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Following global price increases, Louis Vuitton is increasing its capacity to produce ultra high-end handbags, ramping up competition with Hermès.
On Tuesday, the French house inaugurated two ateliers, the Abbaye atelier in Vendôme and the Oratoire atelier (described by Louis Vuitton as the “next generation of ateliers” with its bioclimatic design and modular architecture) in Azé, both south of Paris. Bernard Arnault, chairman and CEO of LVMH; Bruno Le Maire, France’s minister of economy, finance and the recovery; Michael Burke, chairman and CEO of Louis Vuitton; and Frédéric Arnault, the CEO of Tag Heuer and son of Bernard Arnault cut the ribbon with artisans, journalists and local authorities in attendance. The Abbaye Vendôme began operating in 2020 and the Oratoire atelier in 2021, currently employing around 150 artisans with plans to hire another 250, plus 100 persons in other metiers.
Exotic skins in luxury have become a lightning rod for criticism as alternative leathers and other vegan materials become more popular. Burke said that demand for handbags in exotic skin “done in a responsible way” is increasing. “It goes with more bespoke orders. The great majority of exotic skins [handbags] are bespoke. It’s not about price, it’s about bespoke, of course bespoke is expensive,” Burke told Vogue Business. Louis Vuitton's crocodile skins come from farms certified by the Crocodile Standard, a certification launched by LVMH. Louis Vuitton is also one of the last remaining luxury brands to still sell animal fur.
Earlier this month, Louis Vuitton raised its prices globally, attributed to increased production costs, a move that followed Chanel’s, and at a time when most luxury players are raising their prices. Asked by Vogue Business if any further price increases were planned for this year, Burke just replied, “Stay tuned.”
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“It's a bag that I could never afford but it doesn't matter, as long as it creates jobs in France,” Le Maire told Vogue Business while holding an emerald green Capucines handbag made of crocodile, priced around €25,000 according to Burke.
2021 was a record year for Louis Vuitton. According to the latest HBSC estimates, the house generated €17 billion in revenue (LVMH does not break out sales on the brand level). Two additional leather workshops are slated to open in France this year. In the context of a luxury boom in the US and a sustained demand in Asia, waitlists for Louis Vuitton’s iconic handbags are getting longer. Abbaye and Oratoire join two other existing sites producing handbags made of exotic skins (the historic atelier in Asnières and the Issoudun site). Louis Vuitton now counts 18 ateliers in France, three in the US , five in Spain and two in Italy. Some 1,000 jobs are to be created by 2024. LVMH currently employs 35,000 in France. “We are proud to contribute to the economy of the country and its influence around the world,” Arnault said.
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For its Abbaye atelier, Louis Vuitton bought a listed Benedictine monastery that was built in the 11th century in the town of Vendôme, restored and renovated it, investing more than €15 million in the project. “In the luxury universe, Vendôme has become first and foremost a Parisian square, a very beautiful one where Louis Vuitton is well represented. It’s also this link that we have been willing to celebrate,” Arnault said. Expect the Vendôme name to be touted. In early 2021, LVMH bought the rights that it can use for jewellery, precious stones and leather goods, though it has yet to be used.
The inauguration marks the completion of a major project for Burke, a collaborator of Arnault’s since the early days of LVMH who was named CEO and chairman of Louis Vuitton in 2012. “Michael manages to put up with me, it’s not always easy and it has been decades,” Arnault joked, praising the executive and noting that the brand has gone from three to 20 ateliers and that turnover has multiplied by 30 since it was acquired by Arnault in the 1980s.
It was the first time Frédéric Arnault, CEO of Tag Heuer attended the inauguration of a Louis Vuitton atelier. “I find it impressive,” he told Vogue Business. Tag Heuer is also to increase its price, by an average of 5 to 6 per cent, effective 1 April.
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