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Nike named “most valuable” apparel brand again

By Danielle Wightman-Stone

Apr 16, 2020

Sportswear giant Nike has claimed the title of the world’s “most valuable” apparel brand for the sixth consecutive year, however, the Brand Finance Global 500 report also revealed that brands across apparel will be impacted by the Covid-19 pandemic and stand to lose up to 20 percent of their brand value.

The report reveals that the world’s 500 biggest brands are set to potentially lose up to an estimated 1 trillion US dollars as a result of the coronavirus outbreak, with the apparel sector set to be one of the most affected.

Richard Haigh, managing director at Brand Finance said in a statement: “The Covid-19 pandemic is undoubtedly going to hit the apparel sector hard, Brand Finance has predicted that apparel brands could face up to a 20 percent drop in brand value.

“As these brands negotiate store and factory closures, broken supply chains and a customer base that is facing unprecedented economic uncertainty, they will have to prepare for a tough and turbulent journey ahead.”

However, some brands, which Brand Finance calls “agile brands” like Nike, Levi’s and Adidas in the report will “fare much better than their inflexible counterparts”. It also notes that as with most sectors, the damage that will ensue on apparel brands will greatly depend on how long this pandemic engulfs the world.

It also reveals that it expects new consumer behaviour habits to be borne out of the pandemic, and brands who look towards “greater innovation” in their e-commerce businesses and the potential reassessment of their store business models will be stronger.

Apparel brands stand to lose 20 percent of brand value due to Covid-19 pandemic

Nike once again claimed the top stop as the most valuable apparel brand in the world, after recording a 7 percent increase in brand value to 34.8 billion US dollars, as of January 1, 2020. This was helped by what the report states is the sportswear giants focus on “implementing a pivotal distribution strategy move” to reduce the number of retailers selling its products, with the aim of regaining control of the brand customer relationship and improving profit margins.

Nike’s bitter rival and fellow sportswear superpower, Adidas, has seen a less successful year, recording a 1 percent decrease in brand value to 16.5 billion US dollars, however, this still helped it come third in the ranking.

Both brands the report adds have been forced to close stores to stop the spread of Covid-19 which will impact sales. Adidas announced that it expects to lose over 1 billion US dollars from sales in the first quarter of 2020 from greater China alone.

In second, fourth and fifth place in the rankings were luxury brands Gucci, Louis Vuitton and Cartier, all increasing their spots in the top 10 most valuable brands since last year, with Chanel entering the ranking at number 8, while Hermes drop a spot to number 10.

The report also revealed an overall decrease in the value of high street brands, with Zara falling two places compared to last year to number six, after a 21 percent drop in brand value, H&M fell four places to number seven, and Uniqlo down one spot to number nine.

“As with all brands across the sector, Zara and Bershka are negotiating a significant drop in visibility with store closures and consumers staying at home,” explained the report. “Online shopping and e-commerce channels are vital to help alleviate some of the economic damage from Covid-19. Zara has implemented an innovative approach to the pandemic, with models photographing and styling new campaigns from their own home rather than the studio.”

Among the hardest-hit brands were Valentino and Gap, with Brand Finance stating they were the two fastest falling brands in the ranking, both recording a 30 percent drop in brand value.

Italian luxury fashion brand, Valentino, has been negotiating slowing revenue and sales over the previous year, particularly in parts of its key Chinese market, which accounts for approximately 39 percent of the brand’s sales, in the face of civil unrest in Hong Kong and the general slowing Chinese economy.

Similarly, the report adds that Gap’s fortunes have been “less than favourable”. With declining sales, the abrupt exit of chief executive officer Art Peck, and the plan to close 230 of its stores on the horizon, the brand is evidently taking measures to attempt to counteract its sharp drop in earnings.

When it comes to the apparel sectors fastest growing brand that honour goes to denim brand Levi’s who recorded a 38 percent increase in brand value to 4.1 billion US dollars. 2019 was a solid year for the brand, as it celebrated its highest growth rate in more than 25 years and undertook an extremely successful IPO after trading privately for over 30 years.

The brand, which has traditionally relied heavily on its men’s clothing range, now boasts womenswear as the fastest-growing segment of its business, which the report reveals is a “testament to the brand’s successful diversification strategy”.

Image: courtesy of Nike