PuroMarketing Luxury and Premium brands lose more than 18 billion euros in brand value after the impact of Covid 19

Clothing brands dominate the ranking. The 30 brands contribute 62% of the total brand value of the sector. Celine and is the brand that rises the most in brand value, with an impressive increase of 105.5%. Two hotels enter the ranking for the first time: Shangri-La at 29th place and Intercontinental at 35th place. Ferrari remains the strongest industry with a score of 93.9 out of 100 and a AAA rating.

LOEWE, the only Spanish brand in the ranking, remains among the 50 most valuable brands in the luxury segment in the world according to the latest Luxury and Premium 2021 report by Brand Finance, the leading independent valuation consultancy of intangibles whose rankings comply with ISO 10668 and ISO 20671 for valuation and evaluation of brands respectively and that contributes with its brand value database to create one of the indicators of the UN Global Innovation Index (GII). With a value of 29.2 billion euros, the German Porsche remains at the top of the ranking for the fourth consecutive year with a value of 29.2 billion euros.

Although the Spanish company, which belongs to the French group LVMH, has also felt the consequences of the pandemic as it has lost -9.7% in Brand Value and -1.3 points in Brand Strength, LOEWE remains among the most valuable Luxury and Premium brands worldwide in 33rd place in the ranking. Large brands such as Versace (-47%), Montblanc (-20%), Tom Ford (-16%), Miu Miu (-26%) or Fendi (-21%) that drop out of the ranking have not suffered the same fate.

Teresa de Lemus, Managing Director of Brand Finance Spain: "The Covid-19 crisis and socialization restrictions fully affected this sector in which the exclusive shopping experience it entails is irreplaceable in the digital world. forecasts are for improvement as we gain ground against the pandemic"

Covid - 19 has impacted all sectors worldwide and Luxury and Premium brands have not escaped the impact of the pandemic. The luxury segment, represented by the 50 most valuable brands in the world, has a value of 186.9 billion euros in 2021, 18,109 million euros less than in 2020, which corresponds to a 9% year-on-year reduction.

Brands from France, Italy and Germany contribute 75% of the value of the ranking. Spain, with only 1 brand, which contributes 1% of the value, is among the only 10 countries that have the most valuable Luxury and Premium brands in the world.

Teresa de Lemus, Managing Director of Brand Finance Spain, commented: "Luxury brands have the challenge of generating an exclusive experience in the online channel. In a post-pandemic world in which it is booming to enjoy experiences of this life, luxury has great potential as it can offer many more and properly combine the online experience with the face-to-face experience."

What do we call luxury brands?

Luxury products and services are often difficult to define as the threshold that separates Luxury or Premium from other conventional products is subjective. Therefore, we have decided to explain as clearly as possible what the terms "Luxury and Premium" mean to Brand Finance for the purposes of this report. We define luxury brands as "brands that are well known for their high quality but are not widely regarded or purchased due to price." This is often associated with high brand recognition and a strong reputation for quality but low purchase and conversion relevance, as most consumers do not consider brands affordable due to price. We measure these metrics across all brands included in our Global Brand Equity Monitor and use them to feed the Brand Strength Ranking.

For example, in the textile sector, both Uniqlo and Chanel are known and highly regarded for their quality, but Chanel's buying relevance (measured by the number of respondents who would consider the brand among those who are familiar with it) it is much lower due to the price of their products. A similar pattern is found for Nivea and Guerlain in the cosmetics sector or Porsche and Volvo in automobiles.

Porsche in pole position

German Porsche is by far the most valuable Luxury and Premium brand with a brand value of 29.2 billion euros, considerably ahead of GUCCI, the second brand by value in the ranking (the brand value fell 16.6% to €13.3 billion).

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Synonymous with timeless class and luxury, Porsche strives to push the boundaries and redefine the future of the sports car. As part of the brand's "2025 Strategy", the auto giant aims to maintain the traditional aspects for which the brand is known, as well as embark on the shift towards sustainability through the launch of the Taycan. Porsche had strong sales of the Taycan, more than 20,000 units sold last year, even though it had to go on a six-week production hiatus due to the pandemic. This impressive result means that more than 10% of Porsche's sales now come from its EV models.

Clothing brands dominate ranking but struggle with pandemic

Clothing brands dominate ranking Brand Finance Luxury & Premium 50 2021. The 30 brands in the textile sector represent 62% of the total value of the ranking. However, most have been affected by the pandemic, registering losses in brand value.

Coach posts the biggest drop in brand value this year in the apparel subsector, falling 34.7% to $4.0 billion. Coach's sales and profits improved from the prior year. However, according to statements from Coach's parent company Tapestry, the outlook across its brands looks more positive than expected thanks to triple-digit e-commerce growth and a strong rebound across the Chinese market. Coach has continued to embrace its strategy of celebrity-endorsed partnerships and collections, most recently superstar Jennifer Lopez as the global face of the brand.

