In early April, Lacoste appointed a new leader for its North American market, Desiree Thomas (formerly of ba&sh). “The United States is the biggest sports market in the world, and Lacoste is still very small there,” emphasizes Thierry Guibert, the brand’s CEO, who also heads the owning group, Switzerland’s Maus Frères.
155 Chinese Subcontractors
An American conquest somewhat troubled by the announcement made in early April by Donald Trump of exorbitant customs tariffs—although the American president has since suspended them for ninety days, leaving investors on edge. The United States maintains an average global rate of 10% and a dizzying rate of 145% for China.
This is very disabling since the textile industry is still largely dependent on Asian and Chinese factories. “One must keep one’s cool,” acknowledges Thierry Guibert. Indeed, some of Lacoste’s products, such as sneakers, are largely manufactured in Asia.
According to a document made public by the company in March 2024, it employs 35 subcontractors in Taiwan, 39 in Thailand, 115 in Vietnam, and even 155 in China. Sports shoes represent one of the “growth vectors of Lacoste,” according to Thierry Guibert, and already account for 20% of sales volumes. “They went all-in on sneakers more than five years ago, and it has paid off, confirms Alexis de Prévoisin, a trade expert consultant. “They have transitioned from a single-product brand with the polo to a fashion brand.”
Potential Price Increases?
This newly hard-won balance could be threatened if, in July, the customs rates rose to 46% for Vietnam, a major producer of shoes. “If we reach this level, we will look for alternatives to manufacture our products,” the CEO retorts.
Yet, switching entirely to Made in France, for the brand that owns a factory in Troyes (Aube), seems unrealistic: production costs there are three to four times higher than in Asia. Hence the importance of other solutions. “We would also question the presence of certain references and the price,” he acknowledges. Lacoste might thus revise its range downwards and increase its prices.
How would the customers of the crocodile brand react to a rise in prices, especially since the famous polo—sold for around 110 dollars in the United States—has seen its price soar by 18% in ten years? “Their rather high-end positioning will help them in the United States,” reassures Cédric Rossi, an analyst at Bryan Garnier & Co. “It’s a resilient clientele that will accept price increases of 5 to 10%.”
Proponent of Nearshoring
Yet, a new crisis in the purchasing power of Americans would change the situation. “We monitor consumption trends because inflationary phenomena are possible,” admits Thierry Guibert, who remains confident in the potential of his brand in the United States. Riding the current enthusiasm for golf and racquet sports in the United States, the brand plans to expand its American network from 87 stores, mainly on the Sun Belt—from Miami to California—to 150 within three to four years.
Moreover, aware of the risk of overexposure to China, Lacoste has been working for years to rebalance its production locations. In ten years, the share of products manufactured in the textile workshops of the Middle Kingdom has thus dropped from 50% to less than 5%, where adidas is still at 14%. “We manufacture a lot in the American zone, especially in Peru,” explains Thierry Guibert, a proponent of nearshoring, i.e., bringing the production tool closer to the place of consumption. About 20% of the brand comes from Latin America (Peru, Guatemala, Brazil), against 35% from Asia and 40% from Europe.
Despite the yo-yo of customs tariffs, Lacoste does not intend to revise its ambitions. “Brand strategies are not built week by week,” Thierry Guibert insists. Determined to stay on American soil, even when strong headwinds blow.
