Louis Vuitton's sales have doubled in four years. Last month, Louis Vuitton announced a revenue of 20 billion USD in 2022 - just 4 years after the brand became the first brand in the luxury industry to achieve annual revenue of 10 billion USD.
Louis Vuitton has benefited from a boom in luxury spending following the pandemic. Regular price increases also contribute to the brand's revenue growth.
Louis Vuitton is the largest brand owned by LVMH - an empire that includes brands such as Tiffany & Co, Christian Dior... LVMH did not announce the financial results of each individual brand, but analysts pointed out that Vuitton's profit rate reached about 50% last year, up several percentage points since 2019 and is one of the highest profit rates in the industry.
Louis Vuitton takes advantage of its influence in the handbag sector to expand into a much larger fashion empire while maintaining its monopoly despite expanding globally. Vuitton's revenue accounts for nearly a quarter of the parent company's $86 billion revenue last year.
Louis Vuitton's rapid growth has helped push the brand's parent company to reach the largest valuation on the stock market in Europe, helping billionaire Arnault become the richest person in the world.
The Wall Street Journal pointed out that in the context of industries facing difficulties, the luxury goods industry, including Louis Vuitton, continued to develop with store renovations and expansions during the 2020 and 2021 pandemics, including new locations in Tokyo (Japan) and Miami (USA).
The brand maintains a marketing apparatus, implementing large advertising campaigns at a time when many competitors in the industry are cutting costs.
But Vuitton's scale comes with risks. Luxury brands can offer higher prices by creating a beyond-extreme monopoly and uniqueness associated with their products and often connecting with the brand's heritage.
This is inherently difficult to do as brands are increasingly developing into "giants". Regarding this challenge, billionaire Arnault emphasized when announcing LVMH's business results in January 2023 in Paris: "Don't be too impressed by size. The most important thing is quality."
This led to a change in strategy, from an effort to dominate the leather industry to becoming a leading luxury company. A decade ago, Louis Vuitton stores were dominating leather goods such as bags, wallets and small accessories.
Nowadays, most of the stores have added new product categories such as ready-made clothes, shoes, watches, jewelry, perfume, etc. Vuitton even sells pet storage bags shaped like a miniature classic truck. Vuitton stores are now an average of 30% larger than 10 years ago.
Vuitton's strategy also includes a quick blend of culture and trade. This began under American designer Marc Jacobs - the brand's creative director from 1997 to 2013. Vuitton has gone in a progressive direction, escaping the traditional limits of exclusive luxury goods and moving towards a more official and comprehensive orientation. Designer Jacobs pursues collaborating with famous artists such as Kanye West, Japanese artist Takashi Murakami...
In 2017, Vuitton's collaboration with the famous street fashion brand Supreme "is the first important moment that things that previously seemed impossible can become possible" - veteran fashion writer Jian DeLeon commented.
The successful bridge between the world of luxury goods and street fashion aims to help young people learn from competing luxury brands and street fashion.
Benjamin Simmenauer - Research Director of Institut Franceis de la Mode - commented that Vuitton's market position is a balance between tradition and modernity. He pointed out that Vuitton's grasp, especially with street fashion, gives the brand a more modern focus compared to other luxury companies such as Hermes.
Vuitton also nurtures connections with the art world to shine cultural values - the focus of the beyond extends to the company's most ordinary products.
Meanwhile, products designed by art director Nicolas Ghesquiere often appear on the red carpet because they are worn by celebrities such as Emma Stone and Gemma Chan.
When you buy Vuitton, you buy a part of the superpower universe where all the celebrities use it, where those products connect with the most exclusive events, the best artists. You can go to a Vuitton store to buy a small wallet and feel like you are a part of this extremely elite world," said Mr. Simmenauer.
