Most Recent Articles In Financial
Latest Financial Articles
Not only is creative director Phoebe Philo expecting her first child in two months — and working on an infants’ line — the high-flying French firm is embarking on an aggressive expansion drive that could see it become a billion-dollar baby for parent Compagnie Financière Richemont.
“We multiplied the sales by five in the last five years, and we plan to do that again,” said Ralph Toledano, chairman and chief executive officer. “Chloé could be a billion-dollar company if you include all licensed products.”
Toledano outlined a multiyear plan that includes:
- Leveraging brand awareness by more than doubling communication and advertising spending.
- Expanding into costume and fine jewelry, watches, lingerie and baby apparel.
- Kick-starting its diffusion and fragrance businesses.
- Expanding the retail network, starting with flagships in Beijing and Tokyo in 2005.
Although he declined to give precise figures, Toledano revealed that parent Richemont would invest “tens of millions of euros” during the expansion phase — and he allowed that profitability at Chloé would be compromised in the near term.
“The group is supporting us because they see we have a major growth opportunity,” he said in an exclusive interview at his sparsely furnished office above the Chloé boutique on Faubourg Saint-Honore here. “I think Chloé is now a fashion leader. What we have to do is take advantage of that. What we have to do now is increase the brand awareness. It’s key to our future growth.”
To that end, spending on communications will more than double and advertising budgets will triple next year, he said. The former category includes runway shows and the public relations functions.
Market sources estimate the Chloé brand generates wholesale volume of about $200 million, with Europe and the Middle East representing about 40 percent of revenues; the U.S. and Japan, each 25 percent, and Asia-Pacific, 10 percent.
Over the past five years, Chloé’s annual growth rate stood at 36 percent, and Toledano said a 35 percent pace is a sustainable goal for the coming years.