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“We’re not obsessed by growth, but we are obsessed by the quality of what we try to do.“ |
Philippe Schaus CEO DFS Group |
INTERNATIONAL. Philippe Schaus may be the new man at the top for DFS but as he takes over the CEO’s reins he already displays an intimate knowledge of, and respect for, the company, its history and culture.
Today (1 August) Schaus formally replaces Ed Brennan who steps down after 13 years.
Schaus joined DFS from majority shareholder LVMH just over a year ago as Group President of Merchandising and Marketing, and the interim months have been put to good use. “That gave me a year to learn about DFS and to learn about the team,” he says, talking to The Moodie Report during the recent DFS Hawaii 50th anniversary celebrations. “It is an extraordinary team – we have very, very good people.”
One of those people is of course Ed Brennan, the man he is replacing – first as CEO, then (in December) as Chairman. “He has given an incredible spirit and warmth to the company,” Schaus notes.
“I think you saw it yesterday [during Brennan’s speech at DFS Hawaii’s 50th birthday party]. It’s really unique how DFS has this family feeling and transmits it, not only within the organisation but also to outside partners.
“That really has a lot to do with the whole way Ed has managed the company and created a real humanity within DFS. It really is a humanity – that’s one of the most seductive aspects of DFS, besides the fact that it’s a great company with great people, great potential, and doing well. It’s a very nice culture.”
So what does Schaus think he’ll bring in terms of change of style or philosophy from his predecessor?
“The most important thing is continuity, to keep this great style that the company has,” he replies. “Of course, we have a very good management team. One of my important partners will be [newly promoted Chief Operating Officer] Michael Schriver, with whom I’m working very closely.
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“Philippe inherits a well-run ship and a superbly talented team – we look forward to his years at the helm as he brings the added value of his extensive luxury brand experience.“ |
Robert ‘Bob’ Miller Co-Founder DFS Group |
“So I would say, style-wise, it’s really about working with the existing team, which has some outstanding personalities like Michael, [President Global Merchandising] Harold Brooks and Sibylle Scherer, who has just joined us [as President Consumer Marketing and Branding]. I feel a great support from the entire team. This is a team; it’s not about one person. I have a senior management team and we have an executive committee. And it will be very, very key to my way of looking at things that this is a team effort.”
Commenting on Schriver’s promotion to Chief Operating Officer, Schaus says: “Michael is one of the biggest pillars of this organisation and his role in this new constellation will be absolutely paramount, because he’s heading Operations and Business Development, as well as his role as Chief Operating Officer.
“Also he will also be adding IT and some other shared services, which are based in Singapore. And I really count on him as my main partner in this whole journey we are going to undertake together. His role and importance cannot be overstated.”
MAXIMISING THE MARKETING MESSAGE
But there will be some changes, Schaus admits. “Of course, every manager brings a little touch to what he develops. I think we are probably going to focus a little bit more on marketing and communication because we have a great story to tell.
“And then, of course, there are a lot of projects in the pipeline – in terms of expansions of existing stores, as well as us having won the Hong Kong bid, which creates a lot of opportunities and a lot of focus. There are many, many things happening.”
I ask where the major marketing thrust will fall – behind DFS the brand (or sub-brands perhaps as with the new ‘T’ Galleria in Hysan Place, Hong Kong) or in a wider consumer sense?
“There are two different aspects to this,” he replies. “On the T Galleria question”¦ we decided for different reasons that we wanted to give that store in Causeway Bay, which is opening in August, a different name, because it’s a different concept from our usual downtown stores. Causeway Bay is an area in Hong Kong which is super-active”¦ it’s probably the highest traffic in the world. Someone told me that 160,000 people a day pass by our store – an unbelievable number – and most of the people are travellers”¦ from China or other places.”
Raised in Luxembourg, Philippe Schaus began his career in 1987 at J.P. Morgan before joining The Boston Consulting Group GmbH in 1990. In 1992 he became International Commercial Director of the Porcelain Tableware Division at Villeroy & Boch before being promoted to Managing Director for the division in 1999. Schaus joined Louis Vuitton in 2003 as President of the Europe Zone and was appointed Senior Vice President International in 2006. Between 2009 and 2011 he was Executive Vice President of Louis Vuitton. He joined DFS in July 2011 as Group President of Merchandising and Marketing. |
From there, the notion of ‘Travellers’ Galleria’ was born, neatly simplified to T Galleria. “It’s an interesting experiment,” says Schaus. “The store’s going to open that way, and we’re looking forward to seeing the reaction.
“Is there a next step to that? We don’t know. Let’s give ourselves a few months to observe. And then we’ll have to answer that question.”
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But there’s much more to the marketing equation than a bold store branding concept. Based on his own feelings and customer feedback, Schaus believes that DFS is sometimes “over-delivering and under-promising”.
“We are not talking enough about what we are,” he says in clarification. “Many people, when they are standing outside the DFS store, don’t know what’s inside. So there’s a whole idea here which says ‘Let’s try to progressively, and prudently, over the next year, make ourselves a little bit more visible, a little bit more understandable, a little bit more transparent.’
“The team has done a fantastic job over the past five years in upgrading our stores, and upgrading what we’re doing”¦ in terms of service, systems, merchandise, architecture and ambience. We should bring this out a little bit more and make it clear who we are.
“And then on the airport side we think that, when we are running the operations, the hero should be the airport. Airports have to be differentiated. They have to tell a story about their location. When you’re in an airport, you want to know where you are.
