Lifestyle brand Lacoste has continued to break serious ground in the Australian market since 2002. Assia Benmedjdoub sits down with its global and regional head honchos to talk new ventures.
It is day 12 of the Australian Open and Jo-Wilfried Tsonga is preparing to face Roger Federer in the semifinals. Just several hundred metres away from the impending action on centre court, another Frenchman is drawing battle plans.
“Our main competitor worldwide is the same as always,” he says, brushing the leg of his pale chinos. “The one we always target is Ralph Lauren.”
Lacoste SA chief executive Christophe Chenut takes a long sip of sparkling water before settling back into a white leather lounge. He is surrounded by a team of marketing and corporate relations executives, many of whom have made the 24-hour flight from Paris to close rank at Melbourne Park. Some join in on discussions, others bury their head in slivers of shiny paperwork.
Lacoste has pumped considerable millions into its five-year sponsorship program with Tennis Australia, and a portion of this includes the corporate entertaining lounge it now occupies. Aside from some seasonal campaign images along two walls and four dressed mannequins at the entry, the space is clean, chic and stripped of colour.
Chenut is here to conduct business.
“The Asia Pacific region for Lacoste is becoming more and more important as, of course, for any global fashion brand,” he continues, after naming Ralph Lauren as a key rival. “Having the chance for us to be an official sponsor for a major event in this region was a huge opportunity.”
Today the 77-year-old company licenses its trademark to various corporations around the world, including French-based Devanlay which owns the exclusive clothing license and UK-based Pentland Brands which produces Lacoste footwear. When the company decided to set up a regional office in Hong Kong two years ago, its global licensees were already pushing east with their own Asia Pacific branches. This combined effort, among other strategic initiatives, saw one sixth of Lacoste’s 1.5 billion turnover come from the region in 2008.
Chenut says he hopes to capitalise on the growing Asian economy by propping this figure to one fourth, no doubtspurred by a 25 per cent fall in sales in the US market last year.
“We were doing very well in America for many years and then last year, with the crisis, it has been really very tough. Historically it was much more complicated for a company based in Paris to manage a business so far away as Asia, but we realise now how important it is. We have our team and our licensees working together to create events in department stores, malls, sponsorships and making the work we’ve done in other countries relevant to this market. We should have 20 to 25 per cent of our revenue coming from here in the next five years.”
Chenut admits Australia is a relatively small piece of this pie, with sales in Japan, China, Korea, Thailand and the Phillipines currently dominating. He is impressed, nonetheless, by the work Australian distributor True Alliance has done since first taking on Lacoste footwear in 2002.
Lacoste Asia general manager Jerome Bachasson elaborates.
“Probably the best way to describe this market in 2002 was one with a lot of hanging fruit – opportunity we could capitalise on especially with a strong local partner. One of the ways to rejuvenate the brand here was to focus on the lifestyle angle; we are not just the polo brand anymore. We sell a lot of footwear, a lot of bags.”
Prior to the appointment of True Alliance, its former local distributor operated “more like a franchisee, just managing one or two stores”. At one stage, some twenty five years ago Bachasson speculates, Lacoste even had manufacturing operations here.
“Because the manufacturer went broke,” he admits, laughing, when asked why this arm stopped. “The whole manufacturing sector in Australia collapsed with competition from Asia so we had to rethink really our business model and find a solid partner. Our former distributor who, as I said, was managing one or two stores, did the best he could but he had limited capacity. So we gave the distribution of our shoes to True Alliance and they did such a good job. It became obvious they were the best partner to develop other categories.”
Since acquiring Lacoste apparel and accessories in 2006, True Alliance today distributes these products through 120 retail doors in Australia and 45 in New Zealand. Footwear wholesale accounts number at around 45 for the Australian market and 10 for the latter. Although Lacoste operates six stores domestically, the Australian Open has driven the number of commercial spaces with pop-up stores and merchandise stands.
