Pierre-Yves Roussel, who joined Tory Burch in 2019 after holding the position of chairman and CEO at LVMH, with a background in the luxury fashion industry already under his belt, has shared his updated business strategy for this new stage in the brand’s life at the recent Vogue Business x Google Summit of Fashion.
Roussel spoke about his ideas for pricing and brand elevation, positioning the brand within the realm of “new luxury brands”. Bringing lux quality and elevated design features into the collections, while maintaining the classic characteristics of the American luxury market, Roussel calls it “seeking for value”.
Benefited by its direct-to-customer distribution method, Tory Burch owns 340 stores and e-commerce channels globally. Its direct selling channel takes up 85% of total sales. Roussel says, “She (Tory Burch) had the concept of being a vertically integrated business, where 85% of business is straight to consumer, so we sell most of our product in our own stores or on our e-commerce.” He also made it known that about 70% of online sales were generated from mobile devices. Even in small wholesale businesses, the company controls their brand image and sales channel, hence all strategies adopted in distribution channels remain uniformed.
In August, Tory Burch opened a new boutique in Soho New York, at 151 Mercer Street, in a bold new move initiated by Roussel. It serves as a social centre and go-to location for events, while also offering traditional shopping services and a luxurious retail experience.
The store carries the full line of Tory Burch products, including its house and home series, 151 Mercer handbags, and the limited edition Lee Radziwill Double bags that are for sale exclusively at this store. It also displays a small selection of antiques collected by Burch herself, bringing delight and surprise to customers who shop at the store.
The boutique has three floors, designed and built for the brand by architectural designer Gwenaël Nicola from Curiosity. Symbols of the brand are highlighted by merging elements of oak, cirrus and brass. All furniture and decorations in the store were personally selected by Burch.
Under Roussel’s leadership, the company has changed the pricing concept. It no longer offers frequent discounts. In fact, the price of products has been raised to better reflect their quality. This innovation has initiated a chain reaction in its inventory. By ceasing to produce discount products, customers’ return and refund rates were lowered.
“I think in the last three years or four years, we’ve further reinforced that so, for example, we’ve taken all the products that we’ve had for many years – iconic products – and we’ve redesigned them, improved the quality, and introduced a lot of new products also,” Roussel explains. “So, overall we’ve raised our pricing just to reflect the quality, and we reinvest a lot of that price increase into the quality and the making of our products.”
Roussel met Tori Burch (together below), the brand’s founder, chairperson, and chief creative officer, when LVMH considered investing in the company, and established his innovative ideas soon after. They later married. “I was amazed with the brand even before I’ve met Tory,” he says. “I was always impressed by the success she has had, but more interestingly I think she was very visionary on so many things. She was the first in the fashion and luxury market to create a website, to really use social media to build the brand.”
Tory Burch takes on the same long-term development strategy as LVMH. “Obviously you have got a long-term vision, and has the interest of building your own business,” said Roussel. This means long-term benefits from the investment data and the centre of distribution resources, but meanwhile takes a conservative approach on aspects including expansion and cash management. This explains why Tory Burch managed to achieve profitability in the second year of its establishment.
For Tori Burch, returning to the centre of New York City, with the latest shop and an innovated product line, may also mean returning to the spotlight.