To be successful in a fast-moving industry means never standing still, a work ethos that Leather Avenue Holding Sdn Bhd keeps well, says its Managing Director Kenny Toh.
Give us a bit of a background on Leather Avenue, when and where it was established, and how many stores do you have in Malaysia and overseas?
Leather Avenue was formed approximately 10 years ago on the back of more than 20 years’ experience in the retail industry. I and my team have always envisioned that we are going to become a market leader in the Leather Goods and Luggage sector. We started with a very humble beginning of some core staff and grew to about 200 staff to-date. In the first year, we had only three stores, and today, we have grown to about 30 stores nationwide.
What are the brands marketed under Leather Avenue?
We are the sole distributors for Mendoza, The Bridge (Florence, Italy), Cerutti 1881, Coccinelle and new brands Tru Virtu and Ogon. We are the licensed manufacturer to Valentino Creations and our own brands such as Charles Berkeley, Esfolar and Lushberry. The obvious popular choice is Mendoza. We have been with them for more than 20 years.
How does Leather Avenue set itself apart from other similar retailers?
We are not only a typical retailer but instead hold the role of a sole distributor, own brands and are licensed to manufacture as well. So our business model is unique and always comes from different business acumens and directions. This way, it enhances our capability to be very competent in the market as well as being able to offer the newest products to our customers, which is essential in today’s fast-changing world.
Who is Leather Avenue’s target market?
Our target customer ranges between the age of eight and 80 years old. We don’t specifically target any particular segments as we believe our progressive and lifestyle products appeal to all walks of life. irrelevant of age and ethnicity. Today, consumer behaviour and taste are moving towards to a more globalised taste, essentially a preference for a more modern lifestyle. We have always believed that modern consumers are constantly upgrading their lifestyle by seeking better products, and we try to keep up with the pace of the demand.
Leather Avenue is licensed to design and develop new products under certain brands. Which brands are these and what are the advantages of being able to do this?
We are licensed to produce Valentino Creations under the category of luggage, and brands we own such as Charles Berkeley (leather goods), Esfolar (lady apparels and handbags) and Lushberry (luggage). We have a team of designers who are responsible for the development of new products every season. Because of our exposure in different categories locally and abroad, this has opened up our advantage to strike a balance between Asian and Western design influences. Some of the brands such as Charles Berkeley are now in the Italian market and Lushberry in Japan, Taiwan, Dubai, U.K. and U.S. This gives us a footprint in the international arena and at the same time, (makes us) very competitive.
How does the company keep up with changing consumer demand?
Our forward vision allows us to constantly innovate, explore and come out of the comfort zone. We cannot wait for the market to change first before us. In fact, we would like to constantly introduce the latest and be the first in our industry. Yes, there will always be risks by chartering into untamed waters, but if you never try, you’ll never gain.
Are online luggage and travel accessory retailers a threat? Is there a preference for consumers to purchase online these days compared to brick and mortar stores?
Yes, we cannot ignore that the online business is a threat, but we think that both online and offline stores will eventually coexist and will not cannibalise each other. In some cases, it is already happening. Many think that the cost for selling online is relatively cheaper, but on the contrary, you need a lot of back-up in terms of photography and support in order to upload the product information. Moreover, in the luggage sector, the logistics cost is quite costly. In terms of customer behaviour, online provides more convenience, but brick-and-mortar provides the shopping experience for the five senses, in which you can see, feel, smell, taste and touch, which is unattainable with a flat screen.
What about counterfeit bags? What has been the impact from black market sales on Leather Avenue’s business and revenue? How has the company overcome this challenge?
I admit this is an ongoing battle for many companies. Counterfeits always have their grey areas and are costly if you pursue legal action against all of them. From a practical sense, most copies would never achieve the same level of quality anyway compared to an original. We would look at it from a case-to-case basis. Having said this, customers today are smart enough to differentiate between these products. Most of the fakes we have seen in the market are ‘cheap’ copies and we believe our genuine customers would not buy them.
What trends are you seeing for luggage sales next year, and how does Leather Avenue plan to ride on the trend?
The growth of the travel industry, particularly in the next decade in Asia, dominates almost 50 percent. There will definitely be high demand for travel accessories. You will notice there are now many luxury brands that have ventured into this category. With the affluent travel lifestyle of modern millennials, the demand for better quality and lifestyle accessories is on the rise. We anticipate the market will expand and we are more than ready to embrace the trend.