By approaching brand building like the stages of a love story, Philippe Mihailovich argues in his forthcoming book that luxury branding is more about human relationships – passion, desire, love, and trust than the mass market theories often used by companies today. The seventh in his monthly series covers brand universe structures.

Creating the best that a human can do is partly what luxury branding is all about, but attracting desire is the ultimate. The talented constantly create new things for us to desire and ideally, can’t live without. When we fall in love the same emotions come into play.

If we are rational, we may ask ourselves if we can trust the person we have fallen for. Naturally enough, once we give this trust, we don’t want to be betrayed. But what does this trust mean exactly? Trust is at the core of love, and if we love a luxury brand when we buy into it, we don’t want to know that the subject of our affections is flirting indiscriminately with every passerby. If our brand is offering discounts on the same item that we’ve just bought, we feel betrayed. We don’t want to hear that our coveted object was produced on a conveyor belt when we believed it was special, even hand-made. We don’t want to find that it was glued when it should’ve been stitched. We don’t want to find out thousands have been sold when we thought our own was bespoke.

Yet, the reality of commercial success is that money is involved and the brand may have to appeal to as many buyers as possible, without shattering trust or exclusivity. Pierre Cardin has been so successful his name appears on everything from Haute Couture down to ephemera and cheap items. The once luxury brand has been so promiscuous it no longer appeals. What a shame. The great man made his name and talent ‘available’ through largesse and kindness, rather than greed. But the decision to democratise his style and flair nonetheless diluted the very substance of his offering. Like the love affair: you no longer desire a person if they become available to just anyone.

But this obvious example of the conflicting tides in the life of a luxury brand gives us clues of how to survive and build a brand. Perhaps Cardin should simply have developed a brand architectural structure as Giorgio Armani has successfully done whereby each sub-brand represents a different Armani universe, quality level and price point. Armani, who may be considered a grand master of brand architecture, has ingeniously combined both the European luxury pyramid model, building from top-down, with the American satellite model where all categories spin around a central premise.

As with Cardin, everything does still carry his name. But different houses are established for different lovers….So, Armani Privé, Giorgio Armani, Emporio Armani are all Armani but each can be trusted not to stray and flirt with other markets. And the more exclusive the sub-brand, such as Privé, the more undiluted Armani it is.

The pyramid has Armani, the ultimate griffe at its apex – Emporio Armani, half way down the slopes is less than 50% true him and AX is simply the lowest percentage of Armani design and quality, for a quick kiss – but hardly a lifetime partnership. As each sub-brand in the pyramid is a discrete house brand of its own concept and following, it may launch product line extensions across any category – from menswear, to female, to fragrances, and home. We know where we fit, and which maison we are compatible with. But is this clever separation within Armani still supporting an overall luxury image?

The man is smart enough to focus all publicity around himself as an Haute Couture designer, to build aura, while also designing for a plethora of other brands – Mercedes Benz, private jets, yachts and hotels. For the Emporio Armani label, models provide the faces for the brand not Giorgio himself. Confusion and distrust are minimised. His structure enables us to appreciate the pinnacle he occupies in the pyramid, as well as his role as the sun being the central force of an Armani universe.

By plotting his brands in the form of a universe we begin to get an idea of the elasticity, breadth and depth of his universe. This form of brand visualisation shows that the planets circle around the sun and cannot be separated from it, but each has its own distance from the sun. Like the solar system, a brand universe must evolve and be in a state on constant change. His brand does this. What we trust in the brand, first and foremost, is its creator as god of his universe. Is it any wonder then that we see mega-brands building mega-stores as temples to their gods?

Sub-branding is an essential component to brand stretching. Not only does it help extend the brand’s universe, it helps to stretch our minds to accept new facets of the brand without creating confusion of what the brand, as a family name, stands for. Nevertheless, today Armani feels less and less exclusive and more and more like a mega-brand. Do Hollywood stars still dream of wearing Armani?

Haute Luxe brands retain more integrity because they have not stretched their brands too far down – or proliferated them. And then we are back to human relationships, again-‘I want it because it is rare and exclusive and nobody else I know can have it. I want it…because I can’t have it.’ There is something about this aspiration to have what we cannot easily get, that gives the Armani universe vitality still.

How do these rules work at Louis Vuitton? The love affair here is interesting. Once Louis Vuitton’s relationships were with a loyal ‘old moneyed’ clientele however the house changed to offer fashion, eyewear, jewellery and other items and opened retail stores all over the world.

