Louis Vuitton named as most valuable luxury brand for an eighth time

louis vuittonLouis Vuitton may be the most valuable luxury brand, but it is losing ground, according to the latest Top 100 BrandZ survey.

The report, which is released by consulting firm Millward Brown outlines the Top 100 Most Valuable Global Brands.

Apple clinched the No.1 top spot again ($US185 billion) and the top luxury company is Louis Vuitton, coming in at 29th position.

The French luxury house clinched the top spot for an eighth straight year, but is losing ground as Italian brands Gucci (68th) and Prada (95th) are slowing creeping up. Louis Vuitton’s brand value dipped by 12 per cent from last year to $US22.7 billion.

The value of PPR’s Gucci brand surged 48 per cent to $US12.7 billion, ranking it the third in the luxury list, while Prada’s worth soared an impressive 63 per cent to US$9.45 billion, placing it fourth, Millward Brown Optimor said. French luxury house Hermes stayed in second place at $US19.1 billion, unchanged from last year.

Rounding out the top ten when it comes to luxury was Rolex, Chanel, Cartier, Burberry, Fendi and Coach.

Overall, luxury grew by 6 per cent, which is a strong increase but softer than the 15 per cent the previous year because sales slowed in the BRICs (Brazil, Russia, India & China) markets.

Even as the rate of economic expansion slowed in the BRIC countries, luxury sales still grew. Wealthy Asian clients continued to support and bolster the brands both with purchases made at home and while traveling abroad, which helped grow financial results in Europe.

 We have spoken about the slowdown in China’s economic growth, but loyalty still seems to count for something when it comes to some luxury brands.

Chanel and Louis Vuitton illustrate how luxury brands cultivate Brand Contribution in various ways. Chanel emphasizes the brand’s exclusivity, while Louis Vuitton tends to be more accessible, widely celebrating its heritage in travel and evoking the elegance of earlier periods.

 Will Louis Vuitton get the top spot for 2013 for a ninth straight year?

By Cassandra Murnieks

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Europe’s financial woes don’t worry Giorgio Armani

giorgio armaniWhilst most of the luxury houses have seen a dip in their financial results due to a slowdown in Europe and China, Giorgio Armani is pushing through the barrier to post extremely positive results.

Sales at Giorgio Armani rose 16 per cent to €2 billion in 2012, faster than a year earlier.

The increase in revenues in the directly managed retail channel was quite positive for the Italian luxury house in 2012, recording a 19 per cent increase, while, in terms of geographical areas, growth was in double digits in all territories, including Europe, despite the unfavourable economic situation there. Sales in China slowed slightly but still rose by 39 per cent, and operating profits climbed 20 per cent to €340 million.

Giorgio Armani opened more than 100 stores in 2012, which now takes their global store count at more than 2,200.

Giorgio Armani, Group Chairman, commented: “The excellent results achieved in 2012 confirm the quality of leadership that we have here at Armani. They are the result of a strategy focussed on the constant search for quality, an approach that over the years has built an extraordinary level of brand awareness and loyalty. We have also continued to enjoy a strong relationship with our wholesale partners. The positive figures for the Group in the first quarter of 2013 give us cause to look ahead with confidence, and help confirm that our commitment to consistency, continuity, and long-term strategy is the right path to follow.”

By Cassandra Murnieks

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Giorgio Armani and Cate Blanchett team up for fragrance launch

Giorgio Armani and Cate BlanchettDesigners and celebrities go hand in hand…. Some designers look at celebrities as a muse, whilst others may dress a celebrity for the awards season.. Nonetheless a relationship is formed.

One of those designer/celebrity relationships is Giorgio Armani and Australian actress Cate Blanchett.

Over the years the talented designer has created masterpieces for Blanchett which has not only wowed her acting counterparts and the fashion world, but the international media. So, it is no surprise to read that Armani and Blanchett have teamed up again for the launch of SI’, Armani’s new fragrance.

The feminine fragrance was launched last week in front of the media at the Milan headquarters of the designer in Via Borgonuovo 11.

The launch was celebrated by a cocktail reception, with Blanchett in attendance.
Blanchett expressed her enthusiasm for the for the SI’ project, dedicated to a woman that is strong yet feminine.

“SI’ is my tribute to modern femininity – an irresistible combination of grace, strength and independence of spirit”. Giorgio Armani said of the fragrance.

By Cassandra Murnieks

Photo courtesy of Giorgio Armani Australia PR Office

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Qatar and Italy join forces for a potential stake in Versace

versaceQatar Holding is becoming a strong force in the luxury industry.  With their portfolio boasting names like Harrods and Valentino along with small minority stakes in Tiffany & Co and LVMH Group, they are now circling Versace.

