October 8, 2004
Future Of Luxury Brand Groups
The Wall Street Journal describes today how luxury groups are considering moving from being ‘pot pouris of fashion, cosmetic and liquor brands’ to a position where they concentrate on a few key - and profitable - brands. Colossal luxury groups were created with the hope that benefits derived from economies of scale in areas such as supply and marketing would greatly benefit the three main groups (LVMH, Richemont, Gucci). However all the groups have seen a three year slump in sales and there is an alarming fact that each groups’ top brand (Gucci for Gucci, Cartier for Richemont, Louis Vitton for LVMH) earns more than twice the operating margins than their parent companies. Furthermore, Louis Vitton contributes half of LVMH’s $3.7b annual revenues!
It is likely that we’ll see the casting off of the smaller less profitable business concerns. Wall Street Journal hints at brands like Thomas Pink, Givenchy and Donna Karen will be the first to leave the LVMH stable and Boucheron for Gucci. Looks like the sales are going to be even better this year!
LVMH
Gucci
Richemont
Wall Street Journal
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3 Responses to “Future Of Luxury Brand Groups”
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October 20th, 2004 at 1:04 pm
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October 25th, 2004 at 1:25 pm
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January 7th, 2005 at 3:39 pm
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