Looking for the top 10 luxury brands in the world? There’s something undeniably appealing about owning expensive and exclusive clothing and merchandise, which is why top luxury brands can get away with selling their products for exorbitant prices that aren’t justified by the cost needed to make them.
The global luxury market grew by 3% in 2016 to a size of $240.47 billion. However, the growth rate is sputtering worldwide due to softening consumer spending and political headwinds like Brexit. In fact, in the U.S and Asia, the luxury market contracted by 3% in 2016. Luxury Institute CEO Milton Pedraza thinks that the biggest factor that marred the luxury industry in 2016 was the economic slowdown in China, which led Chinese consumers to hold back on spending. That followed China posting its lowest ever growth rates in 2014 and 2015 after the Chinese government started a massive crackdown against corruption and the country’s notorious black markets, which hindered spending on luxury items.
Most of the luxury brands are based in Europe, where several terrorist incidents dented traffic at stores and impacted overall shopping trends. Mr. Pedraza is hopeful that growth will increase in the luxury industry in 2017, though only in the single digits. Experts think that in 2017, the luxury market will grow by 4%-6%, driving the industry to a value of over $268 billion. Bain & Company expects around 30 million new luxury market customers from China in the next 5 years. But increasing market awareness and changing conditions are forcing luxury brands to open low-cost stores in China and Asia. Experts now predict that the next prominent luxury customer base will likely come from Africa in the next 5-10 years. Tourists around the world are also not spending like they used to. Last year, local purchases exceeded tourist purchases by 5 percentage points for the first time since 2001. According to a report by Bain & Company, luxury cars was the top segment of the industry in 2016, growing by 8%, followed by hospitality, restaurants and beauty products.
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Experts fear that the luxury market could face further downturns if President Trump implements his plan of a 20% tariff on imports. This would result in skyrocketing prices of luxury goods, which already have pretty hefty rates. Contrary to general opinion, experts believe that extremely rich people are very price-conscious. According to Ambika Zutshi, CEO of Fashionbi, luxury companies will have to close stores and layoff employees if the government pushes them to bring their production to the U.S.
“Say bye to American luxury companies making it in China or Mexico,” Ms. Zutshi said in an interview with Luxury Daily.
President Trump’s decision to back out from the Trans-Pacific Parternship was also bad news for the luxury market. The U.S Fashion Industry Association has been a staunch supporter of the deal.
With this market situation and data in mind, let’s find out what the top 10 luxury brands in the world are, based on their brand value according to both Forbes and Brandz. For further reading, check out our previous list of the 21 Most Valuable Luxury Brands in the World.
10. Tiffany & Co.
The New York-based jewelry and fashion accessories company Tiffany & Co. (NYSE:TIF) has a market cap of $9.2 billion and brand value of $2.47 billion according to Brandz. Tiffany’s CEO Frederic Cumenal recently announced his resignation amid plummeting sales. Tiffany ran a commercial during the 2017 Super Bowl featuring Lady Gaga, as it seeks to reinvigorate its brand among younger women.
9. Burberry
Burberry is a London-based luxury brand which was founded in 1856 by Thomas Burberry. Burberry is famous for its ready-to-wear apparel, fashion products, cosmetics, glasses, and fashion accessories. According to the 2016 BrandZ Top100 report, Burberry has a brand value of $4.59 billion. Burberry, which is famous for its beige check designed clothes, reported a 40% increase in sales for the first three months of 2016, amid rising demand before Brexit’s implementation.
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8. Prada
Prada ranks 8th in our list of top 10 luxury brands in the world. It is an Italian luxury fashion brand which specializes in leather handbags, travel accessories, shoes, apparel, and perfumes. Prada was founded in 1913 by Italian Mario Prada. Prada has a market cap of $8.6 billion and a brand value of $6.8 billion. In August 2016, Prada reported its first sales decline since 2011, amid the terrorist attacks in Europe and weak market conditions in China.
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7. Chanel
Chanel, which takes seventh spot on the list of the top luxury brands in the world, is a high-end luxury brand which was founded in 1909 by Frenchwoman Gabrielle Chanel. The company manufactures and sells clothes, luxury goods and fashion accessories. Chanel’s brand value is estimated at $7.2 billion. The company is now controlled by billionaires Alain and Gerard Wertheimer. Chanel’s operating profit fell by 17% in 2015 due to slowing sales.
6. Coach
Coach Inc (NYSE:COH) is a New York-based fashion products company founded in 1941. Coach is famous for its handbags, wallets, leather goods, fragrances and jewelry. According to Forbes, Coach’s brand value is $7.5 billion. The company started lowering the prices of its handbags in 2016 amid declining demand and foot traffic at its stores.
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5. Rolex
Rolex ranks 5th in our list of top 10 luxury brands in the world. It is a Swiss luxury watchmaker which started operations 112 years ago. As of May 2016, Rolex’s brand value is $8.8 billion. Recently, the company started an expensive customization program which lets Rolex gold watch owners change the color of their watches to black. One of Rolex’s most expensive watches costs as much as $1.1 million.
4. Cartier
Cartier is a French luxury brand which designs, manufactures and sells jewelry and watches. The company has over 286 boutiques around the world where it showcases its high-end jewelry and watches. Cartier was founded in 1847 by Louis-François Cartier. Cartier is owned by Swiss jewelry and watchmaker Financière Richemont SA. Cartier’s brand value stands at $10.1 billion.
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3. Hermès
Third on our list of top 10 luxury brands in the world is Hermès International, a France-based high-end fashion, textile and luxury goods brand, which was founded in 1938. Hermès International’s market cap stands at $36.4 billion, while its brand value stands at $11.7 billion. Hermes’ famous Birkin handbag costs $15,000, and is quite famous among the wealthy of the world.
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2. Gucci
No list of top luxury brands in the world would be complete without Gucci, whose luxury handbags, watches, perfumes and apparel are immensely popular around the world. The Florence, Italy-based company has a brand value of $12 billion, as of May 2016, according to Forbes. Gucci is a subsidiary of French holding company Kering.
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1. Louis Vuitton
Louis Vuitton Malletier, commonly referred to as Louis Vuitton, is a top luxury brand which makes leather shoes, handbags, accessories, sunglasses, and jewelry. Its brand worth exceeds $27 billion, making it one of the top 20 most valuable brands in the world according to Forbes, and far and away the most valuable luxury brand. The 162-year-old company is also one of the most profitable brands in the world, with net profit margins of 30% as of May 2016. Famous endorsers of Louis Vuitton include Angelina Jolie, Bono, Michael Phelps, and Jaden Smith.
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That completes the list of the top 10 luxury brands in the world. Are any of these brands in your closet? Which is the one brand you can leave home without being seen wearing or carrying? Share your style with our readers in the comments below.
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