We first reported this in October last year with Mayhoola, an investment vehicle backed by a major private investor group from Qatar, who met with representatives from the Italian government and the Italian corporate world to discuss the deal.

Fast forward to May 2013 and Qatar Holding and an Italian state-controlled investment fund are interested in investing in the Italian fashion house, according to Italian newspaper, Il Sole 24 Ore.

Reuters reports that Qatar Holding signed a joint venture agreement with FSI in November 2012 to invest in Italian companies in sectors including food, fashion and luxury.

Who are FSI? They are an Italian strategic investment fund owned by state financing company Cassa Depositi e Prestiti.

Il Sole said that there were some 10 other expressions of interest for Versace besides that of Qatar and FSI and its understood that talks are only in their infant stages as the Versace family aren’t 100 per cent sure if they want to sell a stake.

In April, Versace Chief Executive Gian Giacomo Ferraris told Reuters the house may consider opening the company to outside investors to help fund expansion in overseas markets such as Asia.

Neither FSI or Versace have made a comment on the latest reports.

By Cassandra Murnieks

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MO Luxury Australia launches into Asia

hong-kong-luxury-real-estate2Reflecting the robust growth of the premium and luxury sectors in the Asia Pacific region, Sydney-based MO Luxury is taking a great leap forward and expanding into Asia.

Following on from the success of her specialist recruitment and advisory business in Australia, MO Luxury’s Founder & Director, Melinda O’Rourke, has opened an office in Hong Kong, May 2013.  Ms O’Rourke sees this move as timely given that many of MO Luxury’s clients operating in the premium and luxury sectors have their regional brand headquarters in Hong Kong, Shanghai and Singapore.  She says, ‘Opening an office in Hong Kong will ensure we are closer to our clients and able to respond to their specific needs with our specialist Recruitment and Advisory services more swiftly’.

MO Luxury Asia will be further strengthened by the appointment of Mr Richard Denny as Chairman. A Company Director, Entrepreneur and recent Senior Vice President of global satellite company Inmarsat, Mr Denny brings a wealth of experience to this role. He continues to compete at a high level in motor racing with both Maserati and Porsche and maintains a range of business interests throughout Asia.

With the depth of experience and understanding that MO Luxury Asia bring to this sector, the business will also now operate in the art market, covering recruitment, cultural training and advisory services.  This strategic initiative reflects the growing demand for art in the region.

There are many synergies that already exist within the luxury and art worlds, with several international brands collaborating with Contemporary artists, (Louis Vuitton and Hermès as examples) foundations and art awards (Prada, Cartier and Bulgari amongst others).

MO Luxury Asia has retained 1858 Ltd Art Advisory, an International Art Advisory headquartered in London with operations also in Hong Kong.   Ms Raikhel-Bolot, co-founder & Managing Director says, ‘1858 Ltd advises a global client base, providing specialist art advisory services and bespoke solutions to High Net Worth and Ultra High Net Worth Individuals, private clients, corporations, luxury brands, museums, private banks and family offices.   We welcome the opportunity to work with MO Luxury in Asia as they pioneer in marrying art and luxury recruitment and advisory in the region’.

Knight Frank’s annual 2013 Wealth Report showed one of the main trends driving investments of passion is the increasing globalisation of wealth, epitomized by the world of fine art, according to data compiled for the report by 1858 Ltd.

Ms O’Rourke said, ‘I am extremely enthusiastic about the opportunities this presence in Hong Kong offers, to working with 1858 Ltd, and contributing to the continued growth of our clients’ businesses through recruitment, cultural training and specialist advisory services’.

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LVMH built up Hermès stake, according to French stock market authority

lvmhThe talk about LVMH’s stake in Hermès just won’t go away…. And now it’s getting more complex according to the latest news.

The international media has reported over the weekend that the French stock market authority has found LVMH secretly bought shares in the rival luxury group to build a stake, and not just for financial investment.

We reported last month that LVMH boss Bernard Arnault had been scrutinised and questioned over their stake in Hermès, for which he said that the 22.6 per cent stake was ‘unexpected’.

“You know, we found ourselves owning shares in this company…unexpectedly. We had not planned to be shareholders in this firm. We made a financial investment, and that financial investment had an outcome that we had not expected.” Arnault said at the time.

With the latest news, Reuters reports that LVMH would fight the findings of the watchdog’s probe before its sanction committee when it meets on May 31 to hear the company’s defence.

Hermès have yet to comment on the latest findings.

