ANDREAS HERNANDEZ IS HAPPY. He’s used to taking guests around the Dickensian factory of the 150-year-old British shoemaker John Lobb to show them the 190 steps it takes to make a pair of the classic shoes. “Most luxury cars can be made on the assembly line faster than a pair of our shoes,” he claims. We—Hernandez, the creation and development director at John Lobb, and I—have stopped midway through our hour-long tour of the 1,600 sq. m. factory. In front of us is a pair of blue-black laced shoes. There is not a single embellishment on them, not a hint of decoration. Just a single lace on each, no more. It is zen in shoes. “You are the first person who has used this word. This is exactly the word I thought of when I designed them. This is what most people don’t understand: At the heart of shoemaking is functionality that is like zen. Anything extra destroys it,” says Hernandez about the shoe which, give or take a few pounds, would cost around £1,000 (Rs 1 lakh and change).
In the world of luxury, simplicity is a difficult value proposition. Were the first couturiers of Paris simple? Was Christian Dior’s New Look in 1947, coming as it did after years of wartime rationing of fabric and material, simple? Is Coco Chanel’s little black dress simplicity personified?
John Lobb’s customer pitch from the time the founder (the John Lobb) started a shoe shop in 1866 has been in creating an austere atmosphere of rigorous, and highly expensive, functionality. In the process, he laid the foundation of a $40 million (Rs 252.9 crore) global business, which continues to remain at the very top of its craft.
For the past four decades, John Lobb has grown at 10% to 15% a year on a spartan distribution model. Even today, it only has 21 stores and barely 50 points of sale; call it the Harrods of shoe brands. It is one of the tightest distribution networks in luxury; even tighter than most top-end shoe brands; Christian Louboutin (see page 92), for instance, has 106 stores.
For John Lobb, selling is like the zen shoe—minimalist. And that’s something its owner, uber snooty French luxury giant Hermès, which bought John Lobb in 1976, is known for. (A former CEO of Hermès once told me that it doesn’t use the word luxury because everyone who needs to know, already knows.) Marrying accessibility with exclusivity could be the lesson in the John Lobb story. But more on that later.
John Lobb was a Cornwall boy who started out as a shoemaker’s apprentice in London. He made a name for himself in Australia making shoes for miners during the gold rush. By 1866, he had returned to London and opened his first shop on Regent Street. Such was the success of the shoes—each pair made from a flat, which is a wooden replica of the shape of the client’s feet—that by 1902, when the first John Lobb store opened in Paris, it had the attention of buyers such as the Shah of Iran and General Charles de Gaulle. Big hits then were the William ‘monk’ shoe (with crossover straps instead of laces) and the slip-on Lopez loafer.
In 1871, Charles Goodyear Junior, son of Charles Goodyear who transformed the automotive industry forever by inventing vulcanised rubber, invented a form of soling shoes known as Goodyear welting. Shorn of shoemaker’s jargon, this means stitching layers of interwoven rubber, leather, and plastic, making a sole that is waterproof, and which can be repaired and re-soled indefinitely. Most important for shoemakers, the sole can easily be taken apart and put back together. John Lobb became one of the earliest, and best-known, proponents of this method and developed a process of making made-to-measure shoes. That process—which calls for 300 hand movements and 50 man-hours to make a pair of shoes—is still followed.
Shoes with the Goodyear welted sole bring in 70% of John Lobb’s annual revenue; the rest comes from more casual, non-welted shoes. Around 25,000 pairs of Goodyear welted shoes are made at the Northampton factory each year and around 8,000 non-welted shoes are made in Italy to Lobb specifications. In 2013, to manage growing demand, an additional 500 sq. m. of space was added near the main factory in Northampton, once the main shoemaking region in Britain with some 40 shoe factories. Only 10 factories survive today. All of them have a history of Goodyear welting.
