Louis Vuitton leads race for global TV exposure

By Karyn Scherer

The question has to be asked: why on earth would an upmarket leather goods company choose to pour tens of millions of dollars into what is widely perceived as a rich man's boat race? It's not even the race - it's the race that decides who will race.

Julia King, Oceania chief executive of Louis Vuitton Malletier, tries not to look too astonished. When sponsors were sought for a challenger series for the America's Cup in 1983, the company jumped at the chance, she almost snaps.

"When you think about the core image of Louis Vuitton, the things you think about are quality, innovation, and the technology that's associated with that innovation," she enthuses. "That makes it quite a good match for the things that happen with the America's Cup."

The company is reluctant to say how many millions it is pouring into what is now known as the Louis Vuitton Cup, but it is believed to have paid more than $10 million for the naming rights alone.

It is a staggering deal, given that many companies are currently questioning the benefits they get from sponsorship.

"The drain on our resources will be substantial, but we think it's worthwhile," she insists.

The statistics, she believes, speak for themselves. In 1995, it was estimated that more than 4 billion people in 172 countries tuned into the 600 hours of match racing featured on television.

This year, the challenger series will run from October to late January or early February, depending on the strength of the winning team. The winner will then go on to challenge Team New Zealand for the America's Cup on February 19.

Accountancy firm Ernst & Young has estimated between 65,000 and 85,000 extra tourists will head to New Zealand for the event.

Some of those, notes King, will no doubt have seen the promotional packs about New Zealand that Louis Vuitton has distributed to all its stores around the world. She concedes the company does not necessarily expect the deal to provide a significant boost to sales.

"Specifically in New Zealand, perhaps not, but worldwide the whole America's Cup-Louis Vuitton Cup structure gives the company a global image that it could probably not expect from any other event.

"There is nothing that covers as many nations, and has as many people interested on a jingoistic basis as the America's Cup, and still with that upmarket image."

The yacht races are not the company's only marketing tool. Last year, it organised an antique car rally through China - an event King describes as "one of the great adventures of my life".

The Paris-based company also decided to cash in on France's success in the soccer World Cup by producing a limited edition soccer ball. Only 3000 of the balls, which were sold for $1000 each, were made. Eight were sold in New Zealand, and 28 in Australia.

The promotion proved so successful it spawned another marketing idea: a book featuring photos of famous people with soccer balls. More than 140 of the world's best-known personalities appear in the book, which is being used to raise money for Unicef. New Zealand is represented by Sir Peter Blake.

Given that the company's products range in price from around $400 to $30,000, it may surprise some people to learn that a fifth of all sales at Louis Vuitton's four New Zealand stores are to locals. In the weeks before Christmas, the ratio can be as high as 60 per cent, says King.

When she joined the company almost a decade ago, there were just two stores in Australia and New Zealand. There are now 14 and sales have grown steadily each year.

"The first four months of last year were dire in our terms. We only grew by about 10 per cent. Our tourist business is ahead this year by 38 per cent and our local business has grown by 30 per cent. Business is going very, very well this year."

The company is part of luxury goods giant Louis Vuitton Moet Hennessy, and King's responsibilities include looking after the Christian Dior brand in this part of the world. New Zealand sales of the label, she admits, are "mild".

"We're hoping that once we build some presence for the brand that we'll then start to think about a stand-along boutique in New Zealand, but it will probably be five years down the track."

King was lured to her current job from the Sydney office of advertising agency Lintas. At the time, she was managing director of the agency, which at that stage was the city's second largest. She had been in advertising for 22 years and was ready for a change, but wasn't sure at first whether retailing was the right move.

"When the headhunter spoke to me I was only half-hearted. But after I met the executives from the company in Paris, I realised what a fantastic organisation and opportunity I was being offered. In the first instance there were the people - they were charming and intelligent. In the second instance, it was to do with the marketing. There were these wonderful products which we had to market, and that was it."

She has held numerous directorships throughout her career, including the Australian Wool Corporation, Country Road, and the Sydney Dance Company, and remains on the boards of organisations such as John Fairfax Holdings and The Australian Quality Council.

In 1996, the French Government awarded her the Ordre National du Merite.

"People aren't usually so lucky to have two really good careers. I have been so lucky - I had a good career in advertising and I have a great career with Louis Vuitton."