Rafael Nadal’s Shoemaker Shows Why Small Is BeautifulAndrew Roberts
As luxury-goods companies such as LVMH Moet Hennessy Louis Vuitton SA struggle to reconcile their global presence with an exclusive cachet, the shoemaker to tennis champ Rafael Nadal says it’s benefiting from being small.
Sales of Corthay shoes, which can cost more than $10,000 for a bespoke pair, are growing “very strongly’” as wealthy shoppers increasingly seek rare and refined products, said Xavier De Royere, the French company’s chief executive officer.
“The ecosystem needs small fish,” De Royere said in an interview at closely-held Corthay’s workshop and store near Place Vendome in Paris. “You can’t have every single shopping mall in the world looking alike.”
Luxury demand is shifting as supply increases. To cater to the wealthiest shoppers who want products few others have, widely available brands such as Louis Vuitton and Kering SA- owned Gucci are curbing expansion and adding more expensive goods. LVMH last week reported profit that trailed analysts’ estimates amid weakening Asian demand at its fashion and leather-goods unit. Kering reports first-half earnings tomorrow.
“There is a contradiction between being distributed everywhere and being exclusive,” said Eraldo Poletto, CEO of handbag maker Furla SpA. “Luxury often just means expensive.”
The hunt for rarity plays to small elite brands such as Corthay that offer something new, according to Rahul Sharma, managing director of Neev Capital.
The shoemaker, founded in 1990 by Pierre Corthay, operates six stores in Europe, Asia and the Middle East and also sells its colorful footwear in retailers including Saks Inc. Prices for ready-to-wear models such as the Casanova Oxford start from about $1,500. The company has about 500 clients for its bespoke shoes, including Nadal and actors Clive Owen and Cate Blanchett.
“Customers are really happy to be somewhere different and somewhere small-scale,” said De Royere, who invested in Corthay in 2010 after almost 15 years at LVMH, where he worked for the Vuitton and Loewe brands.
Corthay’s size and preference for small stores also helps with distribution as larger luxury companies compete for the biggest, and best, selling space, according to De Royere. By offering something different, “we’re able to secure top-quality locations” next to brands such as LVMH-owned Fendi and Givenchy, while keeping the shopping experience intimate.
“We’re not fashion dictators,” said Pierre Corthay in a workshop under the store, surrounded by rolls of animal skin, including elephant hide. “But nice Corthay shoes can really help ugly suits.”
As Corthay opens more stores, including in New York next year, the challenge is to avoid “going too fast from hard-to-find to hard-to-miss,” said De Royere, citing Yves Carcelle, his former boss at Louis Vuitton. De Royere declined to disclose financial information.
“It’s a small baby that we’re trying to cherish and develop in a healthy way,” he said, “not force-feed him like foie gras.”