If any French executive is having a busy moment it is Pierre Yves Roussel. A prominent figure at front rows worldwide, Roussel is the man who manages what’s often referred to as “the other brands” of LVMH, and the person who oversaw the recent acquisition of two happening young designers, J.W. Anderson and Nicholas Kirkwood.
His official tile is Chairman & CEO Fashion Group LVMH, and as such he handles notable labels like Celine, Givenchy and Marc Jacobs. Adding Pucci, Kenzo and Loewe to the new UK purchases and you have a stable of eight fashion houses with turnover of over 2 billion euros. In summary, a nice job if you can get it.
Many people saw the UK deals as a major strategic change for the LVMH which since its birth in the mid Eighties has essentially concentrated on buying existing brands – and the more venerable the better – before installing new management and creative talent.
I don’t think it is a change of strategy at all. We did make investments in small brands before.
Though, to hear Roussel, neither acquisition represented any radical departure. If anything, he argues, they are the latest steps in a long-term vision
“I don’t think it is a change of strategy at all. We did make investments in small brands before. Look at Marc Jacobs and John Galliano. Marc has been a great success, others less so. But that is part of the game. Don’t forget we invested in Pucci when it was turning over the equivalent of 5 million euros annually. Today that figure is well over 100 million euros. Berluti at the time of the acquisition was just 2 million dollars. So, to us, size is not a criterion of the investment. And the proof is that Berluti and Pucci have both grown into big success stories,” he insists in a call from his office in Paris.
That said, LVMH’s chairman and shareholder of reference, Bernard Arnault did lose substantial millions throughout the nineties bankrolling fledgling couture house Christian Lacroix, and has since not bought any young French fashion label.
Roussel counters that Bernard Arnault has always had a long-term vision of a large portfolio of brands. A strategy that spreads the risks and also means the odd setback is never disastrous for the group.
“At one stage, when Michael Kors was designing Céline, we owned one third of Kors and we sold, and probably we should have kept it. So, in the history of our group there has been a portfolio of brands from the very beginning – at least from the early 90s. And Bernard Arnault has stuck to that vision. Even in early 2000 when Prada cleaned up their portfolios, he did not change,” he notes.
Roussel joined LVMH in 2004 from McKinsey & Company, where he had one particularly notable intern – Bernard Arnault’s daughter Delphine. Born in France in 1965, Roussel boasts finely fluent English and an MBA from Wharton. His initial title was Executive Vice President, Strategy and Operations, though rapid promotion meant that by 2006, he was named Chairman and CEO of the Fashion Group,
When he arrived, Arnault asked him to work on the group’s less prominent brands, at a time when a lot of people told the LVMH honcho to focus on Vuitton. Arnault’s vision, however, was very much about building a multi-brand stable in luxury.
“It allows you to better cover the market. Plus, it also teaches you more about all the tremendous opportunities one has with such talented people, who can move from brand to another. When you work at Chanel you basically stay at Chanel,” sniffs Roussel, before going on to list a series of high-profile management movements within LVMH.
“Marco Gobbetti ran Givenchy and then went to have great success at Céline. Pietro Beccari was at Vuitton and now with Fendi and Berluti. I accept this is mainly true for managerial talents, but we actually do move designers and talent from studio to studio too,” he cautions.
In terms of annual sales, he points out that: “Céline now is what Dior was seven years ago. And Céline five years ago was a big as Louis Vuitton was in the early 90s. Absolute numbers are not a criterion for an acquisition.”
“The first step of everything is that we start by seeing if we are connected to the designer. Finding that their creative potential convinces us and that they are entrepreneurs.”
Asked about LVMH plans for Anderson – a resolutely avant garde designer whose shows are as sexually suggestive and perverse as his upbringing is classically straight, his father Willie Anderson as the captain of the Irish national rugby team – Roussel responded.
“The first step of everything is that we start by seeing if we are connected to the designer. Finding that their creative potential convinces us and that they are entrepreneurs. Meaning, that for a few seasons they have proved they are successful and capable of overcoming difficulties and having a 360 degree vision. There is quite a lot of talent out there. But those individuals who can build a brand and be smart as brand ambassadors and pick the right people, all those multiple characteristics in one person, is much more rare. Much! And both Nicholas and Jonathan have those qualities. In the end you invest in talent and people before brands – but on multiple levels. Then, when you do engage, you give them multiple resources and support,” he expounded.
“Jonathan is very impressive, especially the way he thinks and about Loewe. He did not do a market study, just developped a very strong vision,” said Roussel, who has installed the Northern Irishman as the successor to Stuart Vevers in that Madrid-based house.
Much of his recent activity has been done in tandem with Delphine Arnault. His former stagiaire is now his hunting partner. She was particularly active in the deal with Kirkwood, spending quality time with him in Paris when the London-based shoemaker presented his latest collection in Paris in the days after the agreement with LVMH was announced.
“I wish that in five years Nicholas can be as big as Christian Louboutin. But maybe that won’t happen, maybe his level is different, let’s see. But the market is so large and his aesthetic proposal is so relevant so we are investing. There are more commercial brands than Kirkwood, but we believe that Nicholas has more depth,” he argues.
Why has LVMH has not invested in a fledgling French fashion brand since Christian Lacroix? Was that a very unfortunate lesson we asked Pierre Yves. He response was revealing: “That was a long time ago and not as successful as we planned. On the other hand, we know Marc Jacobs has been very successful. So there is a counter example. But don’t forget there is no such thing as a risk free investment!”
“And to be honest we did not have the same experience as we did today. It has taken us several years to get our heads around a huge portfolio,” cautions Roussel, who stresses that his luxury fiefdom of eight brands “keeps me pretty busy. Some do one hundred million a year, and some close to billion.”
While the bottom line is of course vital, the meat and potatoes of his job is ultimately managing talent, doubly so as eight brands are trickier than one. In a typical year, this includes handling some 84 collections and more 200 people creative.
“The thing is with young brands they barely protect their names. We connect them with the right people who can handle that. But it is definitely not a plug and play thing! More like being in a family where you can call friends and relatives.”
Somewhat curiously, he believes that there are not so many synergies in his stable of fashion houses, except maybe for buying, back office, and what he calls, “the hard ones like IT and intellectual property.”
“In practice there are no front-end synergies, but lots of soft synergies, like learning from each other. For instance, if J.W. Anderson wants to do shoes or Nicholas wants to create bags, we have the know-how. Of if they want to open a first store in Japan, which partner to use. The thing is with young brands they barely protect their names. We connect them with the right people who can handle that. But it is definitely not a plug and play thing! More like being in a family where you can call friends and relatives. A privileged network of expertise to avoid mistakes, more smart money than financial resources. Any one can foot a few million that is marginal!” he snorts.
Roussel has garnered a reputation for smartly repositioning several brands by his savvy choice of creative talents. He is credited with bringing Phoebe Philo into Céline, where her highly inventive shows are now regarded as the bell weather collection of the world’s key fashion capital, Paris. He also showed chutzpah with his appointment of two retailers Carol Lim and Humberto Leon as co-creative directors of Kenzo. And even if aficionados are less than convinced by their tailoring skills, the duo have made Kenzo a happening brand.
“I am always having discussion with designers and talk to them for many years. When Phoebe and I first talked it was about starting her own brand. But then when we looked at Céline and agreed that as that brand had no real DNA we could gain five years by putting her in the house. So we leveraged a platform we had, after we had already created a full business plan for her own brand!” he laughs.