French newspaper Le Monde reported over the weekend that the stock market authority’s investigation found LVMH had in 2001-2002 acquired an initial stake of 4.9 per cent through subsidiaries based in tax havens and which was not declared in its accounts.

“LVMH intends to vigorously contest the conclusions found in this report,” the company said in a statement.

“The sanctions committee … will not hand down a decision until it has examined all evidence presented in LVMH’s defence,” LVMH said. “It will then only be able to conclude the absence of any wrongdoing by LVMH towards the law and the (stock market authority’s) rules.”

Last month, Hermès CEO Patrick Thomas said he remained “extremely confident” concerning the outcome of the AMF investigation and the criminal complaint.

By Cassandra Murnieks

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Luxury global market now tops €200 billion

luxuryshoppingIt is expected that worldwide luxury goods market revenues will grow as much as 50 per cent faster than global GDP, according to a new report issued by consulting firm Bain & Company.

Unveiling their latest findings at a conference hosted by Italian luxury goods association Fondazione Altagamma, Bain confirmed that luxury revenues grew by 10 per cent in 2012, given the strong growth present in the first half of last year.

What changed in the second half of the year? Subdued spending in Europe and slower growth in China are mainly to blame.

The total size of the luxury market, which was €212 billion euros in 2012 is expected to reach €250 billion by mid-decade.

Bain’s report confirms that luxury spending is no longer restricted to traditional markets in Europe and America, but tourists are now expanding their dollars to countries such as Australia, South East Asia and Dubai.

In today’s society, the rise of the middle class in emerging countries is polarising the competitive arena, becoming a “new baby boom sized generation” for luxury brands to target.

So what luxury items are on consumers’ radar right now? Bain reports that absolute luxury items are leading the way, meaning no logos, highest quality materials and exquisite craftsmanship. This is a slight change from years ago when logos were everywhere and accepted by society.

When it comes to breakdown of products, leather goods and accessories are expected to continue to grow. Apparel spending recovered slightly, whilst watch purchases continue to decline, mainly due to the Chinese Government’s ruling of a stop in luxury gifting and a decrease in spending.

WIth cosmetics also being considered a luxury item, whilst they are slowing down in mature markets, they are continuing to grow in emerging markets.

Geographically, Europe remains a challenge for the luxury industry. With tourism numbers slowing down in this region, so is spending. With Europeans, especially in southern Europe,  Bain expects a flat-to-two per cent growth.

The U.S continues to grow and impress at the same time. Consumer confidence is at a high, retailers are rethinking their strategies when it comes to digital shopping and there are more stores opening. The rest of the Americas (Central and South) is also expecting to rise by a further 5-7 per cent.

When it comes to regions, Asia has been on the top in the last few years, with the help of strong consumer spending coming from the Chinese. But Bain’s forecast for the region now paints a different picture. Growth in the Asia-Pacific region, excluding mainland China, would reach 7-9 per cent this year, down from 10 per cent last year at constant currencies. For mainland China, it forecast growth of 6-8 per cent at constant currencies.

Japan’s growth continues to grow steadily as the country’s monetary policy depreciates the yen and pushes local consumption. The Middle East is also growing at a steady pace, with Dubai continuing to be the center of gravity and the only city that is attracting foreign luxury consumers – think Russians, Indians and Africans.

“We are seeing a more even distribution of global growth,” said Claudia D’Arpizio, a Bain partner in Milan and lead author of the study. “In turn, brands are refocusing from short-term, reactive hot spot thinking to long-term sustained growth strategies.”

By Cassandra Murnieks

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Richemont reports strong results despite a wobbly economy

cartierIt’s been a big week for luxury group Richemont…

Whilst the world’s second largest luxury group reported its strongest-ever full-year results, it also announced that their chairman Johann Rupert will take a year sabbatical starting from spring.

The 62-year-old, who founded the company as an offshoot of his father’s business, said he would use the time to travel and read before returning to Geneva. Rupert will begin his hiatus after Richemont’s general meeting in September and return to the company and his current role next year.

We mentioned last month that Richemont had put out the expectation that its annual net profits would rise by about 30 per cent, which they were able to achieve.

The Swiss luxury goods giant had strong performance in its jewellery and watch division and by favourable exchange rates, the group said this week.

Richemont’s bulky portfolio includes impressive brands such as Cartier, Piaget, Jaeger-LeCoultre and Montblanc.

Their net profit for the financial year ending at the end of March had come in at €2 billion. Operating profit had jumped by 18 per cent to €2.4 billion during the financial year, on sales up 14 per cent at €10.1 billion.

As we mentioned earlier, Richemont’s jewellery and watch division added some extra sparkle to the bottom line, with a 13 per cent rise in jewellery sales to €5.2 billion, and an 18 per cent rise in watch sales to €2.7 billion.

