H&M, Louis Vuitton and Wal-Mart, respectively, are ranked as the world’s most valuable apparel, luxury and retail brands this year, according to a study by consulting group Millward Brown Optimor.
The group assessed global brands with the highest valuations in 17 sectors, from cars and coffee to technology and personal care. Much like a financial analyst evaluating the prospects of a company’s stock, the Millward Brown study forecast the “intrinsic value” of 100 global brands by estimating their ability to “generate demand.”
The valuations are not based solely on conventional measures, but use both tangible and intangible measurements from Millward Brown, such as earnings directly attributable to sales of a brand and consumers’ views of those brands. In some cases, such as Vuitton, Millward Brown’s valuation for 2009 exceeds the brand’s 2008 revenues, and in other cases, like Wal-Mart, the valuation for this year is far lower than the company’s actual revenues. This points to the aura of the Vuitton brand, for instance, playing a bigger role in purchases of those luxury products than, say, the Wal-Mart brand figuring into shopping the discount giant.
Google was assessed as the number-one brand worldwide, worth $100.04 billion, followed by Microsoft, $76.25 billion; Coca-Cola, $67.63 billion; IBM, $66.62 billion, and McDonald’s, $66.58 billion.
H&M blew by Nike under Millward Brown’s assessment to become the most valuable apparel brand, worth an estimated $12.06 billion, in a sector hit hard by the recession.
The 62-year-old Swedish fast-fashion retailer was fueled by its offer of fashion, value and exclusive designer collections at affordable prices, such as a recent collection by Matthew Williamson and a collaboration with Jimmy Choo, which will launch a collection for women and men in about 200 H&M stores in November, said Pierre Dupreelle, a director at the brand consultant.
H&M’s mastery of the supply chain hasn’t hurt, either. As fashion is fundamentally about the offer of something new, the chain continues to benefit from the frequent deliveries of fresh items to its stores — in intervals of about three weeks, according to The Boston Consulting Group Inc. Its even speedier competitor, third-ranked Zara, gets it done in 14 days.
“They’ve also been helped by ongoing store openings,” Dupreelle acknowledged of H&M’s more than 1,500 locations worldwide. New stores helped H&M to continue to gain market share in the second quarter as the chain reported a better-than-expected 6.4 percent increase in net profits.
Fashion players dominated the 10 luxury brands ranked as the world’s most valuable, led by Louis Vuitton, worth $19.40 billion, up 5 percent from 2008. Wal-Mart was the retail brand with the highest valuation, at $41.08 billion, a gain of 19 percent. Both Vuitton and Wal-Mart far surpassed the second-place brands in their respective categories: Hermès, projected to be worth $7.86 billion, and Tesco, $22.93 billion.
“Louis Vuitton and Hermès control their distribution channel from A to Z and they don’t discount,” Milton Pedraza, chief executive officer of the Luxury Institute, said of the luxury brands’ leading status.
Flexing some marketing muscle has helped Vuitton and Hermès as well, contributing to reports of “[mid]- to high-single-digit profits and tens of millions of dollars of growth throughout this recession,” said Greg Furman, president of The Luxury Council.
On Monday, for instance, LVMH Moët Hennessy Louis Vuitton, the world’s largest luxury goods company, said it will be a main sponsor of New York City’s 2009 Summer Streets event. Summer Streets closes a 6.9-mile route from the Brooklyn Bridge to Central Park to cars, so that people can run, bike, walk and participate in eco-friendly activities on the thoroughfares on Aug. 8, 15 and 22.
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