How Will Balmain Become The $500 Million Luxury Brand Next Year?

In the four fashion week of the 2019 autumn and winter, some 400 brands went on show, and only about 30 brands sold for more than 500 million US dollars. Massimo Piombini, chief executive of luxury brand Balmain, recently said that by 2022, Balmain will become the next luxury brand of $500 million a year.

He said he was confident that he could further tap the energy and talent of the brand creative director, Olivier Rousteing, and use the huge resources of the Balmain parent company, the Qatar Royal Investment Agency Mayhoola, to achieve this goal.

Balmain was founded in 1945 by French fashion designer Pierre Balmain, whose design is famous for its elegance. The American novelist Gertrude Stein and the Duchess of Windsor (Duchess of Windsor) are all early fans of the brand. Karl Lagerfeld, who just died, worked for Balmain studio in her early years.

In 2011, Olivier Rousteing, a talented young designer, took over from Christophe Decarnin and became the new creative director of Balmain. He not only retained the style elements before the brand, but also added luxurious ornaments to the men's wear. In those days, Olivier Rousteing, 25, was also the youngest creative director in the fashion industry. This noble and sexy style has won the love of American day post singer Beyonc, Rihanna and Jennifer Lopez.

The sleeping beauty awakened

In June 2016, Mayhoola, the largest shareholder of Valentino and the Royal Investment Agency of Qatar, acquired Balmain, with a spanaction volume of about 460 million euros (see "ornate ambition" report: Valentino major shareholder, Qatar Royal Investment Agency acquired French luxury brand Pierre Balmain, trading volume of nearly 500 million euros) Valentino Massimo's former global commercial director Massimo Piombini became the new chief executive officer of Balmain, and reported to the chairman of the Balmain board and the chairman of the board of directors.

When asked about the difference between Balmain's work and Valentino, Piombini said, "the biggest challenge I face in Valentino is to manage the spanition from Mr Valentino to new designers. His first successor, Alessandra Facchinetti, was not successful, but then Maria Grazia Chiuri and Pierpaolo Piccioli designed partners to relocate Valentino. Therefore, when Mayhoola acquired Valentino in 2012, it has completed the first stage of its business plan. "

Piombini added: "but Balmain is not a question of repositioning, but positioning. This brand is like a sleeping beauty waiting to be awakened. At that time, Balmain had no retail business, no accessories, and no Asian market. When Olivier came, he brought his vision, new ideas and practical measures. We can work together better and better according to the established plan.

Over the past two years, Balmain has established a new regional office and updated the modern management system. The number of employees has increased from 200 to nearly 500. Annual sales increased 50% from 130 million dollars two years ago to 200 million US dollars.

Prudent and comprehensive channel development strategy

At present, most luxury brands focus on the expansion of retail outlets, and Piombini has different views.

He believes that the market has been changing and the way consumers are shopping is changing. Balmain should expand its retail business cautiously. In fact, the flagship store opened in Paris not long ago is the first flagship store in the history of Balmain brand. He takes the wholesale business very seriously, especially those strong fashion business partners, including Balmain's first electricity supplier, luxury electric supplier Net-a-Porter, and Mytheresa, LuisaViaRoma and Farfetch.

It is worth mentioning that the electricity providers (including the official website and the third party website) contributed 25% of Balmain sales to the luxury goods industry, and the proportion of luxury goods industry is usually 10%. Especially considering that Balmain has not yet made great efforts to expand its accessories business, most of the online sales are clothing products with high price per passenger. Piombini owes it to design director Olivier Rousteing, a talented social media opinion leader who has 5 million 300 thousand fans on Instagram and is supported by a large number of top stars, supermodels and fashion designers. Balmain x H&M, launched in November 2015, was hit by a series of Rob after being on the shelves. It once caused the store to become paralyzed and became the most successful designer in the history of H&M.

Piombini said: "we are trying to turn Olivier fans into sales, and are committed to developing new products that are more price friendly and friendly, such as sports shoes and bags. We are a digital company that will communicate with customers digitally. "

At the same time, the brand is also selectively developing the entity store network. Besides Paris, it also tested the new store concept in Milan, Miami and Las Vegas.

At present, Balmain has 25 stores and 350 distribution outlets in the world, but in view of the fact that the brand's accessories business has not yet been fully developed, the company has not yet expanded its retail sales (duty-free shops).

Piombini said: the wholesale business now accounts for 80% of the brand, and the rest is retail business the ultimate goal is to make wholesale and retail sales reach 60:40.

Strengthen sports shoes and accessories category

Balmain recently set up a new business department focusing on sports shoes, with a new general manager, team and marketing budget. The series is designed by the internal team and is produced near Hongkong, China. Piombini said: "ten years ago, luxury brands went to China to produce money to save money, but now they choose China because they have amazing technology, and they can achieve the idea that Italians or other Europeans can not achieve it. For example, the black leather high grade sneakers on my feet were designed in early November last year and put on shelves at the beginning of December.

In the aspect of accessories, Balmain has a factory in Italy leather capital Scandicci, with 40 employees. Piombini introduces that the accessories category of Balmain is growing very fast now, and the proportion of garments is 25:75. By the end of 2022, he hopes to achieve 50:50.

About Massimo Piombini

Massimo Piombini is the elder statesman in the luxury industry. He has worked in P&G (Procter & Gamble), Bulgari, Gucci, Bally and Valentino, and has worked in mergers and acquisitions among investment banks, and has worked for the former investor of Bally brand and Private Equity Investment Firm Dezhou Pacific (TPG). His cousin, Antonio Belloni, is the managing director of the French luxury goods giant LVMH group and is also chairman of the Executive Committee.