LONDON, United Kingdom — Technology brands may dominate, but luxury fashion brands Louis Vuitton, Hermès and Gucci are still at the top of their game. The same can’t be said for Burberry, Prada and Ralph Lauren.
That is according to Interbrand’s Best Global Brands 2017 ranking, which measures financial performance and a brand’s ability to influence customer choice and command a premium price or secure earnings. While Apple, Google, and Microsoft are the three most valuable brands, Louis Vuitton held its position at 19, Hermès climbed two places to 32 and Gucci climbed one spot to 51. Burberry slipped three places to 86, while Prada dropped 13 places to 94 and Ralph Lauren fell out of the rankings, from 98th last year.
The report comes amidst turbulence in the luxury sector, as brands contend with the rise of digital, a depressed US department store environment and a shift in luxury spending from goods to experiences.
“One of the most critical ways to turn change into growth is building and constantly developing a strong brand,” says Interbrand CEO Jez Frampton. “At a time when speed-to-market, customer centricity and cultural alignment are more important than ever, brands are the key to change, and to growth.”
Louis Vuitton is the highest ranked luxury brand at 19, maintaining the same position as last year. It is one of three LVMH-owned brands in the ranking, with Dior at 95 and Moet & Chandon at 99. The fashion conglomerate is the only group to have three in the top 100 aside from Volkswagen with its namesake brand, Porsche and Audi.
“Louis Vuitton has connected the brand into culture. When we look at Louis Vuitton, Gucci, Hermès what is the magic with these brands? Not only are they going strong operationally, but it’s their relationship between brand and culture and they are doing it in a way that is of the moment and relevant but also sustainable. It’s not a flash-in-the-pan. It’s well thought through, strategically driven and delivered with the strength of their conviction,” says Rebecca Robins, global director at Interbrand and co-author of “Meta-Luxury”, which cited Louis Vuitton’s collaboration with streetwear brand Supreme.
It’s about creating the right dynamic of desire and demand.
Indeed, Hermès is the top-growing luxury brand for the past two years, driven by its protection of the integrity of the brand, while also staying relevant by diversifying the brand and retaining its culture of excellence, Robins says.
Both hard luxury players Cartier and Tiffany have maintained a position in the rankings, but both have dropped as they grapple with only tentative signs of a recovery in demand. Cartier fell to 65 from 62, though the strength of its heritage helps its survives the challenges of hard luxury better while products such as its Love bracelets have kept it relevant to a new audience, Robins says. Tiffany, meanwhile, fared worse with a drop of 7 places to 81. The incoming chief executive Alessandro Bogliolo will need to revive declining sales by appealing to new customers through innovation, new products and how the brand is experienced. “It’s about creating the right dynamic of desire and demand,” Robins says.
In the bottom half of the table are the remaining fashion luxury players.
“There are dips and drops in the values of Burberry and Prada, now at 86 and 94,” Robins says. “‘As you look across the Top 100, it’s the most polarised that the luxury brands have been in the past five years.”
Prada, which is in the middle of a turnaround under chief executive Patrizio Bertelli, fell to 94. Luca Solca, head of luxury goods at Exane BNP Paribas, called out the brand for its lack of entry-level price points, poor merchandising and a slow acceptance of the new, digital imperative. “There’s no doubt that Prada remains one of the most remarkable soft luxury brands in the world, but its true promise remains unfulfilled and given the magnitude of the mistakes the company has made in recent years, it’s clear that the business needs more than a tune-up,” he wrote recently in his regular BoF column, Luca’s Letter.
Ralph Lauren, which fell out of the brand rankings, “is now looking to better manage its absence and presence,” says Robins. “Its turnaround process and New York Fashion week show showed signs of a renewed focus.”