Luxury Brands Experience Huge Profit Increases
The recession, housing crisis and unemployment rate may tell one story, but a recent study of the world’s top brands suggests that consumers are embracing luxury lifestyle and indulgent brands despite economic troubles. In The Brand Finance Global 500 report, the global economic downturn has actually spawned a new breed of recession proof brands that consumers are turning to regardless of their financial position.
Usually consumers look for lower end products during these times, but this study shows consumers are increasingly eager to indulge in high quality cutting edge design. Some of the world’s top fashion chains have experienced soaring profits. For instance Louis Vuitton profits reached $4.9 billion, Hermes enjoyed $3.4 billion and Polo Ralph Lauren saw a $3.3 billion profit increase.
It may seem contrary to what you hear on the evening news, but brands like Rolls Royce have seen an increase of 17% in brand value to $3.1 billion. “The rise to prominence of luxury and lifestyle brands in this year’s report is quite impressive,” says David Haigh, CEO of Brand Finance, in a news release. “Whilst the world remains shrouded in economic misery, people are investing their hard earned cash in brands they feel they can rely on to produce quality, long lasting products. It is also an encouraging sign for the economy to see that the overall value of the Global 500 increase by 3.3% to $US3,415 billion from last year.”