Stepping on the Gas: Chloé Gets the Cash

Chloé is embarking on an aggressive expansion drive that could see it become a billion-dollar baby for parent Compagnie Financiere Richemont.

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So far, he’s off to a good start. Philo’s acclaimed fall-winter collection of delicate, bow-festooned dresses, dashing capes and wide-legged trousers is proving a hit with more than just fashion editors. Brand sales in July and August were up 55 percent over a year ago, placing the brand on track to post plus-50 percent growth this year.

“We know our clientele,” Toledano said. “Now we have to expand our clientele.”

The explosive sales growth in recent years largely reflects a diversification effort on the product side. For example, handbags and small leather goods, once nonexistent, today represent about 30 percent of direct revenues, driven by such hits as bracelet, sling and camera styles. Licensed products also multiplied, including the See by Chloé diffusion line and eyewear.

Ready-to-wear represents about 70 percent of direct sales, with the balance being handbags and leather goods.

As for future product expansion, Toledano said costume jewelry and baby clothing would be introduced for spring 2005 retailing, the latter initially in Chloé stores only. Others, like watches and fine jewelry, will be layered on in the next two years.

Toledano said fragrance, licensed to Unilever, is also a top priority, though he declined to give specifics about any forthcoming launches.

“This business is a major growth opportunity for us and it will have to move fast and big time,” he said. “Chloé will move in this area.”

Believed to generate some $110 million only a decade ago, Chloé’s fragrance business has dwindled in recent years amid management turmoil at Unilever.

Direct retail, which generates about 40 percent of Chloé revenues, is another priority.

At present, Chloé operates freestanding stores in Paris, New York, London, Hong Kong, Taipei, Munich, Moscow, Monte Carlo, Dubai and Kuwait — plus about 40 leased departments, about half of them in Japan.

Besides Beijing and Tokyo openings in 2005, Toledano said a larger Paris boutique is a priority, along with new headquarters for a company that is bursting at the seams in its current location.

Toledano has a strong track record of picking design talent prior to joining Chloé in 1999, having plucked a then-unknown Alber Elbaz from the studio of Geoffrey Beene for Guy Laroche, where Elbaz catapulted on to the international fashion radar.
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