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Essay: Global strategy suggestion on LVMH fashion and leather goods line

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Global strategy suggestion on LVMH fashion and leather goods line

International Business Management

“LVMH’s Direction for the Future”

“Global Strategy Suggestion on LVMH Fashion and Leather Goods Line”

I. Introduction

Have you ever heard of “Veblen Effect”? This theory was designed by Thorstein Veblen in the 19th century and named after him. It refers to abnormal consumption patterns that consumers expand their expenditure on a specific good in spite of increase in the price.[i]

In practice, several companies are aggressively striving to reinforce this human nature in order to boost their sales. One of the typical examples is the luxury goods industry. Even if those companies, which involved in this industry, have already been selling their products at the unaffordable price to the middle class, they do not hesitate to raise the price level of their products so as to fascinate more customers because a lot of their customers are apt to show off their wealth or dignity through those extremely expensive products manufactured scarcely by those luxury brands. This tendency is getting more diffused globally according to the rise of overall income level in the developing countries.

As you have known, LVMH group is the leading French conglomerate in this industry. This group has established through the merger between Mo�t Hennessy and Louis Vuitton in 1987 and holds over 60 luxurious brands in the luxury industry including fashion and leather goods industry, the jewelry industry, the cosmetic industry, the selective retailing and high-end winery and liquor industry.[ii] Amongst them, the fashion and leather goods product line which is represented by Louis Vuitton and Fendi is the most lucrative sector for LVMH group[iii] and public interest in this field has been amplified.

Thus, this study would focus only on LVMH’s fashion and leather goods line. At first, the current international activities of this sector would be discussed and it will be followed by external scanning and international strategy recommendations.

II. LVMH Fashion and Leather Goods Line’s Current Performance

A. Organizational Structure

As of 2009, LVMH fashion and leather goods line is adhering to the multi-brands strategy. 12 prestigious brands consist of the fashion and leather goods line of LVMH group. After Mr. Bernard Arnault, who plays as a CEO, established LVMH group in 1987, it has been striving to extend its subordinate brands through M&A of some prestigious brands. It initially succeeded in acquiring Givenchy, well-known as a prestigious apparel brand in 1988 and its latest M&A achievement was Fendi, one of the strongest Louis Vuitton competitors in 2004[iv]. In addition to this, LVMH has sustained a close strategic partnership operation with Rossimoda, a Venice-based women’s shoemaker, since 2000[v]. Rossimoda is actively collaborating with multiple brands of LVMH so as both to invent and to distribute LVMH new shoes. The brief introduction can be identified at the appendix. (See Table. 1)

B. Steady Prosperity in 2009

According to the annual report of the fiscal year 2009, LVMH fashion and leather goods line owns 1,164 stores over the world. Those stores have generated revenue of 6,302 million Euros and profit of 1,986 million Euros in 2009. These figures have shown that fashion and leather goods posted both growth in revenue of 5% and increase in profit of 2%. (In 2008, revenue and profit were 6,302 million Euros and 1,927 million Euros respectively)[vi]. Despite the latest global financial turmoil, Louis Vuitton turned in a remarkable performance for the year, again recording double-digit revenue growth based on published figures. The brand has made outstanding headway in Asia and continues to benefit from strong momentum in Europe. Fendi and Marc Jacobs also confirmed their potential, showing a good level of resilience to the economic slowdown in Europe and reporting strong revenue increases in Asia.[vii] (Refer to Table. 2)

C. Major Markets

LVMH fashion and leather goods line is gaining the largest revenue from Asia market and it represented 46% of the aggregate revenue in 2009. Among of them, Japan is the 1st largest market and generated 18% of total revenue. It also obtained 18% of the total revenues in US and approximate 30% of total revenue was realized in Europe continent.[viii]

Nevertheless, a noticeable change of market revenue proposition can be found between the result of 2008 and the one of 2009. In 2008, US took up 19% and Japan represented 20% of gross revenue of LVMH fashion and leather goods line and it means that LVMH fashion and leather goods line had generated the most revenue in US and Japan like 2009. However, as it can be seen, the portion of revenue made from those 2 nations slightly declined. In other words, the market dominance of Japan and US has weakened during the fiscal year 2009.[ix] This can be confirmed at the enclosed as an appendix. (See Exhibit 1)

III. Key Success Factors of LVMH Fashion and Leather Goods Line

A. Management Philosophy of LVMH Fashion and Leather Goods Line

Yves Carcelle, CEO of LVMH fashion and leather goods line, mentioned “three eternal value” of LVMH fashion and leather goods line at a conference when he visited Korea in 2007. Those values are ‘original know-how’, ‘craftsmanship’ and ‘icons’.[x]

