SOURCE: Natalie Theodosi | WWD
The loss of brand value during the coronavirus pandemic has been universal: According to the latest report by the brand valuation consultancy Brand Finance, the world’s 500 biggest corporations are set to lose $1 trillion in brand value.
The apparel sector has been among the hardest hit, with a potential 20 percent decrease in brand value. However, some megabrands, particularly in the sports world, have been able to retain their positioning, with Nike leading the way.
Nike has claimed the top spot as most valuable apparel brand in the world for the sixth year in a row, boosted by its “pivotal distribution strategy move” and a reduction in the number of retailers selling its products, allowing it to improve profit margins and have more control over the customer journey, according to Brand Finance.
Adidas came third in the ranking, even though it recorded a 1 percent decrease in brand value to $16.5 billion. Gucci came in second, while Louis Vuitton and Cartier were fourth and fifth, respectively.
Brand Finance’s chart of this year’s most valuable brands also highlighted an overall decrease in the value of high-street labels, with Zara falling two places compared to last year to number six and H&M falling four places to number seven.
Online shopping and e-commerce channels are vital in helping to alleviate some of the economic damage from COVID-19.
“As with all brands across the sector, Zara and Bershka [both subsidiaries of Inditex] are negotiating a significant drop in visibility, with store closures and consumers staying at home. Online shopping and e-commerce channels are vital in helping to alleviate some of the economic damage from COVID-19. Zara has implemented an innovative approach to the pandemic, with models photographing and styling new campaigns from their own home rather than the studio,” notes the report.
Among the hardest-hit brands were Gap and Valentino, which both recorded a 39 percent drop in brand value. The Italian luxury label had already been grappling with a slowdown of its sales in China, fueled by the civil unrest in Hong Kong, while Gap was impacted by the abrupt exit of its chief executive officer Art Peck, and news that it plans to shutter 230 stores.
Brand Finance has also released an additional chart, recording brand strength by measuring factors such as “marketing investment, familiarity, loyalty, staff satisfaction and corporate reputation.”
Luxury megabrands featured heavily on the list, with Rolex at the top, followed by the likes of Gucci, Louis Vuitton, Hermès and Moncler in second, fourth, fifth and sixth places respectively.
“The global luxury watch market has been celebrating continuous growth over the previous few years — a result of growing demand amongst Millennials and the upsurge in e-commerce channels. Despite the brand only releasing one new model last year, Rolex saw solid sales across the U.K. and globally,” said the report.