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Why Luxury Should not Delocalize: a critique of a growing tendency

Author

Listed:
  • Jean-Noël Kapferer

    (HEC Paris - Recherche - Hors Laboratoire - HEC Paris - Ecole des Hautes Etudes Commerciales)

Abstract

Many famous luxury brands have recently planned to delocalize their production. Many applaud luxury brands for closing production sites in their home countries, considering such cost optimization to be a rational evolution. But others claim that in doing so, luxury is losing its soul. This article reminds managers that any decision must be analyzed and evaluated within the context of a strategy. Luxury is a subjective concept but a luxury strategy is not: luxury's ability to sustain its high prices and profitability is governed by strict rules. What Prada and others are doing is, in reality, discontinuing their luxury strategy, in favor of a fashion strategy, without acknowledging this explicitly. In fact, the luxury strategy is a specific business model. Fashion is another, governed by a completely different set of working principles.

Suggested Citation

  • Jean-Noël Kapferer, 2012. "Why Luxury Should not Delocalize: a critique of a growing tendency," Post-Print hal-00715585, HAL.
    • Handle: RePEc:hal:journl:hal-00715585
    as

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    Cited by:

    1. Koronaki, Eirini & Kyrousi, Antigone G. & Panigyrakis, George G., 2018. "The emotional value of arts-based initiatives: Strengthening the luxury brand–consumer relationship," Journal of Business Research, Elsevier, vol. 85(C), pages 406-413.
    2. Michael Löffler & Reinhold Decker, 2012. "Identifikation und praktische Nutzung von Mustern des Aufwärtskonsums," Schmalenbach Journal of Business Research, Springer, vol. 64(7), pages 722-746, November.
    3. Colette Depeyre & Emmanuelle Rigaud & Fabien Seraidarian, 2018. "Coopetition in the French luxury industry: five cases of brand-building by suppliers of luxury brands," Journal of Brand Management, Palgrave Macmillan, vol. 25(5), pages 463-473, September.

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