France’s new policy to boost the luxury industry

–As Louis Vuitton, Hermes and Chanel expand production capacity to meet growing demand for “Made in France” luxury goods, a new government-backed programme could boost the luxury industry.

Bernard Arnault, LVMH’s chairman and chief executive, said in his annual results on January 29th that although Louis Vuitton’s sales topped $10 billion last year, it could have “grown a lot more”. Arnault explains that brands are “constrained by capacity, it takes time to train new artists, and they can’t move faster without compromising quality.”

Hermes also cited capacity issues last week. The family-run conglomerate unveiled plans to build its 19th leather goods factory after sales rose 10% in fiscal 2018. Guillaume de Seynes, executive vice president of manufacturing and equity investments, told BoF that the famed kelly bag maker “will start recruiting 250 saddle and leather artisans at the end of this year for the operation of the Normandy factory in 2021.” The company is already training artisans to meet the needs of two more manufacturing plants opening next year. “It takes them 15 to 18 months to master the techniques of making kelly bags, and our most sophisticated bags are being used as our best training products,” de Seynes continued. He points out that Hermes started the in-house training programme a long time ago.

Also next year, Chanel has decided to invest more in craftsmanship. The company will open a new 25,500 square metre studio in the north of Paris to house its 12 specialist workshops, including feather studio Lemarie, shoemaker Massaro, embroider Maison Lesage and milliner Maison Michel. Every year, the craftsmanship of these workshops is reflected in the brand’s Workshop collection. Bruno Pavlovsky, president of the brand’s Global Boutique department, said: “Chanel has been actively involved in supporting, developing and ensuring the continuity and durability of ‘craftsmanship’ for the past 35 years, as they represent a unique and ultra-high craftsmanship.”

Hermes, meanwhile, is adding textile specialists, a glove maker and tanneries. But acquiring know-how remains a problem for many of the business partners of France’s biggest luxury goods companies, threatening the momentum of the €154bn industry.

The education and training system must respond to this new environment in order to foster the competitiveness of French luxury goods and fashion.