Paris hotel race: Bulgari debuts Thursday, to take on Cheval Blanc
One thing Paris would not appear to need is another luxury hotel. Yet LVMH has launched two five stars this fall, with Bulgari Hotel the latest.
The new 75-room hotel opens Thursday, December 2 at 30 Avenue George V, across the street from two other famed five-stars – George V and Prince de Galles.
No luxury brand has built as significant a hotel network as Bulgari, with seven already open and another five in the pipeline. Creating what its cerebral CEO Jean-Christophe Babin calls “a necklace of hospitality” circling the planet.
Its latest inn is also in marked contrast to LVMH’s other big hotel opening, shiny contemporary Cheval Blanc Paris on the banks of the Seine. Bulgari Paris, designed by architectural firm Antonio Citterio Patricia Viel, is a subtle blend of Italian warmth; sleek furniture from Gio Ponti and B&B Italia; French craftmanship; haute gamme finish and Lucullan cuisine.
Like its multilingual Franco-Italian general manager Sylvain Ercoli, or Bulgari CEO Jean-Christophe Babin, a Frenchman who slips easily between French, English and Italian.
As of Friday morning, Bulgari will boast seven hotels, with another five under construction, outpacing all other fashion and luxury marques in the luxury hotel sector. Bulgari Paris has a starting rate of €1,500 for a standard room of 45 square meters; while its top-shelf is a giant suite – they claim to be the largest in Paris overlooking the whole city. A flagship of luxury experience, the double-floor penthouse has a 400-square-meter suite, 600-square-meter terrace/garden and a price tag of €40,000 per night.
The nine-story hotel even includes a 220-square-meter Bulgari boutique. While its 1,200 square-meter spa pool references Rome’s Terme di Caracalla. The façade with enlarged windows hints at Italy’s entre-deux-guerres Rationalist architectural style. The chef is Michelin-starred Niko Romito inside Il Ristorante.
So, we sat down for a cappuccino with Babin, who has been in charge chez Bulgari since 2013 for a natter on luxury, the art of living, and which horse to back to win best hotel in Paris race – Cheval Blanc or Bulgari?
FashionNetwork.com: Why are you opening a Bulgari Hotel in Paris now?
Jean-Christophe Babin: The philosophy of Bulgari is to create a collection gems of hospitably. Just like our high jewelry, objects that are also very rare. So, we pick cities and locations that are extraordinary in terms of style. We looked at multiple alternatives – at over 10 – before we found the right location here in the city’s Golden Triangle.
We are going to open in Rome, our hometown. In Piazza Augusto Imperatore, where most of the 114 rooms will have views over the mausoleum of Rome’s first emperor and of Ara Pacis. It’s in a 1930s building – protected by the ministry of culture – so the façade is protected. Before it was an insurance company; next it will become our most extraordinary flagship. We will open in Moscow; a city with a mix of business, glamour and art, just 10 minutes from the Red Square. We’ll be in Tokyo in 2022 and by 2024 in Miami Beach, in the '20s on Collins, the first hotel as you enter the Art Deco district.
FNW: What is your business model?
JCB: We combine all models really. In Milan and Rome the hotels are operated directly, as one was our first and the other our showcase. We had to do it ourselves to show people how we wanted them to be done. In Paris, our local partner owns the physical hotel, but we bring our level of service and know-how. They handle the P&L.
FNW: What is your licensing royalty percentage?
JCB: This we cannot discuss. To us this is a brand image statement – an experiential and luxury immersion. In a boutique you can spend one hour maximum, but in a hotel, you stay from 24 hours to 72 hours. Here our signatures are engraved into glass, while sketches show our 1920s jewelry. Everywhere would be too literal. You discover our Italian welcome in the lobby; enjoy an extraordinary culinary experience; relax in the spa and enjoy a last drink.
FNW: Did Bulgari’s success in hotels influence Bernard Arnault to enter the sector, by developing Cheval Blanc and then buying Belmont?
JCB: Well, he was certainly very interested in what Bulgari was doing when LVMH acquired the company in 2011. Back then, Bulgari had opened in Milan and Bali and was finishing Bulgari London. He first opened Cheval Blanc in Courcheval, his first idea for a hotel, though it is really a ski resort hotel. So, probably the success of our Bulgari hotels in each city in terms of leadership and the market did make an impression.
