Brand Value During COVID-19

Brand Finance has published its annual report on global brands' value, and the outcome is relatively gloomy. It has been estimated that the value loss caused by COVID-19 will be up to US$1 trillion, globally. This is an unexpected and unprecedented situation as the current pandemic has shone a light on how fragile some familiar brands are. 

 

Brand Finance's impact analysis shows that the apparel sector is one of the most heavily impacted industries globally and could face a potential 20% loss in brand value. Brand Finance calculates brands' value following some strict criteria that mostly focus on the ability of brands to lead, adapt and be agile. 

 

The criteria are the following: lead in terms of innovation and products – from design to trends as well as in managing relationships with clients; quickly adapt to diverse business scenarios without substantially impacting the business's structure; and lastly, be agile responding to critical situations with a proactive attitude instead of being caught off guard. In simpler words, brands that have transformed their business model to be in tune with the current lifestyle patterns are more likely to weather this pandemic storm.

 

Brands have been classified into three categories – limited impact (0% brand value loss) moderate impact (up to 10% brand value loss) and massive impact (up to 20% brand value loss) - based on the severity of enterprise value loss observed for the sector in the period between January 2020 and March 2020. 

 

The core category product of a brand is undoubtedly highly influential in determining the success of a brand, but sometimes the situation is more complicated. Sometimes it's not the product but the way that brands reach out to clients.

 

A definite winner for the sixth year in a row is Nike, a brand that has taken a higher control on its direct distribution channels mimicking the luxury approach of minimising wholesalers, delivering a much more "on brand" experience as well as improving profits. On the contrary, Nike's rival Adidas has announced that it predicts to lose over $1 billion in Greater China alone, exposing its obsolete model of relying on wholesalers for 85% of its business.

 

Zara, owned by the Spanish group Inditex, the second largest textile company in the world, has slipped down to sixth place among the top ten brands. What seemed to be Zara's insurmountable strength - no direct advertising but a precise positioning in the mind of a global clientele - has become its Achille heels. The lack of visibility due to store closures in the majority of its 93 markets worldwide, has impacted the brand to its core pushing management to rethink the relationship with its audience, which is now more active online. It will be interesting to monitor how the cancellation of fashion shows, the de facto style office of the brand, will affect the output process of Zara altogether.

 

Rolex maintains a strong position, according to Brand Finance. The global luxury watch has been buoyant in recent years, attracting the attention of millennials and adapting to the e-commerce model. Rolex aligned with all first luxury watch brands strategy released only one new model last year, maintaining exclusivity and recording robust sales globally. This move boosted the brands' relevance in the luxury industry, positioning Rolex as an iconic investment during uncertain times.

 

Relevance with a global audience is the key to the success of two major brands like Gucci and Louis Vuitton, both brands retaining their strong position in Brand Finance's chart. Both brands have revolutionised their business to adapt to the fast-changing panorama in the far east. Greater China, despite its pre-virus issues - protest in Hong Kong and a slowing economy - remains the most relevant markets for consumption, vitality and progress. Louis Vuitton and Gucci have regenerated their business as formatted plug-ins that fit into the highly integrated omi-channel Omni-experience approach that China has developed in recent years. Both brands have also put a bet on the fact that the world will shortly follow suit adopting the Chinese model. Covid-19 seems to be accelerating the changes towards that very model. Brands that are not able to adapt will inevitably stay behind. This is the case of Valentino, a brand which has seen its value decrease due to its inability to create appealing investment products sold as experiences for the discerning Chinese market that accounts for 30% of its global revenues.

 

It is interesting to highlight once more that it is not necessarily the product but the feelings that make or break a brand and its position in Brand Finance's chart. Levi's is the fastest growing brand in this year's ranking, increasing an impressive 38% to US$4.1 billion as of 1st January 2020. Last year was a pivotal year for the brand;   becoming public with a successful IPO on the New York Stock Exchange and managing to maintain relevance with younger audiences throughout the globe with successful brand's association - the music festival Coachella and the launch of 'Use Your Voice' advertising campaign. The Gap, on the other end of the spectrum, is selling similar products and boosting the same iconic past, without success. One of the most prominent losers, recording a 39% drop in brand value, The Gap had to face a series of setbacks including the ousting of its CEO at a crucial time and the closure of 230 stores globally putting the brand in a reactive defence mode. 

