Lacoste president Thierry Guibert on the brand's growth and strategy for 2023
Lacoste just closed an exceptional year 2022. The French premium sportswear label achieved an incredible growth, ending the year with an outstanding +26%. Thierry Guibert, who has been at the helm of Lacoste since 2015, announced that the brand passed the €2.5 billion mark in turnover, twice as much as in the mid-2010s. FashionNetwork.com met with the brand's dynamic president, the driving force behind the MF Brands group which is owned by the Swiss Maus family, at the company's headquarters in Paris. FashionNetwork.com took this opportunity to discuss the brand's worldwide success, to understand its new creative approach, its creative director Louise Trotter's departure, and also to talk about its future ambitions. Thierry Guibert wants to build on Lacoste's momentum and aims to reach 4 billion euros in turnover by 2026. He details the areas in which he would like to grow the brand, including footwear, women's wear and perfume but also other projects such as the opening of new stores in London and New York with the same concept as the very successful store that opened last summer on the Champs-Elysées in Paris.
FashionNetwork.com: On January 10th you announced the departure of Louise Trotter. Why this change?
Thierry Guibert: Four years is a fairly classic period of collaboration between a brand and a creative director. At the same time, we have massively reconquered the Gen Z and Millenials with various projects involving many creative communities around us. The question arose: isn't the future model for Lacoste to rely on these communities? Details of this new creative vision in our article). Louise has done a remarkable job on the creativity of the collections and the development of a certain number of segments such as women's wear. And the brand's results today are a tribute to her.
FNW: Let's talk about these results. What factors led to this growth?
TG: We grew by 26% last year to €2.5 billion. I'm usually quite humble but given that we were already back to 2019 levels by 2021, that is an extraordinary growth. We are above the market but also above our competitors. Above all, it is a balanced growth in terms of geographical areas with almost 30% in Europe, 24% in the United States, 20% in Asia, excluding China, 60% in South America and even 15% in China despite the lockdowns in this market in 2022. Growth is also balanced in terms of product categories, with a 30% peak in footwear. And we were positively surprised, because we experienced linear growth throughout the year between 25%-30%. All the work we did on the brand paid off in 2022.
FNW: Your first market was the US for a long time, is this still the case?
TG: No, France is our largest market and it accounts for 18% of our turnover. The US represents 14%. In five years, we have tripled our turnover. We were doing 150 million in France and this year we are over 450 million in France. Our strength is that we have a very balanced business. We are not dependent on any one market, behind France and the United States, we have South Korea at 9% and many markets between 5% and 9% of global business.
FNW: Lacoste worked on its offer and attracted a younger clientele, which drove the brand's growth. What was your strategy?
TG: It's was a long term project we worked on over the last five-six years and it is complicated to summarise. When I arrived at the end of 2014, Lacoste still had an extremely strong reputation, but its desirability had probably decreased and its wardrobe was a little enclosed, very much polos for the forty-somethings. However young people from the suburbs were wearing Lacoste... When I arrived, I said that the day the suburbs stopped wearing Lacoste, I would be worried. And besides, creativity comes from the street.
So 4-5 years ago, when we established the brand's platform and the strategic direction, we wanted to keep a balance that allowed us to build on very solid foundations: quality and a chic casual style. And we were lucky enough to see overall trends evolve towards that same style, more casual than tailoring. At one point, we noticed that Millenials and Gen-Z knew the brand but couldn't find what they where looking for in our offer. We managed to find a balance between keeping the brand's DNA and developing the wardrobe in terms of products, colours and silhouettes, we saw a strong acceleration in these young consumers. And in fact, the brand was made for them. We also took advantage of the underlying trend of Off-White and others, which revolutionised streetwear and made it luxurious.
FNW: This work also includes a direct takeover of several licenses and recently a change of perfume license. How long did this take?
TG: Taking over a licence means taking over the creative process. This means that it takes three to four years before the impact of the change is felt in stores. But the figures speak for themselves, in five years we have doubled the size of the brand. These are different product categories, but, in particular with Louise (Trotter), we worked on short seasons, made up of moodboards, which were aimed at all product categories. In the first season, we refined the process and for the last three seasons the studio has worked on the coherence of the collections. In footwear, for example, we are experiencing quite exceptional levels of growth.
FNW: You have worked on Lacoste's identity and redefined the silhouette. You have a development plan for 2026. What are your objectives?
TG: The plan that we wrote in 2021, after a tough period due to Covid-19, was to reach three billion euros in turnover in 2026. But now we are two years ahead of that target. So our ambition is to reach four billion euros by that date.
