Yahoo Finance Sidney Toledano Shares Positive Outlook on Luxury in Saudi Arabia
Saudi Arabia is familiar territory for seasoned luxury executive Sidney Toledano. “I’m impressed by the Saudis,” said the former chief executive officer of LVMH Fashion Group and Dior and current adviser to chairman Bernard Arnault, in Riyadh.
He reflected on the market while speaking with Miles Socha, WWD’s international editor, at the Global Fashion Summit in the Kingdom. “I’ve been visiting for many, many years. We had a Dior in Riyadh 30 years ago, and it was very different times,” he said. “Back then women could not be working. But still you have a country that has always had very real experience in high fashion, more than most in the world.”
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The current market dynamics, driven by the huge youth population as well as the government’s liberalization plan, is clear wherever one looks, he said. “One doesn’t need a database to understand the evolution of this country. Just walk into stores today and the transformation is clear.
“I never liked the word fashion ‘industry’. I like using fashion ‘community’. The Ministry of Culture here realizes the core of fashion, above business, is about culture.”
During his visit, Toledano toured the ministry-supported state of the art production facility being developed by the Saudi Fashion Commission. “Here they have state-of-the-art machines. I am so impressed. I could see designers from France coming to use these types of machines.
“I see the potential is huge and education is the key building blocks. In our business, creatively, the drawing is a start. Then creatives have to produce a prototype and set up production. Without this, you can never see the products on a shelf.”
In his role as chairman of the board of Institut Français de la Mode, the French fashion school, Toledano revealed plans to expand the agenda for fashion education in the region with a partnership with the Saudi Fashion Commission. “Yesterday we signed an agreement to define a roadmap for transfer of knowledge. We aim to develop bachelor’s and master’s degree programs here. The partnership would be a win-win for both of us.
“Now everyone realizes the clients are here, so everyone is opening stores,” Toledano continued. “The Saudization means everyone working is Saudi, from managers to sales people. The passion they have for luxury brands is great. But we have to talk about training for local boutiques, having the right sales people. This is where we can help with the IFM.
“We have seen Saudi clients shopping all around the world. One day I hope you will have as many local clients shopping here as they do abroad.”
Toledano shared his wisdom on how to successfully navigate a commercially successful business in a highly creative industry, having had successful working relationships with creative icons at LVMH ranging from John Galliano to Karl Lagerfeld.
In describing the CEO-designer relationship as a “dance,” Toledano emphasized that the designer’s creative vision should lead and set the direction. “You’re dealing with very smart and intuitive people. The vision of the designer is key. If I see a CEO telling me ‘this is my vision,’ I say, ‘but we are doing high fashion, we need someone disruptive to set a vision, that comes from creative.’”
He advised against CEOs trying to drive the creative process based solely on business analyses, as that could stifle the necessary disruption and innovation needed in high fashion. “The CEO can then organize the supply chain, the factory, the events to allow them to have impact with their vision.”
Toledano stressed that while numbers and data are important, true success lies in creating products that people desire. He cautioned against solely focusing on short-term metrics like gross margins, as they may overlook the long-term desirability of a brand or product. “I see the numbers every morning. It takes maybe 10 minutes. Numbers are important. Yes, if you have a bad P&L you have to change something.”
But the most important aspect to the growth of the luxury fashion industry is desirability, he said. “Who needs another bag, wallet or pair of shoes? Fashion, provided you have a middle class who can move upward, which means improving income and enjoying life, then luxury fashion will continue.
“We are training the next generation in luxury and the world is changing. There are new tools, new countries and markets. But it’s still always driven by the same thing: the desire. I’m very optimistic,” he said.
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