“The Jewellery Maisons and the Specialist Watchmakers have reported remarkable growth in sales and profits, despite the continuing strength of the Swiss franc and historically high cost of precious metals and stones,” Chairman Johann Rupert said about the figures.

Sales were steady in all regions, with the Americas region being the most impressive, with a rise of 18 per cent to €1.2 billion. European sales came in at €3.1 billion with a 17 per cent rise and sales in the Asia-Pacific region rose by 13 per cent to €4.1 billion.

These figures may be impressive, but the luxury group still saw somewhat of a shortfall after sales last year exploded with the thirst that the Chinese had for luxury goods.

Rupert said on Thursday he was optimistic “despite the slowdown in the Asia Pacific region and continuing uncertainty in the world economy.”

“The enduring appeal of our Maisons and their growth potential lead us to look forward to the future with a degree of optimism,” he said.

By Cassandra Murnieks

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Salvatore Ferragamo impresses with first quarter

ferragamo-ss13-01As the northern hemisphere heads towards summer, the sun is beaming strongly for Salvatore Ferragamo’s first quarter sales were warming indeed to read.

The Italian luxury house confirmed this week that its net profit in the first quarter more than doubled on the year to €24 million.

Why so profitable? What’s the reason for this very sunny Italian story?!

It has been such a good start for the year that Ferragamo’s first-quarter profit beat estimates and the company confirmed its projection for earnings growth this year.

With total revenues of €282 million and a 9 per cent increase at current exchange rates, the Group has also registered solid growth in the first three months of 2013, with sales up by 23 per cent compared to 2012.

Where are all the sales coming from? The Asia Pacific region seems to be the best performing for the luxury house with a turnover of €102 million, an increase of 6 per cent. China was again a major contribution, with a recorded growth of 20 per cent.

Europe, further confirming the exceptional brand awareness of Ferragamo and its ability to attract the interest of the global tourist flows, posted an increase in revenues of 10 per cent compared to the same period in 2012.

North America continued the solid growth trend registered in the past quarters, recording a revenue increase of 19 per cent compared to the same period of 2012 with  Japan showing a 4 per cent increase at constant exchange rates, registering a decrease of 8 per cent at current exchange rates due to the unfavourable impact of the Japanese Yen fluctuation vs. Euro.

Revenues in the Central and South America area also showed excellent results with an increase of over 13 per cent.

When it comes to product breakdown, there has been an increase in the sales of footwear (up by 8 per cent), handbags and leather accessories (13 per cent), which together represent over 74 per cent  of Group total turnover, and fragrances were up by 14 per cent.

By Cassandra Murnieks

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Ermenegildo Zegna opens in Brisbane

Level_1_sartoriaErmenegildo Zegna have had a very full calendar, particularly in the last three weeks with the Ermenegildo Zegna Wool Trophies and now with a new store opening in Brisbane, which is one of Australia’s fastest emerging markets for luxury and premium goods.

The Italian fashion house joins a range of brands that have recently launched in Brisbane, include Gucci, Chanel and Bulgari to name a few.

The new store was designed by Zegna’s in-house architects based on the creative concept developed by U.S. architect Peter Marino for various Zegna global stores throughout the world and compliments the brand’s use of quality materials, integrity and modern style within 260 meters of luxury selling space.

The store has been dubbed as the ultimate men’s emporium. Each of the collections is presented within individually designed areas that convey a unique and distinct vision. The luxury offerings consist of the exclusive ‘Su Misura’ (made-to-measure) service, the traditional Italian tailoring of ‘Sartoria’ in contemporary silhouettes, as well as Zegna’s sophisticated and chic leisurewear collection. The store will also feature the Zegna Sport line and complemented by an extensive range of leather and textile accessories, as well as Ermenegildo Zegna’s licensing collection of ancillaries such as watches, fragrance, underwear and cufflinks & jewellery.

The Ermenegildo Zegna Brisbane store opening highlights a long history with Australia; with the company’s long tradition of sourcing the very best superfine Australian merino wool as far back as the 1930’s. Strengthening this association was the Introduction of Zegna’s Wool awards as early as 1963 supporting the ASWGA, (Australian Superfine Merino Wool Growers Association).

Zegna say that the Brisbane store is a strategic opening that complements its regional Asia-Pacific network as well as its other sister boutiques within the Oceania market; Sydney Flagship opened in 2011, Melbourne opened in 2002 and Auckland in 1997.

By Cassandra Murnieks

Photo courtesy of Ermenegildo Zegna PR Office

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