Luxury brands hit by slowing sales in China, Russia
The value of the top 10 luxury-goods brands fell 6 per cent, or US$7.1 billion, to US$105 billion as companies from Prada to Cartier grappled with slowing sales in China and Russia, research company Millward Brown said in the 2015 BrandZ study published yesterday.
Only Louis Vuitton and Chanel saw an increase last year. Vuitton gained 6 per cent to US$27.4 billion ($37.8 billion), placing LVMH Moet Hennessy Louis Vuitton’s biggest brand atop the luxury ranking for the 10th straight year. Chanel’s value rose 15 per cent to US$9 billion, propelling it to fourth behind second-place Hermes and Kering’s Gucci.
Spending on gifts has fallen in China as the Government clamps down on corruption, while Russia’s shoppers are suffering from the ruble’s depreciation and sanctions tied to the conflict in Ukraine, Millward Brown said. At the same time, efforts to appear more exclusive have created opportunities for cheaper brands such as Michael Kors and Tiffany, which finished in the top 10 for the first time, the researcher said.
Chanel, the maker of No 5 perfume, and handbag purveyor Vuitton fared better than their peers thanks to their unique approach, according to Elspeth Cheung, Millward Brown’s Global Brandz valuation director.
The worst performers were Cartier, whose value decreased 15 per cent to US$7.6 billion, placing it sixth, while Prada slumped 35 per cent to US$6.5 billion. Hermes’s value fell 13 per cent to US$18.9 billion and Gucci declined 14 per cent to $13.8 billion, according to the study. Rolex fell 6 per cent to US$8.5 billion, placing it fifth. Rounding out the top 10 most valuable luxury brands were Burberry in eighth, Michael Kors and Tiffany.