Louis Vuitton Case Study

Louis Vuitton: New product introductions vs. product availability In the spring of 2004, Mr. Marcello Bottoli, CEO of Louis Vuitton, the largest and most profitable subsidiary of LVMH (Louis Vuitton-Moet Hennessy), the #1 luxury goods company in the world, was called upon to arbitrate a ongoing conflict between Mr. Jean-Marc Loubier, the company’s vice president for marketing and sales, and Mr. Emmanuel Mathieu, the vice president for manufacturing and logistics.

For several months, these two senior managers had been bickering about how to solve the out-of-stock problem Louis Vuitton’s 300 company-owned stores around the world were increasingly frequently faced with. Jean-Marc Loubier blamed the situation on the lack of flexibility and responsiveness of the company’s supply chain while Emmanuel Mathieu faulted the recent increase in new product introductions, combined with very poor forecasting of demand. Marcello Bottoli had mixed feelings about the whole issue.

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On the one hand, close to perfect quality was critical in a business where customers might be paying up to €1000 for a pair of shoes and €3000 for a handbag, and he felt very reluctant to disrupt Louis Vuitton’s traditional and proven manufacturing process. On the other hand, the rapid pace of new product introductions had been a decisive factor in the company’s 20% average growth rate in the previous three years and, in a business like that of Louis Vuitton, it was very difficult to predict how customers would respond to new products, no matter how much money, time and effort were spent on market research.

Still, despite the advantages resulting from the snob-appeal attached to those products that turned out being hard to purchase, the opportunity cost of stores being out of products customers wanted had to be very high.

So Marcello Bottoli was determined to find an appropriate solution to the problem very rapidly. The Luxury Good Industry Luxury goods have alternatively been described as “products no one needs” or as “items that serve little purpose in the lives of consumers, except to fulfill dreams”.

With such a fuzzy definition, it was no wonder the precise boundaries of the “luxury goods industry” remained blurred, at best. While haute couture, perfume and jewelry unquestionably belonged to the universe of luxury, segments of many other industries such as the hotel business, the automobile industry, wine and spirits, or even the airline industry might also have qualified as luxury businesses. Very broadly speaking, products traditionally considered to be luxury goods pertained to two main categories: 1.

Products targeted at individuals, which were often derived in one way or another from haute couture.

This first category of luxury goods included such products as designer clothes, leather goods, shoes, eyeglasses, jewellery, watches, accessories, perfumes and cosmetics. Demand for fashion-related items was growing very rapidly. This growth was fuelled primarily by the ever expanding variety of accessory lines offered by luxury brands. In contrast, jewellery and watches were experiencing much slower growth. . Home furnishings and decoration, a more recent development in the luxury goods sector; this primarily covered china, crystal and silverware, and also included household linen, lighting and some furniture.

This second category was growing very rapidly but only accounted for a fraction of the whole sector. Overall, the luxury-goods sector had enjoyed very rapid growth for over 20 years. This was made possible by progressively opening up the market to a much wider range of customers.

Very wealthy clients had traditionally been the major segment targeted by luxury brands but, in more recent years, the market was opening up to a wider set of potential buyers. Luxury goods were no longer reserved to an elite, but had come within reach of an increasing number of people. These new customers were younger and made more occasional purchases.

Sales were very seasonal and purchases made during the holiday season accounted for a disproportionate share of the business. Customers of such expensive items were very demanding. And as luxury goods were by no eans essential, sales were very sensitive to the overall economic climate. Most top luxury brands originated from either France or Italy and, in more recent years, from a few other countries, Spain and the United States in particular.

Two major types of companies operated in the luxury-goods business: on the one hand, large conglomerates built-up through the acquisition of numerous specialized brands had emerged during the 1980s and 1990s. The three world leaders were LVMH (Louis-Vuitton-Moet-Hennessy), Richemont which owned such famous brands as Cartier, Lancel, Van Cleef ; Arpels, Montblanc,.

. and Gucci, owner of Yves Saint Laurent, Balenciaga, Stella McCartney and Boucheron among others. On the other hand, small, often family-owned companies such as Hermes, Lonchamp or Rolex had also managed to thrive in the luxury goods business. In recent years, the luxury goods sector had been hit by a wave of mergers and acquisitions, with over 100 brands being taken over in 2000 and 2001 alone. Western Europe, North America and South-East Asia were the three largest markets for luxury brands.

Asia, and most notably Japan, had accounted for a major portion of the growth of the industry.

