CEO (LOEWE)

- Ms. Montague, you have spent many years working both in Germany and the United States. How would you define the brand “Spain” and “Spanish talent?”

For me it always comes back to the quality of the offer, the authenticity of the offer in Spain that is so interesting about the country, to live and to operate in. Whether you talk about gastronomy or leather goods, because they use top quality ingredients. And it´s passion and artisanal craftsmanship that is employed, in all different sectors, that makes it very authentic. There is a lot of passion involved, and we’re interested in seeing how small specialists can grow in this environment and become more international.

- In recent decades, the world of luxury has experienced an explosion, which Lipovetsky’s called “hyper luxury”: making luxury more accessible to many more people. How would you rate the health of the luxury sector in Spain? Has it been affected by the recession?

Yes, of course, the local customer in Spain has suffered in their indispensable income, every family is supporting more family members, and everybody is suffering. Our customers that shop at the luxury level tend to stay with us, but perhaps they are now buying less, yet they remain loyal to the brand.

We´ve grown during these years, I think at the bottom end of the market it´s grown. Anybody in Spain who is dealing with international markets has had opportunities, but working with only the local market domestically is difficult.

And so we work in 2 different ways, for the business to thrive and to keep a connection with our customers, which is really important. Working with our local customers, all of our brand tracking, which we do annually, shows that Loewe is always at the top of the charts: the most loved, with customers with the most intention to spend, so we know that the brand is loved and that there is an emotional connection to the brand. Where we are known we are really loved.

We felt it was really important to keep the connection with people, during this period that is more difficult, there is less spending power, but to be the brand of choice when there is an occasion. For instance, we have many non-commercial events, which was never the case in the past. Since then, we opened the Galeria Loewe, which was an opportunity, and when you talk about innovation I think this is the first one of its kind in the world actually. There are brands that have their own museums, Valenttino in Italy, but this is a high street top dollar rent location, 600 square feet, with no intention of selling anything.

- Today, LOEWE is a global brand, part of LVMH since 1996. You took up the role as CEO of LOEWE in September 2009. How was the company when you arrived, and how has it changed since your arrival?

We´ve recently had some engagement surveys, we´ve opened it up, much easier communication even if we multisided, less hierarchical than it was 5 years ago, meaning probably more international. In Spain we have fewer stores, employing more people and doing more turnover. In the global network, we have the same number of stores, but obviously with much better productivity. So productivity has increased, generally across the borders of the company. Since my arrival, communication has improved; I would say that the alignment behind the strategy has improved, that there is a very clear direction. There is a lot of focus on us doing this. We are going there, and if we need to shift , because we are small and agile and nimble in our management style, we will make tactical shifts, but we are still going to the right place.

- In September 2013, Irish-born fashion designer,  J.W. Anderson, was made creative director of LOEWE by Bernault Arnault, Chairman of LVMH, as an important step to bring the brand to the next level. Can you define this next level? How are you willing to transform tradition into an exciting vision for the future?

We were looking for somebody to bring us the next step in creativity, somebody with a new talent, powerful creative talent, who can leverage the talent of the house, we have incredible expertise in house, with a strong creative vision, design vision, this perfect execution can really be valued. We really wanted to get to the next step in modernity, in interpreting, giving us a very modern view of how Loewe can be as an international brand in the future. We are already celebrated as one of the top 10 luxury leather-goods houses in the world, but we want to be in the top 3. And to take this next step, in the new markets, we were looking for a fresh designer vision, and Jonathan really has that.

His design is very clean esthetically, very pure, and to deliver this, which is not so embellished, you need a precision execution, and that’s what this house can offer, which is rare. When you talk about luxury, for me what defines luxury are all things that are rare and precious. By definition, handcrafted, leather bags made in our factories in Spain are rare and precious—beautiful objects.

- Last year, LOEWE opened a Leather Innovation Centre + a School of Leather artisans. What is the process like of transmitting the craftsmanship techniques and traditions of LOEWE to younger generations?

In anticipation of future growth, we recognized that if Made in Spain is important to us, and I truly believe it is important to the brand and to the country, then we had to make a decision. If we wanted to protect this legacy of the brand, we needed to expand our production capacity in Madrid or in the south of Spain, where there is more of a labor pool. Moving to the south of Spain would have meant to duplicate the management, duplicating the capacity in Madrid would mean training skills, and we´ve choose that option.

We are working with the Comunidad de Madrid to bring people that want to be trained or retrained, to give them the opportunity to find a new career, and this tends to be a long-term career.

- LOEWE Amazona is the most recognizable and successful series of handbags. What makes LOEWE leather among the best in the world?

It´s definitely among the best. It´s the leather buyers—the skills that we have in house. We have a team of technicians and buyers, who are constantly researching, looking for new techniques, new finishes, how to make the leather lighter, softer, so that it drapes, it behaves like textile, so they challenge us and themselves all the time. It´s a continuous improvement process. Always looking for the new, and now more and more looking for environmentally sustainable supply, techniques, tracing back to the farm.

- Recently, the new Galleria Loewe was opened. This showcases the house’s most iconic products and leathers, and tells the story of its ongoing evolution. ¿Do you consider this to be the latest great idea that LOEWE had in Spain? Which is the next one?

