September 20, 2010
Worth nearly $22 billion in 2010, designer Louis Vuitton is the world’s most valuable luxury brand, according to Interbrand.
The branding consultancy ranks the 100 best brands in the world annually, and placed Louis Vuitton as the 16th best overall in this year’s list. The fashion icon’s brand gained more than $700 million in value, a rise of 4 percent, despite a lagging global economy.
“[Top luxury] brands have offered outstanding service to their customers and have expanded their unique in-store experience into multiple online channels,” said Mandredi Ricca, Milan, Italy-based managing director at Interbrand, New York.
“Luxury brands continue to successfully differentiate themselves by focusing on their heritage and history – and, simply put, by refusing to compromise their positioning to appeal to the mass market,” he said.
Interbrand’s methodology for its 100 Best Global Brands rankings analyzes the impact a brand delivers value for its company.
The three key indicators are the financial performance of branded products and services, the role of the brand in purchasing decisions and the strength of the brand to continue driving earnings for the company.
On top of the world
Gucci, the second highest-ranked luxury brand on the list, fell from No. 41 to No. 44.
However, the brand’s value did still appreciate more than $150 million to $8.3 billion.
Hermès rose to No. 69, up one place from last year’s ranking, with an approximate value of $4.8 billion.
The $200 million boost in value represented 4 percent annual growth for the French fashion house.
Tiffany & Co. and Cartier ranked 76 and 77, each valued at more than $4 billion.
Finally, Armani rounded out the luxury brands on the list, falling from No. 89 to 96 despite a solid 4 percent jump in value to $3.4 billion.
A number of luxury and premium automotive brands – which were not included under the luxury category – also fared well this year.
Premium automakers Mercedes-Benz and BMW also ranked high on the list, holding the 12 and 15 spots, respectively.
Mercedes’ brand value grew 6 percent to $25 billion, while BMW jumped three points to more than $22 billion.
Interbrand said the automakers were able to build their value by developing innovative designs and delivering premium value vehicles with luxury features.
German automaker Porsche jumped two spots to No. 72 as its brand value rose 4 percent to $4.4 billion.
Meanwhile, No. 91 Ferrari inched up 1 percentage point in value, settling at $3.6 billion.
On the other hand, Lexus fell off the charts after holding the No. 96 spot last year.
While brands such as Louis Vuitton and Hermès increased in value this past year, the luxury industry as a whole has been having difficulties maintaining its aura.
Half of luxury consumers have noticed a decline in customer experience, according to Luxury Institute’s semiannual report on the industry (see story).
The key to success in the luxury sector depends on the continued focus on a brand’s core values and the consumer experience, according to Interbrand.
“[Luxury brands should] continue to invest in their heritage and legendary status and leverage social media and the in-store experience to create a ‘3-D’ strategy,” Mr. Ricca said. “[They should] create mass desire, drive selective demand and cultivate individual discovery.
“Important as innovative touch points can be, luxury brands will not generate long-term economic value unless they nurture their ability to offer an outstanding experience to their customers,” he said.
Peter Finocchiaro, editorial assistant at Luxury Daily, New York