NEW YORK (Reuters) - Oscar de la Renta would like to have a greater presence in Paris as the U.S.-based fashion house seeks to boost its overseas sales, but high rents preclude it from opening a store there for now, its chief executive said on Wednesday.
“Paris makes tremendous sense for us as a fashion capital, visibility-wise, but rents in Paris are really still very tough,” Alex Bolen said at the Reuters Global Luxury Summit in New York.
Instead, Oscar de la Renta is actively looking into opening a store in London, as the depreciation of the British pound has made doing business there more affordable, he said.
Bolen said Europe’s current debt crisis and the uncertainty in global stock markets was also giving him pause about the impact on luxury spending.
Expansion abroad should help Oscar de la Renta increase the ratio of sales from international markets. In the medium term, Bolen said he would like to see overseas sales account for about half of total sales, up from roughly a third now.
“We’ve been very focussed recently on our international expansion, which is a work in process,” he said, adding that Oscar de la Renta has beefed up its retail presence in addition to its wholesale business.
Bolen expects overall sales to triple in the next three to five years. He declined to say what the privately held company’s sales are currently.
HIGH AND LOW, WOMEN‘S AND MEN‘S
The company, best known for ultra-luxurious cocktail dresses and evening gowns, also sells high-end women’s sportswear. Like many fashion houses, it has expanded its product range in the wake of the global recession, catering to consumers’ newfound frugality. At the same time, Bolen said higher-end products were still selling.
“We continue to offer, and continue to sell, $20,000-plus off-the-rack women’s evening gowns,” Bolen said. On the other hand, he noted that a blouse that might have sold for $1,000 three years ago may now sell for $500.
“It’s not that we lowered prices. We manufactured differently,” he said.
In contrast with late 2008, when the supply of clothing outweighed consumer demand and led to steep discounts across the industry, Bolen said Oscar de la Renta’s stores sold so much of their merchandise this season at full price that its semi-annual sale event may miss its target.
“I actually think we’re going to not make our sales plan for the sale because we don’t have that much left,” Bolen said. “Our margin will be much better, but our top line will be less because we don’t have that much in the way of goods.”
Bolen said the current environment is such that “it’s OK to be out of stock on some things.” He added, “I’d much rather be there than where we were in ‘08.”
The semi-annual sale started Wednesday, 10 days later than last year, Bolen said, noting that the company was able to keep selling at full price longer this year as consumers moved away from the mind-set that they can wait for something to go on sale.
Bolen said Oscar de la Renta has begun exploring men’s clothes but is being very careful about it so as not to disappoint consumers.
“We are continuing to experiment with it. I want to do it, but I want to do it exactly the right way,” Bolen said, noting that the company could do some high-end casual wear with a made-to-measure suit service.
Asked about the role of Oscar de la Renta, the 77-year-old designer from the Dominican Republic who founded the company, Bolen said he is still “the chief everything.”
“Oscar is extremely vibrant. He loves his work. I don’t see that changing at any point,” Bolen said, adding that no succession plan was in place.
“Oscar has a team of very talented designers with whom he works. If Oscar tells me he wants to make a change, we’ll figure out the best way to deal with the change at the time.”
Reporting by Phil Wahba and Martinne Geller; editing by Michele Gershberg and John Wallace