The gleaming flagship stores of Louis Vuitton, Chanel and Gucci in the Ginza district of central Tokyo are no one’s idea of discount outlets. They were designed by top architects and offer sumptuous displays of luxury goods in Japan’s most expensive patch of ground.
This pushed the value of Kering, which also owns brands including Yves Saint Laurent and Balenciaga, to a seven-year low of €37 billion , a fraction of the €326 billion of the behemoth LVMH. As Kering’s founder Francois-Henri Pinault struggles to restore Gucci’s gleam, his traditional rivalry withEven LVMH, owner of 75 “maisons” including Louis Vuitton and Dior, is feeling the pain: It reported weak sales growth and its value has dropped by 9 per cent this year.
Meanwhile, brands that appeal to the richest shoppers, and can charge the highest prices, are doing fine. But the lesson of the week is that what the industry calls brand elevation — steadily making luxury labels more exclusive and expensive — is getting harder. There was room to achieve it as consumers kept on being drawn into the luxury status game by globalisation, but it takes years of dedication and growth to polish an image.Even LVMH, which has the smoothest brand elevation operation, is fallible.