Welcome!
Luxury Industry and Sectors
Dr. Satyendra Singh
Professor, Marketing & International Business
University of Winnipeg, CANADA
https://sites.google.com/view/drsatsingh
Luxury industry characteristics…
Company size
very small, very high brand awareness (Dior>car), Carven (€1m/yr only)
Sales not comparable
split among retail, wholesale, export, licence royalties are not public
Limited staff
mostly in stores. Many outsourced. Chanel no factory for RTW.
Flagship stores museum. Full assortment. Brand image creator. Extention products consume image.
↓couture-level craftsman/embroiderers (#10K/1920 vs 200 now). Youngsters uninterested.
Financial characteristics
most brands lose $. They survive in group because of ↑value, ↑awareness. It may become lifestyle brand. Then generate profit through product extension. Profitable brand in the group can compensate for losses for many years. Christian Lacroix never profitable in over 20 years.
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Luxury industry characteristics
High breakeven point
everything top quality, even carrier bags. Bottega Veneta has leather handles. Part of purchase experience. Expensive fashion show. Custom-made for catwalks designed for brand image to stand out ie larger shoulder, shorter skirt, tighter waist. Not sold. Flagship store too expensive.
Copy trends (within few weeks of launch)
Balenciaga/L/$4K vs Steve Madden/R/$150
Counterfeit activities
Time frame
perfume. 12 months to make, 18-24 months to launch
Fashion Cycle
Sept/Oct fabric. Prototype development. Feb/Mar fashion show. July stores. Sep/Dec sale at full price. Jan/Feb discount sale (20% of merchandise)
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Fashion mega brands (>€500m/year)
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FRANCE | ITALY | |
Chanel | Armani | Max Mara |
Dior | Dolce Gabbana | Prada |
Hermés | Ermenigildo Zegna | Salvatore Ferragamo |
Louis Vuitton | Gucci | |
2nd-tier fashion brands (€100m−€500m/year)
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FRANCE | ITALY | ||
Agnès | Lanvin | Alberta Ferretti | Les Copains |
Celine | Longchamp | Bottega Veneta | Mariella Burani |
Chloè | Sonia Rykiel | Bulmarine | Mariella Rinaldi |
Jean Paul Gaultier | Yves Saint Laurent | Brioni | Marni |
Kenzo | | Etro | Missoni |
Lacoste | | Fendi | Miu Miu |
Lancel | | Ferre | Moschino |
| | Furla | Nazareno Gabrielli |
| | Krizia | Roberto Cavalli |
| | La Perla | Trussardi |
| | Laura Biagliotti | Valentino |
| | Loro Piana | Versace |
Major luxury groups – Oligopoly
Louis Vuitton Moet Hennessey (LVMH) 🡪 30
Louis Vuitton, Givenchy, Marc Jacobs, Fendi, Donna Karen…
Richemond (Switzerland) 🡪 15
Cartier, Chloé, Montblanc, Lancel…
Gucci (Italy) 🡪 10
Gucci, YSL, Sergio Rossi…
Prada (Italy) 🡪 5
Prada, Miu Miu, Azzedine Alaia…
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Luxury sectors
Fashion – apparel (Prêt-à-porter, haute couture), accessories…
Beverages – wines, champagne, cognac
Eyewear – prescription, sunglasses…
Beauty – cosmetics, hair, perfume
Property – hotels, resorts, spa…
Jewelry – watches…
Auto
Publishing
Decorative art
Accessories
…
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Product structure
Product line/length
Bag, Shoes, Belts…
Product breadth
Hand bag
Evening bag
Weekend bag
…
Product depth
Variety of hand bags in this category…
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Questions?�s.singh@uwinnipeg.ca