Firstly, in order to sustain its ‘original know-how’ and the finest quality, LVMH fashion and leather goods line has never depended on outsourcing concerning manufacturing and procurement even if there are chances for LVMH fashion and leather goods line either to cut down its cost or to take advantage of geographical merits. Secondly, ‘craftsmanship’ means offering every customer every flawless product through hand-made manufacturing of skillful craftsman. To maintain this principle, LVMH fashion and leather goods line is focusing on lean production of small units. Lastly, ‘icons’ can be stated as a sort of differentiation. LVMH fashion and leather goods are striving to assign significant shapes and color so as to retain its identity.[xi]

B. Direct Operation

In general, most multinational companies are likely to adapt franchising as a main method when they enter into a new market. Likewise, Gucci group, one of the strong competitors of LVMH fashion and leather goods line is taking both franchising and direct investment in terms of international expansion. However, Oliver Pectu, who is a luxury market analyst of CPP-Luxury.com, has criticized that this confusing policy is not a successful strategy for any luxury brand to expand its market effectively and in reality, Gucci group is showing the slow progress in expansion into emerging markets such as Eastern Europe and China.[xii]

On the contrary, LVMH fashion and leather goods line is operating its international stores by themselves without any franchising agreement. The reasons that it is not allowed for franchisee to manage a store of LVMH fashion and leather good line brands are related to its management philosophy. Even though, this strategy requires high management cost and might have a weakness in terms of setting up localized specific plans, this action enables LVMH fashion and leather goods line to manage quality control and exclusiveness of its brands directly. Besides, this action can also give loyal customers more satisfaction since LVMH fashion and leather goods line is able to reinforce a consistent brand image.[xiii]

C. M&A and Horizontal integration

Acquiring luxury brands with strong brand power is a main strategy that LVMH fashion and leather goods line holds as a competitive advantage as it has worked for it year after year. There is an anecdote regarding this strategy. During his business trip to America to find out new businesses, Arnault, President of LVMH Group, met a taxi driver and found that he knew about Christian Dior even though he didn’t know many low-priced brands. From this aspect, he concluded that promising business is what just many people know. He also thought that people know brand-name products because those products are valuable since those have histories and traditions. He accordingly judged that merger and acquisitions could bring more synergy than set up new businesses.[xiv]

Consequently, he merged and acquired aggressively more than 60 brands by starting taking over Christian Dior which suffered from company’s financial problems at that time. There weren’t difficulties in pressing ahead with M&A project since most of high-end brand was being operated by family business or managed without any clear plans[xv]. The former French president, Fran�ois Mitterrand criticized Mr. Arnault as ‘a heartless entrepreneur’ due to his aggressive M&A strategy.[xvi]

This strategy can be explained as horizontal integration. It is a strategy used by a business or corporation that seeks to sell a type of product in numerous markets. Horizontal integration occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm.[xvii]

Then, what could be the motivations for horizontal integration? It is generally said that economics of scale, economics of scope and reduction cost can be expected from horizontal integration. It means that company will be able to sell more products in different parts of the world and share resources. However, real motivation for LVMH might be to increase market power. Even though it is much more expansive to acquire another brand than setting up new brand, the benefit can be much greater when you buy existing brand which already has its own identity and tradition.

D. Decentralization and Multi-brand Strategy[xviii]

As well as the horizon integration, LVMH fashion and leather goods line is also trying to maximize the virtues of decentralized organization and multi-brand strategy. Through those strategies, LVMH fashion and leather goods line can wield the some merits as follows.

First of all, LVMH fashion and leather goods line can decrease operational risk since it can gain the same effect as portfolio effect through the multi-brand strategy. Besides, LVMH fashion and leather goods line can promote products by leveraging the synergy of two or more brands through co-branding strategy.

In terms of decentralization, daughter-brands under LVMH fashion and leather goods line are able to sustain its strong brand image and heritage of each brand and be guaranteed their decision making autonomy. In addition to this, LVMH fashion and leather goods line respects designers’ freedom and independence since LVMH fashion and leather goods line is regarding designers’ creativity and fast trend-setting with continuous innovation as the core competitiveness of fashion industry[xix]. This attitude can stimulate designers’ creative ideas and draw greater efficiency and productivity.

Finally, LVMH fashion and leather goods line can implement somehow localized marketing activities by utilizing its geographical advantage. As it can be identified at the Table 1 in the appendix, LVMH fashion and leather goods line is comprised of a variety of nationalities such France, Italy, Spain and Japan. Therefore, it could easily take some relevant measures reacting to the customer behaviors and cultural difference.

E. International Marketing Mix

The most important purpose of marketing activities conducted by LVMH group is to provide customers with both the exclusive prestigious image and priceless values through its products. In order to emphasize on this purpose and best satisfy its customers, LVMH fashion and leather goods line is taking advantage of a lot of high-end marketing environments.

