Less is more: Louis Vuitton tops luxury brand ranking
May 21 2014
The value of the top 10 luxury-goods brands surged 16 per cent to $111 billion as companies from LVMH Moet Hennessy Louis Vuitton to Burberry Group made exclusivity a priority over ubiquity, research company Millward Brown said in the 2014 BrandZ study published on Wednesday.
The Louis Vuitton leather-product label’s value jumped 14 per cent to $25.9 billion, placing LVMH’s biggest and most profitable brand atop the luxury ranking for the ninth straight year. Hermes, the French maker of Birkin bags that is part-owned by LVMH, rose 14 per cent to the second place at $21.8 billion. Kering’s Gucci, a direct competitor to Vuitton that gained 27 per cent to $16.1 billion, was third on the list.
Vuitton is among luxury-goods makers introducing more expensive products with fewer logos and tightening sales networks as wealthy shoppers switch to brands they perceive as being more elite. First-quarter fashion and leather-goods revenue at Paris-based LVMH rose at the fastest pace in two years, indicating that the Vuitton revamp is working.
Hermes’s goal of 10 per cent annual revenue growth is almost double Sanford C Bernstein’s industrywide estimate.
“If you lose exclusivity, you lose your luxury status,” Anastasia Kourovskaia, vice-president for European, West Asia and African operations at Millward Brown’s Optimor consulting arm, said in a phone interview. Many companies in the category are shying away from an overt focus on increasing market share and distribution to highlight their high-end appeal, she said.
The luxury ranking is part of a broader annual study commissioned by WPP, the advertising company parent of Millward Brown that measures brand values across 13 industries.
Clothing brand Prada, watchmaker Rolex, jewellery producer Cartier and fashion labels Chanel and Burberry placed fourth to eighth in the luxury list, respectively. Burberry’s value surged 42 per cent to $5.9 billion, the fastest growth in the segment, as the London-based company halted some promotions on rainwear and leather goods, Millward Brown said.
Coach and Fendi rounded out the top 10 luxury list, though both brands lost value. Coach, in ninth place, declined 4 per cent to $3.1 billion as its handbags lost cache in the US amid product discounting, Kourovskaia said. Fendi slumped 17 per cent to $3 billion as lack of investment by owner LVMH led to the fashion house being seen as less relevant by new luxury consumers, she said.
While both labels seem to have arrested the negative momentum in brand perception, winning back customers “is a very long journey,” said Kourovskaia.
The Millward Brown study, which ranks brands’ value by their earnings and revenue potential, is based on interviews with more than 2 million consumers and an analysis of companies’ performance.
Google, owner of the most-used internet search engine, overtook iPhone producer Apple as the world’s most valuable brand with its estimated value rising 40 per cent to $159 billion, according to Millward Brown. Apple fell 20 per cent to $148 billion, placing second. Vuitton ranked 30th in brand value across all industries.