Silvio Denz is quietly building his luxury goods empire. The
Swiss entrepreneur talks to me about his expansion strategy in China, his plans
to grow an even bigger fragrance business with new brands, and his high-end
co-branding initiatives with Lalique.
Here's our interview:
Silvio Denz, the owner and chairman of the Art &
Fragrance luxury goods group comprising Lalique, Lalique Parfums, Jaguar
Fragrances and Bentley Fragrances among other brands, has just flown into
London for our meeting from Miami, where he has celebrated the opening of a new
Lalique store. This is only the start of a series of shop openings across the
world for the French handcrafted crystal brand. Denz is on a mission to grow
Lalique into a global lifestyle brand, via a strategy of new product offerings,
new stores and retail concepts, and a series of upscale co-branding
initiatives.
Much is happening on the retail front, as new stores will begin
trading in the next few months in Zurich, Muscat, Shanghai and Las Vegas. The
Shanghai emporium represents a much-anticipated retail debut for Lalique in
mainland China.
Lalique debuts in
mainland China
A Lalique boutique run by a partner company has been trading
in Hong Kong since 1961, but only recently did Denz decide the time was right
to expand into mainland China – arguably much later than many other brands. The
first monobrand store will open in Shanghai in December. Explaining why Lalique
had taken so long to enter the mainland, Denz said: “We have not been present
in mainland China up to now, but we are about to open two shops in Shanghai, in
December and March, and will be rolling out stores to other areas.
“Our partner has run our Hong Kong store since 1961 and the turnover there is tremendous. We’ve had many requests over the years from people who wanted to sign a master distribution contract but we wanted to wait until we could do it ourselves.”
While China holds great potential for Lalique, one region
that has already shown steady growth is the Middle East, where some 14
franchise shops have opened over the past few years. Lalique also has a
successful partnership with Mercury in Moscow. Growth-wise, the European market
is “stabilising”, Denz said, noting that recession-hit Italy is an important
crystal market. “But now the focus is on China and Asia Pacific.”
Denz is optimistic about the global economy and believes the recession is over, though he added that France still had “internal problems”. Group sales have climbed 20% this year at retail in Europe, about the same amount in Asia, and some 5% in the US market. “There is always a recovery at retail first, and wholesale recovers after that,” he said.
Since acquiring Lalique in 2008, the Swiss entrepreneur has
expanded the company’s product offerings, which now span decorative crystal
ornaments, jewellery, furniture and the Lalique Parfums fragrance division. In
fact, crystal is becoming less important in the brand’s overall mix than the
newer, arguably “younger” product categories such as fragrances and jewellery.
Fragrances now contribute one-third of turnover, while crystal makes up “not
even one-third” now, because of consumers’ changing tastes.
Building Lalique Maison
.JPG) |
| Silvio Denz, Chairman, Art & Fragrance |
Building Lalique Maison
Lalique entered the furniture category two-and-a-half years
ago thanks to a partnership with interior designer Lady Tina Green, wife of
Arcadia Group’s owner Sir Philip Green, who has helped create the Lalique
Maison collection. These products are designed for everyday life and include
items such as backgammon sets, jewellery boxes and tissue box covers, as well
as larger pieces such as side tables, chairs and bars. Some of the items are
even designed to change colour, noted Denz.
The Lalique Maison collaboration, which also undertakes
bigger interior design projects for superyachts and homes, is showcased at
specially designed showrooms in Hong Kong, New York, Chicago and London
department store Harrods, where a new concession opened a few months ago. These
luxury homeware products can also be seen in selected Lalique stores on a
rotated basis. When I visited the store on London’s Conduit Street, the Lalique
Maison room-set featured a double bed with a crystal headboard and a chest of
drawers incorporating crystal inlay, along with lighting and other items. The
soon-to-open Zurich store, which spans 1,800sq ft, will offer customers a taste
of the Lalique Maison lifestyle, as half the retail area will be taken up with
the collection. It will also be a highlight of in the 2,500sq ft Shanghai
boutique.
In a related move, Denz is now working on Lalique’s first project in the hospitality space, aiming to turn the house of the brand’s founder René Lalique into a boutique hotel, enlisting the help of Lady Tina Green and the architects Pietro Mingarelli and Mario Botta. The hotel is based in the village of Wingen-sur-Moder in Alsace, where the Lalique factory and the Lalique Museum are based.