1. Fashion Shows, “Haute Couture and Pr�t-�-Porter”

Haute Couture is a French term meaning “High dress-making” or “High-end individual customizing” literally[xx]. On contrary, Pr�t-�-Porter can be translated into “Ready-to-wear” in English[xxi]. As watched by mass media, In Paris, Milan, New York, London and Tokyo, which are regarded as fashion capitals of the world, there are seasonal fashion shows twice a year for Spring/Summer and Fall/Winter every year.

Among the fashion brands of LVMH, Givenchy is the only brand which is operation a Haute Couture line and joins the Paris fashion week every year with Ricardo Tisci, the key designer of Givenchy[xxii]. In case of Pr�t-�-Porter, almost all subordinate brands are handling this line, even including Givenchy[xxiii]. French-based companies including Louis Vuitton, Kenzo and C�line[xxiv] are steadily joining in Paris while Italian-based ones like Fendi and Emilio Pucci and American brands such as Marc Jacobs and Donna Karan are participating in the events held in Milan and New York respectively.[xxv]

2. Celebrity Endorsement and StarMarketing

‘Star Marketing’ is the major method for most companies which can afford to cast stars in order to sell goods lately since celebrities including some famous entertainers and star players holds the extreme strong selling power to public.

Likewise, LVMH fashion and leather goods line is carrying out various celebrity endorsement campaigns too. At these days, LVMH group is focusing on casting international top models in order to advertise its newly-released products. For instance, Lara Stone, named as the no.1 model in the world in 2009 is playing as a main model for Louis Vuitton[xxvi] and Fendi and Loewe, the other star brands of LVMH group made an ad-campaign contract with Anja Rubik and Daria Werbowi, the other well-known top models respectively.[xxvii]

3. Flagship stores[xxviii]

Flagship stores, or simply flagships, are main stores from retailers designed to serve a mainstream of customers. LVMH fashion and leather goods line longs for providing aesthetically scarce products. Therefore, it sometimes requires a meaningful place which can function as both a market place and an exhibition hall for customers. Flagship stores can carry out both characteristics and it gradually adds new flagship stores over the world and mainly built flagship stores in Hong Kong, Tokyo, Milan, London, Paris and New York, well known for the fashion cities. At these days, LVMH fashion and leather goods line is concentrating on launching new flagship stores in the mainland of China. Louis Vuitton opened its another flagship store in Shenzhen on July 2009[xxix] and Fendi built its new flagship store in Shanghai on December 2009.[xxx]

IV. The Threats for LVMH group

A. Serious Financial Crisis over West Europe Continent

Recently, the acronym PIGS can be easily heard in newspapers. PIGS came from the initial letters of 4 European nations Portugal, Italy, Greece and Spain. As briefly discussed above, Europe continent accounts for approximately 30% of the whole sales of LVMH fashion and leather goods line, even though the sales growth rate is very stable.[xxxi] As Italia and Spain have a strong purchasing power of luxurious brands, the expecting sales of LVMH group largely would be affected by this crisis prevalent in Italy and Spain. Besides, the management of some brands headquartered in Italy and Spain such as Fendi, Emilio Pucci (Italy) and Loewe (Spain) is highly likely to confront serious hardship in the near future.

This concern is turning to become real. According the new released by CPP-Luxury.com, Unfortunately, the current international crisis has given negative effects to Via Tornabouni street in Florence, an Italian landmark for luxury retail like Madison Avenue in New York, As of August 31, 2009, Versace, Trussardi and Brooks Brothers closed their stores on this street and there are few brands such as Gucci and Prada, which have managed to maintain their sales levels at their stores in Florence.[xxxii]

B. The Change of Japanese Customers

Japan, the largest market of LVMH fashion and leather goods line in terms of revenue shares in 2009, is also struggling serious financial turmoil nowadays and there are worries over the long-lasting stagnation of Japanese economy like 90’s.

In accordance with the interview with Mr Francesco Formiconi, COO of GIORGIO ARMANI SpA in Japan, the major changes brought about in the Japanese luxury consumer profile due to the crisis. Japanese consumers tend to keep away from the luxury brands due to shame, guilt and fear of arrogance and he gave the example of Takashimaya, Tokyo’s largest luxury department store and the luxury district of Ginza, pointing out to several examples of Japanese luxury consumers who prefer to buy discreetly luxury branded products such as Armani, while buying their clothes at H&M and ABERCROMBIE, bothbrandsshowing spectacular salesincreases inJapan.[xxxiii] Furthermore, Louis Vuitton gave up the plan for a new flagship store in Ginza, Tokyo, was expected to complete this year, on December 2008 due to the latest severe slump in luxury brand market.[xxxiv]

Thus, LVMH fashion and leather goods line should pay more attention and set up new expansion plans both to alleviate the dependence on the Japanese market and to diversify major markets to tackle the economic downturns of the current main markets.

