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The luxury market opens to the franchise

If the deductible is required in many sectors, it is struggling to develop in the lap of luxury. Cultures incompatible ? Vuitton, Hermès, Chanel, Dior... These

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The luxury market opens to the franchise

If the deductible is required in many sectors, it is struggling to develop in the lap of luxury. Cultures incompatible ?

Vuitton, Hermès, Chanel, Dior... These shops you are dreaming, you would like to join their ranks ? Very difficult, because these big brands shun the model of the franchise. "Two cultures clash, the rarity and the exception against that of the mass dissemination and standardisation. The big houses will always be afraid of not being in control of their image by delegating their business to a third party," says Alexandre Ste-Marie, consultant, and author of Luxury and Brand (Dunod 2015).

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reasons of a more practical nature also explain their reticence. "They have the financial capacity to open our own stores. Why might they be to the franchise ? They fear above all the loss of control of the prices and stocks", explains Laurent Delafontaine, of the firm of Axis Networks.

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A legitimate fear, because some products, like handbags, are sold more expensive in Asia than in France. "The franchisees could benefit from them to sell the goods with an extra cost important to this region. This was seen," says the expert. Deterrent and especially very bad for the brand image !

A tool to deploy abroad

overseas, however, it is sometimes impossible to implement otherwise than by contract, franchise or financial partnerships. "Dubai, for example, the great names of ready-to-wear, leather goods, art of the table or the beauty pass inevitably by the brothers Chalhoub, essential tycoons of luxury in the Middle East," says Laurent Delafontaine. But the franchise remains the strategic way the more effective to ensure its development in an unknown land.

Fauchon, has for forty years. "This model allows us to better meet the standards of the luxury culture-specific tailoring including some recipes," says Samy Vischel, development director of the delicatessen which also has a few franchisees in France (right of entry from 25 000 euros for a concept of the kiosk).

the Same analysis at Ladurée. "This model has allowed us to settle quickly in 25 countries and take advantage of the know-how of local partners," explains director David Holder. And to add, the strength of this experience : "We learned how to delegate while maintaining our image. There is nothing to prevent develop Ladurée free on our soil."

Ladurée is established in 25 countries, as well as here in Geneva, thanks to the model of the franchise without shred his reputation.

Julian Schlosser

But between a small button to 1.80 euro and a dress to 6,000 euros, and the constraints are not the same. The pricing policy and inventory management have nothing to do between a network with multiple families of products, and an area of high gastronomy. Can we still speak of the same luxury and the same issues ? "There is no fixed definition of the concept, warns Alexander of Sainte-Marie. Some characterize the luxury and the nobility of materials, the excellence of the finished product, the historical heritage... but no one has the same references." Question of culture, age, and perception. A good number of brands navigate between the premium, super-premium and luxury.

A way to speed up the pace of openings

This is the case of Roche Bobois is proud to bring together Kenzo Takada, Jean Nouvel, and Bruno Moinard in its catalog, and from 260 stores throughout the world, including a quarantine of franchisees in France. "Our mixed-use development, between franchise and own stores, helps to speed up the pace of our openings, beyond our own financial resources available," admits Gilles Bonan, chairman of the management board.

The advantage becomes greater than the risk of does not control everything, and the model is win-win, because there is no entrance fee, the new franchisee to only provide working capital, fund the work as well as the acquisition of the stock. In the same logic, Longchamp has also chosen a development in the franchise. "This facilitates the implementation in medium-sized cities such as Dijon, Avignon, Rouen, Lille... We can't do everything ourselves", says Jean Cassegrain, chief executive officer. In twenty years, eleven brands have opened in the Hexagon. For what right of entry ? The brand remains discreet on the subject, joining there his colleagues from the luxury.

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candidates sorted on the pane

Preserve the spirit of the house, his side elitist... this is the true challenge of franchisors and high-end everything depends on the profile of the candidate. "We choose to franchisees of former independent merchants with which we work since long time", says Jean Cassegrain. This is the ideal, but this is not always possible, especially in new territory abroad.

Read our complete file

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To avoid casting error, Ladurée sorts on the future candidates. To ensure reliability, David Holder made the same appeal to private organizations, a kind of détectives private marketing, who carry out surveys of fame. At Roche Bobois, the investigation appears to be less drastic. The direction, however, ensure that the candidate has a strong financial plan, an optimal location, and that it has assimilated all the codes of the brand. A key principle in the franchise, but omnipresent among the players in the premium, which want to secure at any price this "I-don't-know-what" of French luxury.

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