It's all in the name of Louis Vuitton

By T. Sima Gunawan

HONG KONG (JP): Shakespeare, eat your words. His well known phrase "What's in a name?" no longer fits this hedonistic world. Well, at least that is the situation today in the realm of luxury goods.

The first thing many affluent people look into before buying a product is the label.

"The label. It's because of the name that I want to buy it. (The name) means durability," Iris said while putting a Louis Vuitton tote bag over her shoulder. The monogram canvas bag she was eying cost HK$3,800 (about US$1,000).

Another woman forked out HK$8,000 from her wallet for a classic blue handbag. "I have 20 more of these creations at home," said Pery, manager of a trading company, who fell in love with the Louis Vuitton range five years ago.

Iris and Pery were just two of several hundred guests invited to the opening of the new Louis Vuitton 6,600 square-foot store at The Landmark, one of the most prestigious retail sites in Hong Kong. It is the first store in Asia to present the entire range of Louis Vuitton creations, including shoes and the ready-to-wear collection. It is being sold under a new concept which aims to "capture the traditional sophistication of the brand while encapsulating a sense of modernity."

The two-level outlet was inaugurated on Feb. 11 in a lavish ceremony by Yves Carcelle, president of Louis Vuitton Marlletier. A launching of its new men's and women's spring/summer ready-to- wear collections, created by American designer Marc Jacobs, followed the opening. Jacob's works, designed for the young, are cool classics and, obviously comfortable -- a combination of fine fabrics, clean silhouettes and chic detail.

Louis Vuitton does not appear fazed by the economic crisis in the region.

"Despite the Asian economic crisis, we believe in our strategy to open new-concept stores in prime locations, consolidating our leadership in leather goods and venturing into new products that appeal to a wider group of customers within the luxury market," he said.

In fact, he is supremely confident in the bright future for luxury products. "Selling luxurious items has been an untroubled market for years. I think with the crisis, consumers will be more selective, so we must maintain the quality of the products and develop our services."

No question mark hovers over the quality of Louis Vuitton products. They are beautiful, comfortable and long-lasting. Unfortunately, only a few lucky rich people can enjoy the creations. The cheapest Louis Vuitton item carries a price tag that is higher than, say, the monthly earning of a low-rank civil servant in Indonesia.

But wearing a luxury item should not make you guilty as Louis Vuitton has provided jobs for 2,500 people in the production and retailing business, according to Carcelle. The company, which has stores in 39 countries all over the world, invite staff to participate in ongoing training at its headquarter's in Paris. "This gives them -- especially those coming from developing countries -- a chance to travel to Europe (often) for the first time in their lives," he said.

"After all, providing the world with beautiful products also fulfills everybody's desire to enjoy a bit of life," he said. He added that "it's important to desire (things), the world motivation is to desire; you really want something, you want more: I think it is a good philosophy,".

Indeed, it is not only the rich who desire Louis Vuitton merchandise. Many of those who have less money are also tempted to buy the products. This has opened an avenue for an illicit piracy business, which is rampant in many parts of the world.

"A violation of the intellectual property rights, imitation products are dangerous as they cheat consumers who are unaware of the piracy," Carcelle said.

"It's usually the underground economy, which sometimes involves people working in poor economics, sometimes children. It's that kind of system that I think all governments have to fight," he said.

Louis Vuitton spends US$10 million per year contesting illegal merchandise.

It is no secret that imitating products is a rampant practice in various countries, including Indonesia.

Asked which country inflicted the hugest loss to Louis Vuitton, Carcelle answered with a big smile, saying "I don't want to be rude to you."

Louis Vuitton's factories are located in France, Italy, North America and Spain. Unlike some international fashion companies which open factories in Asian countries to take advantage of cheap labor, Louis Vuitton shows no interest in this practice.

"So far our policy is to manage our factories near our headquarters in France," Jean-Marc Loubier, senior vice president, said.

Management is one of the most important things in the company. "We have to manage (the business) very precisely, we have to be friendly but also rigorous with costs. When we invest, we have to be well-planned and cost-conscious," he said. "The economic down- turn in Asia could affect us. But by doing our job efficiently and professionally, we can offset the problems."

The Louis Vuitton retail business in Indonesia is handled by PT Bagasi Luks. Its first store opened in 1988, when the country was enjoying an economic boom with growth of almost 10 percent. In 1990, the store moved from Ratu Plaza to the prestigious Plaza Indonesia. The second outlet opened in Plaza Senayan at the end of 1995, followed by a third in Surabaya.

"Business was good then, otherwise, we wouldn't have opened more stores," said Inka Utan, Louis Vuitton country manager, who is also general manager of PT Bagasi Luks.

Customers are both locals and foreigners, especially tourists. But sales have dropped by more than 50 percent due to the economic and political crisis.

Compared to Singapore and Hong Kong, Indonesia is a slow market for the goods.

"On average, annual sales in Indonesia are more or less the same as the weekly sales in Hong Kong," she said.

Only bags, belts, scarfs and wallets are available here, but the collections are the same as those in Singapore and Hong Kong. The price, however, is about eight percent higher, because of the higher import duty and "other" costs.

Inka is working hard to maintain the business by, among other moves, boosting its public relation works. "We have to survive, there's no other choice."

In this case, the Louis Vuitton head office does not interfere. Despite hardships facing the country, Loubier is sure that conditions will improve. "We have no intention to close down the shops. It's a long-term investment. We still have interesting business there. We believe in the future of Indonesia."