C. Distribution of Counterfeit Products

Since the early 1990s, according to Interpol, trade in counterfeits has grown at eight times the speed of legitimate trade. 20 years ago, commercial losses around the world by counterfeiting were estimated at US 5 billion dollars while, they recently were expected to amount to roughly US$500 bn.[xxxv]

Counterfeit products dilute the market share and harm the brand integrity of LVMH fashion and leather goods line. The factories and merchants in Asia are becoming more sophisticated in counterfeiting, enabling them to penetrate and sell many of their products all over the world. This cause fearsome problems since LVMH generates about 46% of its profit in Asia including Japan[xxxvi].

To more specify, many of the counterfeits in the market are created in China. In 2007, 22% of all fakes seized by EU customs belong to clothing and approximate 80% of it made in China, whilst in the US, during the first half of 2997, fake apparel worth �10 million was collected and most of it – over 70% – came from China.[xxxvii] In 2006, approximately 12% of luxury products were sold in China and it was 3rd luxury brand market following US and Japan. Furthermore, it is expected that the portion of Chinese market would reach for 29% by 2015.[xxxviii]

What about in Korea? According to the survey conducted by Trensmonitor in 2010, around 38% of Korean used to buy counterfeit products over the last year. Moreover, roughly half respondents said that they thought that Louis Vuitton had the biggest quantity of counterfeit products.[xxxix] In fact, it might be true. In the first half of the 2009, more than 65% of all counterfeit products uncovered by Korean Intellectual Property Office were fakes of LVMH’s products. Following this, Chanel was placed on the 2nd rank.[xl] From this viewpoint, LVMH cannot be free from counterfeit problem in Asia as it is.

V. Opportunities for LVMH group

A. The world-wide rise of Men’s Interest in Fashion

The more international exchange has generated, the more recognition of prestigious brands is pervasive between young generations in the developing countries.

According to Flur Roberts, luxury-goods manager at market-research firm Euromonitor International in Asia, the retail market for luxury men’s wear could be one of the most promising markets in the world. For instance, Euromonitor is forecasting that consumption of men’s luxury products in South Korea will grow by up to 48 percents between 2009 and 2013 and even in mature luxury markets such as the United States and the United Kingdom, sales of men’s designer clothing have enhanced at twice the rate of the women’s sector for past five years.[xli]

Paul Cadman, Ferragamo’s Asia- Pacific CEO, stressed out that the faster pace of growth of the brand’s men’s products was especially noticeable in developing markets, such as India[xlii] and China and India became the fourth country to hold an all-men fashion week after London, New York and Paris in 2009.[xliii]

Hence, LVMH fashion and leather goods line is also actively focusing on Men’s luxury products in order to take initiative when that market get activated. Recently, Louis Vuitton launched men’s apparel and Givenchy is expanding its market with the prestigious men’s fashion.[xliv]

B. The Overall Growth of Purchasing Power in Developing Countries

As mentioned above, Asian countries consist of considerable share of the revenue structure of LVMH fashion and leather goods line. It means that in sense of revenue, the important markets for LVMH fashion and leather goods line are Japan representing 18% and other Asian nations like China, South Korea, and Hong Kong occupying 28% of the revenue.[xlv]

At these days, LVMH fashion and leather goods line is concentrating on not only Japan but also China. In China, there are 35 official stores with more than 900 authorized retails outlets and it is employing up to 4,800 people. Chinese expansion will be more dynamic in that Chinese market is developing at the rapid pace and the purchasing power of Chinese people is growing and becoming more important for the LVMH fashion and leather goods line.[xlvi] In addition to this, a recent study of Bain and Co.revealed that out of 300 openings of luxury stores in 2009, Bain said, 15 percent will be in China, 25 percent in other Asian countries, 30 percent in the Middle East, 15 percent in Eastern Europe and 15 percent in the US. China and Korea remain the top Asian markets to attract luxury brands, yet smaller markets such as Mongolia and Kazakhstan are drawing more interest from luxury brands. Last month, Louis Vuitton opened their first stores in the Mongolian capital of Ulan Bator.[xlvii]

VI. Strategic Suggestions for LVMH Group (Conclusion)

A. Diversify main markets

As watched above paragraphs, West Europe and Japan are passing through severe economic turbulence at these days. Owing to that, the overall revenue of LVMH fashion and leather goods line can have been shrunk for long time as it has earned approximately 50% of the entire sales since 2000s’.

To cope with this challenging international circumstance, LVMH fashion and leather goods line should concentrate its capabilities on diversifying main markets into developing countries by constructing new flagship stores in those regions or making a sales strategic alliance with local giant retailers. In Fact, it is carrying out some appropriate measures to enhance its market dominance in some Eastern Europe countries like Hungary and Romania, Mid-East and South East Asia.

