Luxury is not what it used to be.
The value of the top 10 global luxury goods brands fell by 6 percent, or US$7.1 billion, to US$105 billion, as companies from Prada SpA to Societe Cartier grappled with slowing sales in China and Russia, research company Millward Brown said in its 2015 BrandZ study published yesterday.
Only Louis Vuitton and Chanel SA saw an increase over last year. Vuitton gained 6 percent to US$27.4 billion, placing LVMH Moet Hennessy Louis Vuitton SE’s biggest brand atop the luxury ranking for the 10th straight year. Chanel’s value rose 15 percent to US$9 billion, propelling it to fourth in the list behind second-place Hermes and Kering SA’s Gucci.
Spending on gifts has fallen in China as Beijing clamps down on corruption, while Russia’s shoppers are suffering from the ruble’s depreciation and sanctions tied to the conflict in Ukraine, Millward Brown said. At the same time, efforts to appear more exclusive have created opportunities for cheaper brands, such as Michael Kors and Tiffany, which finished in the top 10 for the first time, the researcher said.
Chanel, the maker of No. 5 perfume, and handbag purveyor Vuitton fared better than their peers, thanks to their unique approaches, Millward Brown Global BrandZ valuation director Elspeth Cheung said.
Chanel has harmonized prices across regions, encouraging more in-store consumption, Cheung said, while Louis Vuitton has successfully revitalized its brand with a fresh take on its original LV monogram.
The worst performers were Cartier, whose value decreased by 15 percent to US$7.6 billion, placing it sixth, while Prada slumped 35 percent to US$6.5 billion, the study found.
An overly expensive product mix and lack of novelty at Prada have led shoppers to spend elsewhere, analysts at Exane BNP Paribas said.
Hermes’ value fell 13 percent to US$18.9 billion and Gucci declined 14 percent to US$13.8 billion, the study said. Rolex fell by 6 percent to US$8.5 billion, placing it fifth. Rounding out the top 10 most valuable luxury brands were Burberry in eighth, Michael Kors and Tiffany.
Meanwhile, Apple Inc overtook Google Inc as the world’s most valuable brand, with its estimated value rising 67 percent to US$247 billion, Millward Brown said. Google’s value gained 9 percent to US$173.7 billion.
Vuitton ranked 34th in brand value across all industries, compared with 30th last year.
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