The shoemakers at John Lobb are so finicky that 40% of all leather bought is discarded because it is not good enough; among other things, the pores in the leather are examined through magnifiers to ensure that only pieces with the right-sized pores are taken. Wrong pores mean the leather does not breathe properly. It takes at least three fittings before a bespoke pair is delivered. Nobody at Lobb is willing to assess what a pair of such shoes costs, because it depends on what the customer wants—special designs, monogramming... The more the customisation, the higher the cost.
There’s growth coming from elsewhere too. The U.S., one of the top five markets for John Lobb, will see the opening of two new stores this year in Houston and Miami, adding to the ones already in New York and California. A new store is also coming up in Hong Kong. “Asia has been in the forefront of our distribution with the opening of four stores there in the last five years. Asia and the U.S. will be our strongest growth markets in the coming years,” says Thomas Collette, commercial director, Europe, West Asia, and India, for John Lobb.
Particularly interesting in this story is Japan, where the company opened a store exactly a decade ago—five years after the U.S. debut. Japan has consistently been the top revenue earner for John Lobb, contributing about 23% to the books. How did this happen? Steve Johnson, site director at Northampton, says it’s probably because “Japan is a product-driven nation”. So, with barely any advertising, John Lobb has been a hit with the Japanese buyer.
This is the curious alchemy in the world of luxury. In the ’80s and the ’90s, Japan used to be the biggest consumer of luxury, providing the world with epic photos including snaking queues outside Louis Vuitton. It even formed the sociological basis for research into how the Japanese consumers saw their body as the most valuable ‘real estate’ on which to display their wealth, especially in cramped Tokyo, a city infamously short of space. Brands focussed purely on products have had a history of making it big in Japan; for instance, Ermenegildo Zegna, the Italian fine fabric maker, rakes in 10% of its revenues from Japan alone. This on a turnover of over $1.7 billion. The same is true of Lobb. As Hernandez says, “We are not a fashion purchase. We are an investment that will look and feel good for a lifetime.”
THE BIGGEST QUESTION for CEO Renaud Paul-Dauphin is how to grow the company when competition such as Prada-owned Church’s and Berluti from LVMH Moët Hennessy-Louis Vuitton is looking at men’s businesses to deliver profits. Church’s is one of Prada’s most profitable brands, bringing in double-digit growth last year even as the group’s profits fell by 28%.
John Lobb has to balance between growing the non-welted, not-made-in-Northampton shoes and the welted shoes business. Because of the time taken to make welted shoes and the limited availability of talent (Hernandez says it takes years to perfect just the art of stitching a Lobb shoe), there are only so many shoes that can be made. This year, in what the company is calling a breakthrough move, Lobb has launched a “featherlight” non-welted plimsole, the Levah, perhaps the most casual shoe it has ever made. This is the venerable Lobb’s attempt at taking on its more stylish competition.
New creative director Paula Gerbase, all of 32, who created ripples when she was hired in 2014—a young woman heading creative at a pedigreed man’s shoe brand—is also pushing allied products such as shoe creams, waxes, shoe horns, belts, socks, and brushes. Hernandez, who will retire next year, says, “A dynamic new range and portfolio are being developed, and Paula is the breakthrough mind to push into new territories. We cannot remain stagnant in history. We have to keep the history but also keep growing.”
That’s particularly relevant because there’s competition from new places. Take Christian Louboutin. After two decades of making women’s shoes, the Paris-based designer has moved into men’s shoes, which, says CEO Alexis Mourot, has seen “exceptional growth”. Such is the focus that Louboutin has given pride of place to a men’s boutique bang opposite its flagship women’s store on Rue Jean Jacques Rousseau in Paris.
The trouble for luxury companies is that the customer is changing. A John Lobb customer today, unlike a couple of decades ago, will not necessarily hesitate to buy a Louboutin for another occasion, another day. This means brands have to keep reinventing themselves for an increasingly casual and younger customer.
Meanwhile, there are still customers like London-based investment banker Rahul Agarwal, who owns two pairs of John Lobbs. For him, the brand speaks of a certain quiet arrival. “I don’t care so much about things looking cool,” he says. “I just want to know that I can afford the best.”