Introduction to Louis Vuitton
Louis Vuitton is the biggest name in luxury fashion right now. From its stately origins as a luggage manufacturer, designer Marc Jacobs used a relatively blank slate to push the brand into the modern era; not just joining the conversation but helping to write and reinvent the language too.
His departure opened the door for Nicolas Ghesquière from Balenciaga who has mastered and incorporated both future and past in the LV vision. The Louis Vuitton Collection is now a seasonal highpoint at Paris Fashion Week.
But for many, the name Louis Vuitton is synonymous with handbags. The LV bag’s uniquity on the streets of Tokyo or Beijing does nothing to diminish the bag’s desirability.
In fact, the opposite seems to be true. Vuitton, under the steely management of LMVH CEO Bernard Arnault, is still in the ascendancy and its women's bags collection leads the way.
Let’s take a closer look at the bags LV makes. Why stock has been a problem lately, and what the brand does with unsold lines.
About the bags
Louis Vuitton’s women’s bags are predominantly made from highest quality leather; many with the classic [and instantly recognisable] brown and tan logo effect, others with more subdued styling, colours and cuteness that nod to Chanel-level chic, YSL left-leaning sophistication, and some pop-culture infused, more youthful models.
You can expect metal parts, cutting, construction and stitching to be of the very highest standards with all LV bags.
But quality comes at a price. Shy of Hermes and certain bespoke bag makers, Louis Vuitton is the most sought after and therefore most expensive bag brand, with prices frequently hovering around or just below the £2,000 mark. Some of LV’s smaller bags are cheaper, although for newer models like the sporty/formal hybrid Twist, expect to pay more than £3,000.
How many bags do they make a year?
Numbers are hard to come by because LV, like most brands in the luxury sector, prefer to remain discrete on matters of supply and demand.
Louis Vuitton made profits [including clothing and other accessories] of around 10 million euros in 2021, indicating that production is not running slowly.
The ‘problem’ of scarcity is slightly mysterious then. The brand’s prices, like those in most of the luxury sector, have gone up in recent years, but this has been matched by a steady increase in demand, and LV has upped its production.
It seems likely that – rather than a stock or supply chain issue being a factor – LV has instead begun scaling down production of some of its more popular models [such as the Pochette Metis with its smaller dimensions, conservative pricing and oh-so-popular logo, colours and Saffiano leather finish] as it seeks to diversify and promote newer and more experimental bags.
This certainly ties in with the idea of the brand retaining and furthering its position at the top of the trend supply chain, whilst not letting profits fall.
What do they do with unsold bags now?
It’s shocking but true – Louis Vuitton [allegedly] disposes of unsold bags by burning them. The practice is not completely uncommon in the luxury sector [Burberry Handbags was also charged with burning unsold bags] and ensures that they cannot be stolen [ a problem that would increase if they’re left in a warehouse]. It also ensures, in the USA, that LV can reclaim duty payments if bags are destroyed this way. And of course, that air of exclusivity is maintained.
Louis Vuitton claims that no bags are destroyed in this manner and that their unwanted bags are either discounted or sold privately to employees.
Alongside [and probably ahead of] rivals like Gucci Handbags and Saint Laurent, Louis Vuitton sits atop the fashion world, and produces the most famous and sought-after bags in the luxury sector [overtaking, arguably, Prada Bags as the logo of choice some time ago].
Availability of some of its more popular models has been an issue, although this is probably nothing to do with supply chain problems and is just a matter of LV intelligently re-aligning its strategy.
Nevertheless, bags that don’t sell are allegedly destroyed by fire, a tactic that LV denies, but that keeps exclusivity high.
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