B. Strengthening Men’s lines into Asian Market

As discussed in the former paragraph, the potential of Men’s apparel is very promising. In reality, LVMH group eagerly pours its capabilities into Men’s Apparel. Currently, three French brands and 2 American Brands of LVMH fashion and leather goods line have their own men’s apparel line. Those brands are Louis Vuitton, Givenchy and Kenzo in France and Marc Jacobs and Donna Karan in New York. In addition to this, seeing that Thomas Pink is mainly producing men’s finest shirts and neck ties, this brand can also be sorted as the seller of Men’s apparel.

However, it is harder for Asian customers than those who are living in Europe and US to experience those men’s products since LVMH fashion and leather goods line rarely opened its store excluding Japan. Moreover, because all of product has been made on the basis of the statistical data on Western standard body shape except for Haute Couture clothes, the size cannot fit the Asian male customers. This factor makes Asian customers feel less favorable for buying clothes even though they have great interest in luxury brands.

To summarize, LVMH fashion and leather goods should pay more attention both Asian expansion of Men’s line and customizing overall size of its apparels into the Asian standard even though it requires operational cost in order to attract more customers and pull out more sales potential. Moreover, it can be recommended for LVMH fashion and leather goods line to take partnership with some famous Asian designers so as to meet the tastes of Asian customers.

C. Tackling Counterfeit Products

In order to cripple the rampant counterfeiting industry, the primary step for LVMH fashion and leather goods line is to communicate with Asian government (especially PRC government), and to seek legal assistance of local custom authority to clear away the distributions of the counterfeiting products. In fact, it is expected not to be effective as WTO has recently asked China to impose laws to monitor the condition, but no remarkable and effective result is drawn.

However, the brands have enjoyed a few victories. In December 2005, a Beijing court ordered the Xiushui Haosen Clothing Market, operator of the silk market, a popular shopping pavilion in that city, to pay LVMH, Burberry, Chanel, Gucci, and Prada $14,000 in damages for selling fake products.[xlviii] As well as this, a Chinese court handed out prison sentences in 2006 and heavy fines to 2 men who were found guilty of exporting illegal copies of perfumes that are patented by LVMH.[xlix]

This movement is unusual in China and many industry experts believe that it could be a sign that, after years of lobbying by the luxury goods industry, the China authorities are starting to take actions towards clamping down on the practice.

Apart from lobbying, there is another way to persuade Asian government. LVMH fashion and leather goods line can emphasize on an outflow of tax income caused by counterfeit products. According to Frontier Economics, Europe’s economic consultancy, Tax outflow due to fakes came to 85 US billion dollars a year in G20. The American Chamber of Commerce insists that if US government spends 1 dollar to prevent distribution of duplicated items on the market, US can collect 5 dollars of tax more.[l]

Another way to protect its profit is using new EU rules regarding online sales. Under updated EU antitrust rules, it is prohibited to sell high-end products through internet sales with the exception of approved sellers.[li] It means that luxury brand owners will be able to protect their image and property since a lot of counterfeit products is being sold via internet. It is estimated that online sales generally make up 20 to 30% of the global counterfeit market.[lii] So, if LVMH fashion and leather goods line can make Asian government legislate this kind of law above, it can save huge loss from counterfeit.

LVMH fashion and leather goods line should also take further measures concerning distribution channels in order for counterfeit manufacturers to reduce the proximity for the raw materials of it. In addition to, exclusive retail stores, it is important for LVMH to limit the use of vendors and suppliers. Otherwise, LVMH fashion and leather goods line could integrate the distribution channels vertically by acquiring the suppliers companies directly. This should be able to reduce the availability of its raw materials in the market significantly.

Increased brand promotion and product advertising would also be essential to create the demand for the real commodities. This can be assisted by personalization of the products and warranty provision to make clear distinctions between real and copied products. Then people would be much aware of the significance in buying the true brand to the counterfeits.

D. Investment in Diffusing Model

Today’s economic slump has been forcing luxury brands to consider cutting down their selling price.[liii] As an alternative of lowering price, some luxury brands can launch less expensive production lines.

The typical example of adding a diffusing line is Armani Exchange, diffusing Armani line. Both brands accomplished huge success in low-end luxury market. Those brands are referred to as ‘Masstige brand’ – a compound came from ‘Mass’ and ‘Prestige’ – which means the price is more affordable than the luxury brand but the quality and design are more excellent than other normal brands. Masstige brand is the effective strategy both to provide the products with similar quality at a less expensive price and to extend its business range into low-level of luxury market.

There is another example of luxury brand’s entering into a diffusion line too. A internationally well-known diffusion sport wear brand, Puma belongs to PPR group, a holding company of Gucci group now. It acquired Puma in 2007 and it can proceed to sport wears and equipment market.[liv]

Actually, LVMH is operating Marc by Marc Jacobs fashion, a kind of similar diffusing label but it can also support either to launch new diffusing low-end line or acquiring relevant a retailer. When it comes to adapt a diffusing line, LVMH fashion and leather goods line express concerns on its highest brand image and a price-setting right. However, it could minimize those concerns by applying ‘no-brand strategy’ or taking advantage of its multi-brand strategy.

