a lower price. These factors have also given luxury consumers more brand
choices and variety than ever before, and have contributed to the changing
consumer psychology.
Thirdly, the rapid growth of digital, information and communications tech-
nology has provided a completely different operational platform for both
luxury brands and luxury consumers. The internet presents luxury brands the
possibility to attain a global level of brand awareness within a short period of
time. It also offers luxury consumers more empowerment to choose among a
wide array of products, easier access to view their choices and lower switch-
ing costs. This influence has led consumers to be individualistic and experi-
mental in their fashion choices. As a result, consumers have become
self-stylists and bold enough to mix luxury and high-street fashion in one
outfit; something that their mothers and grandmothers would have considered
taboo in the past.
Fourthly, the luxury sector has been undergoing a deconstruction process
since the 1990s as a result of changes in the investment and ownership struc-
ture of several luxury brands. As from this decade, financial institutions
including investment firms, private equity holding companies and other non-
luxury companies have realized the high intangible asset benefit of luxury
brands. This has resulted in increased investments in the luxury sector
through acquisitions, capital investments and brand portfolio development.
These ‘outside’ companies include Italian equity funds company Charme,
which owns Scottish cashmere brand Ballantyne; Equinox Holdings, which
previously had a majority stake in Jimmy Choo; Starwood Capital, which
owns Baccarat Crystal; Bridgepoint Capital, which recently sold Molton
Brown to Kao of Japan; W Holdings, which owns Amanda Wakeley; and The
Falic Group, among several others. These companies place an emphasis on
return on investment and augmentation of shareholder value. As a result there
has been increased pressure on luxury brands, for rapid sales and profitabil-
ity. This has led to the introduction of several mass marketing strategies in the
retail and brand management of luxury brands. These strategies have further
led to the creation of an ambiguity in the definition of a true luxury brand. As
a result, luxury brands have divided into groups of ‘true luxury’ and ‘common
luxury’ or ‘fashionable luxury’. Before this era, the branding and retail strate-
gies of luxury brands were clearly different from mass fashion brands but
currently, the line that differentiates strategies applied in the two sectors is a
blur.The effects of the changing environment
The results of the changing definition of luxury and other phenomenal trans-
formations in the luxury sector are several. However, chief among these is
clearly described by the frequently used phrase ‘the democratization of226
luxury fashion branding