Apparel and luxury brands are hot commodities worldwide, according to global research agency Millward Brown, which unveiled its 2014 BrandZ Top 100 Most Valuable Global Brands Wednesday.
The firm, which specializes in advertising, marketing communications, media and brand equity, reports that luxury brands rose in valuation by 16 percent, the greatest increase since the recession, to a combined value of more than $111 billion. Despite changes in shopping behavior, the leading brands remain constant with seven of the top 10 brands remaining in the luxury ranking since 2006. Louis Vuitton continues to reign as the number-one luxury brand for the ninth year in a row. Vuitton grew 14 percent in the last year and is now valued at more than $25 billion.
Hermès, Gucci and Prada round out the top four places of luxury brands. Burberry had the highest percentage growth of 42 percent with a brand value of nearly $6 billion, moving up to eighth-highest ranked luxury brand.
Anastasia Kourovskaia, vice president of the parent company’s Millward Brown Optimor division overseeing Europe, the Middle East and Africa, said winning strategies by luxury brands to grow brand equity include a renewed focus on exclusivity over accessibility to mass audiences, and a shift away from prominent logos to more subtle fashion statements.
“During the recession, luxury became a stealth indulgence after years of conspicuous consumption,” said Kourovskaia. “Marked by that experience, today’s shoppers continue to adopt a more considered approach to their luxury lifestyle choices favoring design and craftsmanship over ostentatious displays of status. Many luxury brands are shying away from an overt focus on increasing market share and distribution to highlight their exclusivity.”
Meanwhile, apparel is the fastest-growing sector in brand value among the 14 key areas of the global economy examined by BrandZ, growing 29 percent year-over-year. The ninth release of the study measures consumer brand perception along with financial data to calculate brand value.
Among this year’s top 10 apparel brands, Nike was named the most valuable, stealing the top spot from Zara by increasing 55 percent to a brand value of $24.6 billion. The strongest rise, however, came from Uniqlo, which rose by 58 percent to $7.3 billion, moving up two notches to take the number-four spot. The only decliner in the top 10 was U.S. yoga brand Lululemon, down 13 percent to ninth place and a valuation of $3.3 billion.
Also making the list were three designer names: Ralph Lauren, which fell two points to the sixth spot but with a 13 percent gain and a valuation of $6.32 billion; Hugo Boss, which inched up one point to eighth position with a 28 percent increase and valuation of $4.5 billion, and Tommy Hilfiger, which made the list for the first time in 10th place with a brand value of $2.004 billion. British fast-fashion retailer Next held seventh place with a 39 percent rise and brand value of $5.7 billion.
Based on the fortunes of similar and competing companies, the results of the study reveal how a brand and its portrayal via communications are critical to a brand’s relevancy with consumers as well as its financial success, said Oscar Yuan, vice president and head of brand at Millward Brown.
“We’re seeing a lot of interest across the apparel category,” said Yuan. “One of the big trends in the branding world is brands are increasingly going across categories, like Apple is not just a computer company anymore, it’s a consumer electronics and goods company.…Nike is a great brand. They really are not just here to sell sports apparel, they’ve gone beyond their [traditional] category into that of a digital brand.…Their innovation is second to none in the sports apparel industry.”
Sizing up Zara — which slid one point to second place but still rose 15 percent to a brand value of $23.14 billion — Yuan said how the fast-fashion brand scales its supply chain model to new markets such as China will be critical.
“They do design and manufacturing in-house, and that explains their dominance [in Europe]. But they’ve been moving into new markets they’re not familiar with over the past year, with China becoming their second market,” he observed.
H&M maintained the third spot with an increase of 22 percent and brand valuation of $15.56 billion.
“H&M is fantastic at creating partnerships like David Beckham’s swimwear line,” said Yuan. Beckham’s swimwear for H&M launches today.
Regarding Uniqlo, Yuan lauded the fast-fashion retailer as the “largest single brand value in the ranking.”
“Uniqlo really understands that shopping and clothing is an experience, and they are great at creating an experience, like when they partnered with [the Museum of Modern Art]. They are trying to make their spaces more like a museum than a store, and they encourage people to sit and revel in the space,” explained Yuan.
The Ralph Lauren and Tommy Hilfiger names are part of the top 10 list because of a global demand for American designer brands, particularly in China.
Addressing Lululemon and its 13 percent drop in brand value to ninth place, Yuan said, “Consumers are looking for brands that are relevant to them, that understand the lives they are living and are compassionate.…Chip Wilson’s [Lululemon’s former chief executive officer] comments about consumers being overweight after that quality control problem [transparent Luon yoga pants] became a huge issue.”