Bling is out, enduring quality is in. That’s the message this holiday season from makers of luxury goods, who are betting that even in a shaky economy, shoppers will still pay serious money for fine craftsmanship.
Instead of sexy models flaunting handbags and lots of skin, Louis Vuitton’s current ad campaign features Vermeer-inspired images of demure young women hand-finishing purses and wallets at a workshop table. One ad is entitled “The Young Woman and the Tiny Folds,” another “The Seamstress With Linen Thread and Beeswax.”
There’s just one tiny detail missing. Hardly any Vuitton bags or wallets are handmade. While reporting an article on Vuitton in 2004, I visited one of its factories in the village of Ducey near Mont St. Michel. There I saw rows of workers seated at sewing machines, stitching together machine-cut pieces of canvas and leather. The partially finished bags were rolled from one workstation to the next on metal carts.
It was no sweatshop. The building was modern and airy, with windows overlooking the Normandy countryside. But the work being done there didn’t resemble in any way the painstaking handiwork shown in Vuitton’s ads. Indeed, the factory managers – who had been recruited from companies making such things as mobile phones and yogurt containers — talked proudly about the strides they had made in automating every step of the process. Just about the only Vuitton products still made by hand, they told me, were custom-made items produced at its historic atelier in the Paris suburb of Asnières.
Analysts told me that Vuitton’s efficient manufacturing allowed it to reap operating margins well above the industry average. That’s still the case: During the first half of 2009, the fashion and leather goods division of Vuitton’s parent LVMH Moët Hennessy Louis Vuitton – which consists mainly of the Louis Vuitton brand – posted an operating margin of 30%. That’s considerably better than the margins at two of its leading leather-goods rivals during the same period: 25% at Hermès and 22.9% at Bottega Veneta.
Which brings us back to those Vuitton ads. Sure, most people realize that advertising often isn’t literally true. We know the food we eat isn’t produced by jolly peasants and milkmaids, yet such images abound in food ads. But shouldn’t the truth-in-advertising standard be tougher when a company is asking customers to shell out hundreds or even thousands of dollars for a mass-produced item? What do you think?
by Carol Matlack on Business Week
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