But in the second half of the 90s, the economic downturn in Asia had led many luxury brands to focus their efforts on North America as well as on other emerging parts of the world such as South America, Eastern Europe or India. LVMH Formed in 1987, LVMH rapidly expanded to become the world leader in luxury goods. In 2003 it achieved €12 billions in sales with an 18% operating margin and a 6% net margin. The company employed 54,000 people worldwide (63% of whom were based outside of France) and owned over 1500 retail outlets throughout the world.

In 1999 and 2000, LVMH’s sales grew 23% and 35% respectively, with net profits in the range of 8% to 10%. In 2001 and 2002, LVMH registered lower growth rates (3. 8% only in 2002) because of the downturn in the global economy, of unfavorable exchange rates, and also because of poor performance in several of its newly acquired businesses (in particular in watches, jewellery and retailing). It took Bernard Arnault, the CEO of the company, less than a dozen years to build up LVMH through the acquisition of numerous luxury brands, expansion into retailing and an aggressive globalization strategy.

LVMH was named after the first two companies that were merged in 1987 to create the company: the luggage and leather-goods maker Louis Vuitton and the Champagne and Cognac producer Moet-Hennessy. In subsequent years, many more famous luxury goods producers were taken over and added to the conglomerate’s brand portfolio: Christian Dior, Guerlain, Kenzo, Donna Karan, Celine, Dom Perignon, Tag Heuer, Loewe… LVMH also entered selective retailing by taking over DFS (Duty Free Shopping, the world’s largest chain of airport shops) in 1996 and Sephora in 1997.

LVMH’s expansion into retailing proved less successful than expected: DFS saw its profits drop 66% and its sales decline by 16% the year after it was acquired; this was blamed primarily on bad timing, with Asia, where most DFS stores were located, entering a deep recession shortly after the acquisition by LVMH was carried out. In 2003, LVMH owned over 50 well-known brands operating in five main sectors: Wines ; Spirits (which accounted for 18% of sales), Fashion ; Leather goods (35% of sales), Perfumes ; Cosmetics (18% of sales), Watches ; Jewellery (4% of sales) and Selective Retailing (25% of sales).

Appendix #1 lists the main brands controlled by LVMH. The two divisions on the basis of which LVMH was originally founded (Fashion ; Leather goods and Wines ; Spirits) were clearly the most profitable, with 2003 operating margins of 32% and 38% respectively. LVMH’s sales were fairly evenly distributed between their three main geographic markets: Europe accounted for 37% of total sales, Asia for 30% and the United States for 27%.

While each individual brand enjoyed a great deal of autonomy, LVMH nevertheless tried to leverage potential synergies existing within the entire company. For example, outlet locations were closely coordinated across brands in order to benefit from clustering effects (the idea was for customers to be attracted by one brand’s store and then drift on to other luxury brand outlets, which allowed for enhanced cross selling). Also, in ll countries except France, all the brands operating under the same corporate division would share the same vice president for finance and the same VP for human resources: “This allows us to transfer salespeople from one store to another or to appoint as managers of a new store people who have already demonstrated their abilities working for a different brand” explained one of LVMH’s senior managers. Louis Vuitton was clearly one of LVMH’s flagship brands.

Though the company did not disclose detailed figures on each brand[1], it was estimated that Louis Vuitton alone accounted for about 80% of the total sales of the Fashion ; Leather goods division. Also, according to most analysts, Louis Vuitton contributed close to 75% of LVMH’s total profit.

Louis Vuitton Set up in 1854 by a young trunk-maker by the name of Louis Vuitton, the company started out by designing and manufacturing innovative stackable trunks and by marketing them through a company-owned sales outlet located in Paris.

Then, in 1876, the company introduced luxury trunks with detachable frames. Initial success enabled the firm to set up a store in London as early as 1885. Louis Vuitton’s son, Georges, created the legendary Monogram design that incorporated his father’s LV signature that was to become famous the world around. In 1959, Georges’ grandson invented a new chemical process to produce a highly resistant yet soft coated canvas to be used for both stiff luggage and soft bags.

The Monogram collection still accounted for over 50% of the company’s global sales in 2003!

