Affordable versus ”true” luxury
CPP-LUXURY.COM is conducting a series of analysis editorials on the fast developing ‘affordable luxury’ with the aim of understanding the international context and how this ‘affordable” notion will change how luxury is perceived from a business point of view. Recently. we caught up with Luca Solca, Managing Director, Sector Head Global Luxury Goods at EXANE BNP PARIBAS.
What do you make of brands such as Mulberry ‘downgrading’ its positioning by lowering prices and introducing less expensive models?
This is really smart and appropriate – Mulberry was not credible in the high end, while it has a great opportunity in the accessible luxury space
Coach has taken a different approach which is shutting stores and expanding its product range to turn Coach into a lifestyle brand. What is your view?
Coach will have to work harder on brand exclusivity perception – they will find it hard to sustain higher prices in their stores while maintaining a massive outlet presence.
I expect they will have to reset their factory outlet business more, in order to build a “clean base” to grow from.
How do you see the evolution of brands such as Michael Kors and Lonchamp – both having reported growing positive financials in the past 2 years?
They are making the most of mega-brands moving up their entry price points, and grabbing the blank space left by them. Please see our recent reports “Handbags Competitive Dynamics: Clouds on the Horizon”
Can we speak of a growing trend of affordable luxury brands in jewellery and watches?
Especially in jewellery – affordable watches are a mainstay and have been a mainstay for some time.
When defining affordable luxury, shall we also consider the cheaper product categories of the high-end luxury brands?
Of course. Hermes has a huge presence in affordable luxury: think ties, scarves, baby toys, etc. And so does Chanel, with fragrances and cosmetics.
The art is to profit from the masses of aspirational consumers, while maintaining the “illusion of exclusivity”
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