Exclusive: Independent Luxury - Survival In The Consolidation Jungle


Jonas Hoffmann | August 31, 2015

This month marks the release of the tome 'Independent Luxury', examining the expansion of conglomerates and extinction of independent companies. Here, its joint authors exclusively reveal a first look their four innovation strategies to endure in the consolidation jungle.

This month marks the release of the tome ‘Independent Luxury’, examining the expansion of conglomerates and extinction of independent companies. Here, its joint authors exclusively reveal a first look their four innovation strategies to endure in the consolidation jungle.

The world of luxury is harboring an endangered species: that of the independent companies! In an increasingly challenging and globalized luxury environment, companies are fighting to escape from the ever-growing clout of luxury “conglomerates” – Swatch Group, LVMH, Kering and Richemont.

As of 2015, these “big four” own more than 100 brands and are maintaining a constant pace of acquisitions, relying on vertical integration to secure supplies (and deprive competitors of them), which has particularly damaging consequences for independents. Most independents are struggling to survive and end up being acquired or going out of business.

Interestingly, this same movement toward consolidation is rendering brands more and more uniform, thus creating opportunities for players able to craft unique offerings for niche luxury clientele.

We have toured the world in the past decade to uncover the strategies followed by groundbreakers in fashion, watchmaking, leather goods, accessories, cars, gastronomy, design and retail. The results are presented in the book “Independent Luxury: The Four Innovation Strategies To Endure In The Consolidation Jungle” (Palgrave-Macmillan, 2015).

Innovation is the path to follow in this challenging journey and the companies studied have chosen one of the four innovation strategies below in their development.

“ Game changers are building breakthrough innovations at the product and business model levels ”

Innovation Strategies For Luxury Independents

“Back to the roots” includes independent companies innovating in the essence of luxury: extreme quality and extraordinary craftsmanship to create the ultimate sensorial and emotional experience. For companies such as Vignes, Sheme, Thomas Mercer, Mirazur by Mauro Colagreco, Norlha and Brunello Cucinelli, luxury is rooted in a terroir and a sense of purpose permeates this endeavor. These are companies symbolized by the horse, a classical symbol of elegance and nobility.

“Code breakers” are playing with product and societal codes to culturally innovate and build the icons of today and tomorrow. Examples include Isabel Marant and Miuccia Prada in fashion, Fernando and Humberto Campana in furniture design, and HYT in watchmaking. The tiger – with its strength – symbolizes these luxury iconoclasts.

“Eagle in the aquarium” companies are disrupting the way that luxury companies create, deliver and capture value. Globalization and digitization are powerful enablers to reconfigure resources at the levels of funding (e.g. crowdfunding), design (e.g. Dassault Systèmes Fashion Lab), manufacturing (e.g. 3D printing), distribution (e.g. Yoox – Net-à-Porter), marketing and communication (e.g. Holition and Digital Luxury Group). The eagle in the aquarium symbolizes these invaders in the luxury ecosystem.

“Game changers” are building breakthrough innovations at the product and business model levels. Comme des Garçons, Études Studio, Iris van Herpen, MB&F;, and W Motors are independents taking bold initiatives in a fascinating and inspiring journey. The complex and powerful dragon symbolizes this group.

“ Disregarding the rather hostile economic landscape, a new brand decided to enter the automotive sector ”

CASE STUDY: A “Hypercar” Game Changer From Dubai: W Motors

In 2012, disregarding the rather hostile economic landscape, a new brand decided to enter the automotive sector. A high-end brand that started with a dream and the unshakeable conviction that there is always room in the market – even a saturated market – for an ultra-exclusive and totally incomparable product: a product for which innovation is not a concept, but an essential element.

This brand is W Motors (W standing for “WOLF”), which manufactures “hypercars” selling at US$ 3.4 million each. Its creator and CEO, Ralph R. Debbas, brought together the most specialist engineers (such as Magna Steyr), the most experienced consultants (Studio Torino), the most advanced mechanics (RUF Automobile) and lend their skills to the most daring, or, as some say, the most foolish, project.

The first W Motors HyperSport is the Lykan, taking its name from the werewolf, this half man, half wolf creature that is exceptionally strong and practically uncontrollable.