It´s one of the things that we´ve done, and I’m proud of it because it was a truly innovative and pioneering initiative, which also came from an idea that we had an opportunistic space and we said ok, let´s do it. And it turned out really fast, because the team was so excited by the idea, and we managed to deliver something quite quickly that was exciting and exactly as we would have dreamed of. Sometimes a simple idea, when everybody is on the same wavelength, comes out quite fast.

Every store has a local flavor as well as telling the story of the brand. Heritage sometimes can become a burden if it´s not used as a platform from which to look forward into progress. So if we used it as a foundation as solid as you can stand on to move forward, then I love celebrating heritage. Otherwise it can become old; history alone is old.

The window displays over the years, which were famous in the 1940s, were quite famous. People came to Madrid to see the Loewe window displays, which I think they are doing again now. That’s another thing we are very proud of, our creativity in our windows; all of it goes back to the creativity of our designers over the years.

These days, where everything is so global, the media and digital platforms are important, social media is important. It´s a conversation with the client and customer, and as I said, everything is not about being commercial. We have a Foundation, which is a platform to express Spanish culture a little more abroad. In the Galeria, we have around 70% tourists. It´s actually surprising that around 30% of the visitors are locals, and repeated visitors, which is interesting.

- Brands that are based on emotions are much more effective than those based on rationality (ex: Apple). In what pillars do you base your communication strategy?

We have communicated a lot about being the masters in leather, talking about the quality and the craftsmanship of the products and how that’s quite unique in the competitive setting and at very high levels, particularly in the international markets, where in China the brand was not so well known. In Japan, quality is very important and so we´ve communicated a lot on that. And now we´ve started to communicate with Penelope Cruz, who is the most internationally recognized and the only Oscar winning actress from Spain, as a platform to be in this international out looking Spanish brand rooted in Spain. 

- In Europe, 2013 saw the opening of the first LOEWE store in Italy with a new space designed by Peter Marino in Piazza di Spagna in Rome. What do you predict for LOEWE’s growth potential in Europe?

Rome has been a great success, that was one of our proudest moments. That’s not many things, in a company of this age, that you can do for the first time. Whenever I come up with a new idea, “yeah we´ve tried that in 1953 and it didn´t work.”  The store has been a success since the first day it was opened, and on the strength of that we are opening in Milan this year—in July probably. We have good wholesale services in Italy, and maybe we´ll open a 3^rd one in time. Also we are looking at travel retail, expanding our airport presence, which I see very much as a flagship strategy and a window to the world. There are different views about airport retailing and some people see it as duty free, and a different level. I see it as a nurturing marketing opportunity for greater visibility, with high traffic of passenger numbers, so we are looking at different hubs around Europe. The first one we have leased is Frankfurt, which is an important hub. People usually come to Europe through London, Paris, Frankfurt, and Rome to a degree, so those are the interesting places for us, obviously Prague, where we are very present in, we had a pop-up store during all this transition period. We are present in almost every terminal going forward. Because we resale directly, we are very flexible. I think flexibility is also really important in this time, when you come back to what really works. Now you have to be creative; you have to innovate your way out. if I had sat down and waited until it´s over, we might have died in the meantime. There is never a good time to be brave. You have to be brave, to push on, to innovate, to move, to be constantly evolving and developing the business, pushing boundaries, because if we´re not, the market moves around us, and if you stay still, you essentially move backwards.  

Also with the circle Fortuny it´s interesting for me at this time, we´re talking about how to develop the voice of Spain internationally in terms of alta gama, really high-level products.

- LOEWE is one of the Spanish companies that Spaniards most identify with luxury. Do you think that LOEWE can represent the new “Spanish brand”, giving credibility to the concept of innovation and being an example of what the country would like to be known as?

Yes I hope so; we want to be part of that story, and because 2/3 of our business is outside of Spain, we´ll grow as we open new boundaries and new frontiers, and then of course, we are telling the story of Spain in the modern world in a new context as we evolve.

- You have always worked in international roles: your previous role was at Mulberry in London, where you spent a total of nine years, the last six as Chief Operating Officer. What have been the most important lessons that you have learned during your professional experience that you currently use in your daily management at LOEWE?

I didn’t expect many similarities between my roles. There have been very few similarities, and in many ways that is what was always appealing--Moving on to something different and tackling a new challenge. I don´t look backwards.

I learned that if you are true to the brand and really understand the soul of the brand and the spirit—where it´s come from and it´s assets—then celebrating those values is always appreciated by the public. When I start to feel uncomfortable about pushing forward, it´s usually just about the right amount. I think I am quite brave in making decisions, but probably not bold enough.

I know than Spain will love this brand more and more because, as we become more successful outside of Spain, Spaniards will find value and be proud of that.

- LOEWE in a year, ¿What are your personal expectations? What can HBR readers expect from LOEWE in one year?

We should expect to celebrate the Brand’s opening in Miami, in Milan, maybe Moscow. We´ll have a new website up, and we´ll be celebrating Jonathan’s first shades in Paris. Best in class team—ready to break new boundaries.