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High Stakes

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T he principal language of retailing isn’t English, French, Chinese or anything else in today’s global tower of Babel — it’s data. And getting that data quickly and consistently across all markets is a business imperative.

No one knows this better than Longchamp, the iconic Paris-based fashion retailer whose handbags and accessories have adorned the world’s chicest women for more than 60 years. The company hit a language barrier, though, when gathering global sales and customer data from disparate systems threatened to slow expansion.

A new POS retail solution from Cegid enabled the retailer to significantly improve the customer experience on a global scale and continue its expansion in Europe, Asia, South America and the United States.

“Having the same system all over the world sends the message that we will be aggressive in establishing our presence outside of Europe,” CFO Andre Louit says.

Longchamp — which founder Jean Cassegrain named for the famous Parisian racetrack — operates about 230 locations worldwide (160 leased departments and 70 freestanding stores). The company is heavily concentrated in Europe, with some 30 stores and 75 leased departments, many in French departments in stores like Galeries Lafayette and Printemps.

The company has 11 freestanding stores in the U.S. in addition to departments in Saks, Nordstrom and Bloomingdale’s. An additional four U.S. stores will be opened this year, including a store in New York City’s prestigious Rockefeller Center. “We’re taking over the Movado space in the Center’s concourse, which runs from Fifth Avenue to the fountain,” Louit says. “It’s rather small at about 800 sq. ft. But it’s going to work out very well for us.”

Longchamp is also focusing on its U.S. department store distribution, Louit says. “We need to improve the way we look in Nordstrom’s, Bloomingdale’s and Saks, and there is room for us to grow in Neiman Marcus. It won’t happen overnight, but we have to show them we are Neiman material and how we can draw an interesting crowd for them.”

In the increasingly lucrative Asian region, Longchamp has 22 freestanding stores in Hong Kong, Taiwan, Japan and China, in addition to 100 leased departments.

“It’s important for us to establish a strong presence in [China] and we are planning a total of 10 more stores this year,” Louit says. “Frankly, Kowloon is the place to be. ... Chinese coming from the mainland shop in Kowloon because it’s more Chinese-oriented and Chinese-friendly. That’s where all the big retail players are and now we have a great space. Space is key in showing you are a strong brand in China.”

The major growth in Europe will be outside France, Louit says. “We still have a lot of potential in the U.K. and Germany. In Italy, we’re opening our first freestanding store this year in Milan. This will put us on the fashion map, and hopefully we can use it as a springboard for the rest of the Italian market, which is the key to being an international brand.”

Louit is also excited about prospects in South America, particularly Brazil. “We’ve had a store in Sao Paulo for the past four years in a very exclusive mall and we’re going to open two more locations in 2012 that will be unlike anything in the U.S. and Europe,” he says. “There are 200 million people living in Brazil, and eventually we should do as much business there as we do in the U.S.”

Comparability is key
The greatest impediment to Longchamp’s global growth was outmoded POS software that made it difficult for the company to adapt to local markets. “The brand’s positioning in the fashion market requires us to renew our product ranges quickly,” Louit says. “Speed has become a performance criterion in our market and we must have the right tools that enable us to achieve it.

“We had major difficulties in pulling data together,” he says. “When we wanted consolidated net sales we had to gather them from different systems. ... This led to problems in benchmarking because we had to adjust the figures to make them comparable. That kept us from focusing on data capture, and that’s the key in the retail business.”

Longchamp has been sitting on a gold mine of customer knowledge — relevant data, like customers’ age range and whether they’re buying for themselves or gifts. “But if you don’t have the right system or if you spend too much time trying to get two different ones to work together, then you’re spending less time on improving your business,” Louit says. “In some cases, we didn’t have the data because the systems were not actually configured to give meaningful information from one country to another.”

Longchamp was no stranger to Cegid, having worked with the company in Europe for nearly 10 years. In 2008, Longchamp used two Paris stores to test Cegid’s newest system, which can run in all of the company’s markets. The rest of Longchamp’s freestanding stores in Europe joined the system in 2009; freestanding stores in the United States and Japanese operations were added in 2010.

Japan was somewhat problematic due to the difficulty of translating Japanese into French, but “it’s a big market for us with 60 leased departments and 10 freestanding stores,” Louit says. “Having the same data for Japan and Europe is key.”

Cegid was adopted for all 45 leased departments in France last year; the company is in the process of implementing Cegid for the 30 stores in China, and expects to include Korea by the end of 2012.

“It’s a long process to train people to run their business the Longchamp way, but it’s a way to make sure retail operations and data are consistent in all key markets,” Louit says. “We’re also getting the data much faster and in a more consolidated way than we used to. Therefore, corporate in Paris can look at figures worldwide and know how a product line is doing in each area at the same time.”