In more recent years, further classic leather-goods lines were launched and turned out being highly successful. In 1985, the Epi collection was introduced, first in black and brown shades then expanded to include new bright colors. The Taiga line was launched in 1993, followed by the Cuirs Exotiques line in 1995. The Damier line was manufactured on a large scale in 1996 for the Monogram’s 100th anniversary and was such a success that it soon became a permanent Louis Vuitton collection. Louis Vuitton’s major expansion occurred quite late, under the chairmanship f Henri Racamier, a retired executive and a graduate of HEC, who happened to be married to an heiress of the Vuitton family.

In 1977, when Racamier took over the family-run company, total sales were about €10 million; by 1987 they had increased to over €600 million. In 1987, Henri Racamier decided to merge Louis Vuitton with Moet-Hennessy to form LVMH. One year later, Bernard Arnault, who was then the CEO of Dior, made a takeover bid for the recently formed LVMH group; after a long and bitter legal battle, Arnault eventually managed to take over the company in 1990.

In 2004, Louis Vuitton was still the largest and by far the most profitable subsidiary of LVMH. 2003 sales were estimated to be around €3. 5 billion.

From 1987 to 2003, Louis Vuitton enjoyed an average annual growth rate in the range of 12%. Operating profit was estimated to be about 45%, way above the industry average of 25%. Leather goods, in particular the legendary Monogram collection of luggage and handbags, continued being the company’s main line of business.

In 2003, Asian sales accounted for 50% of the company’s business and Japan alone accounted for 30%. The company employed 9,500 people, operated 8 plants and over 300 stores worldwide. 60% of the workforce was based outside France.

Louis Vuitton’s lines of business Louis Vuitton organized its business into four major product lines: – “Leather goods”, essentially bags and luggage –most of which are in fact not made primarily of leather– were the company’s core business. This business accounted for an overwhelming portion of total sales.

Most leather goods collections were classic products with extremely long life cycles – several decades in many cases -, while fashion-driven products with a short life span only accounted for 20% of sales. – “Shoes” were a recent product line extension for the company. Shoe designs were highly seasonal and most models had to be renewed very frequently, at least twice a year. – “Designer clothes and ready-to-wear lines” came in two annual collections, one in the winter and one in the summer.

In addition, more specific lines of clothes were produced on special occasions, such as the Louis Vuitton Cup (a major ailing competition sponsored by the brand and considered to be the second most prestigious sailing event in the world, second only to the famous America’s Cup). – “Accessories”, that included watches, eyeglasses, perfumes, jewellery and writing accessories were a very diverse group of products, most of which had a very short life cycle. It was not until 1998 that Louis Vuitton departed from its exclusive focus on bags and luggage. That year, the company introduced for the very first time both a line of shoes and a collection of ready-to-wear clothes.

Watches were introduced in 2002 and it was not until 2004 that the first full line of Louis Vuitton jewellery was created.

Louis Vuitton outsourced the production of all its accessories and the manufacturing of its shoes. Despite all these various line extensions, leather goods still accounted for 87% of the company’s total sales in 2003. As it was the case with most luxury goods firms, Louis Vuitton’s cost of goods sold only accounted for a small fraction of total costs. According to most estimates, COGS was no more than 15% of total sales.

In turn, logistics accounted for 13% of COGS.

Despite very high design and marketing costs, Louis Vuitton’s operating margin was estimated to be at least 45%. Manufacturing and logistics Louis Vuitton relied on a limited number of highly specialized suppliers, most of which were based in France and in a few neighboring European countries. Major raw materials were leather and canvas. Louis Vuitton’s purchases were thought to account for over 50% of the global production of the grade of soft leather that the company used.

All other components, such as clasps and clips, were made to order and accounted for only a very minor portion of costs.

It took on average 6 to 8 weeks for major supplies to be delivered. As a consequence, Louis Vuitton maintained 2 ? months of raw material inventory. The only product line that Louis Vuitton manufactured in-house was its “leather goods”. The 1200 SKUs (stock keeping units) in this line were manufactured in 8 facilities (6 were located in France, 1 in Spain and 1 in the US) employing a total labor force of 3,600.

A major motivation for maintaining most manufacturing activities in France was the “made in France” label which was seen as very valuable by some customers, notably in Asia.

The plant located in the US only served that local market though many products sold in North America were still shipped from abroad. Louis Vuitton occasionally outsourced some manufacturing when production capacity was too tight. Production planning – as well as raw materials procurements – was scheduled based on volumes forecasted by the logistics department.