W Motors Lykan HyperSport car (courtesy of W Motors)

Like a hand-made watch movement, the Lykan HyperSport, limited to seven units for the first model, receives the same painstaking attention. The carbon-fiber body is hand-built, layer-by-layer, in Italy. Its hand-built engine is assembled piece by piece in Germany. With its 770HP twin-turbo flat six-cylinder engine, the W Motor HyperSport offers a stunning performance – 0 to 100 km/h in less than 2.8 seconds and can reach top speeds of 385 km/h with maximum torque of 980nm, making this beast one of the fastest and most powerful in the world. It is also the most technologically advanced hypercar in its category.

In 2016 two new models are scheduled to be launched:

- The Sedan model with a production of 100 vehicles per year retailing at around US$200,000.
- The SuperSport model with a production of 25 vehicles per year retailing at a price half-way between that of the Sedan and the Lykan: US$1.4 million.

Its next project is to develop a world-class automotive research and development platform in Dubai. In the spirit of the impressive investments being undertaken for the Expo 2020, W Motors aims to play a pivotal role in the emergence of R&D; and innovation Made in Dubai.

This would take the form of a start-up accelerator to bring together talents in the automotive business where W Motors, alongside a group of public and private investors, would take a role of innovation facilitator, potential client and investor. If this project takes off, it would represent real business model innovation in a highly concentrated and mature sector like the automotive industry. Hard to believe, maybe, but no harder than the creation of W Motors in the first place…

How to innovate? A thorough analysis of these four innovation strategies uncovers a common pattern composed of five stages: the BA2RE® luxury strategy approach.

“ This is a world where storytelling, distribution choices and experience take centre stage ”

The BA2RE® Luxury Strategy Approach

It all starts with the creator/ entrepreneur worldview and purpose. Believing refers to the vision, the identity, the DNA of the company, its guiding values and aesthetics. This belief can evolve in the same way that living organisms evolve, but it has a certain stability. It is what enables energy and resources to be focused.
Innovative creators and entrepreneurs are constantly anticipating to grasp changes and act on them. They sense l’air du temps and are often the “right person, in the right place at the right time.”

They combine analysis and feelings to draw forth intuition on what is next, often reaching out to a certain number of stakeholders such as artists, designers, cultural organizations and media experts that can nourish them and later on help to legitimize a breakthrough proposal.

Acting refers to crafting the offer for a certain group of clients. It is a world of strategic choices: What is the offer? Who are the clients? What are the resources, capabilities and processes necessary to construct, deliver and capture value?

Then comes the central moment of the encounter with the client. Reaching refers not only to winning clients, but transforming them into fans and advocates for the brand. How to reach first the hearts and then the minds of clients? The goal is to have a core of top influencers and clients to espouse the offer (and the message). This is a world where storytelling, distribution choices and experience take centre stage.

Enduring is the capacity to be more than a one-time hit or fad company. It is a process to develop the company in its growth stages demanding a long-term view and solid financial backing. At the personal level it demands stamina, resilience and the capacity to generate luck.

We present in the book final chapter how this strategic approach has been applied to the development of Encelade 1789, a Swiss brand dedicated to exclusive accessories.

*Main Image Credit: Hermes SS14 Campaign. Hermes is in no way mentioned in the book ‘Independent Luxury’.

Joint authors Jonas Hoffmann and Laurent Lecamp

Independent Luxury launched worldwide in August 2015. To further investigate the book visit:

Jonas Hoffmann

Founder - Luxury Strategy Consultant

Professor of Luxury Strategy at SKEMA Business School and expert in innovation, I am also an executive trainer, consultant and keynote speaker in international summits in Europe, the United States, Asia and the Middle East. My passion is to develop relevant knowledge for senior executives to strategize and act appropriately when faced with complex global problems. I bring a novel, independent, and international perspective to issues of strategy, innovation, branding and growth by developing a three-step “lab” approach. The first step involves identifying patterns of strategy development and constructing a model based on comparative case studies, literature review and experience. In the second step, the model is improved and refined after interaction with companies and executives through consulting and executive education. Finally, the results are consolidated into a sound and actionable model complete with methods and tools. My field of work in recent years has been primarily the luxury/creative sector and entities competing in symbolic markets, and secondarily the tech and energy sectors. My latest project is “Independent Luxury: The 4 innovation strategies to endure in the consolidation jungle” (Palgrave Macmillan), a book co-developed with Laurent Lecamp. We deal with the timely issue of the survival of independent luxury companies. The book present four winning innovation strategies, and an original approach to guide entrepreneurs, creators, designers, managers and all those who dare to challenge the status quo to become groundbreakers. More information on