Luxury Brand Management: A World of Privilege, 2nd Edition

CHAPTER 2

Specificities of the Luxury Industry

Representatives of any business sector are usually eager to assert that their business is different from any other, but managers working in the luxury industry are possibly the only ones who are justified in claiming so. The luxury sector really is different. This is due partly to the amount of creative talent needed for a luxury brand to be successful, and partly to the very different way in which a luxury brand with a worldwide market needs to be run. Three major differences will be identified. We will then briefly examine the major requirements for success in this business. We will conclude by identifying the main companies operating in this field.

What Is So Different About the Luxury Goods Industry?

The three major differences between the luxury industry and the non-luxury segment are: company size, financial characteristics, and the time factor.

Company Size

In almost every business, size is a major—if not the most important—element in comparing firms or industries. However, in the luxury world, size doesn’t seem to matter that much. In general, luxury businesses are small, but they are respected and have impressive reputations. Dior Fashion has annual sales of approximately €1 billion, while the Peugeot Group has annual sales of €56 billion. So, in fact, Peugeot is seventy times bigger than Dior Fashion. General Motors has sales of around €150 billion, one hundred and fifty times those of Dior Fashion. The number of employees ...