“So we are going to progress in terms of marketing and in terms of making it more understandable to the consumer that they are in a particular airport. I mean, when you are in Hong Kong, you are not in Singapore; and when you’re in Singapore, you’re not in Hong Kong. So we will be getting more into differentiation and more into messaging. These are really the two big thrusts on the communication side.”
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AIRPORTS BACK IN THE FRONT LINE
Schaus says the airport and downtown sides of the business are “two very different animals”, even though they both talk to the same travelling customer. Because of its two strands, spread across a vast global network, DFS has a unique business model, he believes, one that involves working with great airports, great downtown locations and the world’s best brands.
Having come from a monobrand background at Vuitton, he’s relishing the multiplicity of DFS. “When you’re at a place like DFS you get a full perspective of all the brands. And you can much better appreciate how they’re positioned.”
DFS’s astounding triple triumph at Hong Kong International Airport and its determination to retain its Los Angeles International duty free concessions seem to underline a renewed vigour in a historically important channel for DFS that has waned in recent years relative to the downtown luxury sector. Do recent events augur a major thrust back into airport retailing?
“It’s important,” Schaus replies. “But we will be very selective, because there’s only that much you can do at a good level of quality. We are going to focus ourselves on the best airports.
“While we are going to be selective, very clearly the win in Hong Kong has emboldened us to continue that view. But very important here is that every airport has to be treated as a separate entity with a clear focus on that airport and that location.
“We believe more and more that an airport is a signature of a city, of a country. And we, as the operator of the airport, have a big role to play to get that signature over from the shopping point of view of the airport.”
A BOLD NEW ERA
So today, 1 August, formally marks the changing of the guard at DFS. How does Schaus feel about that? “It’s a mixture of feeling thankful for being given the opportunity and being proud to be part of DFS,” he replies. “I have a very strong feeling towards the whole team at DFS, and I have a responsibility to all of them now.
“I want to make sure that DFS remains this place where they love to work. That’s a big responsibility to a company, and one that means taking it to the next steps of development. I’ve been thinking a lot about that.”
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Chinese tourists line up outside DFS Galleria Chinachem in Hong Kong |
CHAMPIONING CORPORATE SOCIAL RESPONSIBILITY
Besides maintaining DFS’s remarkable commercial momentum of recent times, the new CEO also promises to maintain the company’s impressive focus on Corporate Social Responsibility – dramatically manifested in its leadership role on travel retail charity Hand in Hand for Haiti and its work for other causes such as The Smile Train.
“It’s part of what we are. It’s part of what makes people proud to work for DFS,” Schaus replies. “It’s consistent in our approach to giving back to the community, and I do believe that it is essential. I think DFS is a role model in this regard, and that has been very much driven by Ed Brennan. And so we owe it to us and to DFS and its team to continue in that direction.”
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Michael Schriver (left) is “one of the biggest pillars of this organisation and his role in this new constellation will be absolutely paramount”, says Philippe Schaus, while Ed Brennan (right) “has created a real humanity within DFS” | |
Schaus promises to retain DFS’s commitment to Corporate Social Responsibililty projects such as the remarkable travel retail charity Hand in Hand for Haiti | |
I put it to Schaus that DFS under its current ownership – Bob Miller and LVMH – is a rare combination of a big, powerful corporation and an entrepreneurial spirit that still runs through the company like a bloodline.
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“DFS is sometimes over-delivering and under promising. We are not talking enough about what we are.“ |
Philippe Schaus |
“Yes that’s right”¦ but you know the big corporation is also very entrepreneurial,” he adds. “Remember what Mr Arnault has been doing over the past few years”¦ the association with LVMH is fantastic for DFS because it gives us access to resources, to know-how, to people – resources which we would not have otherwise.
“The combination of LVMH and Bob Miller’s family and team is an incredible combination. LVMH has put a lot of emphasis on giving DFS the right level of autonomy to achieve its objectives and to function as a multibrand distributor, and that’s definitely going to continue.”
So much for DFS; but having immersed himself in the company for a year, how does he see the state of the industry?
“It’s an industry which is very fragmented today,” Schaus replies. “It’s an industry in which the level of execution of retail varies a lot. When you travel around the world you find fantastic executions and terrible executions – sometimes not very far away from each other.
“It’s an industry where”¦ some airports have understood that retail shopping is part of the attractiveness of the airport, besides being a revenue generator.
“Some airports have recognised that differentiation is key and that they have to have their own identity. They have realised that retail can help to create that identity. And some haven’t – so there are a lot of opportunities out there.”
“To me it’s all about quality. I think if a brand can create a nice quality environment in an airport, then I don’t see why that should be any different from being in a good shopping mall. It’s all about the quality of what you do. It’s not about doing it or not doing it.
“This company is 52 years old, and there are many more years to come; and we have to leave growth opportunities for future generations of managers. We just have to make sure that we get our act together. The most important thing is the quality of what we do and the brand that we are building.”
Schaus returns to his them of continuity both in terms of the successful business model and the search for excellence which he says have been dual DFS hallmarks down the years. “We’re always trying to go as far as possible in terms of excellence with partners, be it the airport operators or the brands,” he says.
“It’s being selective about what we do. We’re not obsessed by growth, but we are obsessed by the quality of what we try to do. That’s clearly the focus for DFS.”
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Philippe Schaus addresses media at the DFS Master of Spirits II event in Singapore earlier this year |
