Alexandre Arnault’s re-imagination of a classic brand: Rimowa.
Photos taken from Rimowa’s Instagram Account
The Retail and Luxury Goods Conference at Harvard Business School (HBS) has always been an event that I look forward to every year. I come away from the conference having learned so much from the esteemed panel of speakers HBS invites and a notebook full of insights from the event. This year, the conference’s keynote speaker was Rimowa‘s CEO and President Alexandre Arnault. At just 26 years old, Arnault became the CEO of Rimowa in 2017, when the company was taken in by the LVMH group. Despite being acquired at a lofty €800 million valuation, Arnault had his work cut out for him in transforming a classic luggage brand into a modern item for Millenial and Gen Z consumers. In just three years, Arnault has completely reimagined the company, while still retaining its core identity in superior luggage craftsmanship and design. So, what has Arnault done and how has he done it? In his keynote speech, Arnault addressed a few critical decisions he made which have helped Rimowa become even more successful in the 21st-century retail marketplace.
1) New Leadership Style
Throughout his presentation, Arnault stressed the fact that he wanted to transform the brand’s internal identity from a traditional corporate management system to operating like a start-up. First, he emphasized the importance of everyone within the company identifying as a team, using “we, not I”. This group mentality allows for every stakeholder to take ownership of the successes and failures of the business as a whole. This attitude also helps to instill greater collaboration, unity, and trust within company culture. Arnault also implemented the practice of “engage. disagree. commit.,” meaning that decisions within the company are allowed to be challenged and disagreed upon, however, once a decision has been made, everyone must commit fully to its implementation. Similarly, this practice helps to focus and motivate employees towards a common goal, despite differences of opinion. The three other targets Arnault focuses on are “move fast and light, be design driven, and embrace the unknown,” core goals clearly tied to the Rimowa brand.
2) New Products and Collaborations
One of Arnault’s most defining features to the outside world is his age- at only 26 years old, Arnault began leading over a half a billion-dollar company. However, Arnault’s age just might be his greatest benefit. Arnault has the ability to understand the current and next generation of consumers. It was this insight that motivated him to increase the number of product launches Rimowa has per year. Rimowa’s number of new launches per year went from 8 in 2016 to a staggering 28 in 2019 per year. Rimowa has partnered with high-end and exclusive brands such as Supreme,- whose collaboration sold out in 16 seconds– Dior, and Moncler on these new product releases. Rimowa’s luggage is easily identifiable through design elements, such as its ribbed exterior shell, hard casing, and signature wheels. Therefore, this luggage provides a blank canvas for collaborating designers to express their own brand’s uniqueness, while still ensuring consumers know its a Rimowa product first and foremost- a clear win-win for both parties.
3) Revamped Brand Identity, but Retained Differentiator
Rimowa also went through a complete rebranding, some major changes being a redesigned logo, a new website, and a new slew of brand ambassadors, such as tennis star Roger Federer and the top model Adwoa Aboah. These changes have helped communicate a message to the world that Rimowa is now on the cutting edge and you should be paying attention. One thing that Arnault has made sure not to tamper with, however, is Rimowa’s classic design and craftsmanship, which is what retains the company’s true brand value. You can easily tell a Rimowa piece of luggage coming down the luggage shoot from any other black canvas rollie being churned out.
4) Celebrity Endorsements
Along with Rimowa’s new face has come new endorsers of the brand. Huge celebrities like basketball player LeBron James, Louis Vuitton’s artistic director Virgil Abloh, and Chef Nobu Matsuhisa, to name a few, have jumped on board in representing the company. The diversity in these high-achieving celebrities is especially key, demonstrating the luggage’s appeal to just about everyone who can dream big. Arnault notes that his focus on marketing, and especially social efforts, has paid off, given that their Instagram account has grown from having 38,000 followers in 2016 to 402,000 in 2019. What was once seen as an expensive piece of luggage is now a marker of adventure, status, achievement, and much more.
Lastly, Arnault notes that it was the major restructuring that took place that helped the company achieve significant gains within the retail marketplace. In terms of labor, Rimowa cut the number of people required for production and reallocated jobs to retail services, as a result of the company opening 77 new stores over the past 3 years. Additionally, a drastic evolution in their business model, going from uncontrolled wholesale to a precise retail operation, is one way the company achieved more financial stability. Arnault saw that the company needed greater control over their product and restructured its channel mix, providing only 25% of its product to wholesale compared to 75% previously, increasing retail distribution to 68% from 25%, and increasing e-commerce sales to 7% from 0%. Changes to the labor and channel mix have definitely paid off, resulting in an increase in annual revenue from €443 million in 2016 to €455 million in 2019.
All things considered, it will be interesting to see what Rimowa’s next move is in adapting to the retail challenges that the COVID-19 pandemic has raised. With traveling being drastically reduced and normal jet setting taking a pause, spending on luggage in the foreseeable future will take a major decline. Yet, one way Rimowa has shown to be adapting to the limitations of such a niche product is through product differentiation, having recently launched its own eyewear range. Looking back on all of the flexibility Rimowa displayed and changes it has been able to make over the past few years, although the future seems uncertain, I hope Rimowa is here to stay- and I think it will be.
The information and numbers shown in this article are derived from the keynote slides presented at the HBS Conference.
Ursula D. 