ELLE SAAB CASE STUDY

ABOUT SAAB

Born in Beirut

Developed an interest of dress making in early age

At age nine, he made clothes of his sisters with the use of curtains and table clothes

Opened his first atelier in Beirut in 1982

Began designing luxurious evening gowns and wedding dresses

AS A DESIGNER

Focused on Haute Couture

In the 1990s, moved to a larger atelier in Beirut and organized exclusive fashion shows in Europe

Opened a salon and showroom in Paris in 2000 and a flagship store in Paris opened in March 2007

ES opened its first U.K. boutique at Harrods in July 2008

In June 2010, he opened its first flagship store in Dubai’s prestigious Dubai Mall

GOAL OF THE COMPANY

"Attract, select and maintain customers who place significance on high-end, one-of-a-kind designs made from the finest fabrics and materials”

EXHIBITS Exhibit 2 highlights the quantity of millionaires by country

World’s high-net-worth individuals (HNWI) grew 17% to 10 million in 2009 despite a contraction in world gross domestic product (GDP).

The highest change is shown in Australia while other important figure to be mentioned is 23.8% in United Kingdom

Exhibit 3 shows the public relation and marketing expense as percentage of sale of year 2008. The highest amount is 87.4% of Fashion Shows, which means that highest number of advertisement is done through fashion shows

Exhibit 4 shows that in 2006 Haute Couture; the highly personalized and customized product of the brand made the major chunk of the sales revenue making 60 percent of the sales as compared to 40 percent made by ready to wear (RTW) and accessories.

After 2006 there was a change in the break-up of the sales revenue as RTW brought in higher sales as compared to Haute Couture

In 2007 RTW accounted for 54 percent of the total sales whereas Haute Couture made 46 percent and the following year that is 2008, RTW made 59 percent and Haute Couture 41 percent

Strengths

Well established brand.

Direct ownership of stores (except for Dubai)

One of the few certified couture house

Weaknesses

Weak presence in multi brand shops

Specifically restricted to luxury clothing line

Poor Current Ratio

Still low sales in Asia and Russia

Opportunities

Rise in high-net-worth-individuals (HNWI) 

Immense potential in Asia (Increasing number of millionaires)

Threats

Decline in Haute Couture

Changing clothing trends

To mix luxury and affordability

Casual dressing on the rise

Upcoming competitors in RTW line

Online sale of RTW

Tapping the affluent middle class

PROBLEMS Change in trends

In US, ladies endorsed the brand by wearing couture day wear to luncheons, parties and events while women in the Middle east and Russia did not showcase these dresses thus defeating the purpose of advertisement through word of mouth

Change in preferences and trends which were changing from class unique handmade clothing to clothing line which was more casual

Competitors were shifting into the ready to wear field and giving tough time to the company

SOLUTIONS

The industry is facing a downward trend and this is an external factor to ES, thus combating this fall requires an extra effort.

Opening a slightly less extravagant line, within the existing haute couture line, can provide a cushion with the new line

On the ready to wear part, the company can beat other new competitors by increasing its volume as it is offering its ready to wear line at selected places only

There was an upsurge in HNWI from year 2008 to 2009, especially in China, where millionaires grew by 31% from 2008 to 2009. Thus, China is a lucrative market for ES to tap

ES should also adopt an online business model for the RTW line. Prospective customers should be able to buy select RTW things online

There is a shift in trend from luxury clothing to more casual clothing where Customers nowadays are well informed and seek value for money in every purchase; hence ES should seek to expand his RTW line

CONCLUSION AND RECOMMENDATIONS

Since Elie Saab is planning for further expansion both globally and their product portfolio they need to be extra cautious about it because the brand name is at stake

Asian market serves as a potential interest but there are number of other factors that have to be considered including the distribution channel

As far as the product portfolio is concerned the management should keep adding products but they need to keep Haute Couture as their core product since the brand is known from this highly customized premium offering

From an advertising perspective the company should make more use of celebrity endorsements to further enhance its image as a premium product

THANK YOU