‘Has it been sleeping around or is it just flirting’? “In the United States, adultery is a breach of trust, or a breach of contract. The French however, are primarily concerned about the impact it has on family life and ruining a family is more appalling than a breach of contract which happens all the time”, say Nadeau and Barlow (1). For Vuitton, the family in question was the founder’s family. And when they lost control and the brand spread out, many ‘special customers’ felt betrayed.

The factors that may have led to some demise of Vuitton’s luxury image are unlike those we have witnessed in luxury before. Unlike Cardin, it wasn’t over-licensing or selling in undesirable distribution channels at varying price points. Vuitton takes great care to only sell through its own outlets and not to over-extend into too many product categories, certainly not the cheaper ones. It even remains one of the few famous French names without a signature fragrance – for now.

The marque selects the best locations for its outlets, employing the best architects it can find and each outlet is built to fit, as well as stand out, in its local environment. It selects renowned contemporary artists to build installations in its stores and has even established an art gallery in its Paris maison. But perhaps it is too present, too much out there. Too many counterfeits make some Vuitton bags seem as common as backpacks in a camping site. To most, Hermès still feels like a luxury brand- the founder’s family still runs it, they still communicate on their incredible craftsmanship and are not seen to be everywhere. We still trust it.

“I think that many brands have co-opted the word luxury to mean premium or just expensive whereas for me luxury is about delivery- what you get at the end of it. A luxury object is where neither side really cares about price,” Mark Tungate, author of Luxury World tells me. “The maker is not necessarily interested in doing it to make a profit, and the purchaser is not necessarily interested in the value in it. You want to feel as if the maximum amount of effort has gone into it. Whether it is mental toil or physical touch, there has to be a reason why you reveal this physical object, because you know that there’s an intense amount of care that is attached to it – that’s why Hermès is still a luxury brand- I have a feeling that they still have that incredible craftsmanship attached to them, an image of their ateliers – with others you feel they are just a name.”

”Hermès is a family home more than it is a luxury home”, says Christian Blanckaert, the ex-Chairman and CEO of Hermès Sellier (2). “It is a home of beauty and of what is small, a shrine of the imaginary mind, a haven of creativity. Hermès is at the heart of emotions, and almost of something surreal”. But when we hear Robert Chavez, CEO of Hermès, USA claim to have doubled the size of the US business in the past five years, and aims to double again in the next five years by expanding across the country, it is hard to feel this personal touch, soul, rarity or authenticity that Blankaert refers to.

Ultimately the debate over how big is too big may be one of the industry’s growing pains. Luxury marketers face a difficult challenge. They want to grow their revenue and profits, but one of the major strategies for doing so – growing the basic size of the franchise – risks undermining the brand if not done correctly. “Luxury brands are after all a privileged club in which access and membership are obtained from ownership of a product or consumption of experiences. Therein lies the rub. The reason most luxury consumers are drawn to such possessions and experiences is because of exclusivity: it makes them feel special or important precisely because so many people can’t afford to buy them and therefore are denied access to members’ elite inner circle,” says the Open Fridge Door blog (3).

We all understand the need for profits but we want luxury to feel like a privilege. Traditionally luxury brands have been private businesses run without any sophisticated marketing or business models in place. Now, luxury is big business and sophisticated enough to warrant business models taught at business school. But therein may lie a problem. The very analysis, sophisticated and illuminating as it can be, threatens to undermine the creative soul, the inspiration and the desirability of the product behind the business. The love affair we ask the markets to embark on can rarely last, but its essence is eternal.

The luxury world has to understand the essence it already owns….and one lesson supercedes all others in business. That magic ingredient is more pertinent in the exclusive luxury market than anywhere else. It is human, and fallible. It is about desire.

”The dictionary definition of luxury”, said one Russian oligarch buying up European luxury houses to LuxeTv’s Sue Douglas,” is unnecessary indulgence. The cleverness of the brands that dominate the markets today, is that they make it necessary”.

And in any love affair, the only necessity is desire.

(1) Nadeau, J.B and Barlow,J, “Sixty million Frenchmen can’t be wrong: why we love France but not the French” (sourcebooks 2003)

(2) Blankaert, C “Luxe” (2007) Le Cherche Midi

(3) Open Fridge Door – The paradox of luxury