconsistencies can even create desirability … You need to bring chaos to your business.

Chart showing fashion company revenue, how Dior has grown rapidly over the past 5 years

In the first two years of the pandemic, Beccari invested heavily in everything from fashion shows to influencer marketing, despite repeated store closures and supply chain disruptions. “We shouted when everyone was silent,” he says, implicitly criticizing some competitors who cut live shows and product launches. “Speed, action and risk taking are part of today’s world if you want to succeed.”

The tactic worked, according to Morgan Stanley analyst Edouard Aubin, who estimates Dior sales jumped around 50% between 2019 and 2021. He believes Dior has been “the fashion and leather goods brand to fastest growing in the world over the past two years”. years”.

Mario Ortelli, who advises luxury companies on strategy and acquisitions, says of Beccari: “He’s a risk taker, and that has paid off. Now the only question is to avoid overexposure after such a rapid growth period. Can he keep this magic in the long term?

When asked what his dream for Dior was in terms of size, Beccari refused to say.

“If Dior were still listed on the stock exchange, I would strongly encourage people to buy the stock,” he says. “We still have huge opportunities in many categories, and the sky is the limit in terms of what we can sell at what price.” He cited the example of a yellow diamond that Dior will sell at 30 avenue Montaigne for around $50 million.

Dior also only has 240 stores worldwide, he added, suggesting that a retail expansion could boost sales significantly. That’s about on par with the 221 from Hermès and the 273 from Chanel, according to Stifel, but far less than the 488 from Gucci or the 478 from Louis Vuitton.

The newly renovated Dior boutique at 30 avenue Montaigne

The newly renovated Dior boutique at 30 avenue Montaigne © Adrien Dirand

Renovating 30 Avenue Montaigne is something only a mega-brand could undertake, says Beccari. “Today, Dior has the economic power that allows us to carry out unthinkable projects,” he says.

However, convincing Arnault to give the green light was not easy. “Economically speaking, the project would never have made sense financially for the small Dior business we had at the time,” he says. “But Mr. Arnault is a very intuitive entrepreneur who is able to decide with his instincts when it comes to imagining the future.”

The building has a rich history that Beccari wanted to use to fuel the Dior mystique that keeps luxury fans from Shanghai to Seattle coming back to the brand. Christian Dior has long shown his collections to Europe’s post-war elite here, and Dior employees joke that his ghost can be heard rattling around the top-floor atelier where skilled people small dishes have been sewing creations for 75 years.

Although the renovation tripled the retail area to 2,300 square meters, Beccari refuses to call 30 avenue Montaigne a boutique because it contains so much more than that.

30 avenue Montaigne includes a museum gallery which presents a rotating collection of dresses and objects from the brand

30 avenue Montaigne includes a museum gallery that presents a rotating collection of dresses and objects from the brand © Kristen Pelou

There are three lush interior gardens and pleasant places to relax like a brightly colored restaurant and a bar with a patisserie – nods to Christian Dior’s love for nature and its indulgence. Visitors can also tour a museum about the history of the brand and its founder which will feature a rotating collection of dresses and items like early sketches of “New Look” dresses with cinched waists and full skirts.

On the upper floors, qualified Dior teams will work in the couture workshop and a new one for jewelry. “I think a lot of industry watchers or our competitors will see this place as something completely new in the luxury space,” he says.

None of LVMH’s other brands has an equivalent mixed-use space from which to tell its full story, although the group’s 750 million euro renovation of La Samaritaine department store was equally ambitious.

“Our work is a continuous quest to find a balance between tradition and modernity”, says Beccari. “If you’re the art director, if you’re a CEO, that’s the hardest part of the job.”

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