It is an irony of the luxury industry’s explosion – global sales were an estimated €135bn ($174bn, £93bn) last year, up from €80bn in 2000 – that in its success may lie the seeds of its undoing.
As big-name brands promise growth of at least 10 per cent a year and open shops not only in emerging markets but in places ranging from Leeds in the UK to Australia’s Surfer’s Paradise, they face accusations of crossing the line from an exclusive to a mass market.
“I was in Miami Beach the other day, driving up I-95 to Palm Beach, and I saw this enormous Cartier billboard with huge rings, and my mouth just fell open,” says Dana Thomas, the author of a forthcoming book, Delux.
“This most chic of all chic French names advertising on a highway. Who are they trying to reach? The commuters of Dade County? It lowers their brand image enormously.”
This doesn’t worry Hermès, which plans to open a store in Charlotte, North Carolina, later this year.
“We have doubled the size of our US business in the past five years, and our aim is to double again in the next five years,” says Robert Chavez, chief executive of Hermès in the US.
“We see many potential sites to expand into across the country.”
These include San Diego, Phoenix, Denver and Seattle.
It was partly such an approach that prompted Tom Ford, the former vice-chairman of Gucci group, to decide to launch his own “ultra-luxury” label.
Mr Ford, who believes the traditional high ground of luxury is being eroded by the drive for market share, will position his Tom Ford men’s line as an exclusive brand for connoisseurs.
Industry lore has it that 60 per cent of young Japanese women own a Louis Vuitton handbag.
As a result, says Ms Thomas, “Young people in Paris are wholly uninterested in the big-brand handbag thing. There’s going to be a backlash, probably first in Europe and then America. But by then the big brands will be busy selling in Russia and China, and they won’t care.”
The Vuitton flagship store on the Champs-Elysées reports that Chinese consumers are buying at the same rate as the Japanese, and China, where Vuitton has 12 stores, with another three scheduled to open this year, is the brand’s third largest clientele after Japan and the US.
This year Gucci will open three more stores in China, taking its total to 11, and make its debut in Ukraine.
Yet, says Mark Lee, Gucci’s chief executive, “We’re doing everything to protect the brand. You have to consider how many markets opened up in the last 10 years after the fall of communism, how much new wealth was created.
“This is a population; it’s a reality. Honestly, I think the media gets more worked up about this than the
Nevertheless, one of his priorities is to develop Gucci’s jewellery collection, because of its “more luxurious, less seasonal, less disposable” nature.
For Mr Lee, this is an example of the company’s efforts to guard against a cheapening of the brand’s image.
A number of other brands have been exploring ways of maintaining an aura of exclusivity while continuing to broaden their sales base.
At Louis Vuitton and Alexander McQueen, for example, the made-to-order piece – whether an elaborately constructed dress or a handbag encrusted with semi-precious stones, with a price tag to match – has helped offset more accessible lines.
Experiments such as the “guerrilla” shops of Comme des Garçons in unused warehouses that open only for a year, or Prada’s avant-garde Tokyo shop designed by the architects behind London’s Tate Modern, give an edge to brands that might otherwise seem too familiar.
Ultimately the debate over how big is too big may be one of the industry’s growing pains.
One of the few brands to escape the accusation of cheapening itself is Chanel, a fully private company
that derives the bulk of its profits from sales of the perfume Chanel No. 5. This allows it to avoid the pressures facing most of its peers, many of which are part of large luxury conglomerates composed of formerly family-run businesses.
“The listed brands have to please their shareholders. They have to raise their numbers every quarter,” says Ms Thomas.
“Because of this, luxury has gone from being an experience to being a classification for a business.”
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