E. M&A of Italian brands

M&A is the core strategy for all of luxury brand conglomerates as well as LVMH fashion and leather goods line to rule the world luxury market as mentioned above and there are lots of competitors which are suffering from serious difficulty in their operation including some Italian prestigious brands like Salvatore Ferragamo and Prada.[lv] However, it cannot buy all of them because it does not have enough cash to take over and buy other brands in order to reinforce its market power. Moreover, governments and other industries might provide some sorts of restrictions to LVMH fashion and leather goods line in order to avoid a monopolistic control of the luxury brands.

Nevertheless, one of these target brands might be the Italian brand Salvatore Ferragamo as it stands as a synonymous for luxury products and specially it targets men as a consumer; deepening our goals to extended into the growing male consumers demand; but its currently suffering from low sales in the market and management now predicts operating profits will be down 10% to 15% this year, to about $1.5 billion, and some analysts think even that is too optimistic.”[lvi] Therefore, it will be beneficial for both companies to merge.

VIII. Reference

“Veblen Effect”, Wikipedia(http://en.wikipedia.org/wiki/Veblen_effect)

LVMH Official Site (www.lvmh.com)

LVMH Annual Report 2009

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GUCCI GROUP lags behind LVMH, with a hasty and confusing expansion strategy, CCP Luxury.com, 05 Apr. 2010 (http://www.cpp-luxury.com/en/gucci-group-lags-behind-lvmh–with-a-hasty-and-confusing-expansion-strategy_666.html)

LVMH CASE STUDY: Management of Global Corporations,pp.4, ESSEC LUXE MBA, October 8, 2008

Horizon Integration, Wikipedia (http://www.wikipedia.org/)

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Anja Rubik Showcases New Fendi Peek-A-Boo Bag in Spring/Summer 2010 Ad Campaign, Jan. 2010

(http://bagbunch.com/anja-rubik-showcases-new-fendi-peek-a-boo-bag-in-springsummer-2010-ad-campaign/)

Loewe Love, Vogue, Jan 2010 (http://www.vogue.co.uk/news/daily/100106-loewe-shoot-with-daria-werbowy.aspx)

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Asia’s largest LV flagship store opened in Shenzhen, China Resources Vientiane City, Get LV handbags (http://www.getlvhandbags.com/asias-largest-lv-flagship-store-opened-in-shenzhen-china-resources-vientiane-city/)

Fendi adds luxury to Shanghai flagship store, China Daily, Dec 21, 2009 (http://www.chinadaily.com.cn/bizchina/2009-12/21/content_9205522.htm)

Crisis takes its toll on luxury fashion stores in Florence (Italy), CPP-Luxury.com, Sep. 4, 2009 (http://www.cpp-luxury.com/en/crisis-takes-its-toll-on-luxury-fashion-stores-in-florence–italy_387.html)

Japanese luxury consumer profile suffers major changes, CPP-Luxury.com, 09 March 2010 (http://www.cpp-luxury.com/en/japanese-luxury-consumer-profile-suffers-major-changes_621.html)

Louis Vuitton Ginza Store Cancelled, Tokyo fashion.com, Dec. 2008 (http://tokyofashion.com/louis-vuitton-ginza-store-cancelled/)

Heneage Mitchell, Counterfeiting is Big Business, (http://www.tobaccointernational.com/0607/security.htm)

http://www.spotcounterfeits.co.uk/china-counterfeit-problem.html

http://news.nate.com/view/20060703n02631

http://news.nate.com/view/20100504n22036

http://www.munhwa.com/news/view.html?no=2009071401031624316002

What men want, Sonia Kolesnikov-Jessop, Luxury institute, Apr. 3, 2010 (http://blog.luxuryinstitute.com/?p=618)

Men’s fashion comes of age, Wall street journal, sep 14, 2009 (http://www.livemint.com/2009/09/14151613/Men8217s-fashion-comes-of-a.html)

http://mbaalum.ust.hk/doc/about%20LVMH%20Group.pdf

Asia becomes no 1 priority market for luxury brands, while the U.S. will take years to recover, CPP-Luxury.com, Nov. 2, 2009 (http://www.cpp-luxury.com/en/asia-becomes-no-1-priority-market-for-luxury-brands–while-the-u-s–will-take-years-to-recover_466.html)

http://www.brandchannel.com/features_profile.asp?pr_id=310

http://www.cosmeticsdesign.com/Products-Markets/Luxury-goods-makers-declare-war-on-China-counterfeits

http://news.nate.com/view/20100310n18191

http://www.reuters.com/article/idUSLDE63J1QM20100420

http://www.managingip.com/Article/1258137/LVMH-outlines-anti-counterfeiting-battle.html

