Hermès has fared relatively well in the midst of a pandemic-ravaged market. Analysts celebrated the Paris-based brand when FY20 results were posted early this year, as the Birkin-bag maker’s revenues amounted to 6.39 billion euros ($7.7 billion) – down by just 6 percent, which is quite a bit less than rivals LVMH and Kering, which saw their 2020 sales fall by 16 percent and 18 percent, respectively. “To record only a 6 percent drop in sales after the most horrible year for the luxury industry ever was an outstanding result,” Bernstein analyst Luca Solca stated in a note in February, pinpointing a “better performance” in Europe, “a significantly stronger rebound” in Asia, and “high demand” for its products across the board as some of the “differences” between Hermès and its “weaker peers.” 

In a separate note, Citi analyst Thomas Chauvet highlighted Hermès’ 20 percent revenue growth in Q4 and its record 37 percent increase in gross margins for the second half of the year, saying that the 184-year-old brand “appears to be in a different league” than similarly situated fashion brands. The same takeaway applied again this month when Hermès’ beat analyst expectations and its rivals in terms of revenue growth the first 3 months of the year (up 44 percent compared to the same time last year), which was “particularly noteworthy” given its decision not to raise prices in as aggressive a way as many other luxury players.

Elsewhere in the upper echelon of the luxury market, other entities have also performed well, all things considered. Like Hermès, which notoriously proves its worth in times of economic downturn and/or uncertainty, certain luxury automakers have stood out. Lamborghini, for instance, “had its most profitable year ever in 2020 and its second-best sales year in the brand’s history,” CNN reported this month, despite a sales drop of 11 percent on a year-over-year basis for 2020. The company’s results were boosted by what Bloomberg’s Hannah Elliott called “the right mix of six-figure SUVs,” which have proven a draw among Chinese car buyers, “and multimillion-dollar supercars.” 

Meanwhile, fellow Italian automaker Ferrari’s sales were down by less – 10 percent compared to 2019, but thanks to a “record” Q4 results, the company’s results “exceeded full year guidance on all metrics.” And in case that is not enough, Ferrari revealed in February that orders for future cars were similarly at “record” levels. 

The Latest Luxury Brand?

In the midst of the COVID pandemic, there appears to be another – albeit less traditional – standout player in the “luxury” sphere: Pfizer. The name of the New York-headquartered pharma giant has been likened to a coveted brand in its own right in a growing number of instances over the past several months, as the various vaccines have been brand-ified amid the increasing roll-outs and information campaigns. This is evidenced by the inundation of (unauthorized) “Pfizer” and “Moderna”-bearing merch on sites like Etsy, the comparison of the Pfizer-BioNTech vaccine to the likes of Hermès (even if light-heartedly), and of course, the enduring inquiry that you have inevitably heard (or posed): “Which vaccine did you get?”

It is not entirely clear whether the “what did you get” question is purely the most relevant of the small-talk comments and inquiries that usually center work or weekend plans, or whether it reflects some inherent preference as a result of the widely-publicized efficacy of the Pfizer shots, something that “has been in the news for endless of hours,” Manuel Hermosilla, assistant professor of marketing at the Johns Hopkins Carey Business School, told Quartz late last month. Either way, the question – which writer/cultural commentator Chris Black recently called “the newest obnoxious question sweeping modern social situations” – has, nonetheless, permeated conversations and placed an emphasis on brand in a way that is more traditionally used when talking about things like a handbag, watch or car. 

All the while, memes that depict vaccine vials covered in Chanel and Hermès branding have circulated social media, a play, certainly, on the element of branding that has been attributed to the vaccines. 

The brand-specific vaccine question also seems to indicate some underlying preference for one version versus others, even if the difference in effectiveness between Pfizer and Modern, for example, is largely negligible. The notion of preference – or that one “brand” of vaccine might be more desirable than another – has also been reflected among at least some vaccine-seekers. In the United Kingdom, the Washington Post reported that Pfizer has come to be called the “posh” vaccine, while in the U.S., it is not entirely uncommon for people to state a preference for the Pfizer doses, per Quartz, which noted in March that “according to marketing experts, Pfizer has emerged as the victor of the vaccine branding wars so far.” 

While the notion of brand in the context of a vaccine for a globally-spanning and potentially deadly virus seems preposterous, as a culture that largely revolves around, relies upon, and identifies with brands – and as a result, prioritizes some over others – on a daily basis, the fact that this way of thinking would not be turned-off when it comes to things like vaccines is maybe not so surprising. 

