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Sep 21, 2018
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French handbag maker Longchamp to invest in China to revive sales

Reuters API
Sep 21, 2018

Longchamp, one of France's leading handbag makers, is increasing its presence in China and the United States to boost its sales, its CEO said, betting on celebrity tie-ins and its online platforms to revive sluggish growth.

Kendall Jenner was announced as Longchamp brand ambassador earlier this year. - Instagram: @longchamp

Founded in 1948, Longchamp, best known for its folding Pliage handbags, is one of the last remaining independent family-owned leather goods makers in France with a global presence.

At a time when some top-of-the-range luxury brands, such as LVMH's Louis Vuitton and Hermes, are riding high on strong demand from China, others are having to refresh their designs or marketing strategies to keep young shoppers in particular hooked.

Longchamp, which does not publish its earnings, saw sales grow at a "less vigorous" pace in 2016 and 2017, having tripled in the decade before, Chief Executive Jean Cassegrain, grandson of the firm's founder, said in an interview.

The company – whose top market is French, followed closely by China – took a hit as tourist numbers in France fell following deadly Islamist militant attacks in 2015.

But by next year, Cassegrain said Longchamp aims to outperform growth in the broader luxury industry, which according to consultancy Bain, should rise 6 to 8 percent globally.

The firm had said it made sales of 560 million euros (503.11 million pounds) in 2015, and they are estimated by industry watchers to still be in a 500 million to 600 million range.

Longchamp, which sells its bags and accessories in China through Tencent's messaging site WeChat, plans to launch its own e-commerce platform there in 2019 to increase sales, following similar moves by rivals LVMH and Kering's Gucci.

The handbag maker has largely finished expanding its worldwide store network, with 1,500 sale points in department stores and 300 of its own shops, although it plans to open a few more in the United States, including one in Beverley Hills.

"We're entering a different phase of growth, it's no longer about store openings but about improving the performance of our current network," Cassegrain said.

Longchamp, which manufactures about half its bags in France with the rest in countries including Tunisia and Romania, recently marked its 70th anniversary with its first fashion show in New York and picked celebrity model Kendall Jenner as the face of its campaigns to raises its U.S. profile.

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