European Luxury Dominates Global Market but Smaller Houses Face Pressure to Consolidate
-
European luxury brands dominate the global luxury goods market, accounting for about two-thirds of sales. Success factors include heritage, craftsmanship, and clustering of specialized skills.
-
LVMH, led by Bernard Arnault, exemplifies European luxury, as a conglomerate housing 75 brands and the world's second richest man. Vertical and horizontal integration have fueled its growth.
-
Independent European brands like Hermès have thrived but smaller Italian luxury houses may need to consolidate to keep up with luxury giants.
-
Asian and American rivals have struggled to break into ultra high-end luxury compared to established European houses.
-
Europe enjoys built-in advantages like history, lifestyle mystique and long-cultivated craft skills that foreign brands cannot easily replicate.