What Was the Impact?

Given the reported preference among many individuals for Pfizer-BioNTech doses and the company’s nabbing of the title of the first to secure U.S. emergency use authorization for a coronavirus vaccine, Pfizer appears, in some way, to be the luxury brand of 2021. The consideration of quarterly earnings or stock price as an indication of the strength of the “brand” at play, however, is not quite a simple for Pfizer as it is for say, Ferrari or Hermès. This is due, at least in part, to the fact that Pfizer’s business is simply much larger (Pfizer generated $41.9 billion in revenue in 2020, up 2 percent on a year-over-year basis), and its offerings are far more expansive, and require a far greater level of research and development than those in most market segments. Currently, Pfizer’s arsenal consists of name-brand drugs like Advil, Viagra, Zoloft, Lipitor, and Xanax; vaccines for things like pneumonia; gene therapy products; a slew of generic medications; and “new medicines and vaccines” currently in various stages of development, all of which stand to have a bearing on its bottom line and stock price.

As Keith Speights wrote for Motley Fool early this year, while 2020 should have been Pfizer’s year, the company’s shares actually slipped, making it a “surprising” stock market loser. “You can mainly blame disappointing clinical results for Ibrance,” which is a treatment for HR-positive and HER2-negative breast cancer, he says. Forbes also weighed in, stating that Pfizer – which holds the title of the world’s largest pharmaceutical company – has not been immune to changes in consumer behavior amid often-strict lockdowns. Part of the fall in the New York-headquartered pharma giant sales last year can “largely be attributed to the impact of Covid-19, which reduced doctors’ visits and delayed individuals from seeking care.” 

According to most analysts, things will be looking up for Pfizer this year from a stock market and sales standpoint. Nasdaq revealed this week that “Pfizer and BioNTech are at the threshold of signing the biggest vaccine supply deal ever,” one that will see them supply “up to 1.8 billion doses” of their vaccine to the European Union. “If the full 1.8 billion doses of the vaccine are purchased, Pfizer and BioNTech stand to make more than 35 billion euros over the next couple of years, or around $42 billion at current exchange rates,” per Nasdaq, which is “great news for shareholders that Pfizer and BioNTech are likely to secure a significant revenue stream for the next two years.” 

The Inevitable Role of Branding (and Rebranding?)

But what about the impact of the vaccine on Pfizer from a more intangible, branding perspective? “The commercial and branding implications of the company’s new-found prominence in the world of Covid treatment could be an enormous opportunity to … build brand,” among other things, Mark Ritson wrote for Marketing Week in February, noting that “the development and mass-manufacture of a Covid vaccine will likely become Pfizer’s finest hour, its biggest commercial opportunity and an enormous global boost to the company’s corporate brand equity.” 

From a purely branding asset perspective, Pfizer recently launched “its first major rebrand in decades with a new logo, an effort to highlight the company’s shift from a diversified health care giant to one more focused on creating prescription drugs and vaccines that prevent and cure disease,” according to the Wall Street Journal. The Journal’s Alexandra Bruell notes that Pfizer’s introduction of a “new identity” comes as “consumers have garnered more positive feelings toward the pharmaceutical industry [throughout the pandemic], and shown an interest in how drugs and vaccines come to market, prompting historically reticent pharma giants to promote their corporate brands and communicate more openly about their internal processes.”

Pfizer is, of course, located smack-dab at the center of this.

Reflecting on the topic of brand value and equity, Brand Finance analyst Hugo Hensley says that Pfizer’s brand value – a metric that gauges “the value of the “names, terms, signs, symbols, logos, and designs” that a company uses to identify and distinguish its “goods, services or entities” from those of others – increased in 2021, presumably as a result of the vaccine. In terms of “Brand Strength,” a separate calculation that the London-based brand valuation consultancy uses to value brands, Hensley told TFL that “consumers only really started benefiting from the Pfizer vaccine in the new year,” which means that the Brand Strength Index score attributed to Pfizer “did not see the full impact of being the first effective vaccine.”

Nonetheless, Hensley says that it is “safe to say that Pfizer’s “Brand Strength” – which takes into account a company’s “marketing investment, customer familiarity, staff satisfaction, and corporate reputation” – will “improve, as a result of the fact that the vaccine has been shown to be safe, effective, and reliably delivered.” 

