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The Strategy of a Luxury Flagship Store
FSW examines the practical yet impractical necessity of luxury brand flagship stores and what they mean about the current state of luxury.
The launch of a flagship store, such as the 45,000-square-foot Hermès flagship that opened last September on Madison Avenue, is symptomatic of a trend among fashion houses to establish a more permanent presence in influential cities around the world. Now a model that seems half-brand marketing and half-conceptual art, the idea of a “flagship” or large-scale atélier has evolved significantly since the foundation of the first luxury fashion houses over 150 years ago.
Yet, in the 21st century, what does the concept of a flagship store represent, particularly in the multi-country model that many companies adopt as well as in the face of an increasingly digital-oriented retail market for fashion?
It’s odd to think that the luxury goods giant Louis Vuitton had its origins in humble suitcase design. Louis Vuitton was a licensed layetier, or traveling case manufacturer, who was hired by Napoleon III to design luggage for his wife, Empress Eugénie. From this base, Vuitton began marketing his label from his studio on Rue Neuve des Capucines in Paris in the mid-1850s and eventually opened his first store on Oxford Street in London in 1885.
The Vuitton building at 101 Champs-Elysées, which LMVH now owns outright, did not open until 1913, by when the company had become the largest travel goods manufacturer in the world. Louis Vuitton, then, has come full circle, with plans to launch a new hotel at 103 Champs-Elysées just steps away from its iconic flagship. But, what does this renewed attention to flagship brick-and-mortar stores signify for the brand and for the luxury market in general? All of these moves from LVMH established an updated presence for Louis Vuitton, confirming the brand’s permanent position on what is arguably the most famous shopping street in the world.
The recent H1 2023 global luxury brand results, though they contained some outliers in the form of stellar Hermès results and poor Gucci performance, indicated continued strong growth in the luxury market across the board. While spending among “aspirational consumers” in the U.S. slowed, shopping among high-net-worth consumers showed no signs of slowing down. The consistency of post-pandemic luxury brand growth suggests that a renewed investment in brick-and-mortar stores, particularly on the scale of grand flagships in major cities, is a smart investment. After all, Glossy reports that Tiffany’s 5th Avenue flagship brings in as much as 10% of global revenue for the brand, arguably justifying LVMH’s $500 million refurbishment of the landmark.
Of course, luxury flagship stores serve many different purposes, depending on the brand, country, and city. Some brands are using flagship stores as a way to showcase their commitment to innovation. Valentino, which earlier this year announced a partnership with metaverse company Unxd, did an immersive unveiling of its new Plaza 66 Shanghai flagship on Instagram Reels, showing the new store being unveiled underneath a virtual sheet and paint can. Ralph Lauren’s store in the Miami Design District, which is the first brand location to accept crypto, plans to host digital and immersive experiences in the store as part of its collaboration with Web3 group Poolsuite.
For many luxury brands, however, flagship stores are a way to illustrate or bring to life the brand’s unique vision, heritage, and creative flair. They stir interest simply because they are beautiful spaces with beautiful products for high-end brands. The flagship, it seems, is a physical manifestation of luxury itself. It represents the culmination of money, power, beauty, and fame. In short, luxury is a tantalizing, unreachable, yet desirable aesthetic.
Jean Bergeron, former president of the Comité Colbert in France, defines luxury as “part dream, but its reality is excellence … Yes, the superfluous is essential and luxury is the stuff of dreams. Dreams are what create all human adventures. It is not money, but dreams.” (Translated from a brochure from L’Agence Regionale d’Information Strategique et Techologique de Paris.)
Of course, the popular conception of haute couture as representing all luxury fashion is a misnomer. In fact, the French actually own the rights to the term haute couture. Technically, it refers to custom-order fashion, as opposed to ready to wear (prêt-a-porter). In France, to qualify as haute couture, a fashion house has to meet a set of qualifications and then be approved by the Chambre de commerce et d’industrie de Paris in order to call themselves true artisans of haute couture.
Technicalities aside, then, a luxury store is a further embellishment, in a way, in the fleurissance, or flowering, of a global brand. The concept of a flagship store is a living cultural artifact: a way for luxury brands to make their mark, setting up a type of cultural permanence. This seems comforting in the face of so much impermanence in the virtual world established by online media. Even the multiplicity of flagships, i.e. a company having “flagship” stores in select cities across the world, is arguably a quiet form of cultural diplomacy, even if from a profit-driven standpoint.
So, the next time you’re in airport duty-free or at a shopping mall or on the high street and spy the characteristic Valentino badge or the Vuitton “LV” logo, think of luxury and admire its sheer necessity.
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