The world’s top luxury brands could lose up to 35 billion dollars of brand value cumulatively as a result of the devastating pandemic.
The figures are reported in the latest Brand Finance Luxury & Premium 50 2020 report, which shows luxury apparel brands as the most heavily impacted from Covid-19, facing a 20 percent brand value loss.
Beyond luxury fashion, the value of the 500 most valuable brands in the world, ranked in the Brand Finance Global 500 2020 league table, could fall by an estimated 1 trillion dollars as a result of the coronavirus outbreak.
Within the luxury and premium ranking, three sub sectors are represented: apparel, automobiles and cosmetics and personal care. Brand Finance’s analysis has shown that these sectors are likely to be impacted differently by coronavirus, and the figures are based on the effect of the outbreak on enterprise value, compared to what it was on 1st January 2020.
“There is no denying the importance of the Chinese market in ensuring the good health and growth in the luxury & premium sector. We have witnessed the Chinese successfully keep the sector above water following the 2008 crash and luxury brands will be relying on this market once again in the wake of the Coronavirus pandemic. Porsche – the most valuable luxury and premium brand in the world – sold a staggering 86,000 units in China in 2019 alone, and the auto giant, along with fellow brands across the sector, will be hopeful that keen spenders will keep demand high.”
A good year for Givenchy
Givenchy is the fastest-growing brand in this year’s ranking, its brand value growing 74 percent to 2 billion dollars, simultaneously jumping 11 spots in the ranking from 37th to 26th.
Givenchy’s strong performance and growth, particularly in its makeup division and through its L’Interdit perfume, contributed to its parent company LVMH’s solid financial performance over the previous year. Givenchy has continued to focus on further developing its omni-channel e-commerce platform, the Maison Givenchy, originally launched in 2017 to coincide with former Artistic Director Clare Waight Keller’s - the first female artistic director of the brand - first show.
LVMH, the world’s largest luxury goods conglomerate, has been extending its philanthropic arm further following its 200 million euro pledge to the rebuilding of Notre Dame, by donating funds and resources to fight the pandemic.
A further eight LVMH brands feature in this year’s ranking with a total brand value of 39.3 billion dollars and have grown, on average, by 19 percent
French brands on the rise
Five French brands feature in the top 10, including Hermès, Dior, Cartier, Louis Vuitton and Chanel. Each celebrated a strong year, their brand values growing on average by 14 percent. Gucci secured the top luxury spot at number two (behind Porsche at number one) up 20.2 percent over 2019 and valued at 17.63 billion dollars.
Louis Vuitton is the fastest growing brand in the top 10, increasing by 21 percent to 16.5 billion dollars. Fifth-ranking Chanel recorded a solid 20 percent brand value growth to 13.7 billion dollars. The brand, which has been negotiating the absence of longstanding Creative Director Karl Lagerfeld who died in February last year, reported sales that broke 12.8 billion dollars in 2019.
To see the full report go to www.brandirectory.com.
Image via Louis Vuitton.