The Impact of Brand Extension on The Parent Luxury Fashion Brand: The Cases of Giorgio Armani, Calvin Klein and Jimmy Choo

Abstract

Brand extensions are an interesting brand strategy alternative,as they may attract new segments of customers that may havenot considered the brand before because of different reasons. Therefore, the brand extensions are seen as a perfect way toboost the revenues of the company. However, though thebrand extensions may work quite well for consumer (value)brands, they might have quite opposite effect on the luxuryones. While the brand extensions, especially the downwardones attract attention and make the brands more accessible andfamiliar among new segments of consumers, at the same timethey may weaken the status of the luxury brand among itsexisting clientele and so dilute the luxury brand. And as theluxury brands emphasize their long-term value, once the imageof the luxury brand is diluted, it has to take a very difficultand long way to gain its luxury status back in the eyes ofconsumers, and sadly not every brand manages to get back therespect it once had. Nevertheless, there is little research done on luxury brandsand especially luxury brand extensions. What is more, previousresearch gave more attention to consumers’ evaluations of andattitudes to the extensions themselves than the parent brands. This study explores the evaluations of and attitudes to theparent luxury brands after different extensions are introduced. The study firstly introduces previous findings on value brandextensions and luxury brand extensions. Secondly, the cases ofthree chosen brands, representing a question mark, a failureand a current success practice of luxury brand extensions areanalyzed in-depth: Giorgio Armani, Calvin Klein and JimmyChoo. Armani is chosen as it is one of the most diversified brandsin fashion. Despite the fashion brand varying from hautecouture line Armani Privé to fast fashion brand ArmaniExchange, Armani today offers everything that is needed forone’s luxury lifestyle from sweets and flowers to restaurantsand hotels. The study analyses Armani’s brand extensions, andreactions to them. Armani represents a successfuldiversification of the luxury brand, but at the same time itquestions the risk of over-extension and its consequences onthe brand portfolio. Calvin Klein is chosen because it illustrates an example ofthe brand that once lost its luxury status mainly because oflicensing and in the face of such experience the brand is nowdigging its way back to the luxury industry with its high-endsub-brand Calvin Klein Collection. Jimmy Choo is a world famous women’s shoes brand whosecreations are appreciated by a large public including red carpetstars and First Ladies. After starting as a luxury shoes makerin 1996, the brand has expanded into handbags, sunglasses,accessories and even fragrance. But it was the luxury brand’scollaborations with non-luxury brands Hunters (iconic Britishcompany producing wellington boots) and H&M (Swedish fastfashion giant) that attracted our attention. Jimmy Choorepresents a current success practice of the collaborationsbetween the luxury and non-luxury brands and shows that suchbrand extensions, when carefully thought through, not onlymakes no damage to the luxury brand, but also enhances itsimage and desirability instead. The study analyses these twocollaborations, which are viewed as downward brandextensions, and the impact of those collaborations on theJimmy Choo brand. Each brand approach to brand extension is presented anddiscussed to underline reasons for success or failure. Deskresearch on the brands’ annual reports, reviews, articles andinterviews from fashion, marketing, lifestyle, financial, andother magazines and newspapers, as well as visual material areused for the analysis of the chosen cases. An analysis of the cases of Giorgio Armani, Calvin Kleinand Jimmy Choo leads us to four conclusions: 1) Luxuryfashion brand’s collaboration with a non-luxury brand can havepositive impact on the parent luxury brand if the extensionkeeps the luxury criteria, and the non-luxury collaborator has agood reputation; 2) Downward brand extension enhances theparent luxury brand if the extension keeps the luxury criteriaand parent luxury brand’s quality, qualities and values; 3)Usually licensing, unless strictly controlled, dilutes the luxurybrand; 4) Notwithstanding how diversified the luxury brand is,the luxury brand’s core business has to be constantly enhancedin order for the brand portfolio to be successful instead ofdiluted. This study is going to be the key and starting point for thefurther studies of the impact of brand extensions on the parentluxury brands.