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Luxury brands need specific management
disappearance of haute couture in France is the disappearance of the dressmaking trade in the country, whereas its strength in Italy, in contrast, explains the economic and creative power of Italian haute couture.
Licences signal the departure from luxury The immediate consequence of the above is that the production licence immediately causes the brand to depart from the luxury universe (even if nonconnoisseurs take some time to realize this), because it breaks this intimate relationship between creation and manufacturing. This does not mean that a luxury brand should never grant licences, but that when it grants a licence, the licensed products are no longer luxury but ‘premium’ products (and even then, not always!) bearing the signature of a luxury brand. They can never effectively compete with luxury products on their turf, even if the licensee is a luxury brand. For example, Yves Saint Laurent watches, made under licence by Cartier, were excellent premium products, aesthetically very pleasing, but were not luxury products. We will deal with this point in greater detail in Chapter 13, dedicated to luxury business models. Having said this, we are not more royalist than the king on this subject, and our position should not be caricatured: when you depart from the domain of the pure luxury product and confront the domain of luxury services, things are much less clear-cut. At the extreme, for example in luxury hotels, the refusal of the concept of relocation would have no meaning, since service is rendered locally. The licence (or franchise) is in this case a legitimate and effective means of development, provided that there is strict – and friendly – control! In this context, the decision of the great Italian luxury names, such as Bulgari, to diversify into the hotel business is an interesting one to watch.