In short, the value of the Pfizer-BioNTech “brand” and its impact on the larger Pfizer entity may not be easily quantifiable at this point, but is it difficult to deny that value, just as is it difficult to overlook the deeply-ingrained role that branding plays in the minds of consumers no matter the context. Professor Hermosilla told Quartz that “in the interest of getting through the pandemic, it is crucial to subvert our consumerist instincts for comparison shopping” – and exerting preference for one brand over another – “and heed the advice of health experts,” such as Dr. Anthony Fauci, who says that “the most important thing to do is to get vaccinated and not to try and figure out which one may be or may not be better than the other.”

At the same time, Hermosilla told Quartz that while he would have taken any vaccine that available, “he ‘was glad’ to receive the favored brand.”  

UPDATED (May 4, 2021): Pfizer revealed on Tuesday that the vaccine, alone, generated $3.5 billion in revenue in the first three months of 2021, with the New York Times reporting that while “the company did not disclose the profits it derived from the vaccine, it reiterated its previous prediction that its profit margins on the vaccine would be in the high 20 percent range.” That translates “roughly [to] $900 million in pretax vaccine profits in the first quarter.” Meanwhile, Ferrari’s NYSE-traded shares fell 7 percent on Tuesday “after the company said it would hit its 2022 financial targets a year late due to Covid-19,” according to the Wall Street Journal, a slip that “highlights just how high the stakes are when a stock fetches more than 40 times prospective earnings.”

When the history of COVID-19 is written, it will no doubt note how, in one fell swoop, the global health pandemic accomplished something humanity had long struggled to do: slash global carbon emissions by an expected record of 7 percent in a single year. The planet we live on remains very much in the grip of climate change, and the sweeping pandemic has only underscored the destructive consequences of our “war on nature.”

As the coronavirus swept the globe last year, the European Union, China, Japan and the United Kingdom announced ambitious plans to cut emissions over the next decades. Developments on the environment, social and governance (“ESG”) front have been especially robust in Europe. The European Commission is holding a public consultation on sustainable corporate governance. Switzerland has held a referendum, which was rejected, on whether to impose new standards on Swiss businesses’ activities abroad. In the UK, the government plans to mandate financial disclosures by 2025, following the recommendations of the Task Force on Climate-related Financial Disclosures. 

But there appears to be a disconnect on climate action among countries. The G20 – which accounts for two-thirds of the world’s population – is spending 50 percent more in stimulus money in sectors linked to fossil fuels than low-carbon ones. Our ongoing research, published in Management & Business Review, indicates that the world of business may likewise be divided on sustainability issues.

We had previously identified five archetypes of board behavior – from “deniers” to “true believers” – based on in-depth interviews with 25 experienced Euro­pean non-executive directors repre­senting 50 well-known companies. From a recent check-in with some of the interviewees, we find that the pandemic may have widened the gulf between those resistant to and those supportive of sustainable practices. As one director told us, “We are fighting to survive; sustainability is not on our priority list.” Meanwhile, another said, “COVID-19 shows us that ESG consid­erations are increasingly material to our ability to create value sustain­ably.”

Six actions for boards

Leaders may be split on sustainability, but momentum to “build back better” is growing in society at large as political and financial imperatives align. According to a Boston Consulting Group study, 50 percent of U.S. investors think it is important for companies to continue their ESG agendas and priorities while navigating the crisis, even at the expense of some earnings. Big corporate names – from Microsoft and Starbucks to Kering and BNP Paribas – have announced plans to cut emissions or improve the environment in other ways.

More broadly, there is a growing realization in many sectors of society that one lesson we must learn from COVID-19 is that predictable but inadequately addressed high impact events, like pandemics and climate change, can exact huge costs. Businesses have a part to play and boards, in turn, have an important role in steering companies safely through climate change and other systemic externalities. For boards that are still not unified in their pursuit of sustainability, we suggest six ways to help achieve consensus … 

Revisit company statements of purpose – What does value creation mean to your company? Are your company’s efforts consistent with current sus­tainability demands and principles? Are they in line with the UN Sustainable Development Goals? Does your company have a comprehensive view of how the world is changing as a result of the coronavirus pandemic and of its role in these changes? How is your company sup­porting societal progress? Does your corporate culture encourage participa­tion?

