Do luxury brands make too many product types?
Luxury brands have an amazing reach of diverse industries.
LVMH started out from a merger between Louis Vuitton and Moët Hennessy, but now profits from every venture they manage, including
– Wines and spirits (like Moët & Chandon and Veuve Clicquot)
– Cosmetics (such as retail chain giant Sephora)
– Watches (like Hublot and TAG Heuer)
– Jewelry (like Bvlgari and Chaumet)
…and many more areas from cruise retail shops to food.
It seems like luxury brands can put their hands on multiple product types as long as their supply chain is able make it. And they do.
Tiffany made table tennis paddles at more than $700 USD and Prada sold money clips at $185.
Okay, let’s put the ridiculousness aside. It seems every high-end brand wants to *at least* dabble in, for example, fragrance or tech accessories at some point. Most consumers accept some amount of product diversifying. There is some room to stretch before brands border gimmicky territory.
Nevertheless, consumers aren’t convinced that every product can be high-end.. If expensive money clips are necessary, it wouldn’t be a laughing stock on social media.
We believe most luxury brands started with dedicated focus. They did not make everything.
Some brands were not even appointed by royalties to boot. With humbler backgrounds, they pushed through with impeccable execution for decades then slowly ascend into the luxury landscape.
We believe brands’ past foundation is still highly correlated with their strongest merchandise today. Stuff that made them famous still makes them famous now.
What luxury brands started out making: interesting histories
Louis Vuitton: Suitcases, trunks and locks
Most people interested in luxury items probably have seen a Louis Vuitton trunk somewhere in their lives.
What made the LV brand stood out in the late 1800s was its invention of a secure closing system. Installed on leather trunks, the brand’s durable leather items were added with protection against theft.
High-end consumer discretionaries may be considered frivolous nowadays, but Louis Vuitton created enough practical value that made expensive suitcases worth owning.
Hermès: Harnesses and bags for horse riders
Associated with noblemen, the founder of Hermès produced harnesses, saddles, and bridles tailored to carriages and riders. The family later expanded into making leather bags for equestrian activities, which became the brand’s intended focus.
Chanel: Hats, day-wear, and the first women’s suits
Some businesses manage to make their brand story up close and personal – it is as though the history of the company is itself a biography of the founder. Some serial entrepreneurs never fail, and Coco Chanel just seemed like one of them.
The first business that Coco Chanel started was a hat shop. Inspired by socialite activities in the early 1900s and the World War I, she started making clothes that provided utility for women, all while capturing feminine elegance.
The rest is history – Chanel popularized women’s pants, women’s suits, layers of pearl necklaces, the little black dress, and the No.5 perfume.
Burberry: Weatherproof fabric
Burberry’s history is also fascinating, as the founder Thomas Burberry revolutionized rain resistant, yet breathable fabric.
Although many associate Burberry with luxury today, Burberry’s fabric was used in aviation, marine, and expedition. Eventually this fabric served Great Britain in World War One. The trench coat is a product for the military, even though it’s a common fashion item for everyday and business occasions today.
The Burberry check is patented and remains to be versatile and classy. It started to become more of a high-end fashion brand in the 70s.
Celine: Children’s shoes
Celine transformed into a shoe brand for adults later, and excelled in women’s ready-to-wear, often with sporty, androgynous looks.
Some brands that originated mostly from the leather goods business:
Gucci グッチ
Fendi フェンディ
Loewe ロエベ
Prada プラダ
Bottega Veneta ボッテガヴェネタ
Some brands that originated mostly from couture or ready-to-wear:
Versace ヴェルサーチェ
Balenciaga バレンシアガ
Yves Saint Laurent イヴ・サンローラン
Dior ディオール
Valentino ヴァレンティノ
Givenchy ジバンシイ
Armani アルマーニ
Does it matter if luxury brands make too many product types?
Certain companies operate on more specific and detached expertise, such as watch making. Most people probably identify Rolex as a watch-only brand (which is true today.)
It’s intuitive to relate jewelry brands to jewelries, not bags. But even Bulgari and Tiffany have been diversifying into leather goods – products they are not known for.
If jewelry companies can expand categories, so can fashion houses and handbag brands. The line between apparel and handbags has been blurred. I suppose the apparel and bag categories are easily regarded as “fashion” altogether.
However, we believe long-term brand heritage does affect today’s product performance. There are reasons why Louis Vuitton is coveted by handbag collectors and that Armani is a symbol of perfectly tailored suit; not the other way around. If you do buy a brand’s best designs, after all, you may get a better return in the second-hand market because people buy famed and well-searched vintage goods.
This is not to say that you shouldn’t buy a Fendi coat or a Givenchy bag. This is also not to say that you have to care about sellable, quantifiable gains some time down the line. We simply believe that it’s enjoyable to wear a luxury brand’s proudest legacies oftentimes.
