Democratic luxury: benefits of trading down during recession

In one of my previous posts about luxury brands (I've written several posts about luxury, must be the influence of a an executive course in Luxury Branding that I once took at ESSEC business school), I discussed their struggle to survive during the recession and stay profitable. If luxury industry has been struggling to survive, democratic fashion brands such as H&M and Mango, on the contrary, have been doing quite okay. For instance, H&M reported in April 2009 an 8% sales rise since last July. Their sales are reported to have been boosted by the launch of a summer 2009 collection by Matthew Williamson, an English luxury fashion house, in the last week of April. Just last week, I saw that there were still some Matthew Williamson items left in one of Brussels-based H&M stores, perhaps Belgians are not quite aware of his creations yet? The story was quite different in New York City, where the launch of the collection caused a real mayhem.

The fact that luxury fashion designers co-operate with democratic fashion labels such as H&M often creates win-win scenarios for both parties. Luxury brands receive a great deal of attention from the press during such launches, and gain wider recognition by the masses. You never know, once the recession is over, those who once shopped for a Matthew Williamson dress at H&M, might become wealthier and decide to "trade up" by purchasing items at Matthew Williamson's boutiques. And in general, the trend of "trading down" (mixing luxury items with high street labels in one outfit) can entice Williamson's aficionados into H&M stores for a pair of jeans. H&M and Mango, in their turn, will boost their sales and keep their brand image fresh and innovative.

Another interesting trend has been developing of late. It's not only seasoned luxury designers, but also up-and-coming young couturiers, who design collections for democratic fashion labels. This might be a good strategy for a young talented designer to establish her name on the luxury scene. An example is a collection by an up-and-coming Belgian luxury label Sandrina Fasoli for Mango.

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