The words “Is Luxury Dead” have been echoing the corridors of every upper-crust establishment from NYC to Tokyo and those in between.Although first quarter results were grim when the Millward Brown BrandZ released their ranking of the Top 100 Most Powerful Brands, a list that covers 50,000 brands worldwide, on April 29, the rankings told a different story.
In the luxury category, Louis Vuitton came out on top, with a brand value of $US19.4 billion, followed by Hermès at $7.86 billion, Gucci at $7.47 billion, Chanel at $6.22 billion and Rolex at $5.53 billion.
In the luxury category, Louis Vuitton came out on top, with a brand value of $US19.4 billion, followed by Hermès at $7.86 billion, Gucci at $7.47 billion, Chanel at $6.22 billion and Rolex at $5.53 billion.
When calculating value, it is not just a record of current profits vs. losses. Surveys ask consumers about the loyalty, image and attitude to the brands as well.
While customers may not be able to purchase the entire Gucci Cruise collection, they will, however save for one key piece, or treat themselves to glasses, belts, handbags and other accessories that still exemplify the luxury of their favorite brand.
Louis Vuitton, year-over-year sales in the fashion and leather goods sector - of which Louis Vuitton is a part - increased by 11% to 1.6 billion euros ($2.1 billion) in the first quarter of 2009. They have opened three new stores since May 2009 one in London, one in Padova, Italy and the huge Global Store in Dubai. Louis Vuitton bags, which have proven relatively resilient to the consumer downturn, are estimated to generate gross margins of about 45 % according to Reuters. Vuitton also recently launched the "Mon Monogram" service where patrons have the option of personalizing their bags by painting them with stripes of their choice or with artistic lettering of their names which brings a unique element and adds customer-driven value to the product.
It is the mid-market brands that need to tighten their business plan, stop store expansion or reduce the number of skus in production to stay afloat.
One brand that fell out of the top 10 in 2009 is Giorgio Armani, which ranked eighth last year, with a value of $5.12 billion. Today, that value has dropped by $2.02 billion to $3.1 billion. According to Pedrazza, it seems the brand extensions including Armani Casa, Armani Hotels and AX Armani Exchange, are a probable cause.
In terms of jewelry, there is a definite decline in the high priced items like Cartier Watches and in fact Fortunoff and Fred Leighton have declared Chapter 11 in the beginning of 2009. Brands like David Yurman and John Hardy, however are still showing successful numbers proving that consumers are still interested in quality, but might need to re-group as far as budget is concerned.
The obvious take on this information – unique and exclusive still prevails.
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