The business that is now EPI was founded by French industrialist Jean-Louis Descours in 1974, who acquired the footwear company J.M. Weston. He also held a 30% stake in the company now known as Vivarte, which included the brands André and Kookaï. In 1981, he bought the 150-ha La Verrerie, situated in the Lubéron region of the Rhône Valley, on which he built the wine-production facility now known as Château La Verrerie. Today, the luxury company EPI includes a number of fashion and footwear brands, along with an investment and real estate division.
Christopher Descours, 41, the grandson of Jean-Louis, joined the company in 1999 and became its president and CEO in 2005. He decided the future of the company lay in luxury, and began acquiring fashion brands such as shirtmaker Alain Figaret (2006) and ready-to-wear children’s fashion brand Bonpoint (2007). He sold the stake in Vivarte in 2007 and began looking for more acquisition opportunities, particularly in wine. One came in 2010, as Champagne prices worldwide began to tumble because of the recession: Piper-Heidsieck lost more than a third of its sales volume between 2007 and 2009, with owner Rémy Cointreau announcing an operating loss from its Champagne division of more than $5.5m by the end of the 2010 fiscal year. Rémy entered into negotiations with EPI in February 2011, selling Charles Heidsieck and Piper-Heidsieck, along with Piper Sonoma from the US, for a total of $593m in July 2011. EPI and Rémy Cointreau also signed a global distribution agreement for the three brands.The president of Piper-Heidsieck and Charles Heidsieck, Damien Lafaurie, had previously worked at Rémy Cointreau.
EPI remains a family owned company, whose value was estimated in 2010 to be around $1.02 bn, though the company would not confirm this. Christopher Descours has helped drive the internationalization of the business, and a report in Le Figaro suggested that 70% of its fashion sales are now conducted outside France.
MEININGER’S: What is your business background?
DESCOURS: My study background is in finance mainly, so I began to work at BZW, which was the business bank of Barclays.
MEININGER’S: What was your wine background?
DESCOURS: Wine has been linked to the background since I was young. I saw my father and grandfather really work on the property at Château La Verrerie. They worked on the vines, built the winery, and I got quite interested in this business. The wine business is a wonderful business for a family to own, because it’s asset-based. It’s also very entrepreneurial. Nowadays, selling and promoting wine is very tough, but I am passionate about developing the business and not just sitting on the asset.
We now sell 100% of our production at a very good price, which was not always the case. It’s a brand now that attracts clients like restaurants, which is quite premium. Now that we have done the job in France, we have the opportunity to develop outside France.
MEININGER’S: Turning to the other divisions of your business, who is the luxury consumer?
DESCOURS: Of course the answer is different if we speak about Western Europe, or if we speak about China. The classic consumer in Western Europe is still linked to the quality of the product, the history of the houses, and classic retail. Both consumers in the US and China are really looking at what is created in France and the French lifestyle, and that’s something they are very sensitive to. But the consumer in China is a little bit different, because the way they get in contact with the product is very different. Digital marketing and sales on th internet play a much larger role. Digital marketing technology in China is really advanced compared to what we see in France, and the consumer is younger, which I think is of great importance.
MEININGER’S: The Russian market was a very good one for luxury products until the ruble collapsed in late 2014. How is the market looking now?
DESCOURS: It’s very calm. The Russian consumer has almost disappeared in those markets. The last year or two they have been very discreet and are no longer seen in the Western capitals, or the hotspots in the Mediterranean, or the French Riviera. The Russian market both at home and abroad is very soft. It’s a small market. But we have seen some positive signs in the last months, so it’s coming back.
MEININGER’S: When it comes to luxury consumers elsewhere, which markets are growing?
DESCOURS: For the Group as a whole, Asia is still quite strong. The group is in double-digit growth in Asia, which means mainly China and Japan. South Korea is picking up a lot, and so is Southeast Asia and Australia.
What I saw in Australia when I was there nearly two years ago is lots of restaurants, lots of TV shows about chefs, lots of wine shops, and a foodie population that is growing and growing. Champagne is seen there – as it should be – as a very high-end product and the demand for it is growing. Piper-Heidsieck is among the top three Champagne brands in Australia.
MEININGER’S: Where in the world is softening when it comes to luxury goods?
DESCOURS: France, of course, has been very soft in the past 12 months for all of the reasons you know. But if you put that aside, and look at the performance in Paris where international clients come, it can still be a very good market. However, half of the worldwide luxury market comes from people travelling, so of course France is a soft market today because of all the attacks and because the economy is not so good. The luxury tourist comes there less. Tourists also go to different places depending on currency fluctuations – a lot of the Chinese went to Japan in 2015, because for them it was quite an advantage to go to Tokyo. Now they go to South Korea. Fifty percent of the luxury business is driven by currency movements.
MEININGER’S: And, of course, there has been the cataclysm of Brexit this year. What impact has that had on the luxury market so far?
DESCOURS: If I look at my figures from the retail business it’s good, because the pound has decreased against all the other currencies. Part of this luxury tourism went to London more so than Paris, so the luxury business in London has been doing very well lately. Unfortunately it’s the other way around in France because we produce in Euros. It is not easy to negotiate prices, especially for Champagne.
MEININGER’S: Speaking of Champagne, EPI bought the Champagne division of Rémy Cointreau in 2011. This comprised the Charles and Piper-Heidsieck Champagne production facilities and brand, along with Piper Sonoma from the US. How did you integrate this division into your company?
