Crack the Crunch with the Crunch Breaker
Luxury Posts
Be wary of creating a caring face
December 14th, 2009
Next month, Bulgari’s 11-city touring jewellery exhibition, Between Eternity and History, will end with a start-studded auction at Christie’s in New York with the aim of raising $10m for Save the Children’s Rewrite the Future campaign. So writes the Financial Times in their Asian international edition (http://www.ft.com/home/asia).
The great and the good will be there – Ben Stiller, Sting, Willem Defoe and Julianne Moore, with the New York event culminating in an event that has taken in cities such as Rome, London and Beijing.
Charity has become a tried and tested way to ease consumer malaise at spending on conspicuous luxury, whilst reinforcing brand credentials as being caring and responsible.
But is the consumer becoming more cynical?
Look at Montblanc. Last month the company caused international controversy with the launch of a $23,000 18-carat pen to celebrate the 140th anniversary of the of birth of Mahatma Ghandi. Montblanc was (rightly in my opinion) accused of exploiting Ghandi – liberator, champion of egalitarianism and simple living – in order to enter the Indian luxury market. Despite Ghandi’s grandson endorsing the promotion and Montblanc donating $148,000 too build a shelter for rescued children, the anger was widespread.
And did nothing to enhance the brand worldwide.
Is this the new ‘caring face’ of luxury?
This is sector I know well but frankly I am a cynic on this line of marketing. Last month Gucci paired with Mary J Blige to launch a Center for Women, Jimmy Choo created Project PEP, selling a range of handbags to support Elton John’s Aids Foundation, and Naomi Campbell paired with Louis Vuitton to launch a handbag in support of the White Ribbon Alliance.
Mmmmm. I remain a cynic.
Luxury Brands hold their own in the recession
October 4th, 2009
The big branding story of the past year’s recession has been the threat to the luxury category. Luxury, once thought recession-proof, seemed in danger this time around because of the broadening appeal of discount brands.
As Interbrand’s (www.interbrand.com) Best Global Brands 2009 report, released last week;
In Western markets, the rise of the hi-lo consumers — people who save on what is less relevant to them so they can indulge in what they find to be truly meaningful — has made discount shopping not a sad compromise, but a joyful form of smart allocation.
Despite this pressure, the brand value of the luxury category in the Interbrand study actually grew in 2009. Individual brands were happy to stay flat in this environment, with Hermes up one percent, Gucci down one, and Prada and Louis Vuitton down two percent. (In the automotive sector, Ferrari was the only brand that didn’t lose value.) Companies that had diluted their brand equity with moves toward the mainstream, like Armani and Tiffany, lost more ground.
According to Interbrand, luxury brands that target “wealthy connoisseurs” are most likely to prosper. Successful luxury brands set themselves apart using “authenticity, legacy, and excellence,” the study concludes. European luxury brands who fared best this year – LV, Prada, Hermes – maintained their focus on craftsmanship and exclusivity.
Asian luxury trends have followed a different pattern. While political leaders, expected to be role models, have made a public show of shunning luxury, the public has not followed suit, and—in general—continues to spend.
It is no easy task for luxury brands to be accessible on the one hand and exclusive on the other. “Too high end to be mass, too mass to be high end” is a dilemma that tripped up brands like Armani. Those that fared better emphasize the “roots and meaning of their excellence” to reassure customers about their authenticity, value and relevance.
Luxury in a recession. Is there a future?
March 17th, 2009
That’s the big question and it was answered poignantly last week by Luke Johnson, CEO of Private Equity group Risk Capital Partners and CEO of Channel 4.
‘Ostentatious luxury as a social spectacle is now seen as offensive. At dinner parties it’s now fine to serve Cava instead of Champagne. We’ve always known it tastes the same – it’s simple clever marketing by the French and snobbery that has led us to pay 4 times more for the same thing’.
So Mr Johnson is obviously not a fan of luxury – at least not for now. Maybe it’s an investment of his that isn’t doing too well.
But is it a given that after the fall of Lehman Brothers last September, Luxury must be dead?
The doom mongers will tell you so, but the facts are rather different.
Louis Vuitton reported that sales were up 30% in the past quarter in the UK and Sweden. House prices at the very top end are on the rise again according to today’s Times. The West End has held its own with sales holding up, whilst the rest of the UK High Street is down at least 8%. Last week Selfridges was packed with shoppers.
Luxury is no doubt a lot more difficult a sector in the current market, but there are brands doing well, certainly at the upper levels, and some businesses seem to be thriving.
It’s the City boys who have to replace a couple of bottles of Krug after work with a round of beers. Maybe they will even consider Cava now.