This article explores the challenges of managing large brand portfolios, using the example of LVMH and its struggles with integrating acquisitions. It highlights the difficulties of maintaining brand identity and profitability as empires grow, citing cases like Liz Claiborne Inc. and Jones Apparel Group. The article also discusses the potential for new players like Guess Inc. to capitalize on the decline of established empires by acquiring and revitalizing brands.
It could be the sense of forward momentum and the promise of new opportunities. The high of winning a big deal. Or maybe it’s just a quick fix to drive sales.
And maybe even the empire Arnault built will have to adjust. HBSC suggested this month that Sephora “may not prove to be a good fit” for LVMH and that the luxury giant could eventually divest the beauty business. There’s some alchemy to successfully owning lots of brands that are both out there hyping their images and expertly churning out their wares.
“Because delivering profits is so important and missing a season can doom a brand or set a brand back, products began to look more similar across brands,” he said. “Quality began to go down, all in the name of delivering increased margins and profits. What started as a promising concept resulted in a bunch of brands all looking the same and not delivering a great product. In turn, customers got bored.
“It’s almost like a brand lifecycle curve,” Prendergast said. “You have the early adopters, then you have growth and you have post-peak, and then you have decline. You could make the argument that that same type of lifecycle curve that no one really talks about. Guess Inc., for instance, teamed up with IP specialist WHP to buy Rag & Bone last year in a brand and operating company hybrid deal. Now the retailer isCarlos Alberini, Guess’ chief executive officer, told analysts in May that the company’s “most valuable asset is the powerful machine, this platform that we have built.”
Fashion BRAND MANAGEMENT LUXURY GOODS ACQUISITIONS FASHION INDUSTRY BUSINESS STRATEGY
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