Vogue Business Index reveals luxury’s top performers

Louis Vuitton is the No. 1 fashion house in the world, according to the results of the first-ever Vogue Business Luxury Fashion Index. This new ranking of the world’s top 50 luxury fashion brands combines the results of an exclusive international consumer survey with a range of additional metrics gathered from fashion houses and other key industry data sources. Vuitton performed well across all metrics tracked, leading on both brand loyalty and purchase intent. Close behind was LVMH stablemate Dior, with Gucci and Chanel landing in joint second and fourth place respectively. Ralph Lauren, ranked 10th, was the only non-European brand to make it into the top 10. The Index is a new initiative by the Vogue Business data and insights team, with the aim to create a balanced scorecard for brands to discover how they match up against their competitors. At the core of the project is a survey of more than 8,000 luxury consumers drawn from 13 key markets, revealing their views of brand desirability, status, quality and relevance, as well as their intent to buy. In addition to consumer sentiment, data points were collected on brands’ financial performance, digital presence, omnichannel capability and the effectiveness of their communication around environmental and social governance (ESG). In all, over 200 data points are tracked across the five categories, drawing on exclusive sources including how well brands’ runway shows perform on Condé Nast platforms. What Covid-19 means for the Index The online survey that underlies the Index was conducted between November 2019 and January 2020, with all data included predating Covid-19. This first iteration forms a benchmark showing brands' performance before the effects of the pandemic were felt. Subsequent updates, planned for every six months, will therefore reveal the wider effects of the crisis on the luxury fashion industry. Chanel and Hermès ranked far ahead of their competitors in giving their consumers an elevated sense of status, indicating how strongly the two brands are viewed as bywords for luxury. On average, consumers rated Hermès 8.5 out of 10 on this metric, followed closely by Chanel, scoring an 8.3. The next highest scoring fashion houses ranked some distance behind, with a score of 7.63. Hermès shares are now trading above where they were at the start of the crisis, indicating investors’ bullishness about the company’s prospects. Sales for the French handbag specialist dropped by just 7.7 per cent in Q1, a modest decline compared to the revenue drops seen by some of its peers. E-commerce has grown in stature in recent months as stores around the world have been on lockdown. Bain & Company now says that 30 per cent of luxury sales will be online by 2025, an increase of five percentage points on a pre-crisis forecast. Four of the brands included in the Index have no self-operated online sales channel, including Chanel. Nine more are yet to launch an e-commerce platform in mainland China, potentially one of the reasons local actors like Tmall are increasing their overtures to luxury brands in what looks likely to be one of the only growth markets for luxury in the coming year. Methodology and how it works Results of the five Index categories were weighted based on a combination of the strength of the underlying data and its perceived importance to the industry. Individual data points within each of the sections were differently weighted also; Twitter, for example, was judged to be less important for brands than Facebook and Instagram. The lowest weighted elements were financials and ESG, due to a lack of public, comparable data that exists at the brand level in these subject areas. Indeed, results from the ESG section revealed that customers were generally unaware of any of the specifics of fashion houses’ sustainability policies. No company stood out when consumers were asked to judge brands’ social responsibility, indicating a lack of cut through of the range of fashion pacts and industry pledges made in 2019. Brands’ scores may well have improved since polling though, given the widely reported efforts to assist in the fight against Covid-19. Development of the Index and the overall weighting of the results were overseen by an advisory panel of experts from leading financial and professional services firms with expertise in the consumer goods and luxury sectors. These included representatives from HSBC, Baker McKenzie and Permira. To qualify as a consumer, survey respondents had to spend in excess of $2,500 yearly on luxury fashion and beauty products. Learn more about Vogue Business Data and Insights (VBDI) More relating to the Vogue Business Luxury Fashion Index: Luxury's most prestigious brands as ranked by consumers The shift to e-commerce poses a challenge for luxury brands Fashion's digital acceleration hits its stride North American luxury brands outperform peers financially Consumers think the brands they like are the most sustainable

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