Louis Vuitton Tops Hermes as World’s Most Valuable Luxury Brand

Louis Vuitton Tops Hermes as World’s Most Valuable Luxury Brand
Louis Vuitton handbags on display inside the company's new "Etoile" store, operated by LVMH Moet Hennessy Louis Vuitton SA, in a former cinema in Rome. Photographer: Alessia Pierdomenico/Bloomberg

Louis Vuitton, the French maker of laminated canvas handbags, was named the world’s most valuable luxury brand for a seventh consecutive year.

The brand, owned by Paris-based LVMH Moet Hennessy Louis Vuitton SA, is worth $25.9 billion, a 7 percent increase from 2011, according to Millward Brown Optimor’s 2012 BrandZ study published today. Hermes, in which LVMH owns a stake, rose to second place with a value of $19.1 billion, up 61 percent on last year. Rolex, the closely-held Swiss watch brand, was ranked third at $7.17 billion, a 36 percent gain.

“Luxury is seen as a good investment with people increasingly buying classic pieces rather than high fashion,” Millward Brown Optimor Managing Director Nick Cooper said in a statement. “Those who can afford it indulge, including young professionals who, increasingly unable to buy houses, are spending their disposable income on mid-tier luxury.”

Quality craftsmanship, heritage and history are key factors of success for luxury brands, according to the study. Luxury makers “can embrace brand management as a critical competency for building long-term financial value,” Cooper said.

Vuitton’s value amounts to about a third of LVMH’s market capitalization of 61.05 billion euros ($78 billion).

Chanel, which ranked fourth in the study, saw its value decrease 2 percent to $6.68 billion, while the value of fifth-placed Gucci fell 14 percent to $6.42 billion. Gucci’s worth was affected by a decline in owner PPR SA’s share price last year, according to an external spokeswoman for Millward Brown Optimor.

Prada, Cartier

Prada, which sold shares in Hong Kong’s biggest initial public offering last year, made its debut in the luxury ranking in sixth place with a value of $5.7 billion. Prada plans to add about 80 stores annually over the next three years, many of which will be directly owned, reflecting a general trend among luxury makers to assert tighter brand control by shifting away from licensing and franchising, according to the study.

Cartier, the jewelry brand owned by Geneva-based Cie. Financiere Richemont SA, Hennessy cognac and Moet & Chandon champagne were seventh, eighth and ninth in the study, respectively, with values of $4.22 billion to $4.84 billion. LVMH, owner of Hennessy and Moet & Chandon, controls or has stakes in four of the industry’s 10-most valuable brands. The company holds a 22.3 percent stake in Hermes International SCA.

The Burberry brand ranked 10th with a value of $4.09 billion, a 21 percent increase on the previous year and almost half of its market capitalization of 6.1 billion pounds ($9.7 billion).

Vuitton was the 21st most-valuable brand across 13 industries in the BrandZ study. Apple, the maker of the iPad tablet, ranked first with its estimated value rising 19 percent to $182.9 billion, according to Millward Brown Optimor.

The study, commissioned by WPP Plc, was based on interviews with consumers as well as analysis of company performance.

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