Why Luxury Should not Delocalize: a critique of a growing tendency

Jean-Noël Kapferer
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Jean-Noël Kapferer: HEC Paris - Recherche - Hors Laboratoire - HEC Paris - Ecole des Hautes Etudes Commerciales

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Abstract: Many famous luxury brands have recently planned to delocalize their production. Many applaud luxury brands for closing production sites in their home countries, considering such cost optimization to be a rational evolution. But others claim that in doing so, luxury is losing its soul. This article reminds managers that any decision must be analyzed and evaluated within the context of a strategy. Luxury is a subjective concept but a luxury strategy is not: luxury's ability to sustain its high prices and profitability is governed by strict rules. What Prada and others are doing is, in reality, discontinuing their luxury strategy, in favor of a fashion strategy, without acknowledging this explicitly. In fact, the luxury strategy is a specific business model. Fashion is another, governed by a completely different set of working principles.

Keywords: Luxury; Delocalize; growing tendency (search for similar items in EconPapers)
Date: 2012-03
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Citations: View citations in EconPapers (3)

Published in European Business Review, 2012, pp.58-63

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00715585

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