James Lawson, director of Ledbury Research, explains why well capitalised entrepreneurs are looking for opportunities with dormant prestige brands
Maison Moynat, founded in 1849, revived by LVMH in 2011
The current economic slowdown, combined with densely crowded prestige markets, has led many entrepreneurs to consider reanimating an old brand rather than creating a new one. This entails acquiring the brand, either to restart its original activities or to use its reputation to start new production.
A brand is normally considered dormant – and, therefore, available for acquisition – if its trademarks have not been used for a number of consecutive years, usually three or five, depending on the country.
By reviving an old brand, entrepreneurs will benefit from its existing brand recognition and equity, usually defined as a combination of positive visual, verbal and emotional associations. That is to say, an historic brand intrinsically carries a sense of heritage, credibility and longevity.
“ By reviving an old brand, entrepreneurs will benefit from its existing brand recognition and equity ”
Also, from a financial perspective, unlike the creation of a new brand, the reanimation of an historic brand would require a smaller initial investment to cover marketing costs.
However, reviving an old brand can also present a number of disadvantages. Beyond questioning why the brand died originally, the new products, for example, might not appeal to a younger generation or take into consideration the changes in consumers’ taste.
In addition, using an old brand to commercialise a new range of products could generate confusion in those customers who still associate it with the old products.
“ Using an old brand to commercialise a new range of products could generate consumer confusion ”
Recently, the trend of re-launching historic brands has become particularly significant across the luxury industry, especially among major luxury groups that are looking for historic fashion houses with deep roots and a high level of authenticity.
A classic example is Faberge whose brand was long used for fragrances and cosmetics and only recently saw the original production of jewelled eggs restored. Similarly, LVMH acquired Moynat, a luxury leather luggage house that was founded 150 years ago but whose brand had been dormant for the past three decades.
Moreover, following its successful re-launch of the French shoemaker Roger Vivier a few years ago, this year Tod’s resuscitated Maison Schiapparelli, a fashion brand that had been dormant since 1954.
“ Reviving historic brands requires a significant initial investment that only major luxury groups could likely contemplate ”
Undoubtedly, reviving historic brands requires a significant initial investment that only major luxury groups could likely contemplate, and in most cases, the name and the logo represent the only elements of continuity between the historic brand and its present incarnation.
Nevertheless, it appears to be a cost-efficient development strategy for companies looking to create an exclusive niche brand characterised by a strong sense of history and heritage.
To further investigate luxury brands on Luxury Society, we invite your to explore the related materials as follows:
- 2012’s Best Global Luxury Brands
- What Makes for a Successful Luxury Re-Brand?
- Has Luxury Brand Diversification Gone Too Far?
