June 3, 2014 / 5:46 PM / 4 years ago

Longchamp CEO expects sales growth to double this year

PARIS (Reuters) - Longchamp, one of France’s leading handbag makers, expects sales growth to more than double this year, thanks to solid trading in the United States, a recovery in Europe and buoyant demand in China, its chief executive said on Tuesday.

Jean Cassegrain, Chief Executive of French luxury goods maker Longchamp, poses in a Longchamp store after an interview with Reuters in Paris February 6, 2012. REUTERS/John Schults

The brand, known for its best-selling Pliage bags that start at under 100 euros ($140), said it expects growth at constant exchange rates of around 10 percent this year. That would beatlast year’s 4 percent growth, which was held back by weak demand in Europe.

Founded in 1948, Longchamp, whose logo is a jockey on a race horse, is one of the last remaining family owned leather goods makers in France with a global presence.

It competes against brands such as Italian leather goods maker Furla and France’s Lancel, owned by Swiss luxury group Richemont.

Longchamp said it had not noticed any drop in the number of tourists in its shops, in contrast to other leather goods makers such as Salvatore Ferragamo and Gucci.

“For the moment, we have not really seen a decline in tourists,” Longchamp CEO Jean Cassegrain told Reuters in a telephone interview on Tuesday. “There are still many Asian tourists discovering our brand.”

Cassegrain said he expected sales this year to reach “more than 500 million euros” against 462 million in 2013, adding that the brand had also enjoyed a pick-up in trading in Japan over the past year.

Cassegrain estimated that about one third of buyers in France were tourists and predicted that Longchamp would have more Asian than European customers for the first time this year.

To better tap tourist demand, Cassegrain said Longchamp planned to open a third shop in Paris in November on the prestigious Champs Elysées, where he said an estimated 100 million people stroll every year.

Cassegrain said the prime spot, which it has coveted for more than four years, would be the brand’s biggest store in Europe, with 500 square meters of retail space split into two levels.

Medium-sized fashion brands are finding it increasingly difficult to compete against deep-pocketed rivals such as Prada, Gucci and Louis Vuitton to secure good locations in cities such as Paris as rent increases show no sign of abating.

Longchamp is one of many fashion brands that see investing in flagships in Europe as being as important for their image as for the sales they can rake in from tourists and local buyers.

“This is a strategic investment for the brand,” Cassegrain said. “It is important to be strong at home and our home is Paris.”

He added that the brand had opened a store in Rome and Barcelona in April, and a flagship on Regent Street in London at the end of last year, and that it had plans for a boutique in Munich in November and in Vienna in 2015.

Reporting by Astrid Wendlandt; Editing by Erica Billingham

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