February 22, 2019

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The luxury sector is growing faster than many others and Gucci leads

The luxury sector is growing faster than many others and Gucci leads
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Bertrand Guay | Getty Images

Models on the runway at Louis Vuitton’s menswear fashion show at Paris Fashion week, June 2018

Chanel, a new entrant to the list at number 23, has a brand value of $20 billion, after it reported full-year earnings for the first time. It made $9.62 billion in revenue for 2017, an 11 percent year-on-year rise, with profit up 18.5 percent to $1.79 billion.

Luxury apparel companies have been successful because of an ability to respond to cultural trends. “They have managed to immerse themselves in street culture and provide levels of access that, while retaining their authenticity and a level of exclusivity, have made their brands more desirable to more customers,” Interbrand’s report states.

In terms of sales, the Kering-owned Gucci wants to overtake Louis Vuitton as the world’s biggest luxury label, aiming for 10 billion euros ($11.5 billion) in revenue, according to Bizzarri, who did not provide a timeline. Louis Vuitton, owned by LVMH, had more than 8 billion euros in sales in 2017, according to analyst estimates, while Gucci made 6.2 billion euros.

Interbrand’s annual ranking of the world’s 100 biggest brands measures how much a brand name contributes to a consumer’s decision to buy a product, and therefore the premium a company can charge for brand-name goods, over factors such as price or convenience. It also looks at financial performance as well as how likely a company is to have future success.

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