Insight into Fashion Conglomerates
What is the term 'conglomerates'? Let's find out the meaning!
Today, I will be explaining my analysis of luxury conglomerates. I am a huge fashion business enthusiast and I have been researching fashion groups for many years. I hope to make you all get familiar with the fashion industry by observing my analysis and infographic.
So, what exactly does it mean by 'conglomerates' in business?
A conglomerate is a corporation of several different companies. In a conglomerate, one company owns a controlling stake in several smaller companies, conducting business separately and independently. Thus, examples of conglomerates in the fashion industry include LVMH, Richemont, and many others.
Through my research over years, I always thought monopoly has been taking place in the luxury industry as LVMH has always proven its gigantic number of houses. While I could assume the apparel industry consists of oligopolies since 6 famous fashion conglomerates own over 40 brands that I regularly see, I found out that LVMH owns 75 houses including Louis Vuitton, Dior, and Sephora; the name LVMH is recently often seen in media as Louis Vuitton announced its new CEO Delphine Arnault, the daughter of LVMH's CEO, in mid-January. However, I realized I may be wrong.
While LVMH's net income is still the largest by far in comparison with all the other companies, Kering Group has also shown its power in recent years. Kering ranked second in the 2021 net income ranking despite the number of houses it owns being only 10. Kering is small as a company but is a parent company of Gucci, Saint Laurant, Balenciaga, etc. which are all very successful. Therefore, I believe that the difference between LVMH and Kering is just the operation size and they are both growing and successful. I can now also analyze that while LVMH is leading the luxury industry as the biggest house, Kering is fast-growing and getting close to developing a duopoly in the industry along with LVMH.
These are all my findings and analysis, so I do know that there are many other opinions and I would love to hear them! I developed an infographic based on today's analysis, so click the link below for visual guide :)
While I love fashion business, I know that transformation in consumer trends has been a huge issue for luxury brands and groups, especially in the past few years. An accelerated shift in online shopping has led to an increase in digital marketing, and heightened environmental and social consciousness rapidly increased the need to change production materials, styles and processes. China is now the country with the biggest demand for luxury and many luxury brands are thriving by targeting the right consumers. Nonetheless, the increasing trend of buying more affordable products is negatively affecting high-end fashion brands. One day, I hope to solve these problems, especially by making companies adapt to environmental problems, as a member of fashion groups.