Rimowa was well on its way to stardom, going down as one of the fastest-growing brands known to-date.
In recent years, the brand went through a series of restructuring efforts and succeeded in turning its signature suitcase aesthetic into an iconic fashion symbol, collaborating with notable designers and brands such as Supreme and Virgil Abloh. Rimowa was even projected to meet its long-term goal of over $1 billion in sales by the middle of the decade.
But then COVID-19 hit. The company saw its sales plummet as travel bans were implemented, more consumers chose to stay-at-home. The uncertainty of contracting the virus and the economy left many unsettled.
According to the United Nations World Tourism Organisation (UNWTO), international travel plummeted 63 percent during the first half of 2020. And even today, as we are well on our way to concluding the year, tourism, for the most part, is still largely non-existent, especially as a surge in COVID-19 cases is taking place and potential lockdowns are in order.
And even with a new vaccine on the horizon, it could be at least two and a half years until travel truly returns back to pre-pandemic levels.
These challenges have translated into an almost 50 percent decline in Rimowa sales this year. “[Covid] doesn’t make it super easy to sell the product,” said Alexandre Arnault, chief executive of the German-engineered luggage label. The 28 year old is the son of a French billionaire and chief executive of LVMH, Bernard Arnault, who took a $716 million stake in the company in 2016.
“It’s not a secret that things have not been going well at all.”
But it is not all bad news for the luxury suitcase maker. Since Rimowa happens to be vertically integrated, the company has been able to slow down production and is still in a position to quickly ramp up production as needed.
Rimowa also lucked out in that it had various wholesale contracts coming to an end which prevented the brand from having to worry about unsold luggage. Moreover, its recent collaborations have garnered the brand great visibility.
The company’s partnership with Moncler, for example, still seems to be paying dividends to the luggage maker with the newness, novelty and pure “genius” marketing behind the campaign helping the brand build appeal.
The company’s ability to scale is in the future will lie in its ability to expand beyond its product line beyond its iconic suitcase. In the words of Arnault, the brand is looking to “be with the client everywhere,” whether it is its packing cubes or expanding on its range of bags.
This week, Rimowa announced its first collection of soft bags dubbed “Never Still.” The collection features Italian made unisex backpacks, weekend bags and totes made of waterproof canvas and full-grain leather, ranging from $800 to $1600. The collection is set to drop in stores in mid-January 2021.
The collection is designed to address functionality first, Arnault emphasizes. The collection lacks the hard shell aesthetic Rimowa is known for but it does provide structure and features the notable Rimowa ridges. The look reflects the clean and slick look the luxury suitcase maker is known for, which remains unmatched by the leather made bags many of its competitors offer today.
“We picked materials that have the sturdiness and rigidness of Rimowa, but are softer and more wearable in everyday life.”
While analysis by Bain & Company estimates that the new collection will up Rimowa’s competitive edge in the luxury handbag market, how will the brand fair in a market where consumers are favoring names they already know and trust?
We will have to wait and see this coming January.