Schedule a meeting of the entire board with the sole purpose of discussing sustainability – Ask the CEO to provide all pertinent data on the company’s sustainability prog­ress. Compare leading sus­tainability practices of benchmark companies with your company’s. Discuss in detail the process by which your company identifies risks and opportunities in the medium- and long-term – does it consider the possibility of systemic risks and shocks (like pandemics)? How will gaps be filled? Does the company have existing strategies for reach­ing goals and strate­gies needed for future devel­opment?

Audit board members’ sustainability exper­tise and mindset – Which sustainability arche­type predominates on your board? Do the directors have suf­ficient expertise and inter­est to embed sustainability thinking in their processes, risk management and in­vestment decisions, includ­ing mergers, acquisitions and innovation? Does the board need to re­cruit new members, perhaps those with specialist expertise? How should the board’s membership evolve to make sustainability a priority?

Organize the board in such a way that it can effectively over­see sustainability – Which board committees should concern themselves with sustainability? Should there be a dedicat­ed ESG committee? If so, how will it report to the main board? Does the board have a pro­cess to plan and act in accordance with a range of events on differ­ent timescales, including in times of crisis? Would it help for an indepen­dent expert panel to scrutinize the board’s actions and progress?

Evaluate the information provid­ed to the board on sustainability – What information does the board currently have and what further information does it need? Does the board regularly receive bench­mark data used to judge its performance and that of competitors? Has the board established suitable key performance in­dicators for manage­ment? Does the board need addi­tional resources to better understand or investigate the firm’s sustainability per­formance? Is there a suitable balance between attention to effi­ciency and resilience? If the company received government support during the pandemic, evaluate the fundamental economic reasons for this support and priorities them in evaluating strategy going forward.

Explore how the firm engages with, and learns from, its crit­ics – Does the board need to hear from its critics more directly? Determine and prioritize common denominators in the “build back better” sentiment among key stakeholders. Study potential ESG litigation and policy developments in the geographies the firm operates in and stress test current governance approaches against them. In the event of any corporate restructuring, should the firm allocate funds to expedite or intensify ESG efforts?  

Our six actions should help boards across industries develop a comprehensive view of changing ESG factors and better address pressing sustain­ability challenges facing the communities in which they operate. In a pandemic-scarred world, companies’ long-term growth and profitability will increasingly depend on such efforts.

N. Craig Smith is the INSEAD Chair in Ethics and Social Responsibility, and director of ESRI, the Ethics and Social Responsibility Initiative. Ron Soonieus is an INSEAD Executive-in-Residence and Managing Partner at Camunico.

Chanel is accusing a Miami-based retailer of running afoul of federal trademark law by using its famous double “C” logo on garments and accessories without the authorization to do so and intentionally confusing consumers in the process. For the most part, the trademark counterfeiting, trademark infringement, false designation of origin, trademark dilution, and unfair competition complaint that Chanel filed against DESIGNER-ISH and a number of affiliated defendants (the “defendants”) in a New York federal court this month is a run-of-the-mill trademark case that luxury brands routinely file against third parties for making unauthorized uses of their valuable trademarks by way of counterfeit goods – save for one aspect: some of the goods at issue in this case are face masks. 

According to the complaint, Chanel claims that DESIGNER-ISH and co. are offering up apparel and accessories – from denim jackets and t-shirts to baseball caps and face masks – “bearing unauthorized reproductions, counterfeits, copies and colorable imitations of the Chanel trademarks via [their] website Sojara.com, Instagram and in Pop-Up and other retail stores” across the U.S., in furtherance of a model that DESIGNER-ISH says sees it “taking new and vintage clothing, rework[ing] it to create ORIGINAL one of a kind, handcrafted pieces, [and thereby,] giving it new life.”

Despite sending cease and desist letters to the defendants in connection with their sale of the allegedly infringing products, Chanel claims that they have “continued to advertise, distribute, offer for sale, and/or sell the products knowing the products bear infringements and/or counterfeits of the Chanel trademarks.” And in fact, Chanel claims that the defendants are “engaging in a deliberate effort to cause confusion and mistake among the consuming public as to the source, affiliation and/or sponsorship of [the Chanel-branded] products and, to gain … the benefit of the enormous goodwill associated with the Chanel trademarks.” 