FNW: That means doubling your sales in five years. What is your room for improvement?
TG: We have huge potential in many categories. Footwear is probably our biggest potential. Today it is only 20% of our business, in a huge and growing sneaker market. For a long time, we were under licence and our creativity was somewhat limited. Now our offer is segmented, with an active offer, and sport-performance. Currently, footwear represents a little less than 500 million euros. We can triple this figure in the next four years. Women's wear is another great potential. We have redefined a chic and elegant women's wardrobe, with pleasant materials and an active approach. Today it's 17% of our textile business, and 23% overall if we include footwear. We will never reach 50% of sales with women's wear, but we have room for five to ten points of possible growth. And we have perfumes.
FNW: Precisely on the perfume licence, you have just announced that you are leaving Coty for Interparfums. What motivated this change?
TG: Perfume is not in the 2.5 billion euro range because it is a licence. But it has enormous potential. It is the only category that has not experienced the growth experienced by the other categories. And creativity, in our opinion, has been somewhat lacking over the last three years. We are going to work with Interparfums, which has a lot of creativity and will be able to make Lacoste a spearhead in its portfolio. And we have an ambition to develop geographically in the United States but also in China. The partnership will take effect on January 1, 2024 with the launch of a men's fragrance.
FNW: In the good times that Lacoste is experiencing, the brand has been active in digital. What does digital represent in your strategy?
TG: It is probably one of the key points of our current performance. When I arrived in 2015, e-commerce represented 3% of turnover. We were far behind our competitors. Today we are at 26%. Like everyone else, we have been driven by the Covid period on this channel. In 2020, we had a drop in turnover of around 10%, which is almost three times less than our competitors. And this is thanks to our e-commerce acceleration, because we had invested heavily in the previous five years. We set up our digital Factory, our team dedicated solely to this channel. We invested in solutions and in the back office. We are now at 25% of turnover and we have the potential to grow beyond 30%.
FNW: At the same time, you continue to focus on physical commerce, notably with the opening of your flagship store on the Champs-Elysées last summer...
TG: There are many interactions between e-commerce and retail. Our approach is more omnichannel. But that means that we have a strategy that has evolved. Historically the brand had a lot of franchises. We have worked towards a more homogeneous approach. And indeed we have opened bigger shops like the one on Champs-Élysées.
FNW: What are the results of this shop?
TG: It's a very pleasant surprise. It's a 1,600 square metre store, so it's a very big investment. But we are well above our targets. On some Saturdays, we get almost 10,000 people, which represents up to 10% of the traffic on the Avenue des Champs-Elysées. This is enormous! Overall, the performance is now 40% above our forecasts. What is also very interesting is that this has enabled us to make footwear and women's clothing, which were previously not very visible, except in digital, more visible. And we can see that this expansion of the offer was much anticipated by our clientele. It also proves to our partners that they can allocate a budget beyond polo shirts at Lacoste.
FNW: Does this mean that you will support the development of this concept in your growth plan for 2026?
TG: Indeed, in April we will open a 800 square metre space in London on Regent Street. And we are finalising discussions for a similar opening on 5th Avenue in New York in early 2024. We will probably open a similar shop in Shanghai. We opened a beautiful 350 square metre shop there last summer in a shopping centre, but it is not yet a flagship format.
FNW: What are your expectations for 2023?
TG: I expect 2023 to be a complicated year. I think it will be more difficult from March-April onwards because European consumers will really be hit financially, especially by energy costs. In addition, a number of retailers have a lot of stocks. So they will probably put the brakes on future orders. There are many things we do not know, but for Lacoste, we have a good order book. We have to remain cautious. We outperformed the market by 15 to 20 points last year. I don't know if we'll keep this momentum, but we're aiming for double-digit growth again in 2023. This is consistent with our objectives.
FNW: Within the Maus frères group, the owner of Lacoste, your prerogatives encompass all the brands. What has been the dynamics of the group?
TG: Overall, the group had a very good year in 2022. With the Swiss part of the group (Manor department stores), we will deliver 11% growth. The MF Brands group has grown by almost 20%.
FNW: Last year you mentioned a desire to expand your brand portfolio. Are you ready to make a new acquisition?
TG: We have real investment capacity. We look at assets that are premium or have the ability to become premium. I am fortunate to have family shareholders. We have the time and we will never overpay for a company out of haste. But I'd be lying to you if I said we wouldn't be disappointed if we didn't add an additional asset in the next 18 months.
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