Luxury brands becoming devalued, says Interbrand

Louis Vuitton has been identified as the leading luxury brand in a survey by Interbrand that indicates an uncertain future for high-end brands.

The report shows that through diversifying and expanding, many companies risk devaluing their brand.

Louis Vuitton, which has a 2008 brand value of £14.2bn, ranking above second place Gucci, valued at £5.4bn, is said to have maintained a high brand value with its expansion into the watch market by replicating the quality shown in its existing brands.

Conversely, the Mont Blanc pen brand is said to have suffered by expanding as a lifestyle brand.

Graham Hales, executive director at Interbrand, explains, ‘The ball point fails to be seen as true luxury, but with the breadth [Mont Blanc] now covers it’s questionable if the brand can be seen as iconic. It lacks the sense of craftsmanship that more specialist brands do.’

Dolce & Gabbana, Versace and Armani are said to have devalued their brands by creating less expensive sub-brands, decreasing their desirability among the affluent.

‘Essentially, they become ubiquitous at a point. There’s a degree of accessibility, but the price they pay is losing cachet,’ says Hales.

The survey uses methodology which values a brand based on its financial strength, importance in driving consumer selection and likelihood of creating ongoing branded revenue.

Hales says that luxury brands ‘have enjoyed the good times’ but claims, ‘It would be impossible for a luxury brand to start up today.’

Hide Comments (1)Show Comments (1)
  • carol shenda lewin November 30, -0001 at 12:00 am

    New luxury brands: not so impossible …. it’s a question of time

    These sweeping statements are more akin to tabloid news-grabbing soundbites than a wider perspective. To say that it would be ‘impossible ‘ for new luxury brands to be launched today is one such, totally throwaway, headline-seeking statement.

    The quintessential, true über-luxury brands of today are seeded from decades of a bespoke craftsmanship, the highest levels of skill, quality and uncompromising service. They have become enmeshed into the consumer brand psyche and tiering structure that has marked consumerism since it’s accelerated rise from the middle of the 20th Century.

    In an increasingly mass consumer market, there is even more opportunity for future luxury brand contenders, with a media-addiction and obsession to the ‘haves’ and their lifestyle to fuel mass aspiration:: it’s a materialistic world that defines individuals and their aspirations by what they possess and brands are a big ‘name-dropping’ part of that.

    In couture fashion and eye-watering priced accessories, alone, there’s a whole new generation of risen stars, the McQueens and Marc Jacobs, the new era of high-end luxury, the individual name that adds that glamour and sparkle to the lives of the super-rich, the new patrons of exclusivity.

    The next generation of luxury brands is also surely to include 21st Century exclusivity such as the ‘experts’ and ingredient rarities seen in the beauty industry with the launch of £300+ skincare brands. These hold many of the same ‘credentials’ ethos and principles that were the foundations of today’s most luxurious names. Like them, it takes time to build a luxury brand, and time is something that is impossible to keep from moving on.

    You only need to say two words: ‘Pierre Cardin’, to know that stretching an exclusive brand name below it’s accepted levels of high-quality, craftsmanship, design and style is a recipe for future devaluation, albeit creating a surge in revenues from mass volume / lower price. Effectively it’s a ‘selling-out’, an irresistible grab for the revenues heights from licensing below your class.

    Class today is defined through the zeros in your bank balance rather than in-bred levels of discernment and snobbery associated with that world’s perceived levels of taste – it’s the American way, not the ‘old-school’ European “know your place” that’s driving the genuine future luxury brands; pick through all the current masters and purveyors of bespoke and exclusive services and goods, the future luxury brands are being seeded there, right now: time will tell.

    Carol Shenda Lewin
    Wordpool, freelance brand naming

  • Post a comment

Latest articles