just-style management briefing: Latam consumers follow global brand trends
Louis Vuitton, Gucci and Salvatore Ferragamo are Latin America's leading luxury brands, according to industry observers who add the region's elite follow global trends when it comes to choosing their favourite labels.
"Wealthy Latin Americans travel as much and are just as aware of the top international brands as other elite citizens around the world," says a senior luxury consultant requesting anonymity.
He says this is particularly true in Brazil, Mexico, Argentina and Chile where the LVMH group, Gucci and Salvatore Ferragamo have a strong presence.
Armando Branchini, CEO of the InterCorporate fashion consultancy in Milan, agrees, adding that Dior and Armani are also big sellers.
"LVMH, Gucci, Salvatore and Dior are top of mind in Latin America as they are around the world," he says. "Latin Americans follow the brands that are most famous in North America, Europe, China and Japan."
It's little wonder then that Branchini expects these brands to open stores in the region's largest markets in the near to medium term. However, he doesn't expect a major expansion until Brazil and Argentina lower their high import tariffs and cut import red tape which has stalled many seasonal collections from reaching stores on time for profit.
Like other observers, he says these duties are making it expensive for luxury labels to step up their expansion and open shops beyond those used as marketing windows to encourage shoppers to flock to other outlets around the world.
"As long as Brazil and Argentina keep such high barriers they are going to lose money," Branchini says, adding that both governments would benefit from collecting VAT on luxury apparel, bags and shoes, both domestically and from merchandise bought abroad.
Observers expect Brazil and Argentina to eventually lower their duties to enable the local luxury sector to flourish. They say a growing number of local importers have been pressuring both governments to do this and that this will increase on the back of rising demand for luxury fashion in Latin America.
Apart from the main international brands, experts say it's hard for local brands to make a name in Latin America.
This is due to little local support for designers and a lack of critical mass for luxury.
"It's hard for someone born in Mexico, Brazil or Argentina to become a luxury fashion designer with a worldwide awareness," says Branchini. "We had an exception with Carolina Herrera but she had to move to New York and finally sell her company to Puig [the Spanish beauty and fashion company] to raise expansion funds."
Branchini adds it's much easier to become famous in individual markets. "There are 25-30 famous designers in Japan but not outside Japan," he notes, adding that something similar could happen in Brazil or Mexico.
So far Brazilian designers have made a splash in beachwear and accessories with brands such as Havaianas doing well, while in Mexico Macario Jimenez remains the largest international name.
The Miami-based consultant says more quality designer education is also necessary to create more talented designers in Latin America. Investment in aspiring designers is also lacking, he says.
Finally, demand needs to turn more sophisticated.
"Strong and more sophisticated local demand is not there yet, at least not at the level seen in the US or Europe," he says. "Consequently, there isn't a need for as many collections and brands as in other more developed markets."
Adds the consultant: "Demand has been growing steadily, however, and the potential is definitely there."
Click on the links below to read other articles in this management briefing.
LVMH Moet Hennessey Louis Vuitton saw full year profit rise as the Louis Vuitton brand reported another record year of sales. ...
International apparel retailers are looking to strengthen their presence in lower-tier cities in China amid increasing competition, a report by the Li & Fung Research Centre has found....
French apparel and luxury group PPR has acquired a 51% stake in designer brand Christopher Kane in order to help develop the business....
UK shirt maker Thomas Pink has appointed Andrew Merriman as its new chief financial officer....
Jordi Constans, chief executive officer of the Louis Vuitton brand, is leaving the luxury label after just a month in the role because of a "significant health issue" it was announced yesterday (18 De...
French retail group PPR has acquired a EUR10m (US$13.1m) stake in Bigfoot I, the holding company that owns Russian online retailer Lamoda....
- Traditional financing is a misfit for fast fashion
- Why do modern robotics elude sportswear makers?
- Trump trade policy – Who knows what he'll do?
- Planning is key to an effective inventory strategy
- How would end of NAFTA affect US apparel industry?
- US Q3 in brief - G-III Apparel, Express
- Bagir exports first trousers for H&M from Ethiopia
- Film documents Cambodia garment workers' stories
- Esquel efficiency drive continues to boost brands
- Pakistan suspends India cotton imports
- Outdoor performance apparel 2016: A broader perspective
- Global market review of lingerie – forecasts to 2022
- Global apparel markets: product developments and innovations, October 2016
- Footwear Top 5 Emerging Markets Industry Guide_2016
- REPORT BUNDLE: Africa-Med, Southeast Asia and Central America strategic sourcing pack