“René Lalique’s villa dates back to 1921, so we want to
transform the two-storey house into how it used to be and keep the feeling of
that era as much as possible,” said Denz, who is today sporting a handsome dual
time zone Audemars Piguet watch. “The hotel will house items from the Lalique
Maison collection and will have a modern restaurant with 40-50 seats. There
will be a lounge bar, a breakfast room and a library.”
Co-branding programme
In a bid to emphasise Lalique’s luxury positioning, Denz is
turning to special-edition products and “more exceptional” items, such as its
co-branding partnerships with Scotch whisky brand The Macallan for a range of
decanters; Bentley, with a crystal stopper in the shape of the Flying B car
mascot for a Bentley Fragrances limited-edition bottle; and Bugatti car mascots.
Leading London-based architect Zaha Hadid is collaborating
with Lalique on several new sculptural pieces which will be showcased at the
next edition of the Maison & Objet trade fair and will be introduced early
next year.
Denz is also expanding the crystal product range to appeal
to younger customers who want smaller pieces. A new jewellery collection is
being launched now – the third collection for the category, which made its
debut in 2011.
Focus on fragrance
Denz, who has worked for 33 years in the fragrance industry having
sold his family-owned perfumery chain Alrodo to Marionnaud in 2000, believes
fragrances hold an important role as the “ambassador of a brand”. He cites the
example of Bentley Fragrances, the new licence that rolled out its first
fragrance in March this year. “A Bentley fragrance is £50-60, whereas a car can
cost up to £500,000. You see the bottle in the bathroom in the morning and at
night, as a reminder of the brand.”
Denz is on the lookout for new acquisitions and new fragrance
licences and is in the middle of negotiating with two fashion firms. “We’re
looking at buying a brand or a single licence. It could be a car or anything in
the luxury sector. We’re in discussions with two fashion companies – one is a
high-end brand and the other is leisure. They are both young brands.”
Travel retail an
important channel
 |
| Bentley For Men fragrance ad |
The travel retail channel is also an important sector for
the fragrance side of the business. Lalique Parfums recently installed a pop-up
store at London Heathrow Terminal 5, featuring a chandelier as the centrepiece.
“Travel retail is important – we’re onboard Swiss and in many duty-free shops.
The Terminal 5 shop is important for brand recognition, as people see the brand
and remember it afterwards,” he said.
Three months ago, Lalique installed a “museum area” in James
Richardson’s duty-free store at Tel Aviv Airport, selling very high-end,
limited-edition crystal bottles. “This has been a big success,” said Denz.
Lalique is also seeing success with candles and room fragrances, which were launched at Maison & Objet 18 months ago. The wax is poured into a Lalique crystal vase which can be reused afterwards, giving the product a functional aspect.
The future of luxury
Denz has a clear view of the future of luxury, believing that luxury goods sales will grow as the world’s population becomes ever more affluent. “After people’s basic needs have been met, they look for luxury. China has become so important over the past few years. Every day more millionaires are created in China; the country is opening up,” he said, citing the series of new measures the government recently announced to facilitate the country’s further development. “I believe China is becoming a very important player in the future of luxury. As their basic needs are met, they are buying these things and they travel.”
Denz believes India is “10 years behind” China but will catch up with its big rival in another decade.
Asked about what the challenges are for the luxury goods market, Denz instantly responds: “Fakes”. “Over the past 20 years it’s been a constant battle, as China and India are manufacturing fakes and imitations.”
Art & Fragrance
fact file
Brand portfolio:
Lalique, Lalique Parfums, Parfums Alain Delon, Parfums Grès, Jaguar Fragrances,
Bentley Fragrances and Ultrasun
Group operating
revenue (first half 2013): CHF 55.3m (-1% year-on-year)
Lalique Parfums sales
(first half 2013): +16%, with growth in Russia, the US and Middle East
Net group profit
2012: CHF 9.7m (+17%)
New fragrance
launches 2013: Lalique - Satine for women, Encre Noire Sport for men, Lalique
Azalée, Hommage a l'homme voyageur; Bentley Fragrances – Bentley for Men,
Bentley for Men Azure; Jaguar Fragrances – Jaguar Classic Red, Jaguar
Innovation
