Porsche Design has grown into an €100m-plus luxury lifestyle
brand generating annual double-digit sales growth on the back of global store
expansion and new fashion product development, including an award-winning
handbag. Here, I talk to CEO Dr Juergen Gessler.
PORSCHE DESIGN GROUP FACT
FILE
Turnover (2012): €116.2m
(+45%)
Product categories: Menswear,
womenswear, men’s and women’s accessories, fragrance, watches, luggage,
footwear, writing instruments, smartphones
Number of directly
owned stores: 30
Number of franchise
stores (including travel retail): 118
Biggest markets in
terms of turnover: Europe, followed by North America and Asia Pacific
 |
| Porsche Design CEO Dr Juergen Gessler |
BUSINESS STRATEGY
MJ Rabbit: What is Porsche
Design’s overall business strategy?
Dr Juergen Gessler: Today luxury and lifestyle brands need to focus on
fulfilling core values. Luxury is about quality and improving people’s lives,
and it is not important any more for people to show off. Companies have to
offer a whole lifestyle which people can buy into, because they care more about
where material comes from, about quality and design as well as their individual
style. Our strategy is to provide such an offering – as we have done now for
more than 40 years. We call it “engineered luxury”.
Has the strategy
changed following the brand’s recent foray into women’s fashion and handbags?
“If you analyse the function of an object, its form
often becomes obvious.” That’s what Ferdinand Alexander Porsche once said, when
he founded Porsche Design back in 1972. And up to the present day we follow his
design philosophy, be it accessories, men’s or women’s fashion or even
handbags. The best example is our TwinBag, which revolutionised the women’s
handbags category [the TwinBag can be worn either as a handbag or a shoulder
bag thanks to an award-winning magnetic mechanism - Ed]. Why? Because our credo
is more advanced than the sheer idea of form follows function. It is a
different approach as the whole object has to be considered within its
functionality: in our ideal Porsche Design world, form and function are equal.
One doesn’t work without the other, but also, one doesn’t follow the other. A
truly good product has to fulfil both aspects in order to be a long-term
success: aesthetics and function.
Is Porsche Design
becoming more “fashion”-oriented, rather than “design”-oriented?
Purist
and timeless, that is what Porsche Design stands for. We do not differentiate
between fashion- and design-oriented. In the future customers will more and
more buy brands and products which are relevant. Products which are only fashionable will be
less successful. Products should cover both aspects.
 |
| Inside Porsche Design's London Brompton Road store |
INTERNATIONAL
EXPANSION AND THE CHINA MARKET CHALLENGE
What are the most
dynamic international markets for Porsche Design?
As Porsche Design – compared to other international
luxury and lifestyle brands – comes from small numbers, most markets are still
dynamic for us. Therefore we keep on expanding: in the last fiscal year we opened
50 new Porsche Design locations in total and in 2014 we are aiming to open up
around the same amount. In terms of turnover the most important markets are
Europe, the US and the Middle East. However, Asia is picking up a lot and is strategically
becoming more and more important.
In which countries/territories
are you targeting expansion?
We have a very precise strategy until 2018 with
regard to our expansion plans. And, as our business is growing rapidly, we are
going to open larger stores. For example, our flagship store on London’s Brompton
Road, which we opened last year in Q4, is a 345 sq m store and currently the
world’s largest. However, our new flagship in Milan, which will begin trading
in February/March 2014, will be about 400 sq m. Country-wise we are focusing on
France and Austria as well as mainland China, Russia, Japan, the US and Canada.
And we are looking more and more at the wholesale business, especially with our
men’s and women’s fashion collections.
How important is
travel retail in your strategy?
Porsche
Design customers are very independent and like to travel. Therefore travel
retail is an important pillar in our strategy and creates awareness for the
brand. 15 out of the 50 locations we opened in 2013 were at airports. This year
we are planning to open at the airports in Santiago de Chile, Mumbai and
Vladivostok.
What is your strategy
for China?
China is already a big market for our luxury brand.
However, our expansion there does not stop as the Chinese demand for luxury
products is still growing, not only in tier 1 and tier 2 cities but also in
tier 3 cities. In 2012 we celebrated the grand opening of our first own retail
store in Hong Kong on Central’s Queen’s Road and in 2014 we would love to make
the next step in mainland China.
What are the opportunities
for Porsche Design in the Chinese market?
China’s market for luxury goods is maturing but still
consumers drastically differ from customers in mature markets. Consumers often
spend several months’ salary to buy luxury products and therefore attach great
importance to quality, brands and country of origin.
What are challenges
you have faced in the Chinese market?
The challenge for all brands - and not only Porsche
Design - is to succeed in the competition for prominent retail space and
locations. But Chinese customers are shopping all around the world, so we have
to make sure that in our stores in the US and Europe our sales people can speak
Mandarin.
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| The handbag display at Porsche Design's London Brompton Road store |
NEW PRODUCT DEVELOPMENTS
Which product
categories are you expanding?
Last year we completed our assortment with the
Porsche Design TwinBag, the brand’s first handbag. We are now all set in terms
of our categories and are looking to deepen each category. We are concentrating
on our ready-to-wear and women’s collections in order to change the dominant opinion
that we are a men’s accessories brand, as that is not true. On February 9 we
showed our Fall/Winter 2014 fashion collection at New York Fashion Week and
from Spring on we are launching new women’s jewellery and handbags. So within
the last couple of years our brand has really turned into a luxury and
lifestyle brand.
What percentage of
turnover do women’s products contribute?
Our women’s collections account for around 25% and we
are very proud of this as we only started in 2010. There was a time when the
brand tried to focus on men only. We changed that completely three years ago
and are aiming on more than 30% of turnover out of women’s products.
How important is the watch business to Porsche
Design? Are there any new developments coming up in this category?
The first Porsche Design product ever was a
watch: the legendary Chronograph I from 1972. It was revolutionary as it
was the first all-black watch on the market, and it was black for a particular
reason: Professor Ferdinand Alexander Porsche wanted to create a time
instrument with an uncompromising functionality. Inspired by the black felt
dashboard of a race car, he decided to design the watch in a way that only the
time information is of importance – everything else was non-reflective, in
other words: black. Rather than treating a watch as a piece of jewellery, he
looked at it as an instrument of precision. The heritage and tradition of this
watch accompanies us up until today.
Are there any new developments coming up in the fragrance category?
At the moment there are no new developments
in planning.
 |
| Porsche Design's installation with pop artist Thierry Noir at Art Basel Miami Beach |
FUTURE PLANS
What other plans are
you working on over the next 12 months?
By far most important project for the upcoming 12 months
is our new flagship store in Milan. From Spring Porsche Design will be present
in the heart of Milan’s fashion district, on Via della Spiga. For us this is a
great opportunity and challenge at the same time, and once more it shows our
dedication and appreciation of the fashion business.
What were the
highlights of 2013?
A big step to promote our re-launch as a luxury and
lifestyle brand was our first runway show in New York in September 2013 as well
as an event which we hosted during Art Basel Miami Beach in December [The Heart
of Freedom collaboration with the French pop artist Thierry Noir - Ed]. Additionally
we established the brand as a market leader in the luxury smartphone segment
with our new all-touch Porsche Design P'9982 smartphone from BlackBerry, which
we launched in November. And of course, not forgetting the expansion of our
retail network.