Top luxury fashion companies cut prices and reduce work force in fighting the current crisis, CPP-Luxury.com, Oct 29, 2009 (http://www.cpp-luxury.com/en/top-luxury-fashion-companies-cut-prices-and-reduce-work-force-in-fighting-the-current-crisis_462.html)

PPR Official Site (http://www.ppr.com/front__sectionId-183_Changelang-en.html)

ANALYSIS-Luxury M&A set for boost, predators eye deals, Reuters, Mar 30, 2010 (http://www.reuters.com/article/idUSLDE62T0XO20100330)

http://www.businessweek.com/magazine/content/01_49/b3760043.htm


[i] “Veblen Effect”, Wikipedia(http://en.wikipedia.org/wiki/Veblen_effect)

[ii] LVMH Official Site(www.lvmh.com)

[iii] LVMH Annual Report 2009,pp6, LVMH Group, 2010

[iv] LVMH Official Site(www.lvmh.com)

[v] LVMH makes strategic agreement with RossiModa, theprestigious Italian shoe company. (http://www.allbusiness.com/manufacturing/leather-allied-product/6588016-1.html)

[vi] LVMH Annual Report 2009,pp26, LVMH Group, 2010

[vii] LVMH Annual Report 2009,pp78, LVMH Group, 2010

[viii] LVMH Annual Report 2009,pp26, LVMH Group, 2010[ix] LVMH Annual Report 2008,pp29, LVMH Group, 2009

[x]8 Aug. 2008 (http://economy.hankooki.com/lpage/industry/200808/e2008080513143047670.htm)

[xi] [Consulting] Economy plus, Aug. 2007 (http://economyplus.chosun.com/special/special_view_past.php?boardName=Column&t_num=2476&img_ho=34)

[xii] GUCCI GROUP lags behind LVMH, with a hasty and confusing expansion strategy, CCP Luxury.com, 05 Apr. 2010

(http://www.cpp-luxury.com/en/gucci-group-lags-behind-lvmh–with-a-hasty-and-confusing-expansion-strategy_666.html)

[xiii] LVMH CASE STUDY: Management of Global Corporations,pp.4, ESSEC LUXE MBA, October 8, 2008

[xiv] Aug 27,2007 (http://www.seri.org/kz/kzKsosv.html?ucgb=KZKSOS&no=22201&cateno=2)

[xv] 8 Aug. 2008 (http://economy.hankooki.com/lpage/industry/200808/e2008080513143047670.htm)

[xvi] LVMH Aug 27,2007 (http://www.seri.org/kz/kzKsosv.html?ucgb=KZKSOS&no=22201&cateno=2)

[xvii] Horizon Integration, Wikipedia (http://www.wikipedia.org/)

[xviii] LVMH CASE STUDY: Management of Global Corporations,pp.4, ESSEC LUXE MBA, October 8, 2008

[xix] LVMH Aug 27,2007 [xix] LVMH? 3, Aug 27,2007 (http://www.seri.org/kz/kzKsosv.html?ucgb=KZKSOS&no=22201&cateno=2)

[xx] Haute Couture, Wikipedia (http://en.wikipedia.org/wiki/Haute_couture)

[xxi] Pr�t-�-Porter, Wikipedia http://en.wikipedia.org/wiki/Pr%C3%AAt-%C3%A0-porter

[xxii] Spring/Summer 2010 haute couture in Paris: sensual equestrians for Dior, dazzling modernity at Givenchy, LVMH Official Site(http://www.lvmh.com/magazine/pg_mag_contenu.asp?int_id=600&archive=0&rubrique=ACTUALITE&srub=0&rub=21&str_theme_id=)

[xxiii] Paris Spring/Summer 2010 Ready-to-Wear: Femme Fatale at Dior, Chic Leather for Loewe, Striking Graphics for Givenchy, LVMH Official Site (http://www.lvmh.com/magazine/pg_mag_contenu.asp?int_id=577&archive=0&rubrique=ACTUALITE&srub=0&rub=21&str_theme_id=)

[xxiv] Paris Spring/Summer 2010 Ready-to-Wear: jubilatory spirit at Louis Vuitton, purity at C�line, oriental travels for Kenzo, LVMH Official Site (http://www.lvmh.com/magazine/pg_mag_contenu.asp?int_id=578&archive=0&rubrique=ACTUALITE&srub=0&rub=21&str_theme_id=)

[xxv] Women’s Spring/Summer 2010 RTW in Milan: sensuality for Emilio Pucci, a light touch for Fendi, LVMH Official Site

(http://www.lvmh.com/magazine/pg_mag_contenu.asp?int_id=576&archive=0&rubrique=ACTUALITE&srub=0&rub=21&str_theme_id=)

