Daniel Lalonde Works His Marketing Magic for LVMH

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The New York Sun

Daniel Lalonde, president and CEO of LVMH Watch and Jewelry for North America, looks like he’s stepped out of one of his company’s glossy catalogs for luxury brands such as TAG Heuer, Louis Vuitton, Moet & Chandon, and Christian Dior.


He exudes success. He’s tall, and he wears a smartly tailored striped suit, and, of course, the fabled TAG Heuer Carrera watch, which has been a market leader for 41 years. He’s also unfashionably late for the appointment.


That’s understandable. The Canadian-born Mr. Lalonde’s office is in Springfield, N.J., and on this day, he’s had multiple meetings for some of the renowned brands in the watch and jewelry division: TAG Heuer, which has some of the biggest-selling luxury watches after Rolex; Christian Dior, Chaumet, and Zenith watches; Omas pens, which cost anywhere from $250 to $5,000; and De Beers LV, the luxury retail venture of LVMH and the De Beers Diamond Company, among others.


“I’m having fun at this,” said Mr. Lalonde, who’s been at LVMH for three years, after five years as chief operating officer of Nestle’s Nespresso in Switzerland. During Mr. Lalonde’s time with Nespresso, which creates coffee-making technology and premium portioned coffee, it reached the no. 1 position in global sales for four straight years; he raised annual sales from $25 million in five countries to $360 million in 30 countries.


Previously, Mr. Lalonde was managing director of the retail-store division of Haagen-Dazs Europe. Using his earlier experience with the Rothschilds, and at a management consultancy in Paris, as well as the rigorous academic skills acquired while earning an MBA at France’s Insead, the ambitious mathematics graduate of Canada’s University of Waterloo transformed the ice-cream maker. He developed a network of 130 stores in 12 countries in a short time, tripling the business.


“The key was to surround oneself with smart people from different disciplines,” Mr. Lalonde said. “You have to set a very clear vision. A leader must find the time to explain that vision to his colleagues, and then he needs to summon the energy and wherewithal to mobilize talent. A leader must challenge the people around him and be challenged as well. You need to transmit to them the notion that business growth can only be generated by taking chances, by prudent risk.”


Now he’s brought his marketing magic to LVMH, doubling sales in America, which accounts for 25% of the company’s worldwide revenues. Last year, LVMH’s global sales were $16.1 billion, an increase of nearly $1 billion over 2003. Net income in 2004 was $1.29 billion, an increase of 39.7% from 2003.


“From the very start, I asked, ‘What will it take to double our business in America? Where could we create the opportunities for faster growth?’ And I set out to get the answers,” Mr. Lalonde said. When he became LVMH’s chief executive for America, TAG Heuer lagged in sales of luxury watches. Now it’s no.2. In fact, TAG Heuer sales last year represented more than 50% of the growth in the luxury watch market in this country.


In the American watch market, Mr. Lalonde is especially targeting the 5.6 million households, 5% of the total, in the “superaffluent” category, earning more than $150,000 annually. “The consumer is more interested in luxury watches than ever, although we still have a long way to go,” he said. “Only 5% of the U.S. population wears a luxury watch, so the sky is the limit.”


Mr. Lalonde’s strategy included recruiting the golf champion Tiger Woods to work with TAG Heuer in 2003: Mr. Woods helped design the TAG Heuer Professional Golf Watch. Sales of TAG Heuer watches jumped 30% when Mr. Woods came aboard as one of Mr. Lalonde’s “ambassadors.” The watch, which costs around $1,300, has presold 3,000 units; it will go on the market today.


It took Mr. Woods and TAG Heuer nearly two years to come up with the watch. But their collaboration illustrated how much faith Mr. Lalonde has put in developing “ambassadors” for TAG Heuer. Mr. Lalonde has persuaded Jeff Gordon, the Nascar star, to endorse TAG Heuer. He also led the signing of Maria Sharapova, the 2004 Wimbledon women’s tennis champion; massive ads featuring her are all over the New York area. TAG Heuer also recently signed the actress Uma Thurman, racing-car ace Juan Pablo Montoya, and his professional partner, Kimi Raikkomen. The company also signed actor Brad Pitt, who favors TAG Heuer’s Carrera watch. All of these luminaries have been photographed by the celebrated lensman Patrick Demarchelier.


“These stars convey a certain message that is implicit in our brand – a determination to win, to succeed in life, to surpass expectations,” Mr. Lalonde said. His own drive took him from Cornwall, Ontario, where he grew up aspiring to become a professional hockey player to moving to Europe in early recognition of globalization and its market potential for luxury goods.


Besides roping in celebrities, Mr. Lalonde has promoted the “shop in a shop” concept for LVMH, opening 225 special shops at the nation’s top 1,000 retail outlets. And he’s developed what LVMH – a conglomerate formed in 1987 by Bernard Arnault, France’s richest man – calls customer relationship management, which means staying in touch with buyers after their purchase. “Passion is probably the most important thing when you’re selling a product,” Mr. Lalonde said. “It’s about establishing a winning mind set. But it’s like being an athlete – you’ve got to keep winning to be considered a genuine success.”


The New York Sun

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