By using Chanel’s double “C” logo on products that are not affiliated with or endorsed by Chanel, the famed fashion house argues that the defendants are benefitting from the “enormous value and recognition” that is associated with those marks given that Chanel’s marks “are well known to the consuming public and trade as identifying and distinguishing Chanel exclusively and uniquely as the source of origin of the high-quality products to which the marks are applied.” 

With such unauthorized “advertising, distributing, offering for sale, and/or selling” of the allegedly infringing products in mind, Chanel alleges that the defendants are “likely to cause confusion and mistake among the consuming public that said products are being offered to the consuming public with the sponsorship or approval of Chanel,” and have “injured Chanel’s public image and business reputation and/or diluted the distinctive quality of Chanel’s trademarks.” As such, Chanel is seeking injunctive relief to bar them from selling such products, as well as damages, attorney fees and “such other relief as the Court deems just and proper.” 

image via complaint

Not the first company to file a trademark-centric suit over face masks, since the onset of the COVID-19 pandemic, 3M has garnered the title of one of the most prolific fighters of the unauthorized sale of branded masks – filing a still-growing number of lawsuits accusing unaffiliated third parties of attempting “to confuse and deceive” bulk mask-buyers, such as various city and state officials, into believing that they were authorized distributors of 3M’s products, and jacking up prices for the in-demand respirators in the process. 

While 3M does not assert in many of these suits that the masks being offered up are counterfeit or otherwise infringing, it does take issue with companies use of its marks when they are not authorized distributors of any of 3M’s products. In one such suit, 3M argued that “by using 3M’s famous marks in [its] promotional materials and product listings, and holding itself out to be an authorized distributor of 3M products,” a company called Rx2Live “confused and deceived consumers,” and thus, engaged in trademark infringement. 

All the while, as masks have become an everyday reality, they have also become a fashion category in their own right, with brands like Louis Vuitton, Burberry, Fendi, and buzzy upstart Marine Serre, among others, rolling out branded face coverings to meet mounting consumer demand and filing trademark applications for registration in connection with such new uses of their names and/or logos (namely, in classes 9 and 10, for various types of “protective” and “respiratory masks”), presumably in order to make counterfeiting claims in cases like this one. (It is worth noting that while Chanel includes a laundry list of goods for which it maintains registrations for its double “C” logos, it does not list face masks or coverings as among the “relevant products”).

In most instances, even before brands began offering up logo-emblazoned face masks, fakes hit the web en masse – with a plethora of fake designer face masks in all the shapes, fabrics, and logos imaginable inundating marketplace sites in the U.S. and beyond, prompting at least some brands to take action. Last year, Tommy Hilfiger, for instance, filed a trademark infringement and passing off suit with the Delhi High Court against two Tamil Nadu-based companies for making masks with the New York-headquartered company’s name and logos on them, and offering them up on e-commerce Indiamart, among other sites. In a decision late last year, the court sided with Tommy Hilfiger, awarding it a preliminary injunction. 

Meanwhile, brands have been urged to act quickly when it comes to jurisdictions like China, where there is a substantial risk that trademark-squatters and counterfeiters “will apply to register [the marks of] well-known brands” before the brands, themselves, according to a client note from Cowan Liebowitz & Latman. “China and many other countries are first-to-file jurisdictions, which means that the first person or entity applying to register the mark in that country may obtain prior rights, thereby, creating an obstacle to anyone else’s registration and use of that mark to manufacture or sell the specified goods.” 

“Opposing such applications after the fact can be an expensive and uphill battle,” the note states, also encouraging brands to “consider applying as early as possible to register your trademark for face masks in countries where you manufacture or sell them or anticipate possible counterfeiting issues” on the basis that they “may encounter adverse publicity issues or liability claims associated with the sale and use of defective or ineffective counterfeit face masks.”

It is unclear how long masks will serve as a category of their own, as vaccine roll outs gain steam and the notion of a mask-less future does not appear to be too far off. But in the meantime, a quick perusal of brand name face masks on Google reveals a sizable number of counterfeit masks on sites like Etsy, Poshmark, Rebubble, and Amazon, a nod to the uphill and enduring battle that is trademark enforcement. 

