The story of la Maison Christian Louboutin is not linear. Since its creation in 1991, the brand has experienced quite a journey, transforming year after year without losing its identity. Evolving through diversification and geographical expansion, its CEO reminds us of the different stages the brand has experienced so far.
Alexis Mourot identifies three distinct periods in the evolution of la Maison Christian Louboutin. In its early days, the Paris shoe salon – known for its iconic red soles – faced difficulties breaking through. The shoe market was not strong, he says, and the “single product model was not taking off.”
In his first year of business, Christian Louboutin sold just 200 pairs. The brand started to test different distribution options but did not reap the benefits. “We tried a couple of franchises, in London and New York, but they went into bankruptcy,” Mourot reveals.
The second period, from the early 2000s to 2007, saw incremental growth, but it was only from the mid-2000s, thanks to the development of the US market, that the brand took off. Appearances in movies and television (including a 2002 episode of Sex and the City, which saw Sarah Jessica Parker’s Carrie Bradshaw wearing an iconic pair of pink ruffled Christian Louboutin sandals) contributed to a surge in popularity. At that point, the company’s co-founders realized that things were “getting a bit out of control” and decided to recruit someone to structure and support its growth.
Mourot joined the small team and the third period began. Under his leadership the brand has taken a portfolio approach to growth. Product diversification played a key role in the company’s growth. Mourot reveals: “Originally, we made 100% [of our business] in women’s shoes. Now, it’s 55% women’s shoes, 30% men’s shoes, and 15% leather goods. There is also beauty under license.”
Expanding geographically was a second crucial objective for the brand: “87% [of our business] was done in the US in 2007. Now, we are at 55% in the US, 30% in Europe, and 15% in Asia Pacific, with 40 international subsidiaries. Thanks to that, we can now say that we have gone from being a shoemaker specialist to an international maison of luxury accessories.”
This expansion was accompanied by a wider distribution. Seventeen years later, the CEO proudly shares: “We multiplied the business by 17. We started with only two or three stores. Now we own more than 160 boutiques.”
Almost unique in the fashion industry, but very close to where the origins of luxury lie, la Maison Christian Louboutin achieved recognition and worldwide awareness without advertising. Mourot – whose lengthy career includes VP of Finance at Yves Saint Laurent and high-profile roles managing global brands at LVMH – recalls, “When I started, Christian said, ‘We don’t advertise.’ Many of our partners, including department stores, said, ‘We understand you don’t have a budget because you are a small brand, but give us an ad and we will run it for free for you.’ And we said, ‘No guys, sorry, we don’t do ads at all.’ We have never had any advertising.”
Christian Louboutin himself still holds two different roles: shareholder and creative director. While this is more common in the fashion world than in other industries, this specificity can be a challenge in the management of a brand. Mourot explains how Christian Louboutin – the brand – managed to turn it into an advantage: “You have three parts: shareholders, CEO/management, and the creative designer. I call it the magic triangle, and it’s very important to make sure the three parts are aligned, and each has enough power. If the other two – the CEO and shareholders – are more powerful than the creative designer, it doesn’t work. When the parts align, it makes a very successful business. And if one of the three parts is not aligned anymore, or someone leaves the triangle, you have to do it again.”
Neither came from a big-money family; when the pandemic came, it was quite a shock because we did not have a godfather behind us.
This could be the key to why independent brands can not only survive but also thrive in a world of giants. This alignment is also key to protecting brand equity over time, Mourot believes: “Sometimes, especially after growth, you see brands losing part of their DNA. They undergo so many changes in terms of ownership that they do not understand the brand, the designer who came with the brand, or the brand equity.” This explains why today “a lot of brands in fashion are now studying their brand equity.”
It also raises the question of how la Maison Christian Louboutin has managed to retain its independent spirit despite the entry of new shareholders. “Independence is very important, but I think more important than being independent is making sure there is alignment between the three parts of the triangle,” Mourot says. He points out that the Covid-19 period played a significant role in the new ownership structure: “We like the number three, and we had three shareholders, but one left the company in 2016, so it meant there were only two shareholders left: Christian Louboutin and Bruno Chambelland. Neither came from a big-money family; when the pandemic came, it was quite a shock because we did not have a godfather behind us.”
The management team decided to look for a third shareholder, who would have a maximum stake of 24%, and weighed up various options. One was to go to the stock market, but this option was quickly rejected because the team considered that giving away 24% equity via an IPO would severely compromise the company’s independence and was not “going to protect [them].”
Another option was a part-sale to a bigger group, but when discussions began with one interested party it became apparent that it wanted much more than the company was prepared to part with, so this possibility was also quickly eliminated. A third option was private equity, which was appealing because potential PE partners “would be okay with the 24%.” However, a PE partner would also come with comparatively short-term goals and would likely seek an exit after five years or so – “and an exit was not for us.”
The only option left was a family office, which led to a meeting with Exor N.V., a family office controlled by the Agnelli family and one of Europe’s largest diversified holding companies, with total assets of €32 billion, including in Ferrari. Exor had very long-term goals, loved what la Maison Christian Louboutin was doing, and aligned with the triangle concept. It also identified a missing part of the company’s jigsaw: “They said, ‘You have reached a certain size, but what is your governance?’ And we did not have any kind of structured governance.”
Exor acquired a 24% stake in the company in March 2021 and helped it build its own governance, with a board structure. “This was very helpful,” Mourot explains. “We are still independent. We don’t receive requests asking to buy a share of the company. And we have a guarantor-protector – people know that, if something happens, there’s a bigger group [behind us].”
Despite having this support, Mourot is concerned about the long-term trend towards the concentration of the luxury fashion market in the hands of a few global companies, with analysts forecasting that the market share of the top eight fashion companies will grow from 30% in 2022 to 50% in 2032.
This begs the question of how la Maison Christian Louboutin’s DNA and heritage can be preserved and perpetuated while embracing new challenges and continuing to grow as a global brand. More generally, in such an increasingly concentrated industry, what space will there be for independent designers in the future? And what will happen to the company when its founder and artistic director retires, and that connection is lost?
Paradoxically, the upcoming changes to meet sustainability requirements and the corresponding shifts of consumer behavior will actually benefit la Maison Christian Louboutin. Its smaller volumes, its approach to rarity and creativity, its wariness of marketing on steroids, and its independent and entrepreneurial spirit, might well protect the brand’s social license in a world where society will have to reduce consumption and production to meet the planetary challenges that we’re facing.
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