SHARE
  • Facebook
  • Twitter
  • Pinterest
SIMILAR ARTICLES
Hindsight: Yale Photography On Sexuality and Mundanity
By Sasha Regazzoni
“When you think of your insides, do you imagine a river or...
By Sasha Regazzoni
“When you think of your insides, do you imagine a river or a volcano or … ? What is pleasure without climax? Can there be art without ego?”   In the opening essay of ‘Hindsight’, Yale School of Art’s 2020 MFA Photography graduate show which...
“When you think of your insides, do you imagine a river or a volcano or … ? What is pleasure without climax? Can there be art without ego?”   In the opening essay of ‘Hindsight’, Yale School of Art’s 2020 MFA Photography graduate show which launched last week, writer and visual artist Carmen Winant poses a series of “Questions for...
Neorealist Beauty Meets Italian Craftsmanship with 'Il Traffico'
By Amanda Ballerini
In our newly-minted column on independent brands, our favourite 'Instagram Scouter' Amanda...
By Amanda Ballerini
In our newly-minted column on independent brands, our favourite 'Instagram Scouter' Amanda Ballerini talks shoes, cinema and what they represent and eventually become, with independent brand Il Traffico's designer Marco Antonio Marra.I first discovered Marco Antonio Marra's work some months ago...
In our newly-minted column on independent brands, our favourite 'Instagram Scouter' Amanda Ballerini talks shoes, cinema and what they represent and eventually become, with independent brand Il Traffico's designer Marco Antonio Marra.I first discovered Marco Antonio Marra's work some months ago via Instagram. At the time, his page called' Il Traffico' was a project in development, physical...
Levi’s Celebrates 501 Day
By Alice Ierace
Levi’s, the brand behind the iconic blue denim, has been quite active on Instagram. Over the last...
By Alice Ierace
By Alice Ierace
Levi’s, the brand behind the iconic blue denim, has been quite active on Instagram. Over the last few weeks, music and denim fans alike have been tuning in and rocking out to the brand’s 5:01 Live series on Instagram for live-streamed concerts, panel talks and customization sessions. Today, they...
Levi’s, the brand behind the iconic blue denim, has been quite active on Instagram. Over the last few weeks, music and denim fans alike have been tuning in and rocking out to the brand’s 5:01 Live series on Instagram for live-streamed concerts, panel talks and customization sessions. Today, they celebrate the birthday of their iconic 501 blue jean with live performances from around Europe and...
Pyer Moss Discloses Plans for a Drive-In Event for NYFW
By Elisa Carassai
While the future of the fashion show is still uncertain, it seems that, as of late, designers are...
By Elisa Carassai
While the future of the fashion show is still uncertain, it seems that, as of late, designers are trying to find ways of engaging with their audience in the most creative ways.One of these is American designer Kerby Jean Raymond of Pyer Moss, who just announced he would be presenting his film...
While the future of the fashion show is still uncertain, it seems that, as of late, designers are trying to find ways of engaging with their audience in the most creative ways.One of these is American designer Kerby Jean Raymond of Pyer Moss, who just announced he would be presenting his film ‘American Also,’ a feature film documenting the two years leading up to the boundary-pushing Pyer Moss...
NYNNE’s Nordic Heritage
By Alice Ierace
“I have always been a creative soul since I was little, in...
By Alice Ierace
By Alice Ierace
“I have always been a creative soul since I was little, in many different aspects, drawing, sewing and dancing. I have always been interested in design being a way of free expression. Fashion is a language; it reveals a lot about you as a person and how...
“I have always been a creative soul since I was little, in many different aspects, drawing, sewing and dancing. I have always been interested in design being a way of free expression. Fashion is a language; it reveals a lot about you as a person and how you want to express yourself,” tells us Nynne Kunde, founder of her eponymous brand...
The Future of Beauty in The Era of Coronavirus
By Ludovica Parisi
With new challenges brought by COVID-19 have come new opportunities for retailers to rethink...
By Ludovica Parisi
With new challenges brought by COVID-19 have come new opportunities for retailers to rethink their selling strategies.How the beauty industry is dealing with the pandemic and, most importantly, how will in-store experiences change with the new social distance enforcement and safety measures are...
With new challenges brought by COVID-19 have come new opportunities for retailers to rethink their selling strategies.How the beauty industry is dealing with the pandemic and, most importantly, how will in-store experiences change with the new social distance enforcement and safety measures are questions that need answers. From global firms to high-street brands, the beauty world has reacted...
By Maria Host-Ivessich
In Nowfashion’s newly-minted column on scents, self-defined ‘perfume-nerd’ and director Maria Host-Ivessich asks world-renown master perfumer Francis Kurkdijan about one of the most recurring themes in his work as a perfumer: duality.   Looking at...
In Nowfashion’s newly-minted column on scents, self-defined ‘perfume-nerd’ and director Maria Host-Ivessich asks world-renown master perfumer Francis Kurkdijan about one of the most recurring themes in his work as a perfumer: duality.   Looking at the way society and the relationship of the individual with his own identity is evolving, how do...
Designers Share a Proposal For Rewriting Fashion
By Alice Ierace
A group of independent designers, executives and retailers...
By Alice Ierace
A group of independent designers, executives and retailers from around the world has shared a proposal for the global fashion industry to rethink how the industry could and should work. The Covid-19 crisis has made the need for change within fashion more...
A group of independent designers, executives and retailers from around the world has shared a proposal for the global fashion industry to rethink how the industry could and should work. The Covid-19 crisis has made the need for change within fashion more urgent than ever whilst also providing a powerful opening for dialogue and a rewiring of the system...