DESCOURS: Fashion and Champagne are two different businesses. Some of our clients could be the same, of course. There is a worldwide market for the French luxury business, based on quality and craftsmanship, and that is a category that’s developing. I thought that these businesses could share a way of making the product attractive, and this is the case. There are also differences, because distribution is not the same, and while the consumer might be the same, the path to the consumer is not the same.
My goal was to develop my group around the know-how we had at that time, which was really based on assets we had in the group for quite a long time. J.M. Weston shoes, which are high-quality-craftsmanship shoes made in France, which we’ve owned since 1974. Another asset is the winery we have had in the south of France since 1981. The other asset was a stake in Vivarte, the big retail group in France that sells clothing and shoes, which we sold in 2007. This put a reinvestment decision in front of us and we decided to develop the know-how that we had internally.
MEININGER’S: At the time you bought the Champagne brands, they were widely seen as underperforming financially. So what was the reason behind the acquisition?
DESCOURS: The main reason I got interested in Champagne is because it’s a worldwide brand, a fantastic brand. It’s very attractive for all luxury consumers. I knew it would give my company a more international footprint. As I said, wine is a fantastic business for a family. Charles Heidsieck and Piper-Heidsieck were underperforming, which was not a surprise for me, but internationally Piper-Heidsieck was still one of the five biggest Champagne brands. The footprint of the brand was in all the right countries with the right market share, and Charles Heidsieck was small enough to reorient very fast. The Champagne brand, the footprint, the awareness and the quality were all quite impressive. We had to work on distribution and the marketing proposition, but this is workable when we have the assets we talked about.
MEININGER’S: You’ve certainly shaken it up. Cyril Brun was appointed chef de caves of Charles Heidsieck in May 2015; Séverine Frerson-Gomez was recently promoted to deputy chef de cave at Piper-Heidsieck and given the job of taking the style forward; in June 2015, Damien Lafaurie was named as CEO of both operations; and a new US importer and PR agency were also appointed. It was also reported that you are seeking double-digit growth for Charles Heidsieck. This is interesting, because it’s long been said that Charles Heidsieck was beloved of wine writers, but ignored by the public.
DESCOURS: The company was not in very good shape, and it is very important for us to invest in this category. We really want to make two independent houses. Charles Hiedsieck and Piper-Hiedsieck have different branding and use different types of distribution networks, and we wanted both of them to have a fully dedicated team for marketing, wine and distribution. I wanted a dedicated team for both brands, and that also means for the winemaking positions.
My plan for Charles Heidsieck is to create an independent house of Champagne, the size maybe comparable to a small, high-quality Champagne house that only targets the high-end consumer. We are really targeting a particular consumer with Charles Heidsieck, and the work that has been done by the team is fantastic, both from a marketing and a distribution standpoint. It was begun maybe two or three years ago, and now we are really seeing healthy growth with Charles Heidsieck.
MEININGER’S: You said earlier that wine is unique in that it touches the consumer differently than other luxury categories do. Could you elaborate on that?
DESCOURS: The point of sale is different. For example, take a big luxury brand like a fashion brand. They will have 500 stores around the world. But with a brand like Piper-Heidsieck, we could have as many as 30,000 or 50,000 clients when you take into account retailers and the on-trade. So the market is much more fragmented.
MEININGER’S: What was the biggest surprise about working with Champagne?
DESCOURS: It’s not talking to my consumer directly. I was used to being in contact with my clients in my store, whether dealing with very happy clients, or sometimes less-happy clients, but being in contact with them directly. Developing a store network in fashion is very expensive and hard to maintain, because you have to keep staff in the store highly motivated and professional. It’s an endless effort for the brands, but it’s part of our know-how. It’s different in the Champagne business, because the average number of clients is much higher. But digital marketing is bringing these two luxury business models closer together.
MEININGER’S: How do you use digital marketing?
DESCOURS: We use it the same way in both businesses. One of the common points between all of the houses in the group is the know-how and the quality of the product. This is something that is easy to promote with social media because it’s easy to show what is happening inside the house. You can show how you produce a show, or how you produce a grape or a wine, and you can show it directly to the consumer at a marginal cost, which is quite interesting for us.
We just have to show the outside world what we are doing on the inside.
MEININGER’S: Do you use your various brands to leverage one another?
DESCOURS: When Bonpoint does an event it does it with Piper Heidsieck – and I’m talking about the mothers of course. Sometimes in Paris we do a fashion show for Bonpoint and you will see a little fashion show for kids – available afterwards on the internet – and we serve Piper to our adult guests.
MEININGER’S: EPI is a very large company, and yet it’s privately owned. Do all your business units operate independently, or do they share resources – for example, financial controllers, IT systems, and so on?
DESCOURS: One of the strong principles I have is to preserve the independence of each and every brand; however, we do seek to create synergies between our different businesses. It is the case especially when it comes to developing internationally, where we share bureaus and teams abroad, for finance, for legal matters, for some communications subjects such as media buying. The mission of the EPI team is to favour cross-fertilisation between the brands to get stronger together.
MEININGER’S: Are more acquisitions likely?
DESCOURS: We are always in acquisition mode and are always looking at new opportunities. There are some on the table today that we can’t talk about, but yes. We would like to grow our business by growing ourselves – which is the first and most profitable way of growing – but if there is a strategic opportunity, we will always look at it very closely.
EPI is a family-owned business and we have a strong view of who the end consumer is that we target. We believe that this type of consumer is a person who is interested in knowing about craftsmanship. It’s a category that is growing everywhere in the world and I’m a great believer that our brands have a really great future.