A tradition of craftsmanship continued to prevail within the Louis Vuitton manufacturing process. One facility still produced customized, made-to-order trunks; 100 such trunks, each requiring about 110 hours of work – and selling for about €12,000 -, were produced every year. And, strange as it may seem, this tiny market was growing by 20%! Even for more “standard” products, the manufacturing process was very labor intensive, required highly skilled employees and was aimed at ensuring very high quality standards.

It was estimated that over 80% of the tasks carried out in the manufacturing of a Louis Vuitton bag were done by hand; a team of 24 could make no more than 120 handbags per day. As a consequence, training was essential. In particular, workers were trained for months before new product introductions. Nevertheless, some tasks were highly automated and Louis Vuitton took great pride in how it was able to successfully combine sophisticated manufacturing technology with highly skilled craftsmanship.

Multi-tasking within the manufacturing process was widespread, allowing for a great deal of flexibility and responsiveness.

Average manufacturing cycle-time for bags was 10 days. Because of steady growth in sales, the number of manufacturing facilities increased dramatically after 1995. From 1999 to 2004, four new plants were set up to satisfy the rapidly increasing demand for Louis Vuitton products. A single warehouse located in Cergy-Pontoise, France, globally centralized the logistics function for all plants. Its capacity was doubled between 2000 and 2003.

Goods manufactured in Louis Vuitton’s European plants were forwarded daily to the logistics center.

On average, products remained for about a month in storage at Cergy-Pontoise. In addition to its leading role in organizing flows and managing inventory, the logistics center also handled returns (faulty, damaged, out-of-fashion and other unsold products). On average, 2% of all fashion-related, short-life-cycle products had to be disposed of every year. This was a heartbreaker and was perceived very negatively within a company that prided itself with manufacturing such high-quality –and expensive- products.

As Emmanuel Mathieu, the vice president for manufacturing and logistics put it: “if our marketing staff were better able to anticipate demand, or were in less of a hurry to stack stores up with products for which we have no sales record, I am convinced we could cut the number of returns in half”.

Louis Vuitton also operated 5 backup warehouses throughout the world. They provided the company with storage facilities in areas where operating out of the central logistics center would have proved too complicated because of distance or of difficult access. Distribution Louis Vuitton-owned stores handled a large share of the company’s sales.

Although Louis Vuitton products were available the world over, most company-owned retail outlets were located in Europe, the US and Japan. The total number of such outlets grew from 230 in 1998 to over 300 in 2003.

In addition, Louis Vuitton leased specific areas in department stores which were know as “shops in the shops” and covered about 45 to 50 square meters in shopping space. About 50 of the 300 Louis Vuitton stores carry all major product categories: leather goods, shoes, designer clothes and accessories; 100 of them carry leather goods and shoes while the rest only offer leather goods.

Louis Vuitton had been expanding its retail network into new regions of the world: in 2003, it opened its first stores in India and in Russia and created a 900 square meter store in Tokyo; in 2004, it opened its first store in South Africa, added new stores in China and Japan and expanded its Paris flagship store to 1,600 square meters. Once a month, all store managers had to draw up an estimate of their replenishment requirements and place an order with the company’s central logistics center in Cergy-Pontoise. These orders were then recorded and processed: availability of the requested products was checked and shipping organized.

All shipping had traditionally been by boat though, in recent years, the company had sometimes had to turn to air freight in order to speed up delivery on long overdue items. Indeed, lack of availability had become an increasingly frequent problem and had resulted in a sharp increase in transportation costs. Marketing, sponsoring and communication Luxury goods require significant investments in marketing, sponsoring and media coverage. In order to bolster its growth Louis Vuitton increased its marketing budget 20% in 2003. Still, advertising expenses accounted for only about 5% of Louis Vuitton’s sales that year.

0% of Louis Vuitton’s advertising spending was aimed at enhancing the overall image of the brand as conveyed by the highly popular classic products such as the Buckett bag or the Monogram, Epi and Damier leather goods lines. These marketing investments went to advertising campaigns featuring celebrities and to sponsoring prestigious events, such as the Louis Vuitton and America’s sailing cups or the Louis Vuitton Classic, a very upscale gathering of vintage automobiles. The remainder of Louis Vuitton’s advertising investment was specifically aimed at supporting new product introductions.

Shoes, designer clothes and accessories, as well as some special leather goods collections, were primarily seasonal products with a short life cycle, and required a lot of marketing in order to maximize sales during the first few months, sometimes even weeks, following their market introduction. For example, with their winter collection of designer clothes, Louis Vuitton introduced a little “week-end purse” called Upton, a Peonia bag for carrying around a camera and a Bloomington film case.

