LONDON — Just how peculiar a beast is a luxury goods company?

The founders of Provenance, a new agency here aimed at helping luxury brands prosper, would argue that these companies have special needs — with their small ad budgets and particularly savvy clientele — and that those needs are not properly met by traditional ad agencies or public relations firms.

“Luxury is competing across a variety of sectors nowadays. Aston Martin competes in the automobile and the luxury market, for example,” said Suki Larson, chief executive officer of Provenance, and a former consultant at McKinsey & Co., where her clients ranged from Johnson & Johnson to Christie’s and Condé Nast (parent of WWD). “The challenge is how to grow the brand without becoming what Pierre Cardin was in the Seventies and Eighties,” she added, referring to the overextension of Cardin.

While relatively few ad agencies in the U.K. have specialized in luxury brands, a handful, including Provenance, have recently entered the field, observed Francesca Newland, editor at Campaign magazine, which covers marketing and advertising. “However, this year has seen two other London agencies, Leo Burnett and Miles Calcraft Briginshaw Duffy, open luxury/p.r. divisions, so it is a growing trend,” Newland observed. “I believe it has come about because traditional revenue streams for advertising agencies are less robust than they once were, so some agencies are looking into new areas for growth.”

Provenance’s approach to brands is holistic, and takes into account luxury companies’ limited budgets, compared with those of, say, Toyota or Coca-Cola. “The solution for luxury brands is never one-size-fits-all, and it’s not necessarily a print or TV ad,” Larson related. “It might be a new logo or new packaging. For some brands, customers may even be best reached through viral marketing.”

Founded in February, Provenance counts among its clients Coutts, the exclusive bank that serves Britain’s royal family; RF Hotels, the group founded by Sir Rocco Forte; and the Prince’s Charities, run by Prince Charles. The luxury marketing agency was formed as a division of M&C Saatchi plc, the publicly traded parent of the London international ad agency M&C Saatchi and Talk PR.

This story first appeared in the May 31, 2006 issue of WWD. Subscribe Today.

Ideally, Larson said, Provenance will add 15 clients this year and grow to include restaurants, property companies, jewelry and fashion brands, auction houses and design and interiors firms. Ralph Lauren is one of the brands with which the agency is currently in contact. The agency also is eyeing such luxury players as Patrick Cox; Penhaligon’s, the White Co.; Waterford; Wedgwood, and Aga, maker of cast-iron stoves.

For Coutts, a division of the Royal Bank of Scotland, Provenance is working on print ads for the U.K., and a brand strategy for China. The goal: to translate the brand that everyone in Britain knows as “the Queen’s bank” into something the Chinese consumer can understand.

RF Hotels, founded by Forte in the late Nineties, is being repositioned by Provenance to convey a unified image for the brand comprising 15 city properties, such as the Hotel de Russie in Rome, the Balmoral in Edinburgh and Browns in London. “These hotels are very much individual properties with their own identity — and they will remain so — but the group itself has never been perceived as a brand,” said Larson, adding that Provenance has already come up with a new look for the brochures and the Web site, and has developed a loyalty program for the hotels’ clients.

Prince Charles’ secretary, Sir Michael Peat, approached Provenance to help the Prince’s Charities launch, by June, a luxury brand of decorative arts, with a spirit similar to that of the Arts and Crafts movement of the late 19th and early 20th centuries. For instance, the collection will contain home goods such as china sets and tea services, and will reflect Prince Charles’ belief in sustainable materials.

The prince already has a thriving organic food brand known as Duchy Originals, which he founded in the early Nineties. Today, the Duchy brand offers products ranging from oat biscuits and sausages to shampoo and garden furniture.

Larson is the first to admit that Provenance, the brainchild of the agency’s chairman, Jane Boardman, can learn from relatively smaller luxury players that have been able to establish a significant presence, as have Jimmy Choo, Rupert Sanderson and the Mandarin Oriental hotel chain. (Boardman is chief executive of Provenance’s sister, Talk PR.)

“Mandarin Oriental began punching way above its weight, brand-wise, with the ‘I’m a fan’ ads that feature real clients,” the Provenance ceo observed. “People refer to it as a great hotel ad.”

The Provenance chief executive also mentioned the shoe brand Rupert Sanderson as a small entity growing through viral advertising. Sanderson, who designs the shoes himself, often hosts private, in-store events for high-spending customers and personally visits magazine editors in key markets. Aside from having no real ad budget, Sanderson, a former ad executive, believes print and TV ads aren’t necessary for true luxury brands.

“Word of mouth is a very old-fashioned — and valid — strategy, and most importantly, it relies on the quality of the product,” Sanderson said. “Once you expose people to a quality product, they’ll tell other people. Traditional media is about reaching quantities of people, but the point about luxury is that it’s exclusive.”