Paddling against the current of the sector, the French Celine, is the premium and luxury brand that has grown the most this year in brand value, registering an impressive increase of 105.5% to 1.3 billion jumping 13 points to 34. Under the direction of Hedi Slimane, Celine has managed to successfully infiltrate the burgeoning generation of Gen Z across the Asian market as she rises in popularity thanks to dressing popular K-drama characters.

Hotels appear for the first time in the ranking

For the first time, the Brand Finance Luxury & Premium includes two hotel brands: Shangri-La ($1.7 billion brand value) at #29 and Intercontinental ($1.2 billion brand value) at #35. As guests cancel vacations and working from home is encouraged, the hospitality sector has reached a near standstill on both tourism and business travel and hotel brand values ​​have suffered as a result.

Home to five-star luxury properties with elite postcodes and addresses across the Middle East, Asia, North America and Europe, Shangri-La is the industry's top-ranked hotel brand at 29th. challenges facing the industry, the brand posted an encouraging recovery in mainland China over the past year with demand supported by a rise in domestic leisure travel.

Brands and sectors with potential to be in the ranking

The 50 most valuable Luxury and Premium brands in the world belong to only four sectors: textiles, automobiles, cosmetics and personal care and, for the first time this year, hotels. However, we have large brands in many other sectors that could well become part of this exclusive list such as Qantas, Japan Airlines, Qatar Airlines or Emirates in the airline sector, liquors such as D'Amalfi Limoncello Supreme, Billionaire Vodka or Tequila Pasión Azteca. or in the world of designer furniture, Olimpic furniture, One Pedralbes House, Roche Bobois or the Spanish Treku, Kenay Home or Kettal.

In addition to hotels, among which could be Spanish brands such as Meliá, NH or RIU Hotels and Resorts, we miss luxury Spanish brands in the jewelry and watch sector such as Tous or Festina Lotus or Puig in the perfumery sector or designers such as Zoraida Cases, Cyrana de Elisa Álvarez García or Brain & Beast by Ángel Vidal in the textile sector. In Spain we could count in this ranking with luxury gastronomy brands in which great Spanish restaurants such as Azurmendi, Martín Berasategui, El Celler de Can Roca, Ramón Freixa Madrid or Atrio Restaurante could well be, not to mention the large number of products from Spanish designation of origin and geographical indication such as acorn-fed Iberian ham, Manchego cheese, extra virgin olive oil, Rioja, Rueda or Rivera de Duero wines, Jerez vinegar or La Vera paprika.

Ferrari ranks strongest in industry

In addition to measuring overall brand value, Brand Finance also assesses the relative strength of brands, based on factors such as marketing spend, perceptions customer satisfaction, employee satisfaction and corporate reputation. Along with revenue forecasts, brand strength is a crucial factor in brand value.

We establish the Strength of the Brand, according to three pillars: "Revenues", activities that support the future strength of the brand; "Brand Equity", actual current insights from our market research and other data provider partners; "Outcome or Impact" means brand-related business outcome measures, such as market share.

According to these criteria, Ferrari, which remains in position 7 in the general ranking for the third consecutive year with 7.8 billion - minus 3.7%-) is the strongest Luxury and Premium brand in the world, and the second strongest brand in the world according to the Brand Finance Global 500 2021 ranking, with a Brand Strength Index (BSI) score of 93.9 out of 100 and an elite AAA+ strength rating.

Ferrari reacted proactively to the pandemic, shutting down production when it started and then reopening, focusing its efforts on creating a safe work environment. This minimized disruption and reinforced the brand's reputation as a high-quality and responsible company. In line with this, Ferrari ranks highly in our Global Brand Equity Monitor study, particularly in Western Europe (in the top 3 of all brands analyzed in France, Italy and the UK). Ferrari remains a highly desired brand, albeit aspirational rather than accessible to many.

Along with revenue forecasts, brand strength is a crucial driver of brand equity. As Ferrari brand strength maintained its rating, its brand value only declined 3.7%. For years Ferrari has used products to support brand awareness and diversify revenue streams and is now taking steps to preserve brand exclusivity, planning to reduce current licensing agreements by 50% and remove 30% of the product categories.

Sitting behind Ferrari as the second strongest premium and luxury brand is Rolex (-4.9% to €6.7 billion) with a Brand Strength Index (BSI) score of 89.6 out of 100 and a AAA+ brand strength rating. Rolex is known for its world-leading quality and exclusivity, with the brand's new releases known to set the standard across the watch industry. Despite the challenges of the past year, the luxury watch market has shown remarkable resilience to the pandemic turmoil, with steady demand, demonstrated by Rolex website traffic seeing an increase over the previous year.