Luxury Law Summit: getting the most out of your brand
Building brands and using social media were major talking points at the inaugural Luxury Law Summit in London.
Louise Nash of Covington & Burling LLP chaired a fascinating panel discussion on how to build a brand, with Fabrizio Carretti of private equity company Permira providing an insight into how that company bought luxury brands Valentino and Hugo Boss, and went on to sell Valentino.
Explaining the rationale for the Valentino acquisition – seen as an unusual deal at the time – Carretti noted that the luxury industry “was perceived to be very young”, and it was thought that implementing excellent management strategies could drive value in a way that perhaps hadn’t been fully realised.
While there were certainly some challenges, including identifying the correct designer for the Valentino brand and riding out the financial crisis, “by working closely with management”, it was possible to build an attractive brand that resulted in a “great exit” for Permira. The key, Carretti said, is “the quality of the people running the business … the secret is having very strong managers with impeccable management”.
Fiona Grenier, chief financial officer at online luxury brand retailer matchesfashion, underlined the importance of “sense checking” new ideas for expanding or extending a brand, consulting clients, stakeholders and even customers before committing to proceed in a certain way. “We are very cautious,” she said, adding that “we won’t do anything that will damage the brands we work with”.
Timothy Han, owner of natural candle and skincare company Timothy Han London, brought the perspective of a younger brand to the discussion. For his business, transparency is a key asset. It “will endear your customers to you,” he said, whether through transparent financial arrangements or clear communication on digital platforms.
When developing your brand around the world, it is important to bear in mind that each jurisdiction requires different expertise, said Mary Ellen-Filed, chairman of brand valuation consultancy Brand Finance. “In countries that are not democracies, things can happen very quickly,” she said, and so it is important to have people on the ground if you expand into new markets.
She added that luxury brands need to be aware that Western, established markets are typically “completely different” from emerging economies, particularly in terms of the age of consumers, with Western consumers likely to be older. Brands need different strategies for those different demographics, she said.
A later panel discussion chaired by Nigel Rowley and Donna Martin from law firm Mackerell Turner Garrett considered the opportunities and risks of using social media to promote luxury brands.
Martin described social media as a “delicate area for luxury brands”, which may be concerned about losing their cache as their images are posted and reposted to thousands of online followers.
However, she said, social media isn’t going anywhere, and brands will want to take advantage of a marketing opportunity. She noted a recent survey that found 80 percent of so-called “affluents” (those earning salaries above $100,000), while not necessarily “friending”, or “following” brands on social networking sites, will turn to the medium for more information about the companies.
With this in mind, Martin suggested ways that brands and companies can take advantage of social networking while avoiding infringing copyright.
They were joined by Antonella Barbieri from Italian law firm Portolano Cavallo Studio Legale and Lee Gage, group general counsel for fashion brand Ben Sherman, who said that social media can be undervalued by companies, or dismissed as a channel just for young people.
Recent social network marketing successes by Dior, Chloe and Louis Vuitton were considered, though what factor indicates a campaign’s success? That you haven’t been sued, Rowley quipped.
