Last year, UK Advertising Standards Agency (ASA) adjudged French luxury brand Louis Vuitton’s advertisements as misleading. The luxury conglomerate Louis Vuitton Moet Hennessy (LVMH) ran two campaigns where models posed as craftspeople and lovingly hand stitched leather goods. ASA felt the advertisements lacked “truthfulness” since these products are largely machine stitched. The advertisements were banned.

The incident revealed how Louis Vuitton was struggling to find a balance between its craft making heritage and its contemporary expansion as a brand that recorded double-digit revenue growth in 2010, producing more leather bags and accessories each year than is possible to hand craft.

The exponential growth of luxury market segment and the rise of luxury retail across Asia have driven many luxury brands to undergo enormous rebranding exercises, with product lines and advertising campaigns geared towards younger, affluent and trend conscious consumers. And the idea of the hand crafted retains a powerful allure for some luxury brands, especially the European ones. Somewhat paradoxically, the growth of mass scale branded luxury has boosted hand made crafts as a discrete market segment, crucial to brand value in the growth of luxury businesses.

Perhaps, which is why some luxury conglomerates are bringing small heritage and craft based brands under their umbrella while negotiating the waters of brand expansion. These craftspeople help them retain brand values.

French conglomerate PPR (which reported $14.6 billion revenue in 2010 and owns brands including Gucci, Stella McCartney and Bottega Veneta) have invested in Sowind, whose subsidiaries include Girard-Perregaux, a small Swiss watch manufacturer over two hundred years old. Girard-Perregaux watches, founded way back in 1791 by watchmaker and goldsmith Jean-François Bautte, involve final hand assembly and hand polishing of each watch.

A more unusual example of the alliance between brand expansion and small-scale craft business is the relationship between British heritage men’s wear brand Gieves & Hawkes (owned by Hong Kong property magnate Christopher Cheng) and contemporary luxury brand Carreducker. Gieves & Hawkes has undergone a definitive rebranding in the past five years, revamping its famous Savile Row store into a men's emporium and driving forward a process of international expansion with ready to wear lines and accessories in addition to its tradition of making men's bespoke suits. Carreducker is a small London-based business launched in 2004, which produces around 150 pairs of the finest bespoke shoes each year costing upwards of $4,500 per pair.

But, even though it represents the opposite of brand segmentation strategies that proliferate with ready to wear ranges under luxury brand umbrellas, the growth of luxury crafts represents a shift towards an idea of absolute luxury grounded in the origins of many luxury brands. These origins centre on the best in design, the finest quality materials as well as personal relationships with the makers of craft and are believed to constitute the core of luxury brand values.

The production levels of luxury crafts may seem tiny in the wider context of the multi-billion dollar luxury industry, but this is very much a two-way flow. For instance, with Gieves & Hawkes’ expansion it has been important to orientate the brand around values of craft embodied in men’s bespoke tailoring traditions. The place of Carreducker is crucial to the broader values that feed into the Gieves brand even as it has expanded into worldwide concessions and ready to wear lines.

As for business partners Deborah Carré and James Ducker, who make Carreducker shoes, the process of evolving into a sought-after bespoke shoe brand was quite a feat. Brand expansion is not their goal: They can only produce that many shoes that James and Deborah can individually make, with a small portion of the shoe making process drafted out to locally based specialised crafts workers.

But they do note that besides the main workshop in London, the key to Carreducker’s success as a new luxury brand has been the small workshop at Gieves & Hawkes’ new emporium style Savile Row store in London. In a small glass encased studio at the centre of the store, the craft making side of the shoes is dramatised against the backdrop of the store. This theatrical display of craft making underscores the absolute luxury of bespoke shoes and nods to the bespoke heritage around, which the expanding Gieves & Hawkes wants to take advantage of. “Our competitors are predominantly centuries-old businesses with their own well-established premises. The confidence and credibility that Gieves & Hawkes has given our brand is invaluable,” says Deborah Carre.

Some commentators on the luxury industry have expressed cynicism at this renewed emphasis on craft, concluding that many luxury brands use the myth of craft embodied in a tiny percentage of products at the top of the brand pyramid to sell factory made luxury goods lower down the scale. Like in the case of Louis Vuitton.

But, in a way, the relationship between Carreducker and Gieves & Hawkes shows how important craft is to luxury and luxury to craft. These thriving partnerships between a small company and a large luxury brand reveal a way that luxury can find renewed definition in values of personal relationships and the finest materials. And crafts can be given continuity and new life through contemporary luxury markets. zz

(The author is an anthropologist specialising in sustainable fashion. Phyllida is luxury editor at Financial Chronicle)

phllidajay@mydigitalfc.com