ELIE SAAB: GROWTH OF A GLOBAL LUXURY BRAND
Nadia Shuayto wrote this case solely to provide material for class discussion. The author does not intend to illustrate either effective or ineffective handling of a managerial situation. The author may have disguised certain names and other identifying information to protect confidentiality.
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Copyright © 2012, Richard Ivey School of Business Foundation Version: 2012-07-26
INTRODUCTION
In the summer of 2010, Elie Saab, owner and chairman of ELIE SAAB (ES), was meeting with the company’s managing director, Chucri Cavalcanti, to discuss the company’s strategic goals and marketing strategy for the next five years. The primary goal was to grow the brand in new and existing markets while maintaining the brand’s exclusivity and position as one of the few remaining established brands in haute couture.1
Much of the company’s success in the previous five years was attributable to its rapid growth in the ready-to-wear (RTW) product line, as it became the company’s new line of business. Cavalcanti commented on ES’s success: “While revenues have been growing rapidly, 2007 showed a 27 per cent growth compared to 2006 and 2008 grew by a staggering 49 per cent compared to the previous year.”2
Operating expenses also decreased during the same time period (see Exhibit 1).
While the company was witnessing impressive growth, management was dealing with the challenges of selecting the right partners, identifying new markets with the greatest growth potential and, most importantly, protecting the brand from dilution. From the start, its goal was to “attract, select and maintain customers who place significance on high-end, one-of-a-kind designs made from the finest fabrics and materials.”3 BACKGROUND
The positioning of haute couture began when Saab opened his first workshop in Beirut. Saab had a vision from a young age of becoming a high-end fashion designer, and he was determined to see his vision become a reality. Saab noticed early on that there was a niche for haute couture between labels such as
1 ‘Haute couture’ is a French term meaning “high sewing” or “high dressmaking” that refers to the creation of exclusive, custom-made clothing.
2 Interview with Chucri Cavalcanti, February 2010.
3 Ibid.