The Top Ten Most Resilient Luxury Brands
Luxury labels are riding out the recession well compared with the high street
The wealthy are still living in a material world, although they are toning down their habits. Global luxury goods sales are expected to fall 8% to €153bn ($230bn) this year and will take at least three years to recover to 2008 levels, according to US consultant Bain & Co.
Claudia D’Arpizio, Milan-based partner at Bain & Co, said: “Resilient brands tend to have increased store traffic through pushing new or cheaper items and have a strong brand strength in China. Brands that are showy, logo-heavy and ready-to-wear have generally traded down – people are looking for intrinsic quality and less obvious luxury.”
London-based independent consultancy The Luxury Brand Factor has compiled a list of the top luxury brands. The firm has taken into account consistency in financial performance, brand visibility, communication strategy and product development and innovation.
Where the company is listed, performance refers to gains in its shares since global stock-market lows in March. Sales and staff figures are according to company websites and research by The Luxury Brand Factor.
1. Chanel
Owner: Co-owned by Alain and Gerard Wertheimer, grandsons of the early Chanel partner Pierre Wertheimer.
Performance: N/A
Founded: 1909
The “neatness” of Chanel’s brand and its timeless prestige has kept it profitable during the recession, according to Scilla Huang Sun, head of equities at Swiss Global Asset Management, formerly Julius Baer Asset Management. Chanel is best known for “the little black dress” and Chanel No. 5 fragrance. Sales are estimated at about €4.9bn. It has 1,220 staff and 100 boutiques worldwide.
2. Louis Vuitton
Owner: LVMH Moët Hennessy
Performance: 75%
Founded: 1854
Paris-based Louis Vuitton, part of the LVMH Moët Hennessy holding company controlled by French billionaire Bernard Arnault, is one of the most recognisable brands with its LV monogram. With revenues of $2.7bn at the end of 2008 and staff of about 13,700, it is one of the oldest luxury brands.
3. Rolex
Owner: Private trust, the Hans Wilsdorf Foundation
Performance: N/A
Founded: 1908
The Swiss watch manufacturer had sales of about €3.8bn last year and staff of around 6,000 according to The Luxury Brand Factor. James Bond’s watch of choice, basic gold-plated Daytona watches sell for $30,000; a Submariner model that had belonged to the actor Steve McQueen was auctioned in 2007 for $243,000.
4. Hermès
Owner: 71% Hermès Family; 29% public shares on Euronext
Performance: 58%
Founded: 1837
Paris-based Hermès’ style and longevity have stood it in good stead, with staff of 7,894 and sales of €1.7bn at the end of last year, a 10% rise on 2007. Josina von dem Bussche-Kessell, director of the The Luxury Brand Factor, said: “It operates some of the highest margins of all the industry.”
5. Gucci
Owner: Gucci Group, Pinault-Printemps-Redoute
Performance: 187%
Founded: 1921
Florentine leather producer Gucci, part of the Gucci Group owned by French company Pinault-Printemps-Redoute, generated revenue of $2.4bn in 2008, and operates through 278 stores worldwide. Its classic status has helped it to remain profitable despite the departure of creative director Tom Ford in 2004.
6. Burberry
Owner: Public shares on the LSE
Performance: 213%
Founded: 1856
The only UK-based luxury brand in the top 10, Burberry’s longevity combined with robust advertising campaigns and a move away from wholesale stores into directly owned stores, has contributed to its performance. It reported revenues of £995m in 2008.
7. Salvatore Ferragamo Italia
Owner: The Ferragamo family; a 48% public listing is scheduled for next year
Performance: N/A
Founded: 1928
The smallest brand in turnover with revenue of €640m and small margins. It would benefit from its flotation next year, according to Huang Sun. It has about 2,600 employees and 550 stores.
8. Bottega Veneta
Owner: The Gucci Group, Pinault-Printemps-Redoute
Performance: 187%
Founded: 1966
Originally from Vicenza in north-east Italy, leather producer Bottega Veneta was bought by Gucci in 2001. Von dem Bussche-Kessell said: “The fastest-rising luxury brand, Bottega Veneta continued strong year-on-year consistency in its financial performance, launching jewellery and home collections.”
9. Cartier
Owner: Compagnie Financière Richemont
Performance: 98%
Founded: 1847
Parisian jeweller Cartier is owned by Switzerland’s Compagnie Financière Richemont and has a tradition of making tiaras and crowns for the world’s royalty. It is the number-one seller of luxury jewellery, and one of the top sellers of luxury watches after Rolex, according to Huang Sun.
10. Dior
Owner: Groupe Arnault
Performance: 114%
Founded: 1946
Paris’ largest high-fashion clothing retailer, Christian Dior, which owns 42% of LVMH assets, reported revenue of €12.4bn for the first nine months of the year, a decrease of 8% compared with the same period in 2008, which it says is “resilient”.
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