1 Loss of brand positioning. This is as a result of an unclear brand identity,
increased by a lack of brand control.
2 Loss of quality control of the products, leading to low product quality,
which has diminished the brand’s image.
3 Multiple and uncontrolled product and services range, which has led to an
unclear market positioning and confused consumer expectation of the
brand.
4 Undefined pricing strategy from premium pricing for certain products to
low-cost pricing and discounting for others. This has led to an unclear
brand positioning.
5 Loss of retail channel control. The licensing agreements of Pierre Cardin
gave way to multiple retail channels ranging from exclusive stores to
supermarkets, airports, newsstands and departmental stores. This has led to
the loss of the ‘exclusivity’ and ‘prestigious’ attributes that form a part of
the core competences of a luxury brand.Pierre Cardin has focused more on licensing and less on developing the brand
and maintaining its luxury aura. Brand building is a long-term investment
while licensing provides short-term benefits. The brand seems to have chosen
the short-term option. Pierre Cardin earns approximately €6 million annually
from licences, but this figure is paltry compared to the financial intangible
brand asset value the brand would have accrued had it protected its brand
equity in the market.
Although the brand paved the way for several modern business practices
of the luxury goods sector, it has exhibited a lack of control of its penchant
for licensing, which has badly damaged the intangible asset aspect of the
brand. Other brands that have been through periods of rampant licensing,
which destroyed their luxury image and positioning, include Gucci and
Burberry. These brands, however, regained their ‘luxury’ status through a
carefully managed process of licence buy-backs and brand re-positioning.
Pierre Cardin still stands a chance to recover its once glorious ‘luxury and
prestige’ status.Conclusion
Pierre Cardin has indicated his intention to sell his luxury fashion empire with
a price tag of approximately US$500 million. The Maxims brand is also on
the market for an undisclosed amount, while other connected product lines
totalling about 800 will also be sold for another US$500 million. Not surpris-
ingly, potential buyers are sceptical about the real value of the company in
terms of both tangible and intangible assets.
While the debate of the sale of Pierre Cardin continues in the fashion
sector, the brand maintains its expansion focus with a recent opening of a
seven-storey store in Moscow.302
luxury fashion branding