June 4, 2013
VIENNA, Austria – The CEO of Moët Hennessy said at the FT Business of Luxury Summit 2013 that parent company LVMH Moët Hennessy Louis Vuitton’s No. 1 measure of success for its brands is long-term results.
During the “Case studies: The best ownership model for maximizing profits and power” session, the executives agreed that no matter what the ownership model, brands should always stay true to their core values to succeed in today’s marketplace. Luxury brands should also strive to create products that are superior to their competitors.
“Success is not only figures,” said Christophe Navarre, CEO of Moët Hennessy. "We are there for the long term.
“The most important criteria for success for LVMH is in the long term of our brands,” he said.
“The most important thing [at Moët Hennessy] is that we share the same values of our colleagues at LVMH.”
Conglomerate Moët Hennessy Louis Vuitton owns spirits brands Moët et Chandon, Dom Pérignon, Veuve Clicquot, Hennessy, Belvedere and others.
For the long haul
Moët Hennessy currently owns six brands that are more than two centuries old.
Although the group is rooted in tradition and history, it still strives for innovation in its brands.
“We are the leader in cognac and we are the leader in Champagne,” Mr. Navarre said.
“We are selling brands,” he said. “That is the reason why we need to act as a leader.
“This means that we need to show the way in innovation and creativity.”
In addition, the group also makes sure its brands follow the same values that all of the LVMH brands do.
These values are producing the best quality products, having a luxury image, striving for innovation and brand entrepreneurship and focusing on having the best customer relations.
Quality seems to be the deciding factor that can make or break a brand.
“The first objective in the group is quality,” Mr. Navarre said. “If you have no quality, you have no luxury brand.”
In addition, Mr. Navarre said that LVMH's brands focus on strong management as well.
LVMH currently has more than 100,000 employees worldwide.
New kid on the block
Travel accessories brand Tumi shares some of the same business values as Moët Hennessy, even though the brand is much younger.
The American brand focuses on being a retailer and an upscale lifestyle brand that appeals to both men and women.
Tumi launched in 1975. London-based private equity firm Doughty Hanson & Co. bought it in 2004 for $276 million, which was a pivotal turning point for the brand.
The firm brought the company up to par and made it stronger. The brand was put up for an initial public offering in April 2012.
Doughty Hanson helped bring the brand back to its founding principles, which allowed it to grow into the brand that is it today.
“Working with a private equity gave us a lot of freedom to get things done quickly,” said Jerome Griffith, president/CEO of Tumi. “We have expanded way beyond our original goals.
“Doughty Hanson bought the company for the brand name,” he said. “The power of the name was strong, but the distribution was not big.
“We went back to being a travel brand.”
To bring the company up to par with the competition, Doughty Hanson took the brand back to its roots.
“The business fundamentals stayed the same,” Mr. Griffith said.
“A lot of it went back to our founding principals: excellence in design, continuing technical innovation, superior functionality and world-class service,” he said.
Erin Shea, editorial assistant on Luxury Daily, New York