3. Restructuring programmes to deal with the crisis
When the crisis hit the luxury sector, two major categories of
companies appeared. On one hand, groups with independent distribution networks
and on the other hand groups using integrated distribution networks (i.e.
groups possessing their own point of sales network). The latter enables the
company to act simultaneously as producer, wholesaler and retailer and thus
control the distribution of its products perfectly.
Consequently, groups having an integrated distribution network
with their own stores such as Hermès, Gucci or Louis Vuitton resisted to
the crisis. This system allowed them to react quicker than their rivals when
consumers' needs changed locally and they were able to adapt their production
and marketing strategy accordingly. At the contrary, groups like Richemont,
Estée Lauder or l'Oréal Paris which depend on multibrand
distribution networks had more difficulties to face the crisis. Big luxury
brands learnt a lesson from the crisis and will come out stronger with new
selling techniques and new priorities.
In the context of the crisis, luxury companies that were not
present in Asia or South America understood the importance of such emerging
countries for their sector and started planning their expansion in those
countries. For instance, the German brand Hugo Boss forecast to strengthen its
presence in China as the country looked likely to become one of its three
biggest markets by 2015. Luxury goods companies multiplied acquisitions and
promotion in those countries which are said to be the driving force of luxury
for years to come.
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