Chalhoub launches Makette to pivot from distributor to brand owner
Bottom Line Impact
If Makette achieves disciplined scale, Chalhoub can shift from low-teens distributor EBIT to mid-teens brand-led EBIT, strengthen market positioning with owned IP and data, and build durable brand equity anchored in European craft and transparent provenance.
Key Facts
5- First owned luxury brand from Chalhoub after 70 years distributing 400+ labels across MENA
- Initial assortment: 13 SKUs, 3 styles, 4-5 colorways; handbag price points at $1,050-$1,400
- SLG expansion slated for January 2026 at lower price tiers to widen entry points
- Production: handcrafted in Ubrique, Andalusia; materials LWG-certified; NFC digital passport on every bag for origin, care, and authentication
- Industry backdrop: luxury handbag prices up 60-90% since 2019, creating a value gap Makette aims to exploit without compromising quality
Time Horizons
Executive Summary
Chalhoub Group debuts Makette, a modular leather goods brand priced at $1,050-$1,400, leveraging Spanish craftsmanship, LWG-certified materials, and NFC-enabled digital passports. If Chalhoub scales owned brands to even $50-70m revenue over 18-24 months, portfolio EBIT margin could expand by 400-800 bps versus a pure distribution mix while building proprietary customer data and brand equity.
Actionable Insights
Immediate Actions (Next 30-90 days)
Ring-fence a brand creation unit with separate P&L and governance to prevent channel conflict and enable faster decisioning on assortment, pricing, and distribution.
Rationale: Owned brands require longer investment windows than franchise operations; insulated governance protects principal relationships while scaling proprietary IP.
Role affected:CEO
Urgency level:immediate
Deploy NFC-triggered CRM journeys to capture consented data at unboxing, target 35-45% profile capture, and run referral programs tied to care services and personalization.
Rationale: Digital passports can convert product interactions into owned data streams, lowering CAC 15-25% and increasing repeat rate 300-500 bps.
Role affected:CMO
Urgency level:immediate
Short-term Actions (6-12 months)
Model a 24-month scale plan targeting 65-70% gross margin, 18-22% contribution margin, and 4-5 inventory turns; secure 6-9 months of leather and hardware commitments with hedging where feasible.
Rationale: Margin upside depends on disciplined working capital and input-cost control; early capacity and material hedges mitigate supply risk and price volatility.
Role affected:CFO
Urgency level:short-term
Lock capacity with 2-3 Ubrique ateliers, standardize QA with AQL thresholds under 1.5, and dual-source critical hardware within 6 months.
Rationale: Quality consistency and lead-time reliability are key to premium positioning; dual-sourcing reduces single-point-of-failure risk and improves on-time in-full.
Role affected:COO
Urgency level:short-term
Risks & Opportunities
Primary Risks
- Channel conflict with existing principal brands if retail space and marketing are reallocated to Makette
- Capacity and quality constraints in Ubrique leading to stockouts or variability during scale-up
- Price-value misalignment causing slow sell-through at $1,050-$1,400 without sufficient brand equity
Primary Opportunities
- EBIT margin expansion of 400-800 bps by shifting mix toward owned IP with 65-70% gross margin
- Data ownership via NFC passports enabling lower CAC, higher LTV, and differentiated clienteling
- Template creation for 1-2 additional in-house brands, compounding portfolio control and valuation