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“We need to be in the top airports to engage with our consumer base, with the right concept, the right products and the right staff in each location.“ |
Jean-Louis Delamarre CEO Asia Pacific & Global Travel Retail Lacoste |
After 18 months of consolidating Lacoste’s presence in travel retail under its “˜Fewer, Bigger, Better’ strategy, 2016 is shaping up to be a stellar year for the fashion brand. That’s according to CEO Asia Pacific and Global Travel Retail Jean-Louis Delamarre, speaking to The Moodie Report in Cannes last month.
Delamarre joined the company in April 2014 with a mission to develop a new long-term strategy and “a winning formula” for the channel. He earned buy-in from shareholders and senior management for his plan to, as he puts it, “leverage a fantastic, well-known, iconic brand that has global awareness and to do it in a premium way”.
When he joined Lacoste had around 170 stores in travel retail but the “˜Fewer, Bigger, Better’ plan called for larger, better executed stores in key locations that demonstrated the brand’s DNA and offer.
Delamarre says: “We closed some stores that were not up to the brand standard and now we are opening once more under the mantra “˜bigger and better’. A space of around 50-60sq m is really the starting point for us, where we can express the brand’s credentials well, and where we can do more than polo or textiles. In some places where there are only corners we will go below that, but the bare minimum used to be 15sq m; now it’s closer to 25sq m.”
While this year has seen a mix of closures and openings, in 2016 the net gain will be about 15 stores in the channel.
“The plan is to keep increasing our penetration in the top 50 airports worldwide and in doing so, increasing the average size of each door. We are doing that by an average of 5sq m currently and that will continue.
“We are also improving not only our space but the quality of that space too. We have our more premium concept present in one-third of our doors now and that will be close two-thirds by the end of next year, with a complete transition by late 2017.”
That emphasis on quality – of offer, environment and service – can be seen in the new concept, which was on show at TFWA World Exhibition. It leans increasingly on showcasing the product digitally, and on a big investment in staff training.
Delamarre says: “With better quality product in better store environments with better staff, you can trade up and really premiumise. There are many brands coming into the market so you have be different.
“We’ll introduce more digital elements and use technology better. We have a big presence through digital, via Instagram and other platforms worldwide, but it’s not so easy in travel retail, though it’s on my roadmap. We hope to have something tangible in 2017, especially in relation to our Chinese customers.”
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The Singapore Changi T3 store introduced Lacoste’s new “˜Premium Standard’ retail concept to Asia; the concept is rolling out worldwide over the next two years as the brand delivers larger, improved formats |
Customer service is a key area too. Lacoste puts staff through its retail academy training scheme so they can speak directly and knowledgeably to the customer about the brand.
“Importantly we are now putting in place our own Brand Ambassadors in travel retail, including with Heinemann in Sydney and King Power in Thailand, where we will soon have new stores. This breaks some new ground in fashion as it’s quite unusual, but it’s the right kind of investment, and is better than investing in promotions. If you get the right product in the right door with the right staff, you are most of the way there.”
With the big investments Lacoste has in the pipeline, achieving profitable growth in the airport retail business is no easy task, but the showcase opportunity makes the channel highly persuasive.
“When you operate retail at an airport on your own basis, it is less profitable of course,” notes Delamarre. “The airport offers a window and a showcase about what we can do. You need to balance it in P&L terms between third party operation and direct retail, and if I have to operate directly it is more on an opportunistic basis. If I have to compromise a little on P&L to make a bigger brand statement at a particular airport, then I will.”
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Manchester Airport: One of several breakthroughs in the UK market |
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Stansted Airport: Under construction and set to open soon |
The next phase of investment will focus on continued growth in Europe and Asia Pacific, with Delamarre expressing big ambitions for the Americas market too.
New stores at Manchester (in October) and Stansted (under construction), plus more to follow, mean Lacoste is breaking fresh ground in the vital UK market.
“The move into the UK was part of the strategy as we were under-represented there until now. In Europe we need to complete our network. We are strong in France and Germany is next on our list, a country where we aim to build a substantial presence. We have plans for next year in Italy and the Netherlands too.”
In Asia Pacific, the new Phuket store opens on 1 December, with Sydney opening with Heinemann on 1 February 2016.
Delamarre says: “For Asia we still see opportunities in Japan, which is a complex market. We are strong in Korea, though this was a tough year with MERS, and Singapore, where we hope to extend from the two terminals at Changi where we have stores. Eventually, when T4 opens, we’d like to have four in four. Thailand is our number one market worldwide. There, we’ll expand with King Power in downtown Phuket from December.”
In North America the company has 14 points of sale but there’s a big opportunity to target Asian consumers at international terminals in the USA and Canada, he adds.
After 18 months in the role, what would Delamarre like to see done differently among the stakeholders in the travel retail business?
On this, he is emphatic. “We would like to see more partnership from buying to delivery. It’s not easy to figure out where we are in inventory terms worldwide given the level of data we receive but that has to be a priority. We don’t always have the right product at the right time in the right door. And if we don’t have the right size available it means a poor experience in the store. If I had to fix one thing it would be to create more efficient supply. We don’t share enough and we have to work together to improve the offer for the customer. It’s that simple.”
Yet the business, and the “˜affordable luxury’ category, is in a good place today.
“We’re in a sweet spot with our offer and that is reinforced by the airports we speak to, who want to rebalance the mix. There is a lot of room to capture the passenger who wants to spend less on a luxury item and it’s something that is being addressed by the industry.”
That shift is feeding into Lacoste’s travel retail performance, and will continue to do so in 2016.
“2015 is on track versus budget, although this year has had some ups and downs, such as in Korea with MERS. We are also consolidating with the mix of closures and new openings. 2015 was always going to be a year of laying the groundwork with 2016 a year of big growth. We will get a massive boost from the new openings but that lift will be not only quantitative but also qualitative.
“What will success ultimately look like? If the perception of Lacoste has improved, and we’re seen as a leading brand in premium casual wear then we have done a good job. We need to be in the top airports to engage with our consumer base, with the right concept, the right products and the right staff in each location. And that’s what we’re aiming for.”
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In the pipeline: Renderings of new stores at Phuket (above) and Sydney (below), as Lacoste expands its network in the key Asia Pacific region |
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