European Luxury Sector
European Luxury Sector
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Investment
Strategy and value creation of the European Luxury Firms
Kim-Yann BREDOUX
Arthur DAVID
François THOMAS N.CROFT
Summary
Executive summary
Introduction
In a first time, it matters to define the concept of luxury, which isn’t a clear concept. It seems that luxury is something that people feel differently. There is no official definition of luxury according to the fact one or another perceives it differently, in terms of quality, design, durability or uniqueness.
Historically, these kinds of goods were limited to an elite class. The social perception of luxury goods is linked to the status in society, which is based on the purchasing power. Indeed the price of luxury goods is not determined by its functional value but by the value perceived. Unlike to necessity goods, the demand of luxury goods increases more than proportionally as income rises.
The global demand for luxury goods has been constantly increasing for the past few years; creating a reputation of resisting to economic recession by the sector.
However those past few years show this industry is subjected to a cyclical dynamic, linked to economic variations. So there is a relationship between economic trends and luxury goods industry.
The reasons of this slowdown are in a part linked to a recent strategy in the sector. * Indeed, the will to canvas new customers from the middle class made this sector more vulnerable to economics variations. This wasn’t true in the past, when only elite purchased luxury goods. * The integration of new advanced technologies and high-qualified workforces forced the sector to maintain high costs production
The maturity of the luxury segment contributed as well to slow the growth of the sector. In order to compensate traditional mature markets in Europe, USA, and Japan, the industry tends to develop its activity in emerging markets, like India and China.
We also know there is a dual
-
Investment
Strategy and value creation of the European Luxury Firms
Kim-Yann BREDOUX
Arthur DAVID
François THOMAS N.CROFT
Summary
Executive summary
Introduction
In a first time, it matters to define the concept of luxury, which isn’t a clear concept. It seems that luxury is something that people feel differently. There is no official definition of luxury according to the fact one or another perceives it differently, in terms of quality, design, durability or uniqueness.
Historically, these kinds of goods were limited to an elite class. The social perception of luxury goods is linked to the status in society, which is based on the purchasing power. Indeed the price of luxury goods is not determined by its functional value but by the value perceived. Unlike to necessity goods, the demand of luxury goods increases more than proportionally as income rises.
The global demand for luxury goods has been constantly increasing for the past few years; creating a reputation of resisting to economic recession by the sector.
However those past few years show this industry is subjected to a cyclical dynamic, linked to economic variations. So there is a relationship between economic trends and luxury goods industry.
The reasons of this slowdown are in a part linked to a recent strategy in the sector. * Indeed, the will to canvas new customers from the middle class made this sector more vulnerable to economics variations. This wasn’t true in the past, when only elite purchased luxury goods. * The integration of new advanced technologies and high-qualified workforces forced the sector to maintain high costs production
The maturity of the luxury segment contributed as well to slow the growth of the sector. In order to compensate traditional mature markets in Europe, USA, and Japan, the industry tends to develop its activity in emerging markets, like India and China.
We also know there is a dual