Two very different strategies that have brought them to the same point: staying for two decades among the most valuable luxury firms in the world.
What makes some luxury brands more valuable than others? What factors are the determinants? Is there a perfect success strategy, especially in these troubled times? In recent years, the democratisation and speed of fashion has made firms, both luxury and fast fashion and streetwear, redraw their lines of action to continue attracting the usual clientele and, also, the new generations .
In this sense, two luxury brands have been able to adapt to practically any weather, being the only ones that have remained unbeatable in the top 10 of the most valuable throughout the two decades that this 21st century has been running. Their names are surely familiar to you: Gucci and Louis Vuitton are, today, the emblem of business and creative success. But how did they do it? Two very different strategies have brought them to the same point, and these are their key points.
The world’s most valued luxury brands: Gucci’s rebirth thanks to digital marketing
To find Gucci’s (relative) fall and comeback, you have to go back to the end of the last century. In 1994 , at a time when the Florentine house was adrift, a young Tom Ford took over . The provocative aesthetic of the designer – which we would later know as Porn Chic -, repositioned the firm in the cool universe . Wearing Gucci was once again a symbol of molar and, at the beginning of the new century, the house was valued at $ 5 billion .
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But Ford left the brand in 2004 after a dispute with Kering, Gucci’s parent company. After a short period in which Alessandra Facchinetti and John Ray took over the firm, in 2006, Frida Giannini was appointed creative director, and decided to focus her proposal on recovering the heritage and returning Gucci to its roots. Throughout his tenure, Giannini reinvented the brand’s signature Flora print and redesigned some of the classic accessories , among other iconic symbols, resulting in a brand valuation of $ 10.385 billion for 2014 , according to Interbrand.. However, its collections received rather temperate reviews and failed to attract consumer interest as massively as its competitors. For this reason, and after falling to $ 8,882 million in 2015, Giannini was replaced by Alessandro Michele , who was the creative director of accessories – the great figurehead of the brand – and current creative director of the firm.
The Roman designer reconfigured the brand’s aesthetics around recovering vintage icons, a camp aesthetic, fluid and timeless, and the inclusion of archetypes (of race, age, gender and orientation) until then excluded from cool , such as nerds. According to Forbes magazine, by 2017 Gucci had grown by 44.5% and represented 39% of Kering’s corporate income(and 57% of the luxury activities segment). But it doesn’t all end there: the contemporary twist of Gucci’s vintage icons, the revival of the interlocking double G logo, and iconic house bags, such as the Jackie, made Gucci the fastest growing luxury brand in 2019. , with a growth rate of 23% and a brand valuation of $ 15,949 million, almost double the valuation it had when Michele took the reins 4 years ago. Data that culminated with the sponsorship of the Met Gala dedicated to the camp aesthetic of which Gucci is the champion.
According to experts, much of Gucci’s success comes from the way the brand has used social media as a digital marketing tool. He has also attracted a younger audience by partnering with contemporary icons such as singer Harry Styles – considered the most influential person in fashion of 2020. According to Interbrand, 60% of Gucci’s sales come from millennials , and its fastest growing audience is Generation Z. And a large part of these successes may be due – according to Gucci CEO Marco Bizzarri in 2017 at WWD– to its “Shadow Millennial Committee”, a group of people under 35 years of age who provide constant feedback on the brand.
“Gucci has become much more open, inclusive, transparent and collaborative,” said Rebecca Robins, Interbrand’s global director of learning and culture . “It is a masterclass in leadership style, a really powerful combination of creative and business leadership.
In the 1990s, Tom Ford made Gucci synonymous with cool. In the 2000s, Frida Giannini brought back the classic icons of the brand. However, it was Alessandro Michele who made the snake, butterfly, wolf and double-G canvas logos combined with vibrant colors – elements that would have once been considered outdated or outdated – the top sellers.
The world’s most valued luxury brands: the rise of Louis Vuitton hand in hand with streetwear
Louis Vuitton is today the number one luxury brand in the world, with a valuation that exceeds 30,000 million dollars. But how did you get to this point?
The story of this recent triumph begins in 1997, when Marc Jacobs was elected artistic director of the firm’s women’s collections . Jacobs’ main achievement was to take the most characteristic element of Vuitton, the Monogram canvas from his famous trunks, and modernize and reformulate it to unsuspected limits. His goal was to make the brand a benchmark for future generations of customers, the millennials . And he got it.
He planted the Monogram print on bags and throughout his ready-to-wear line –from umbrellas to leggings–, updating it with contemporary elements such as graffiti and thanks to artists such as Takashi Murakami, to whom Vogue credits the creation of the Iconic Monogram canvas with a white background and multi-colored logos that triumphed in early 21st century bags. In addition, for the 150th anniversary of the firm (1854 – 2004), the firm opened stores around the world and reopened its iconic flagship store on the Champs Elysees in Paris. By the end of that year, the brand’s value doubled – since Jacobs took the reins – to reach $ 16 billion . Four years later, in 2010, Louis Vuitton grew to $ 21.86 billion– the highest record ever collected by Interbrand since it began its luxury brand valuation studies in 2000, and the Louis Vuitton Monogram was widely recognized as a symbol of the finest luxury .
Today the famous Keepall travel bag in Monogram canvas is an undisputed icon of Louis Vuitton.
Right at the height of success and with his mission accomplished, Marc Jacobs retired and passed the baton for the women’s line to Nicolas Ghesquière in 2013 . The new artistic director was responsible for restoring Balenciaga to the splendor of another time by readapting traditional codes to today’s world, and his entry into Vuitton came through the front door: as soon as he sat on the throne, he launched the petite malle bag , a reinvention of the famous trunks of the house in minibag format. He quickly became the most wanted .
On the other hand, in 2011 a silent Kim Jones took over the reins of Louis Vuitton’s men’s division. His aesthetic roots based on the most genuine streetwear were invading his creations until in 2017 the collaboration that broke the internet was forged: Supreme x Louis Vuitton . The collection was one of the most profitable and influential fashion launches of the century, as well as marking a definitive turning point in the luxury-streetwear marriage of recent years. In fact, Women’s Wear Daily reported that after the launch of Supreme x Louis Vuitton, revenue increased by almost 21% .
Louis Vuitton was the coolest urban fashion and luxury of the century and, to top it all off, in 2018 it appointed Virgil Abloh, founder of streetwear firm Off-White, artistic director for men – replacing Jones. In addition to the fact that Abloh’s appointment made him the first African-American to be appointed artistic director of a French luxury fashion house, it definitively established the codes of streetwear in the world of luxury and the brand increased its value from 22.919 billion of 2017 at $ 31.72 billion in 2020 , definitely making it the most valuable luxury brand in the world.