Porsche cements itself once again as the world’s most valuable luxury and premium brand, increasing its brand value by 54% to US$29.3 billion, according to the latest report by Brand Finance, the world’s leading independent brand valuation consultancy.
For over 70 years, the Porsche brand has been synonymous wianceth world-class and superior quality sports car manufacturing. Steeped in tradition, Porsche’s unwavering reputation has meant the brand has achieved solid sales growth reflected in an impressive 54% increase in brand value. The brand has recently announced the launch of it first pure-electric production car, the Taycan, demonstrating its commitment to innovation and development in an increasingly eco-conscious society.
Alex Haigh, Director of Brand Finance, commented:
"Connotations of luxury extend far beyond fashion brands with this becoming ever more apparent since Porsche yet again tops the Brand Finance Luxury & Premium 50 2019 ranking of the world’s most valuable luxury and premium brands. The combination of Porsche’s trusted and long-standing heritage, a commitment to diversification, innovation and after sales-services is what really sets the auto titan apart from its competitors."
Brexit Britain flies flag in New York
As the United Kingdom prepares to leave Europe ahead of the looming Brexit day of 31st October, it is the premium auto brands which have dominated British representation. With 4 of 5 brands coming from the luxury car sector: Aston Martin (down 8% to US$3.3 billion), Bentley (down 8% to US$2.3 billion), Rolls-Royce (up 52% to US$1.6 billion) and McLaren (up 66% to US$1.3 billion) it is only Burberry (up 2% to US$4.7 billion) representing the British fashion sector and leading the way for British luxury and premium brands.
With this week’s ongoing Walpole Trade Delegation in New York, the heads of 18 of Britain’s biggest luxury goods brands such as winemaker Chapel Down and department store Harrods have joined the trade mission, which is hoping to improve relations after US President Donald Trump slapped a 25pc tariff on $7.5bn of European Union goods. In a bid to strengthen transatlantic trade and investment ties in New York, it is also hoped that the mission will propel further luxury brands into next year’s Brand Finance Luxury & Premium 50 ranking.
French luxury brands Cartier and Louis Vuitton swap rank
Prestigious jewellery manufacturer and watch maker, Cartier (brand value up 39% US$13.6 billion), has clinched the second-place spot in this year’s ranking, pushing Louis Vuitton (up 29% to US$13.6 billion) down into third position. The brand, hailed by Edward VII as “the jeweller of kings and the king of jewellers”, has long been the go-to jewellery brand for European royalty. With 300 boutiques worldwide, and the newly renovated flagship London store opening its doors at the end of last year, the brand has successfully recovered from the recent sector slump, further cementing its position as the crème de la crème of luxury jewellery.
Italian brands dominate this year’s Luxury & Premium ranking, with 16 brands represented. Italy’s reputation of being the leading producer of luxury brands dates back centuries, and this standing is reinforced through continually creating products of the finest quality. The connotation from the moniker ‘Made in Italy’ label opens doors on the global stage for Italian brands, allowing them to reap the rewards of international sales.
France is the second most represented nation in the ranking, with 10 French brands claiming spots. France, a traditional rival of Italy in the luxury and premium space, also sports a rich legacy in the sector, with Paris often referred to as the global capital of luxury, due to the sheer volume of luxury store openings on a year on year basis.
Luxury brand entrants
Three new entrants have made it into this year’s Brand Finance Luxury & Premium ranking: Montblanc (brand value US$925 million), Bobbi Brown (US$786 million) and Fendi (US$573 million). The highest new entrant, Montblanc (38th position), launched the first luxury smartwatch, the Montblanc Summit, at the end of 2018, showcasing the brand’s commitment to digital innovation.
Biggest winner: SK-II
Japanese skin care brand SK-II, owned by parent company Procter & Gamble saw its brand value increase by a staggering 117%. The brand is being used as a guinea pig for P&G’s new, more digital-focused, marketing tactics as a result of marketing budget cuts. P&G, the owner of brands such as Always, Gillette, Pampers and Pantene, said in its annual report for the year to June 2019 that it reduced marketing spend in all five of its key business segments for the third year in a row to US$6.75 billion.
Also the fastest-growing brand of 2019, SK-II, steers away from images of opulence and glamour, as evoked by luxury brands such as Chanel and Louis Vuitton, instead favouring more un staged celebrity appearances on social media.
With an advertising campaign costing P&G approximately half of what it would have traditionally spent on similar high profile campaigns, and featuring Chinese actress Ni Ni and British comedian James Cordon, SK-II’s #BareSkinProject rides the wave of the body positivity movement by celebrating women embracing their bare skin. In its new series of Instagram videos and exclusive short films, P&G’s social media accounts have clocked up an impressive 40 million views and 1.3 million online engagements in just two weeks since rollout.
