maconda is one of the most active players in the German-speaking market for commercial due diligences and other commercial transaction services. Its services are also sought after for advising on investment opportunities in the luxury and lifestyle industry. The Cologne-based consulting company has worked with this attractive, yet challenging and diverse industry on several occasions, for instance advising on watches, cashmere clothing, other fashion topics, yachts, premium home furniture, premium garden furniture, jewelry, consumer electronics, table accessories or the gift industry.
Many clients interested in the diverse luxury and lifestyle industry are testament to maconda’s extensive expertise. Recently, we assisted in the acquisition of a leading specialized watch manufacturer based in the Swiss Canton Jura. The company designs and manufactures watches for traditional watch brands, jewelers and retail chains. The transaction was not disclosed.
As part of our due diligence assessment, we undertook an in-depth examination of the global demand for Swiss watches, the key drivers of said demand and the development of various price and quality segments. An important part of the analysis concentrated on the fragile supply chain, especially the security of supply of mechanical movements and so-called assortments for regulation. This took place in light of the well-known supply bottleneck caused by the leading manufacturer in connection with the “Swissness” initiative spearheaded by Swiss associations. Furthermore, we assessed customers’ purchasing behavior and the potential for new business.
The luxury market continues to grow. The rising standard of living in the emerging markets, the increased brand and image consciousness combined with a trend toward affordable luxury, the growing number of high-net-worth individuals (HNVI’s) and mass affluents – such drivers bring growth but also create risk. The largest challenge for luxury brands is to grow their reach and, at the same time, maintain brand and product exclusiveness. Exclusiveness and expansion have to be brought into harmony, based on a balanced strategy to ensure that growth does not take place at the expense of the brand, this being the crucial asset of a luxury goods manufacturer or retailer.
In the luxury market especially, a well thought-out strategy for targeting the right audience as well as a product, licensing and service portfolio tailored to the brand core values are essential. What’s more, the same product and service quality needs to be ensured in an international, often even global, distribution network. There are not many industries as strongly internationalized as the one for luxury goods. Many players are increasingly viewing horizontal and vertical integration as well diversification to neighboring luxury segments as a way of realizing growth potential.
This can cause a steep rise in complexity. Additionally, a general economic crisis will ultimately also impact luxury goods, even though the downward swing may be less severe than in other industries. Players in the luxury and lifestyle market, be they manufacturers, retailers or service providers, are well advised to ensure a stable corporate structure from early on. This should be established in times of smooth sailing and not when crisis looms.
You can find more information in our current Industry focus “The luxury market – preserving exclusivity in the face of continuing expansion.” You can request it via email.
It goes without saying that we are happy to assist you as an experienced and reliable partner for your needs regarding the new positioning of luxury brands, analyses of trends and potentials, commercial due diligence assessments (also for vendors), but also regarding value enhancement projects, segment development, foreign expansion as well as strategic or operative restructuring.
These are some of the topics our competence center Consumer Goods often deals with: fast-moving consumer goods, consumer-oriented services (such as fitness or tourism), foods, cosmetics and toiletries, packaging products, leisure products, wholesale, retail, mail-order and various e-commerce concepts, as well as software relating to “our” core industries. Further competence centers cover corporate services, engineering, plant engineering and technical goods as well healthcare and an aging society. Please do not hesitate to get in touch should you require our expertise. We look forward to hearing from you!
We support our clients in increasing sales, profits and company value and also provide commercial transaction services. These include comprehensive target screenings, systematic preparation for company sales (exit readiness), commercial due diligence assessments (also for sellers) and post-merger integrations. Our main industries of expertise: consumer goods, foods, retail, services (health, leisure, media, etc.), business process outsourcing (customer care, temporary work, facility management, etc.), textiles. We also cover technical industrial goods insofar as they relate to our core industries (such as food processing or packaging machinery). Our multinational team of consultants is optimally positioned, completely covering the key regions of Western Europe, the CEE countries and the BRIC countries – in most cases with native speakers.