It has not been a good year for global luxury. The total value of the world’s top 50 most valuable luxury and premium brands plummeted 7.6 billion dollars, down 5 percent from 227.1bn dollars in 2020 to 219.5bn dollars in 2021.
The figures were revealed in the annual Brand Finance report Luxury and Premium 50 2021, which saw the value of fashion companies suffer in the pandemic, despite accounting for 62 percent of the sector.
The world’s top luxury brand is German automaker Porsche, valued at 34.3bn dollars. Celine is the fast growing brand, up 118 percent.
Brand Finance defines luxury brands as “brands that are well known for high quality but are not widely considered or purchased due to price. This often manifests itself in high brand awareness and a strong reputation for quality but low purchase relevance and conversion – as most consumers do not consider the brands within their reach due to price. We measure these metrics for all brands included in our Global Brand Equity Monitor and use them to directly to feed into the brand strength score, ensuring consistency and transparency.”
Effects of Covid-19
The global coronavirus pandemic has damaged brand values across the luxury and premium sector with the total brand value of the world’s top 50 most valuable down 5 percent year-on-year. Alex Haigh, Valuation Director, Brand Finance said in a statement: “It is not all doom and gloom though, the pandemic can be used as a catalyst for change across the sector, through growing e-commerce channels or through brands’ responses to the increased consumer demand for social and sustainable action.”
Apparel brands dominate ranking but struggle amid pandemic
Apparel brands dominate the Brand Finance Luxury & Premium 50 2021 ranking, with the 30 brands that feature accounting for 62 percent of the total brand value. Performances across the board have been impacted by the pandemic, however, with the majority of brands recording a brand value loss this year.
Coach has recorded the biggest drop in brand value this year in the apparel subsector, falling 31 percent to 4.7 bn dollars. Coach’s parent company, Tapestry, has however cited that forecasts across its brands are looking more positive than anticipated thanks to triple digit e-commerce growth and a strong rebound across the Chinese market. Coach has continued to embrace its strategy of celebrity-endorsed partnerships and collections, the latest of which, saw the appointment of Jennifer Lopez as the global face of the brand.
Celine is the fastest growing luxury and premium brand this year, recording an increase of 118 percent in brand value increase to 1.5 bn dollars and simultaneously jumping 13 spots to 34. Under the helm of Hedi Slimane, Celine has successfully managed to infiltrate the burgeoning Gen Z generation across the Asian market as it rises in popularity thanks to dressing popular K-drama characters in its garments.
In addition to measuring overall brand value, Brand Finance also evaluates the relative strength of brands, based on factors such as marketing investment, customer familiarity, staff satisfaction, and corporate reputation. According to these criteria, Ferrari is the world’s strongest luxury & premium brand, followed by Rolex. Despite the challenges of the last year, the market for luxury watches has shown remarkable resilience to the pandemic turmoil, with demand remaining stable, demonstrated by Rolex’s website traffic experiencing a surge over the previous year.Article source: Brand Directory, Brand Finance