All these products were available in dark colors for men and in white or pastel shades for women.

These three products were not expected to be available for more than a few months. Because of their short life cycle, such products often needed to be discounted significantly if they were not immediately as successful as expected. 18% of all seasonal products had to be discounted, on average 30% below their list price; worse still, most products that ended up being disposed of were products that Louis Vuitton had not been able to sell despite heavy discounting. In addition to traditional marketing, Louis Vuitton spent about €8 million to fight illegal imitation of its products. Counterfeiting was indeed a critical and growing concern.

It was estimated that in the early 21st century, the market bought as many fake Louis Vuitton bags as it did genuine ones. Marcello Bottoli’s dilemma Because LVMH was so dependent on Louis Vuitton for its own profitability, Marcello Bottoli was feeling a lot of pressure from corporate headquarters. He knew he had to increase, or at the very least maintain, the high profit level Louis Vuitton had enjoyed over the past few years. With air traffic down post 9/11, the Sars crisis still lingering on in Asia and a lot of uncertainty about the future of the global economy, he knew it would not be an easy task.

Marcello Bottoli was particularly concerned by the issue over which Jean-Marc Loubier and Emmanuel Mathieu had been disagreeing for the last few months.

He felt that the intertwined problems affecting product availability, new product introductions and escalating logistics costs could seriously affect Louis Vuitton’s growth and profitability. On the one hand, product availability was down, there was no doubt about that. This was sometimes good news, when a product was so successful that it was impossible for the company to meet demand.

In 2004, a new bag in the Monogram collection, designed by Japanese artiste Takashi Murakami, had created such a frenzy and was generating so much interest that customers had to sign up on a waiting list to eventually be able to purchase one. All too often though, customers were not able to purchase the item they wanted because the store was out of their size, out of the color they wanted or out of a particular model. It had been estimated that, on average, out of a total of 100 customers who intended to make a purchase in a Louis Vuitton store, 8 found that the item they had wanted to buy was not available.

0% of these dissatisfied customers ended up buying a different item from the shop immediately; 20% postponed their purchase and returned at a later date. The others either turned to other luxury brands (about 40% of dissatisfied customers) or went for a totally different gift idea than what they had originally intended; in both cases, the sale was forever lost for Louis Vuitton. In Tokyo’s recently opened store, those lines that most suffered from availability problems were newly-introduced, fashion-related products.

Stores faced even greater shortages during the holiday shopping season; sales during the second week of December were almost always below expectations, not because of lower than anticipated demand, but because of too numerous out-of-stock problems. According to Mrs.

Osakei, manager of the new Tokyo store: “One out of every 5 customers that steps in to buy a new, fashion product, cannot find what he or she came to buy. With our classic lines, it is only 2 out of every 100 customers that cannot get what they want.

If stores could be supplied much more often, on the basis of actual sales, rather than on demand forecasts, I am convinced we would be able to satisfy at least 75% of those customers that we currently disappoint by not holding the item they want, and who walk out without making a purchase”. Marcello Bottoli was also concerned that these availability problems might have a negative impact on how customers perceived service in Louis Vuitton stores. In order to address the problem, stores were increasingly placing larger orders for those goods they believed would be in high demand.

This only confounded the problem.

For one, it moved the problem back one step to the logistics center and to manufacturing. With tight production capacity, plants were not able to respond adequately, unless they curtailed production of other product lines. Also, it was creating problems within the stores themselves. Given the limited space available for storage in the stores, larger orders for some products led to displacing others and, at best, resulted in moving the availability problem around; in most cases, it ended up making matters worse because new products with uncertain demand were displacing more classic items for which demand was very stable.

In addition to these shortage issues, Louis Vuitton was facing rapidly increasing logistics costs. Freight costs had risen steeply over the past couple of years because when out-of-stock problems became too critical at a particular store, goods were flown to distant destinations as an emergency response. Storage costs were also rising because inventories tended to grow, in particular with retail outlets expanding the amount of store space allocated to inventory. The table below lists the average share of store space allotted to shopping areas in Louis Vuitton stores in different areas of the world: | | | | | | | | |France |Europe |Japan |Asia |South America |North America | | | | | | | | | |Shopping area / | | | | | | | |total store space |66. % |95. 0% |78.

