Dior Announces Annual Revenue, Growth in Couture

The Christian Dior group announced its annual revenue for the year ending on June 30, 2014. Under the creative direction of Raf Simons, who helms the womenswear and couture collections, and fellow Belgian, Kris Van Assche, who serves as the director of the house's Homme collection, Dior achieved $41.6 billion dollars in revenue for the fiscal year from July 1, 2013 to June 30, 2014, generating profit from recurring operations of $8 billion dollars. Consolidated net profit amounted to $5.2 billion dollars. In a statement from the brand, which is owned by LVMH Moet Hennessy Louis Vuitton, Dior noted that it continued exceptional growth for the house's couture collection, particularly through its network of directly operated stores, up 19 percent at constant exchange rates compared to the same period in 2013.

The house's growth in terms of couture is somewhat surprising, especially as more and more houses move away from showing proper couture collections. Givenchy, for instance, another LVMH subsidiary, announced in December 2012 that it would not show a couture collection for Spring/Summer 2013, after failing to show the season prior. The house has since ceased all formal couture presentations, thereby, alienating itself from the list of official haute couture houses as designated by the Fédération française de la couture, du prêt-à-porter des couturiers et des créateurs de mode. The bottom line for the brand, which is helmed by Riccardo Tisci, (as well as many other brands) is certainly more strongly tied to its ready-to-wear, fragrances, and accessories collections. As such, it appears it just made more sense for Givenchy to focus on them (and an increased international retail structure), while still making custom pieces without having to stage costly bi-annual events.

Growth in terms of couture may not be entirely surprising, though. While, yes, the number of couture clients has decreased dramatically since the 1950's, which brought the rise of prêt–à–porter (aka ready-to-wear clothing), there is an ongoing resurgence of clients coming from new markets. Recent estimates suggest that the current client base for couture is rumored to fall between a couple of thousand and mere hundreds, with Asian Pacific, Middle Eastern, and Russian women, in particular, supplanting the dwindling traditional European-based customers.

"Jean Paul Gaultier is one of the few couturiers today who will actually talk numbers," Alexander Fury wrote early this month. “There are between 60 and 80,” Gaultier says of his clientele. “But the number has actually been growing.” In addition to growth, the couture client is getting younger. Donatella Versace, testified to this, saying she does not necessarily design with older women, the classic couture clients, in mind these days. Of her couture clients, in general, the head of Versace said: “We have much younger, much more international access to couture through the internet. The clothes I did in Paris are not for a grande dame de Paris. She can’t wear it. I don’t want her to wear it, basically!”

Of the 2012 couture season, the Guardian wrote:

Entire front rows - particularly at shows by Stéphane Rolland, Zuhair Murad and Giorgio Armani - have comprised young Middle and Far Eastern women. From Qatar, Bobor al Thani, 21, and her sister, Maha, 23, who sat front row at Zuhair Murad, are typical of today's couture clients.

Fellow couturier, Giambattista Valli, echoed this sentiment, to an extent, telling Fury: “My customers... I can say 28 to 38 is the core." Alexis Mabille, yet another couturier, has "girls as young as 12 as couture clients." He told Vogue last year, "I was in a fitting recently and a mother bought a prom dress for her daughter there and then. The market has evolved." Evolved, it has. Not only in terms of age, but also in terms of region and in terms of growth.

Such a shift in scope suggests that maybe the "just a few clients, all of whom can fit in one row at the house’s fashion shows," as Vogue put it this past season, is expanding. If we look to Russia alone, it is not uncommon to see the Russian Fashion Pack (think: Miroslava Duma, Elena Perminova, Vika Gazinskaya, Anya Ziourova, Nasiba Adilova, and Ulyana Sergeenko, the latter of which has launched her own couture collection), traipsing between fashion shows in couture garments. Similarly, there are the women of the Middle East, particularly the Saudis, Kuwaitis, Qataris and nationals of the United Arab Emirates and the royal families, which Reuters reported in 2011, are the biggest clients of haute couture. According to the media outlet, "their social calendar, which usually consists of 15-20 weddings a year and private parties every month, creates much bigger demand for couture than the occasional charity ball and high society party in Europe and in North America." And these families like Dior; "All the royal families of the Middle East are our customers," Catherine Riviere, head of haute couture at Christian Dior, told Reuters in 2011. Hence, the "switch" in the "currency of couture from dollars and euros to Saudi and Qatari riyals, Chinese yuans and Indian rupees."

Still up for debate, however, is profit. For the most part, couture is generally considered a loss. As Pierre Bergé, the original business partner of Yves Saint Laurent, notably said in 1987: “We don’t make a profit from couture. But it’s not a problem. It’s our advertising budget.” He was referring to resulting exposure in media and on red carpets. Other brands' ability to consistently bring in a profit based on couture collections can likely be implied from the swift decrease in houses that are official members of the Fédération française de la couture, du prêt-à-porter des couturiers et des créateurs de mode; not many houses are official haute couture houses anymore. In 2000, the number of official couture houses had dwindled down to just 18. The number is down even more in recent years. This speaks volumes to the state of couture, as does the movement towards a more couture take on ready-to-wear, which provides designers the opportunity to show a handful of garments of heightened craft without having to meet the standards of the Fédération française de la couture to be legally designated as a hate couture house.

Dior's growth in 2013 is promising and suggests that couture may not be a total windfall after all. A look at the figures for the nine-month period from July 1, 2013 to March 31, 2014 underscores very positive results following the appointment of Raf Simons as the head of Christian Dior Couture. For this period, the Christian Dior group recorded revenue of $31.9 billion, representing growth of 3% compared to the period from July 1, 2012 to March 31, 2013. Of this, $1.5 billion was derived from its couture collection, which reported a 14% increase in growth (+19% organic). In the 3rd quarter alone (the period from January to March 2014), sales from Christian Dior Couture amounted to $497 million, a figure up 13% compared to the previous year (+17% organic).

The results are certainly a testament to Simons and his oft-stated desire to modernize couture, a link that is especially important given the current landscape of fashion and its embodiment of the twenty-first-century woman's needs. At least part of the beauty of couture in today, the most modern of days, is its ability to tie together two seemingly opposition things (haute tradition and our needs in what is otherwise a high speed, digital age, complete with quick rapid turn-overs), and this is something Simons understands. His "transformative sensibility," as Style.com's Tim Blanks calls it, is nothing but a strength to Dior, especially when it comes to couture. Vogue similarly praised Simons's ability to find "modern relevance for haute couture" in connection with his Fall/Winter 2014 collection. Essentially, Raf seems to have found the perfect way to "reconcile the grandeur of the French tradition with the simple, efficient way—or rather, ways—women dress today" according both to the critics' reviews and the house's numbers.