Maison Corthay’s Xavier de Royère is happy for the French footwear brand to follow luxury’s big fish.
Xavier de Royère is a man who knows the luxury sector inside out. Before taking the role of chief executive for French men’s footwear brand Maison Corthay in 2010, he was senior vice president of Spanish accessories brand Loewe, where he focused on expanding into Asia. Before joining Loewe in 2004, he ran luxury goods group LVMH’s UK business as country manager, where he was instrumental in bringing brands such as Louis Vuitton, Christian Dior and Chanel to Selfridges.
Drapers met with de Royère at Maison Corthay’s London store, which is opposite Christian Louboutin on Motcomb Street in Knightsbridge, a stone’s throw from Harrods.
Behind a well-used counter one of the store’s sales associates is colouring a pair of leather shoes at the request of a customer as de Royère, who is wearing a sharp blue suit and a white shirt teamed with a pair of Maison Corthay aubergine Wilfrid shoes, takes a seat for the interview.
Asked why he moved to a small brand, he answers: “I was lucky that [LVMH] was very entrepreneurial, and it was testament to the flexibility in the organisation that I got to try different things and get a good knowledge of markets worldwide. Vuitton was a large brand, Loewe was medium-sized and I also saw the development of smaller brands like Emilio Pucci.”
When Maison Corthay experienced financial difficulties, de Royère led a consortium of investors and became the number one shareholder. “Here I can contribute not only my managerial activities, but also make it my own,” he says.
But in a market dominated by large luxury groups such as LVMH and Kering, how can a small brand like Maison Corthay compete?
“Domination has got a negative connotation. The importance of the larger groups will remain but there is space for the smaller brands,” he says.
“The luxury ecosystem needs both the small fish and the large groups. There is interest from buyers and there is also a consumer that wants to find something that is under the radar.”
The market is awash with success stories that prove his point, he says. “Louboutin is on the other side of this street and the brand was very small 10 years ago. There is dominance, but the big boys also have a role in the industry in developing distribution. [Brands such as] Vuitton, Chanel and Gucci go to new countries and create demand and then you get customers who start to buy expensive products. Then what I call the small fish can tag along.”
He tips women’s footwear designer Charlotte Olympia and luxury leather goods and stationer Smythson as two British brands to watch.
The global luxury fashion and leather goods sector, which was worth £47.1bn as of August 2013 according to Mintel, has been more resilient than others throughout the financial crisis, and de Royère expects the market to continue to grow as new nations buy into luxury and consumers in mature markets search out quality. “Even in markets like Japan where there has been a saturation of luxury goods, we’re finding our sales are practically going to double this year because people are really looking for [brands] that have truthfulness, which they feel they can trust.”
However, the sector is not without its challenges. Perhaps one of the most pressing issues, particularly for the small businesses, comes from the larger groups seeking full ownership of the supply chain by buying raw materials producers. In March this year Kering, which owns Gucci, Christopher Kane and Stella McCartney, bought France Croco, a tannery in Normandy, while Hermès snapped up French calf leather supplier Tannerie d’Annonay in January. LVMH paid €2bn (£1.7bn) for an 80% share in Italian cashmere producer Loro Piana in July, while in the UK, Scottish knitwear manufacturer Barrie Knitwear was purchased by Chanel in 2012.
This presents a problem, says de Royère. “The large groups are buying all the tanneries. So you end up not being able to buy the leather because someone else has bought the whole production.”
He does concede, however, that there is a benefit to these acquisitions: “You want to make sure that the know-how survives. So you are saving a brand by making sure that you are going to give it business, because you’re not buying the supplier to get another 15% increase on your sales.”
As for Maison Corthay, whose footwear retails from £940 to £5,930, de Royère explains that it sources 85% of its box calf leather from French tanneries, about 5% of its footwear is made using crocodile leather from Singapore, Africa and the US, and the remaining 10% is made from camel leather, sourced in Abu Dhabi. Maison Corthay introduced its camel leather range with materials sourced from the Al Khaznah tannery in June, and is the only footwear brand using Al Khaznah, he says.
The business was established in 1990 by Pierre Corthay, now the company’s art director, and has five stores in London, Paris, Tokyo, Hong Kong and Dubai. These account for 80% of sales, with the other 20% coming from its 20 international stockists, which include Harrods and Selfridges in the UK. Japan represents 25% of the business, France 20%, Asia 20% and the UK 15%, with 20% from the rest of the world. De Royère declines to reveal turnover, instead saying the business is growing by about 50% each year. “We’re small so [we are worth] less than £10m, but we’re going to get there quickly,” he says, before adding that this doesn’t mean massively expanding distribution and thus diluting the brand’s exclusivity.
Production has increased fivefold over the past three years. The brand has a workshop outside of Paris where it employs 15 people, though de Royère reveals that he has just signed the lease for a new factory in Beaupréau in western France, representing a £500,000 investment. The machines for the factory are due to arrive shortly, and the brand received 250 applications for the 15 jobs on offer.
In addition, Maison Corthay expanded its successful leather accessories line - belts account for 10% of sales - with the introduction of six leather wallet styles in October.
However, de Royère insists that keeping a tight rein on distribution is paramount - the brand turned down an opportunity to open in Beijing for this reason. “[Yves] Carcelle, the former chief executive of Vuitton, is somebody
I have a lot of respect for, and he once told me the importance of not going too quickly from being hard to find to hard to miss.”
If Maison Corthay’s sales continue to rise at their present rate, de Royère may have his work cut out.