The marketers always talk about the Ps of marketing. One of the Ps is positioning Louis Vuitton fine jewelry business in a more exclusive space. They want to differentiate themselves from other luxury brands who simply add a bejeweled bracelet to their offerings. To position themselves as a serious player in the fine jewelry segment Louis Vuitton has opened its first standalone watch and jewelry store at the celebrated Place Vendome in Paris. The immediate target is the free spending Chinese travelers who love necklaces and bracelets made in France. LV is the undisputed leaders in handbags but would now like to challenge the top jewelers like Van Cleef & Arpels and Cartier. Bernard Arnault, owner of LVMH is trying to make his jewelry business mass luxury and yet preserve its desirability.
Louis Vuitton Exclusive Store
Louis Vuitton has a sales turnover of 6.5 billion euros according to estimates made by Barclays Capital. They are targeting Chinese travelers aggressively to compensate for the slowing down of demand in Europe. The demand for high end watches in China has also dropped as they prefer shopping abroad to take advantage of their strong currency. They hope to capture some of that sale through this store which is a two story boutique complete with its own workshop. The highlight of the jewels on display is a 9 million-euro diamond cut in the shape of Vuitton’s flower logo and a diamond-and-ruby encrusted ring called the Champs- Elysees that costs 75,000 euros. Vuitton has been making lower-priced bijoux and Swiss watches since a decade but has got into fine jewelry only three years ago and their opening a store in Place Vendome is a sort of statement that they have arrived.
Place Vendome is the home of some of the Europe’s oldest and most expensive jewelers since Boucheron opened there in 1893. The timing of the opening of the Vuitton store seems to be very appropriate as according to experts the sales of watches and jewelry are set to outpace the luxury sector’s growth through 2014. The Chinese travelers also spend the most on these two items. It will also help them compete directly with Cartier which has a store next door. The store will also help Vuitton develop a distinct identity from the watch and jewelry brands like Zenith and Bulgari in which LVMH has invested recently. The watch and jewelry division of LVMH excluding Vuitton contributes 8% to the total sales of the conglomerate. The division has grown by 17% in the first quarter compared to the 12% growth recorded by the fashion and leather goods divisions. Vuitton’s flagship store on the Champs Elysees has become a landmark and shoppers have to wait outside to enter the store. Vuitton is hopeful that their jewelry boutique at Place Vendome will also become a retail destination in Paris. In any case Vuitton has positioned itself to fight for the share of the market at the top end of luxury watches and fine jewelry buy opening its boutique right next to Cartier and opposite PPR SA-owned Boucheron. Vuitton is confident that this move will succeed and pay rich dividends in the coming years.
Via: businessweek