0% |81. 9% |78. 8% |91. 0% | Merchandising consultants had recommended that Louis Vuitton stores convert some of their current storage space into more shopping area, in order to make better use of the overall store space available. This was predicted to allow for a 3% increase in sales, keeping store surface constant, and provided there were enough demand.

The Cergy Pontoise logistics center had also seen the volume of inventory increase by an estimated 20%.

By 2004, goods spent an average of 4. 5 months in warehousing, with some references lying around in storage for 6 months or more. Finally, manufacturing costs were also on the rise with outsourcing and overtime becoming more widespread.

While Jean-Marc Loubier and several other managers in the marketing team had suggested generalizing air freight to all distant destinations in order to shorten delivery times, better stick to demand and be much more responsive in terms of store replenishment, Emmanuel Mathieu had responded that such a decision would double the company’s logistics costs and erode its profitability significantly. Marcello Bottoli wasn’t quite sure what he should make of all of this but knew he had to make a decision fast in order to solve the problems Louis Vuitton appeared to be having with its supply chain. Appendix #1 : LVMH brands and lines of business | | | | | |Wines ; Spirits |Fashion ; Leather goods |Perfumes ; Cosmetics |Watches ; Jewellery |Selective Retailing | | | | | | | |Moet ; Chandon |Louis Vuitton |Dior |TAG Heuer |DFS | | | | | | | |Dom Perignon |Celine |Givenchy |Dior |Miami cruiseline | | | | | | | |Mercier |Loewe |Guerlain |Ebel |Sephora | | | | | | | |Veuve Clicquot Ponsardin |Kenzo |Kenzo |Zenith |Le Bon Marche | | | | | | | |Canard Duchene |Givenchy |Hard Candy |Omas |Solstice | |Pommery | | | | | | | | | | |Krug |Christian Dior |Fresh |Chaumet |La Samaritaine | | | | | | | |Chandon Estates |Christian Lacroix |Bliss |Fred | | | | | | | | |Cloudy Bay |Marc Jacobs |Urban Decay | | | | | | | | | |Cape Mentelle |Berluti |Make Up For Ever | | | | | | | | | |Newton |Fendi |BeneFit Cosmetics | | | | | | | | | |MountAdam |Thomas Pink | | | | | | | | | | |Hennessy |Emilio Pucci | | | | | | | | | | |Hine |Donna Karan | | | | | | | | | | |Chateau d’Iquem | | | | | Appendix #2: Financial data on LVMH |2001 |2002 |2003 | |LVMH Consolidated Profit | | | | | |1560 |2008 |2182 | |Operating profit (€ million) | | | | | | 13 | 16 | 18 | |Operating margin (%) | | | | | | 10 | 556 | 723 | |Net profit (€ million) | | | | | | | | | | |2001 |2002 |2003 | |Sales by Business Line (€ million) | | | | | |2 232 |2 266 |2 116 | |Wine and Spirits | | | | | |3 612 |4 207 |4 149 | |Fashion and Leather Goods | | | | | |2 231 |2 336 |2 181 | |Perfumes and Cosmetics | | | | | | 548 | 552 | 502 |Watches and Jewelry | | | | | |3 493 |3 337 |3 039 | |Selective Retailing | | | | | | 113 | (5) | (25) | |Other Businesses | | | | | |12 229 |12 693 |11 962 | |Total | | | | | | | | | | |2001 |2002 |2003 | |Operating Profit by Business Line (€ million) | | | | | | 676 | 750 |796 | |Wine and Spirits | | | | | |1 274 |1 280 |1 311 | |Fashion and Leather Goods | | | | | | 149 | 161 |178 | |Perfumes and Cosmetics | | | | | | 27 | (13) |(48) | |Watches and Jewelry | | | | | | (213) | 20 |106 | |Selective Retailing | | | | | (353) | (190) |(161) | |Other Businesses | | | | | |1 560 |2 008 |2 182 | |Total | | | | | | | |Source : 2003 annual report | Appendix #3 : Transportation alternatives | | | | |Length |Cost | | | | | |Sea/Surface Freight |3 weeks |€300 / ton | | | | | |Air Freight |1 week |€1500 / ton | Appendix #4: Sample products of Louis Vuitton [pic] ———————– [1] As a consequence, all figures on Louis Vuitton presented in this case are analyst and case writer estimates ———————– [pic] Logistics center (Cergy-Pontoise Number of manufacturing facilities n Few retail outlets Many retail outlets [pic] 1 1 6 [pic] CERGY Appendix #5 : Louis Vuitton’s Global Presence