But Paris is the ultimate challenge – as it has the highest density of high-end luxury hotels of any city in the world. We believe as Italians, we are bringing a very special product – glamour, casual style and here fusing French and Italian craftmanship. Yes, in super five stars but with staff that are very friendly. We have leadership – judged by Rev PAR, or occupancy multiplied by average daily rate – in every city where we operate. This is public information. The hotel industry is the most transparent of any luxury industry. In Milan, we just took over the leadership from the Four Seasons, by adding three new keys – including a huge 250-meter suite.
We have been very pioneering since our first hotel opened in Milan in 2004, even before the phrase 'immersive luxury' was invented. It helped us to better understand the client experience and then extend that into your stores. That gives us a great strategic advantage in our stores. There is nothing more difficult than a hotel. For the price of a suite, say €17,000, you can buy a beautiful necklace. But after one night all that remains is a memory, not a necklace around your lovely wife’s neck for 20 years. So, the memories have to be extraordinary, otherwise people won’t pay!
FNW: How has your core business, jewelry, been doing?
JCB: This year, fingers crossed, we should score our best year in history. We had to digest 2020 – and closed doors like everyone depending on each country’s regulations. We were also at the vanguard of sanitary care – producing gel for the health systems of Britain, Switzerland and Italy. And we financed scholarship for PhD research students.
FNW: What are your annual revenues?
JCB: We don’t break them out by brand in LVMH. Bulgari is in LVMH’s Watches & Jewelry division, where Tiffany will probably be incorporated.
In the first nine months of 2021, LVMH Watches & Jewelry’s turnover was €6.160 billion.
Bulgari is most of that division. And I can repeat what Bernard Arnault said two years ago – since the acquisition in 2011, Bulgari sales have more than doubled and profit grown more than five times. Back then a lot of analysts commented that the price was very expensive, around €5 billion. But since then, the acquisition has respected the business plan, and that is often missed! Plus, quality-wise we have focused more on jewelry and high jewelry. More than ever, we stand for jewelry. We are also strong in fragrance and accessories, but there are many brands like that in our group.
FNW: Where do you achieve most of your sales?
JCB: When the company was acquired more than half our business was in wholesale and now it is less than one quarter. By the end of this year, we will sell no jewelry wholesale. And we will only sell watches outside our network in specialty stores. We have made our boutiques more feminine – so they are less a destination for men.
FNW: That was clear in your new Place Vendome store, no?
JCB: You know Paris is one of the most admired cities for its art and architecture. And Place Vendome is the number-one destination for high jewelry in the world. So, we had to sparkle there – with a really Roman style, jewelry inspired by Roman art and architecture. And Peter Marino gave birth to the most beautiful store ever crafted, a beautiful nest.
FNW: You have been active in India?
JCB: Yes, we have an ambitious strategy. With only one boutique in Delhi, we are opening a second in Mumbai. And we’ve started a multi-brand distribution – to have a critical mass. Priyanka Chopra Jonas has become our main face in India. She was also with me recently in Dubai, to launch her input – the Mangalsutra bridal necklace. The next step is to create more jewelry resonating in India and become the first Western brand to add local craftmanship and pay tribute to India.
FNW: In China you stopped using actor Kris Wu, right?
JCB: He was accused of abuse, so we withdrew and stopped the relationship.
Though we are doing very well in China, which is one quarter of our sales - strong but not too much. We have 40 boutiques in 25 cites; 35 are owned by us, five are managed by franchises. There are more 100 cities of 10 million in habitants, so there is plenty of room to grow! And we operate on two e-commerce platforms – Bulgari and on We-Chat.
FNW: How important is e-commerce?
JCB: Pretty marginal – which is common in luxury jewelry as people don't buy every season. Plus, watches need a bracelet adjustment, so you need to visit a store. So, we have lower penetration except in the US, where we are more than 10% e-commerce. We hardly reach 5% in all other countries.
FNW: Who are your competitors?
JCB: Cartier, Van Cleef & Arpels and Tiffany, plus Bulgari – that makes up the big four worldwide. And some fashion brands – Dior, Chanel, Louis Vuitton, and even Chaumet. You need to remember that jewelry is a 15,000-year-old phenomenon, since humankind began celebrating the most important moments in their lives. Today, jewelry has never been in a better position. About 70% of the world market is still made up of unbranded jewelry. So, the growth potential for brands is very important - as branded jewelry is going more rapidly. Two generations ago, the family jewelry around the corner was the trustee of your emotions. Today, brands have become that trustee.
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