maconda advises in the luxury and lifestyle segment
maconda News July 2013
maconda is one of the most active providers of Commercial Due Diligence and other Commercial Transaction Services in the German-speaking region and is also in demand for assessing investment opportunities in the luxury and lifestyle segment. The Cologne consultants have addressed this attractive and multifaceted industry on multiple occasions, including watches, cashmere fashion, other fashion topics, yachts, high-end home furniture, high-end garden furniture, jewellery, consumer electronics, “tableware” and gift items.
Various engagements in the broad luxury and lifestyle industry demonstrate maconda’s strong sector expertise. For example, we supported the acquisition of a leading specialised watch manufacturer from the Swiss Jura. The company designs and produces watches for traditional watch brands, jewellers and retail chains.
In the Commercial Due Diligence, we comprehensively examined global demand for Swiss watches, its key drivers, and developments across the various price and quality segments. An important module of the analysis addressed the fragile supply chain – above all, security of supply for mechanical movements and oscillating systems – against the backdrop of the widely known supply bottleneck on the part of the leading manufacturer, in conjunction with the so-called Swissness initiative of Swiss associations. In addition, we analysed customers’ procurement behaviour and estimated the potential for new business.
Special expertise in luxury and lifestyle products
The luxury market continues to grow. Rising living standards in so-called emerging markets, increased brand and image awareness combined with the trend towards “affordable” luxury, the growing number of HNWIs (High Net Worth Individuals) and mass affluents – drivers like these fuel growth, but also create risks. The biggest challenge for luxury brands is to increase reach while maintaining brand and product exclusivity. Exclusivity and expansion must be aligned, based on a balanced strategy, so that growth does not come at the expense of the brand – the most important asset of a luxury goods manufacturer or retailer.
Luxury providers in particular require a well-considered approach to target audiences and a product, licensing and service portfolio that reflects the brand’s core. In addition, there is virtually a necessity to offer the same product and service quality across a cross-border, often global distribution network – few industries are as highly internationalised as luxury goods. Many providers also increasingly view horizontal and vertical integration as well as diversification into adjacent luxury segments as an approach to realising growth potential.
This can sometimes increase complexity immensely. And ultimately, a crisis does not stop at luxury goods either, even if downturns are usually less pronounced. A provider of products in the luxury and lifestyle segment – whether manufacturer, retailer or service provider – would be well advised to position itself robustly in good time: when business is going well, not only when pressure starts to build.
You can find further information on this topic in our current sector focus “The Luxury Market – Preserving Exclusivity Despite Ongoing Expansion”. Please request this from us by email.
Of course, we are also available to you as a competent and trusted partner – for the repositioning of luxury brands, trend and potential analyses, Commercial Due Diligence (including on the sell side), as well as value creation projects, business development, international expansion, and strategic and operational restructuring.
Competence Centre Consumer Goods
Topics our Competence Centre Consumer Goods frequently addresses: FMCG (fast-moving consumer goods), consumer-oriented services (such as fitness and tourism), food, cosmetics and personal care products, packaging products, leisure products, wholesale, retail, mail order and various eCommerce concepts, as well as software within “our” industries. Other competence centres include business-related services, mechanical and plant engineering/technical products, as well as healthcare services and the ageing society. Please get in touch at any time if you need expertise here. We are happy to support you.