Arnault’s Bet Pays Off: Christian Dior Hits Stride With $36M Profit in ’02

PARIS — Bernard Arnault is expecting another billion-dollar baby — and it’s due in 2006 or 2007.That’s when the Christian...

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In a wide-ranging interview at Dior headquarters here, Toledano elaborated on the year ahead and discussed the key accomplishments since the 1997 arrival of John Galliano thrust Dior into the limelight.

To be sure, Galliano has delivered theater, controversy and headlines, but the sales are testimony to the fact that his high-voltage fashion vision has been translated into salable products — and those with high margins. A new handbag, dubbed "The Latest Blonde," is expected to be unveiled this afternoon at the Dior rtw show that’s helping kick off Paris Fashion Week.

"John Galliano will certainly figure as one of the greatest designers of his time," Arnault asserted. "Through his work at Dior, he has been able to bring modernity to the ultimate luxury house and to envision the fashion of the third millennium."

While scores of fashion houses have ambitions to build significant accessories businesses, Dior has made considerable progress thanks to Galliano designs like the "Saddle." Toledano said handbags, small leather goods and footwear now account for more than half of Dior’s sales. Women’s rtw adds up to about 30 percent, men’s wear "less than 10 percent," with the balance being fine jewelry, scarves, costume jewelry and royalties, the latter accounting for "less than 5 percent" of revenues. "It used to be 80 percent under the old model," Toledano noted. At present, licensed products at Dior are limited to such categories as eyewear, watches, tableware and children’s wear.

"The growth in all categories has been extremely strong," Toledano said. For example, footwear sales tripled in 2002 "and we’re still not in all boutiques with the product."

In recent years, Dior has introduced several hit handbags, including the Lady Dior, Saddle, Street Chic and Admit It ranges, Toledano said. And over the weekend, a total of three new ranges will be on display at Dior headquarters here.

"We have permanent lines, which is important in the handbag business," Toledano said. "If [people] buy luxury goods, they want a sense that it will last for several seasons. The Kelly bag was not a classic shape in handbags when it came on the market, but the way Hermès managed it, it became a classic."
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