The case is Chanel, Inc. v. JARA EISEN, et al., 1:21-cv-03238 (SDNY)

Many fashion retailers are taking a fresh look at their business strategies in the wake of COVID-19, which has seen a number of high street brands forced to close their stores or in some cases, shutter entirely. The impacts of the pandemic and swiftly-changing consumer purchasing behavior, which was accelerated in many cases by the onset of the pandemic, have made it clear that a strong online presence and the ability to adapt to changes in industry – and product – trends has never been so important. Most recently, this has come in the form of a large-scale casualization of our day-to-day wardrobes and the introduction of new must-have products, such as face coverings, as well as a surge in e-commerce consumption. 

Against this background, retailers that rely too significantly on sales through brick-and-mortar stores have become casualties of the crisis, with some going into administration (or Chapter 11 bankruptcy in the U.S.) or seeing parts of their business sold-off to third parties. With such enduring challenges in mind, what are the brand protection considerations for fashion companies in this changing retail landscape? Recent examples of acquisitions clearly emphasize the importance of brand – and brand protection – to any fashion business, whether it be a high street brand or a high fashion house.

Burgeoning fast fashion group Boohoo, for instance, paid £55 million ($75.92 million) for the stalwart retailer Debenhams’ intellectual property portfolio, including over 800 trademark registrations for brands, including DEBENHAMS, MAINE and MANTARAY, as well as the Debenhams website and customer data, opting to acquire these assets, but not the company’s existing stock or stores. Around the same time, fellow e-commerce entity ASOS bought Topshop, Topman, Miss Selfridge and HIIT from Arcadia Group for £295 million ($407.21 million) – the majority of which (£265 million, or $365.80 million) was spent on buying the brands and the related intellectual property rights, and £30 million ($41.41 million) on existing stock. 

These two examples clearly show the immense value that is attributed to a brand – and the various assets associated with it – within the fashion retail sector; these deals also signify the clear move away from needing a physical presence on the high street.

Even within this shift in strategy, the way that companies, such as Boohoo and ASOS, intend to use their new brand purchases shows interesting and differing business models. Boohoo’s strategy, for instance, appears to center on buying third party brands, and running them as separate companies, with the individual brands retaining their own online retail presences, and separate websites, but using the same distribution network as the main Boohoo business. 

ASOS, on the other hand, intends to incorporate its recent Arcadia group brand purchases into its existing online retail platform, a move that is, perhaps, not unsurprising given that ASOS’s strategy for the last year or so has been to try to increase the number of brands it sells by way of its sweeping e-commerce site. It has been selling Topshop and Topman products, for example, by way of its proprietary platform since 2019, with sales of Topshop clothes increasing 41 percent in the first quarter of 2021. The addition of new Arcadia brands should, therefore, readily integrate into the existing ASOS global warehouse and technology infrastructure.

For Boohoo and ASOS, the strategy appears to be to acquire third party brands to grow their own portfolio. Alternative models are emerging from other retailers.

Elsewhere in the market, Marks & Spencer recently announced it is “turbo-charging online growth through the launch of ‘MS2’ – an integrated global digital, data and online business division within Clothing & Home with operating flexibility to compete with pure play competition and develop our growing portfolio of guest brands.” This is materialising in a mostly partnership-based approach, with Marks & Spencer teaming up initially with brands Ghost and Nobody’s Child, but announcing this month that it will also add brands such as Joules, Triumph, Hobbs, Phase Eight, Seasalt Cornwall and White Stuff to its “Brands at M&S” online offering over the next three months. The exact basis of these partnerships has not yet been disclosed, but there seems to be some variation from wholesale agreements to exclusive collaborations.

Offering third-party brands is nothing new for Next, which has sold a large fashion range through its online platform for many years. Rather than through acquisition, Next also takes a partnership approach, working with struggling brands such as Laura Ashley and Victoria’s Secret, and utilising its established online and retail infrastructure to support and revitalise these brands. 

And it is not just large UK retailers that are looking to diversify by bringing third party brands on board. Mango, the Spanish clothing brand, recently announced it too will sell third party brands through its online e-commerce platform in order to expand into complementary product categories. This will initially see products from the Italian lingerie brand Intimissimi for sale on the Mango website from Spring 2021. However, rather than this being a plan to become a multi-brand marketplace, Mango sees this as a way to offer added value to its existing customers.

Given the high value attached to brands and the rapidly changing landscape, what should fashion companies and retailers take away from these recent activities in fashion retail?