Sliding down the rankings this year are Italian brands Salvatore Ferragamo (down 20% to US$1.6 billion) and Versace (down 19% to US$857 million).
Salvatore Ferragamo had a difficult 2018, recording drops in both sales and profits largely as a result of unfavourable performances in EMEA and US. The brand has, however continued to grow in Asia, which could help to boost its brand value in the coming year.
The story is similar for Versace, with the brand recording a sales slump over the last year. Fashion giant, Michael Kors (now Capri Holdings), acquired Versace in December 2018 with the hopes of modernisation and brand expansion.
Versace has stuck to its strategy of capitalising on celebrity endorsements to boost sales. Following the frenzy around Donatella Versace’s 1993 dress at Vogue’s 100th anniversary party – a dress that cemented her role as the face of the brand – Versace has continued to capitalise on the success of celebrities in statement dresses. Most recently, Versace dominated headlines during Milan Fashion Week 2019, where Jennifer Lopez closed the show wearing the green Versace dress from the Grammys in 2000 – an iconic dress that led to the creation of Google Image search.
Chanel inches way up
In the wake of the passing of Chanel (up 95% to US$11.5 billion) designer Karl Lagerfield earlier this year, many have credited him for his tactical strategies of introducing ranges of affordable cosmetics which allowed the aspirational aspects of the brand to be actualised by a wider pool of consumers; those who could only ever aspire to wear Chanel clothing but who could own a perfume or lipstick. Whether Karl’s successor Virginie Viard can continue the brand’s journey is yet to be seen.
Hermès & Tom Ford reject A-list stars
While celebrity endorsements are rife amongst luxury brands – usually in the form of advertisements and brand ambassadors – 2 of the top 50 brands in the Brand Finance Luxury & Premium 2019 ranking notably do not use celebrities as part of their marketing strategies.
Hermès’ (up 14% to US$10.9 billion) aversion to celebrity endorsements can perhaps be summarised in a quote from former CEO, Jean-Louis Dumas: “We don’t have a policy of image, we have a policy of product”. This policy still rings true, trickling down to the brand’s marketing strategy, as celebrities such as Kendall Jenner and Cara Delevigne who are so popular with Hermès’ competitors, are absent from the brand’s advertisements and social media pages.
Tom Ford (up 34% to US$633 million), follows a very similar marketing strategy, as the eponymous CEO has been famously quoted as saying that celebrities “cheapen” the brand. Save for the memorable Tom Ford show at New York Fashion Week in 2010, when stars such as Beyoncé and Julianne Moore modelled on the designer’s catwalk, the brand has largely avoided using Hollywood stars in their marketing campaigns.
The absence of orchestrated celebrity appearances in Hermès’ and Tom Ford’s marketing campaigns does not invalidate either brand profiting from more informal celebrity endorsements. In the case of Hermes, the brand’s highly sought-after Birkin bags have famously been in the headlines, pictured on the arms of celebrities such as Kim Kardashian and Victoria Beckham. Undoubtedly, this media furore has contributed to consumer perceptions of Birkin bags as rare and collectable items, sparking five-year long waiting lists for the latest models. Similarly, Tom Ford’s brand has been viewed to benefit from informal celebrity endorsements, as the fashion mogul is frequently seen in the company of A-list celebrities, as per his recent interview with Julianne Moore for Vogue.
Ferrari races ahead
Aside from calculating overall brand value, Brand Finance also determines the relative strength of brands through a balanced scorecard of metrics evaluating marketing investment, stakeholder equity, and business performance. Alongside revenue forecasts, brand strength is a crucial driver of brand value.
According to these criteria, Ferrari (up 27% to US$8.3 billion) is the world’s strongest luxury and premium brand with a Brand Strength Index (BSI) score of 94.8 out of 100 and an elite AAA+ brand strength rating. Since its inception, Ferrari has remained synonymous with style and performance, enabling the brand to successfully extend into other sectors – from merchandise, such as hats and sunglasses, to theme parks, and even the Maranello Village, a Ferrari-themed hotel – without losing its appeal as a luxury brand. Upmarket auto brands in general continue to turn heads and win consumer approval.
Note to Editors
Every year, Brand Finance values 5,000 of the world’s biggest brands. The 50 most valuable luxury and premium brands are included in the Brand Finance Luxury & Premium 50 2019 ranking.
Brand value is understood as the net economic benefit that a brand owner would achieve by licensing the brand in the open market. Brand strength is the efficacy of a brand’s performance on intangible measures relative to its competitors.
Additional insights, charts, and more information about the methodology, as well as definitions of key terms are available in the Brand Finance Luxury & Premium 50 2019 report.
Data compiled for the Brand Finance rankings and reports are provided for the benefit of the media and are not to be used for any commercial or technical purpose without written permission from Brand Finance.