“That’s something we try to develop everywhere in the world,” Chenut says. “Everytime we’re a partner in an event – tennis, golf, cinema festivals, concerts – we try to build around that a lot of animations in boutiques, pop-up stores, department stores to make the brand visible, to be close to the people and to sell product. During the US Open, we have animations in Bloomingdales, Macys and we have two fashion shows a year in New York we build around.”
For the Australian Open, this promotional strategy has already taken many forms. There is the corporate hospitality lounge at Rod Laver Arena, which hosted an official cocktail party on ‘Lacoste Day’ and served as a meeting place for journalists and key partners such as True Alliance. A commercial booth inside the Arena sells limited edition Lacoste merchandise, while an inflatable 300m2 Lacoste Light Box offers visitors the opportunity to play a game of Spin Tennis, browse the latest collections and see the official players’ outfits.
Offsite events are important too; the most prominent, a pop-up site at department store Myer Melbourne City. The 36sqm retail space is bursting with tennis themes, with high referee chairs acting as fixtures for folded garments and green tennis nets framing off-key product areas. Overhead court lighting looks down on items such as the classic Lacoste L1212 polo in pinks, blues and yellows, along with official Australian Open tees, shorts, caps and socks for men, women and children.
For the duration of the tournament, Lacoste-sponsored players such as Andy Roddick, Jelena Dokic and Samantha Stosur make appearances at various events to sign autographs and meet fans.
Chenut must be thrilled the brand has already capitalised on the tournament, only in its second year as official outfitter?
“We are quite happy, even if there are still things to improve,” he replies, adding the partership is only just beginning. “We have been partners with the Roland-Garros grand slam [French Open] since 1961 so we manage it very strongly because well, first of all it’s five kilometres from the office and we know the place by heart! We are new to this tournament and are still learning.”
In fact, Chenut says the initial contract was signed just six months before the 2009 Australian Open kicked off.
“I had just arrived at the company and within the first week I had a meeting regarding the signature of this partnership,” he laughs. “I had to sign in the summertime because I remember sending Jerome a lot of emails during the vacation. So that’s been very difficult. When you work with Australia, sometimes you send an email and you have an answer back the next day. This year we’re satisfied with all that’s been improved but of course, we still see a lot of small points that can be better.”
It’s a question of visibility, he explains. One of the improvements to come about this year is the redesign of on-court umpire chairs, which are now a brilliant white to offset Lacoste’s green crocodile logo. Linesman boxes are also designed in this way to encourage more viewer attention.
“We are facing something which is a real problem for us: the colour of the tournament is blue and the colour of our logo is green; very difficult to match. In Paris, the general colour of the tournament is green and we worked with organisers to create the chairs of the linesman. Here we had to work on a specific design that existed before and we had to adapt it to make our logo visible. We have improved a lot this year and have some ideas which could be interesting to animate the brand in the future.”
The Australian Open also sits well with Lacoste’s global corporate sponsorship calendar, with no other major event scheduled for the start of the new year. More importantly, it also ties in nicely with Chenut’s expansion plans for the Asia Pacific region. Prior to touching down in Melbourne, he spent two days in Korea, two in Hong Kong and another two in Indonesia, working with licensees and distributors on initiatives to encourage wholesale and retail growth. It’s impractical to fly across the world and back for just one tournament, Chenut explains.
“The idea is to choose a panel of dynamic countries each year to visit before the Australian Open and see them, motivate them, tell them we will help them with investments in advertising or sponsorship of [sportsman]. For us this time, we went to Indonesia, we said you are on our radar screen and we’ve decided we want to grow here. How can we manage to make this happen in your country? I think next time, we could do the same in India where we think we should grow, to Singapore and the Phillipines and Thailand where we are already doing very well.”
Chenut’s thoughts in the meantime however, are straying towards centre court, where Tsonga will attempt to break Federer’s fighting form in the next several hours. Having just touched down from Indonesia to Australia, and endured the initial 24-hour flight from Paris to Asia eight days ago, he doesn’t show any sign of jet lag.
“No no, it’s ok for me today because I arrived in time to see my countryman play tonight.”