[xxvi]Lara Stone new face for Louis Vuitton Spring/Summer 2010 ads, LVMH official site, Feb 15th, 2010 (http://www.lvmh.com/magazine/pg_mag_contenu.asp?int_id=601&archive=0&rubrique=ACTUALITE&srub=0&rub=21&str_theme_id=)

[xxvii]Anja Rubik Showcases New Fendi Peek-A-Boo Bag in Spring/Summer 2010 Ad Campaign, Jan. 2010

(http://bagbunch.com/anja-rubik-showcases-new-fendi-peek-a-boo-bag-in-springsummer-2010-ad-campaign/)

Loewe Love, Vogue, Jan 2010 (http://www.vogue.co.uk/news/daily/100106-loewe-shoot-with-daria-werbowy.aspx)

[xxviii] Flagship store, wikipedia (http://en.wikipedia.org/wiki/Flagship_stores#Flagship_stores)

[xxix] Asia’s largest LV flagship store opened in Shenzhen, China Resources Vientiane City, Get LV handbags (http://www.getlvhandbags.com/asias-largest-lv-flagship-store-opened-in-shenzhen-china-resources-vientiane-city/)

[xxx] Fendi adds luxury to Shanghai flagship store, China Daily, Dec 21, 2009

(http://www.chinadaily.com.cn/bizchina/2009-12/21/content_9205522.htm)

[xxxi] LVMH Annual Report 2009,pp26, LVMH Group, 2010

[xxxii] Crisis takes its toll on luxury fashion stores in Florence (Italy), CPP-Luxury.com, Sep. 4, 2009

(http://www.cpp-luxury.com/en/crisis-takes-its-toll-on-luxury-fashion-stores-in-florence–italy_387.html)

[xxxiii] Japanese luxury consumer profile suffers major changes, CPP-Luxury.com, 09 March 2010

(http://www.cpp-luxury.com/en/japanese-luxury-consumer-profile-suffers-major-changes_621.html)

[xxxiv] Louis Vuitton Ginza Store Cancelled, Tokyo fashion.com, Dec. 2008 (http://tokyofashion.com/louis-vuitton-ginza-store-cancelled/)

[xxxv] Heneage Mitchell, Counterfeiting is Big Business, http://www.tobaccointernational.com/0607/security.htm

[xxxvi] LVMH Annual Report 2009,pp26, LVMH Group, 2010

[xxxvii] http://www.spotcounterfeits.co.uk/china-counterfeit-problem.html

[xxxviii] http://news.nate.com/view/20060703n02631

[xxxix] http://news.nate.com/view/20100504n22036

[xl] http://www.munhwa.com/news/view.html?no=2009071401031624316002

[xli] What men want, Sonia Kolesnikov-Jessop, Luxury institute, Apr. 3, 2010 (http://blog.luxuryinstitute.com/?p=618)

[xlii] What men want, Sonia Kolesnikov-Jessop, Luxury institute, Apr. 3, 2010 (http://blog.luxuryinstitute.com/?p=618)

[xliii]Men’s fashion comes of age, Wall street journal, sep 14, 2009 (http://www.livemint.com/2009/09/14151613/Men8217s-fashion-comes-of-a.html)

[xliv] LVMH Official site (www.lvmh.com)

[xlv] LVMH annual report 2009,pp26, LVMH Group, 2010

[xlvi] http://mbaalum.ust.hk/doc/about%20LVMH%20Group.pdf

[xlvii] Asia becomes no 1 priority market for luxury brands, while the U.S. will take years to recover, CPP-Luxury.com, Nov. 2, 2009 (http://www.cpp-luxury.com/en/asia-becomes-no-1-priority-market-for-luxury-brands–while-the-u-s–will-take-years-to-recover_466.html)

[xlviii] http://www.brandchannel.com/features_profile.asp?pr_id=310

[xlix] http://www.cosmeticsdesign.com/Products-Markets/Luxury-goods-makers-declare-war-on-China-counterfeits

[l] http://news.nate.com/view/20100310n18191

[li] http://www.reuters.com/article/idUSLDE63J1QM20100420

[lii] http://www.managingip.com/Article/1258137/LVMH-outlines-anti-counterfeiting-battle.html

[liii] Top luxury fashion companies cut prices and reduce work force in fighting the current crisis, CPP-Luxury.com, Oct 29, 2009 (http://www.cpp-luxury.com/en/top-luxury-fashion-companies-cut-prices-and-reduce-work-force-in-fighting-the-current-crisis_462.html)

[liv] PPR Official Site (http://www.ppr.com/front__sectionId-183_Changelang-en.html)

[lv] ANALYSIS-Luxury M&A set for boost, predators eye deals, Reuters, Mar 30, 2010 (http://www.reuters.com/article/idUSLDE62T0XO20100330)

[lvi] http://www.businessweek.com/magazine/content/01_49/b3760043.htm

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