The Tamesis
When it comes to luxury brand acquisitions, management company executives have recently focused on the legacy (and potential) of those brands—no matter how well they are currently doing. WHP Global founder, chairman and CEO Yehuda Shmidman emphasized Marc Jacobs’ status as “one of the most influential brands in fashion.” Marquee Brands CEO Heath Golden praised Cavalli as “one of the Italian luxury brands with bold creativity and enduring brand spirit.”
That doesn’t mean they’re undergoing a 180-degree shift in the way they operate. Luca Solca, a luxury goods analyst at Bernstein, said brand management companies are now taking a more pragmatic, private equity-like approach to managing brands. “[They] Make sure their BEP is low [break-even point] and good earnings prospects. “They won’t be in the Premier League – 100 per cent full price, 100 per cent direct sales – but they will be looking for a middle ground consisting of licensing, wholesale (as long as it’s still in stock) and discounts,” he said. “Here, tensions with luxury norms remain a barrier to success.
Still, Solca said the fact that these brands won’t be part of a top luxury league could actually be a positive. As the industry continues to price out shoppers who may have splurged on high-end products, there’s a white space where lower-tier brands — but still luxury brands — can take share. Done right, a brand management company can help them bring quality acquisitions into the space. “A lot of demand is being abandoned by high-end brands and price increases that they can intercept,” Solka said. “It’s nice to get back to reality.”
That may be true, but if the functions and goals of a brand management company are not aligned with the success factors of a luxury brand, can a marriage between the two really succeed?
slow burn
Historically, the reason brand management companies have underperformed when it comes to luxury handbags is that they want too much, too fast. Experts agree that these groups may succeed in the luxury sector if they adopt a long-term strategy.
To win, brand managers will need to build these brands more slowly and at a smaller scale than they have in the past with more mass brands in their portfolios. “The value of luxury brands comes from scarcity, storytelling and cultural relevance,” Lepore said. “The challenge for large brand management companies is to scale these businesses without diluting their original valuable attributes; the brand should always be bigger than the business.”
Jessica Ramírez, a retail consultant and founder of The Consumer Collective, warns that you can’t simply introduce new products and categories to the market to capitalize on a short-term craze. Sanders wonders whether the success of brands like Ralph Lauren and Coach – both of which have executed long-term, carefully planned lift strategies over the past five years – will encourage these companies to adjust their approach. He said it’s possible that could happen, but he doubted it.
These companies also need to bring in the right talent. Sanders isn’t sure the company is willing to cede some day-to-day control to a luxury leader, but he points to Brooks Brothers as an example of one that’s working. “Catalyst Brands works very well with Brooks Brothers. It allows the CEO of the division to drive the vision forward, but that’s rare,” he said. (Catalyst is a joint venture formed in 2025 between JCPenney and Sparc Group, which acquired Brooks Brothers in 2020. The brand returned to profitability in 2023 under CEO Ken Ohashi.)
