The largest Swiss watches group and world’s largest watch manufacturer SWATCH, is reportedly interested in Italian jewellery, watches and accessories brand BVLGARI. In an interview to German weekly magazine Focus, Mr Nick Hayek, SWATCH Group CEO confirmed BVLGARI is one of the most ‘’interesting’’ international luxury brands , with a strong potential for further development. SWATCH Group is targeting a turnover of EUR 4,2 billion in 2010. This piece of news comes just weeks after BVLGARI has reported a 9% decrease in sales in 2009 and luxury industry experts are forecasting a negative 2010 for the Italian luxury brand.
Oliver Petcu of CPP Management Consultants Ltd believes BVLGARI’s current difficult situation is mainly due to its sluggish expansion strategy, most of times decisions being taken ‘’by default’’ and not through extensive feasibility and market research studies. Petcu added that the value of the BVLGARI brand has paradoxically decreased in the past decade, its over-diversification in accessories and bags putting extra pressure on its finances and diluting the value of the brand which has built its century old heritage on high end exclusive jewellery. Today, BVLGARI boutiques and corners sell jewellery, watches, scarves, ties, small leather goods, handbags, cufflinks and perfumery.
Petcu cites the example of the BVLGARI cosmetics line which is widely available in hundreds of hotels worldwide, as being one of the worst strategic decisions taken by management. The licensing agreement with major international amenities producer ADA of Germany must have been driven by the financial motivation, no attention being paid to the quality of the product, which can, indirectly damage the brand reputation in the long term. One by one, top luxury international chains have ‘’given up’’ on the BVLGARI amenities line which is mass produced from artificial ingredients and carried in cheap packaging. Most such luxury hotel chains have long replaced BVLGARI with Aromatherapy Associates, L’Occitane or Molton Brown, brands which are specialized in cosmetics and use, at least in part, natural ingredients. American luxury five star chain Ritz Carlton remains one of the few international deluxe chains to still carry the BVLGARI brand.
Another unfortunate example is the international communications campaign featuring Oscar winning actress Julianne Moore, which has recently been launched in all international glossy magazines. The campaign features Julianne Moore wearing an all BVLGARI attire comprising of jewellery, watch and handbag, all BVLGARI products. It is not only the styling of the campaign but also the awkward positioning of an actress such as Julianne Moore admired for her understated, yet extremely elegant look, rather than an excessively ‘’luxury branded look’’, more easily to attribute to a pop star.
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