First and foremost, it is key to ensure that robust intellectual property protection, particularly for trademarks, is in place. In particular, it’s important to look at three key elements: (1) is your trademark protection up to date? Larger companies which acquire other businesses will have been busy with substantial housekeeping exercises to ensure the ownership of its valuable new IP is correct and that current versions of logos are registered; (2) will you be diversifying and expanding your range of products, for your own business or in partnership with another? Have you checked for any IP issues in your new product areas; and (3) will retail’s shift online take you in to new geographic markets? Is your brand safely registered there?

Partnering in fashion retail is an exciting prospect. The big players’ established, reliable distribution channels and advanced digital presences are an appealing way for younger or smaller brands to get their products in front of a wider potential customer base. Thinking about these three aspects of trademark protection can help all brand owners to avoid any nasty surprises and capitalise on the advantages of the “new normal.”

Samantha Collins is a Chartered (UK) and European trademark attorney at Marks & Clerk.

LVMH Moët Hennessy Louis Vuitton’s revenues amounted to 14 billion euros ($16.72 billion) for the first quarter of 2021, up by 32 percent compared to the same period last year, beating analysts’ expectations for the first three months of 2021, and positioning the group to “continue to gain market share” throughout the year. “The quarter marks a return to growth after several quarters of decline during 2020,” LVMH revealed in a statement on Tuesday, noting that “with the exception of Selective Retailing, which was still impacted by the restrictions on international travel,” all of its various divisions “contributed to the good performance” for the quarter. 

The Paris-based luxury goods conglomerate highlighted its Fashion and Leather Goods division, which had “an excellent start to the year and achieved record levels of revenue.” The usual-standout segment boasted sales of 6.74 billion euros ($8.05 billion) for the 3-month period, an increase of 52 percent on a year-over-year basis (and up by 37 percent compared to the first quarter of pre-pandemic 2019). Such growth was driven by rebounds for the group’s major brands, including Louis Vuitton and Dior, and “market share gains thanks to local clients,” in Asia and the U.S., where LVMH posted double-digit growth. “Europe is still affected by the crisis due to the impact of store closures across several countries and the suspension of tourism,” per LVMH.

Elsewhere in the LVMH portfolio, the group revealed that organic revenue in the Perfumes & Cosmetics division grew 18 percent in the first quarter of 2021 compared to the same period in 2020 and was down 4 percent compared to the same period in 2019. Beauty brands “benefited from the continued growth in online sales from local customers, which offset the impact of the suspension of international travel and the closure of many points of sale,” per LVMH.

At the same time, the group reiterated that the “major brands” in this segment “continued to be selective in their distribution and limit promotions,” a seeming nod to the comment that it made in its annual report in January, in which it revealed that “in a sector suffering from the decline in international traveler spend and makeup, LVMH’s major brands chose to be selective in their distribution and, unlike certain competitors, limited promotions and refused to sell indirectly to the Chinese parallel market, which presents major risks to the medium term desirability for brands that follow that route.”

Still yet, LVMH’s Watches & Jewelry segment recorded organic revenue growth of 35 percent in the first quarter of 2021 compared to the same period of 2020 and 1 percent compared to that of 2019, with the quarter “marking the integration for the first time of the iconic jewelry Maison, Tiffany & Co, which saw an excellent start to the year.” Speaking of Tiffany & Co., the group stated that the “positive perimeter effect related to first consolidation of Tiffany & Co. more than offset negative currency impact.” 

In a note on Tuesday, Bernstein analyst Luca Solca stated that “best in class names like LVMH” are likely to “benefit from strong structural positions and high mega-brand traction” as discretionary demand continues through 2021 and 2022. There are, nonetheless, a number of risks at play for the likes of LVMH, with a “resurgence of the Covid-19 pandemic in China” being “the biggest risk for the sector and LVMH.” Beyond that, Solca claims that “higher competition in beauty retail – especially in the USA – and continuing pressure on make-up can weigh heavy on [LVMH-owned] Sephora,” and still yet, “Covid-19 normalization could swing consumer spend back to experiences from products, which could create growth headwinds at the end of the 2021 fiscal year and in early 2022.” 

In an earnings call on Tuesday, as highlighted by Bernstein, LVMH management revealed that the group is “currently devoting its resources to Tiffany’s integration and slow turnaround and is not considering other M&A for the moment.” It also continues to “prioritize” an omni-channel strategy, “with no material changes forecasted in store footprint in Europe.” E-commerce sales are expected to normalize (to around 10 percent of total sales), per LVMH, but that has not happened yet.