The genius minds behind Christian Dior may have just put on a spectacular couture show, but they couldn't beat the economy in 2008. The house's fourth-quarter revenues dropped 6.9 percent, to $266.4 million. Revenues were down 2.8 percent for 2008 as a whole, to $1.13 billion, but remained flat when expressed at constant exchange rates.
Dior cites a number of reasons for the losses, such as the fifteen new stores it opened in 2008. Dior president and CEO Sidney Toledano said widespread early markdowns in this country hurt business late last year. However, the house did well in Europe (where sale periods were more restrained), the Middle East, and China.
Last year Dior also repositioned itself to a more upscale market, exiting the logo and "access product" business, a strategy that has been working well in Europe. However, stores driven by access (read: cheaper) products might not survive. Guess which country those are in! Toledano said one in Palm Beach recently closed, which can only mean shoppers there aren't so fabulously wealthy, after all.
While couture and ready-to-wear took a hit, beauty sales flourished, posting record profits of $2.98 billion, with especially strong sales of Dior Addict makeup lines and Diorshow Iconic Mascara. So, even though the couture line doesn't make money, it boosts Dior's image, which inspires beauty sales. Hey, we'll vouch for the mascara — it costs $27 a tube, but we own it in two colors. And then there's Tinsley Mortimer, who goes through about four tubes a day.