Louis Vuitton is hurting because its ubiquitous logos have made it appear to be accessible luxury – which is probably an oxymoron because luxury by definition must be largely exclusive.
As Roberto Ferdman writes on Quartz,
It’s been a perplexing year for the high end retail company, whose shares have risen only marginally higher since the start of 2013, while competitors like Cartier, Richemont, Burberry and Gucci parent company Kering have all seen their shares jump by more than 20%. For two decades, the Louis Vuitton brand, which accounts for roughly 50% of the company’s sales, has been able to all but pencil in sales growth above 10% (though sometimes nearer to 20%), but for 2013 the expectation is currently somewhere between 5% to 6% growth, which itself may even be overly optimistic.+
What gives? Louis Vuitton may be flaunting its famous monogram a bit too much.+
The classic logo that it used to quickly establish itself in emerging markets around the world appears to have run its course. The company’s handbags and other leather goods are so ubiquitous today that they have begun to symbolize “accessible luxury” rather than “exclusive” luxury. The problem, however, is that Louis Vuitton doesn’t sell like an accessible, or affordable luxury brand; its handbags, for one, are far more expensive than the likes of Coach or Michael Kors. “Accessible luxury for more money” isn’t exactly the sort of slogan a company wants to swing around.
He may be on to something there.
Consider what Angela Ahrendts, recently of Burberry fame and now of Apple retail fame, said about the challenges she faced after becoming Burberry’s CEO in 2006 (my emphasis, below):
It was a sign of the challenges we faced. Even in a burgeoning global market, Burberry was growing at only 2% a year. The company had an excellent foundation, but it had lost its focus in the process of global expansion. We had 23 licensees around the world, each doing something different. We were selling products such as dog cover-ups and leashes. One of our highest-profile stores, on Bond Street in London, had a whole section of kilts. There’s nothing wrong with any of those products individually, but together they added up to just a lot of stuff—something for everybody, but not much of it exclusive or compelling.
In luxury, ubiquity will kill you—it means you’re not really luxury anymore. And we were becoming ubiquitous. Burberry needed to be more than a beloved old British company. It had to develop into a great global luxury brand while competing against much larger rivals. Among luxury players, Louis Vuitton Moët Hennessy (LVMH) had almost 12 times—and Pinault-Printemps-Redoute (PPR) more than 16 times—Burberry’s revenue. We wanted a share of the disposable income of the world’s most elite buyers—and to win it, we’d have to fight for prime real estate in the world’s most rapidly growing consumer markets. In many ways, it felt like a David-and-Goliath battle.
Ironic that, at least in 2006, Burberry looked at the world of luxury and saw Louis Vuitton (the company, not just the luggage division) as an inspiration.