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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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Expanding Dior’s retail network also remains a top priority. Last year, retail sales represented 78 percent of Dior sales and they are expected to increase slightly in the coming years. Dior added 28 units in 2002, bringing its store count to 144 locations.

Among the 20-plus boutiques slated for this year are a Paris flagship on Rue Royale and new units in Hong Kong; Moscow; Saint-Tropez; Palm Beach, Fla.; Manhasset, N.Y., and at the Bellagio in Las Vegas. Expansions are planned for London and the Forum Shops at Caesars Palace location in Las Vegas.

Sales in Dior boutiques were up 49 percent last year at constant exchange rates. Asked to account for the increase, Toledano said: "The mood is young in the boutique. [Customers] sense the mood of a rejuvenated brand and this is what the customer is looking for. The mood is not formal, old or fossilized. The mood at Dior is one of energy and optimism. It’s a positive brand. Others think that to be luxurious you have to be sad, serious and black."

In one of many not-so-veiled references to what his rivals are up to at Gucci Group, he was no doubt referring to boutique concepts for Gucci, YSL and Bottega Veneta.

"You don’t have to confuse home interior design and store design," Toledano continued. "Dark walls and low light might be nice for an apartment, but maybe not a store. A store has to give energy."

Many industry watchers like to compare and contrast Dior’s progress against Yves Saint Laurent Rive Gauche. Arnault and rival Domenico De Sole, chief executive of Gucci Group, last year waged a memorable war of words in the press, with each declaring they would be the first to create a second major fashion brand beyond their core fashion franchises and cash cows, Louis Vuitton and Gucci, respectively.

Asked which brand is doing better, Dior or YSL, Arnault would only offer: "I let you and the consumers be the judge."

Toledano spoke freely about some of his luxury peers, mentioning Dolce & Gabbana and Burberry as companies he thinks are doing well.
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