It seems as if previous predictions may be proving to be true. Louis Vuitton is consistently losing ground as the world’s most valuable luxury brand due to competitors, such as Gucci and Prada, gaining leads.
According to The Business of Fashion, Vuitton’s brand value has declined 12 percent from a year ago to $22.7 billion. The leather goods company, which is owned by LVMH Moet Hennessy, currently remains the most valuable luxury brand for the eighth consecutive straight year. This winning streak, however, is greatly threatened by rivals’ ability to better manage the trade-off between exclusivity and affordability.
For example, the value of PPR SA’s Gucci’s brand surged 48 percent to $12.7 billion, securing the company the third rank in the luxury list, while Prada’s worth soared 63 percent to $9.45 billion, placing it fourth. Hermes has remained in second place at $19.1 billion, an unchanged status from last year.
These major gains in value can threaten Louis Vuitton’s reign as the world’s most valuable luxury brand. Millward Brown Optimor explained this threat in a recent statement,
“As consumers make room for those luxuries that make them feel better by trading down on other items, it is the middle of the road brands that are feeling the impact of this polarization,”
Competitors’ international brand awareness can also affect Louis Vuitton’s lead. “Prada’s brand awareness in China, Russia Brazil and the Middle East continues to rise,” said Anastasia Kourovskaia, vice-president of Millward Brown Optimor EMEA.
Essentially, Louis Vuitton is getting old. Personally, I would never purchase another Louis Vuitton bag. Everyone seems to have one, whether it’s authentic or, in most cases, counterfeit. Louis Vuitton may still hold the number one spot due to the fact that it’s the most well known, but consumers everywhere are simply getting sick of the company. We’ll see where the brand stands this time next year.
Photo via Business of Fashion