The Four Sectors of the Luxury Industry

By Emilia Wilson, Global MBA Ambassador 2018-2019, Luxury Brand Management Major

When you’re considering the Luxury Brand Management major of the Global MBA at ESSEC Business School, especially if you’re pivoting your career from outside the industry, you are probably trying to figure out what you’re going to do with it afterward. The first place to start is choosing what sector within luxury you’d like to pursue. In this program and across the industry, we define the four sectors of luxury as:
  • Fashion & Accessories
  • Fragrances & Cosmetics
  • Watches & Jewelry
  • Wines & Spirits
While there are absolutely connections between these sectors, it is key to have an idea of what interests you most among the four. As passion is one of the ultimate differences between working in luxury versus other industries, you should tap into what inspires you, what makes you want to endlessly learn more, and what you can’t imagine living without. For me, the clear answer was the watch industry, given my background in the industry and my undying need to know more and more about the intricacies of the industry. 

Below I’ll define these sectors and also address what this program does to teach you about the four as well as some of the events surrounding the sectors that are offered by pursuing this degree with ESSEC.

Fashion & Accessories

In this sphere, you will start by studying the grand maisons, such as Chanel, Dior, and Hermès, and their beginnings. You will learn about the savoir-faire that built each of these great brands into the legends they are. Through this research, you’ll come to understand the collaborations that were inherent to their success. Small ateliers of very niche processes, including embroidery, leather-work, and feather-work, have very little global recognition of their integral presence in the design and production of the couturier's visions. 

Jumping forward in the timeline of luxury fashion & accessories to today, studies involve the significance of the creative directors. As most of the founders of these brands have passed, in some cases more than a hundred years ago, choosing the creative direction of the brand is the foremost decision. The eras of a brand like Louis Vuitton are marked by the creative directors of the brand. What was the difference between the Marc Jacobs and the Nicolas Ghesquière collections? How did they maintain the brand’s DNA and codes within their designs? These are the type of questions you’ll be asking yourself if you choose to pursue a career in the fashion & accessories sector. 

As for the events and education offered by ESSEC around the fashion & accessories sector, you will get to meet a wealth of powerhouses within the industry. First and foremost, you will start the program in an Introduction to Luxury Brand Management course with Professor Denis Morriset, a former executive for brands such as Armani & Balmain. Professor Morriset is integral to the Luxury Brand Management program and will be with you in courses and on business trips throughout your time at ESSEC. We also study with top researchers in the industry, such as Prof. Delphine Dion and Prof. Anne-Flore Maman, to learn more about how brands are using data to identify the “Blue Oceans” in the industry. In the first semester of our program, we had the chance to visit the familial home of Louis Vuitton (read more about the visit in my blog post), which was one of the most enriching presentations on who Mr. Vuitton was and his impact on the luxury industry as a whole. For our Alumni Conference speaker series, alumni of ESSEC in the luxury space come to speak to us. In the fashion & accessories sector, we most recently met with Nicole Comeau, General Manager and Chief Strategy Officer of Olivier Theyskens, the namesake brand of the former creative director for Rochas, Theory, and Nina Ricci. During our monthly networking dinners, we are able to connect with other alumni, such as last year’s ambassador, Erin Thibodeau, who now works for Chloé. During our business trips, we also had the opportunity to meet with executives and Human Resources directors of major fashion & accessories brands.

Fragrances & Cosmetics

Related, but assuredly separate from the fashion & accessories sector, the fragrances & cosmetics sector is undeniably one of the most powerful and profitable of the four luxury sectors. For almost all luxury consumers, fragrances & cosmetics provide the entry point into luxury brands. It is here that you are able to try a Chanel lipstick or Yves Saint Laurent mascara and begin to understand the quality of this level of products. 

This sector is particularly interesting from a partnerships standpoint. Through your studies, you’ll learn that most of these major beauty brands are actually licensing agreements between the brand and a fragrances and cosmetics producer, like L’Oréal Luxe, Coty, or Firmenich. However, there are some notable exceptions to that structure. There are few large luxury brands, such as Guerlain, that create their products in-house, a trend also seen in some niche skincare brands. The importance of a nose, that is the master perfumer who creates fragrance formulas, is on the same level as that of the creative director to a fashion and accessories brand. Similarly, there are certain celebrity dermatologists who run the concoction of skin care products. 

In the intensive course on fragrance & cosmetics, you will dive into the distribution networks, licensing agreements, and creative direction within this sector. The Alumni Conferences provide the opportunity to meet with those currently working in this field, such as Elisabeth Visoanksa, founder of her namesake niche skincare brand Visoanksa. Visits to the L’Oréal Luxe & Firmenich headquarters in Paris offer participants the chance to see first-hand how these firms function internally and to connect directly with the top Human Resources Directors. These visits also provide the opportunity for the management to start noticing participants they would like to invite to work on the capstone consulting field projects, which take place over the summer. During our international travels, we also meet extensively with fragrance & cosmetics brands, offering yet another opportunity to meet with top executives and Human Resources Directors.

Watches & Jewelry

As Paris is the birthplace of maisons such as Cartier and Van Cleef & Arpels, there is no shortage of history you can find just by walking through the streets, especially Place Vendôme, the global epicenter of the jewelry sector. Despite being known for its hub in Switzerland, the watch industry, which is of great personal interest to me as my target sector, has quite a few roots in Place Vendôme as well. Abraham-Louis Breguet, the inventor of the revolutionary (at the time) tourbillon, opened the doors of his watch company in 1775 in Place Vendôme and that has not been forgotten. Their boutique in the same location is treated as their crown jewel and is the home to a fascinating museum, tracing the history of the brand from their status as a royal watchmaker through to today. That being said, it is important to see Paris as a close neighbor to Switzerland, where most of the top watch brands are headquartered. The proximity has served to make the industry in France quite strong.

As with the past two sectors, there are plenty of brands that are involved in watches & jewelry as well as a mixture of the others, such as Bvlgari, Hermès, and Chanel. While there are plenty of brands with their own fashion watches & jewelry, these examples have entered this segment as very strong, high quality producers of these products. This industry has developed through much vertical integration, a phenomenon that is not slowing down whatsoever. It was just recently that Chanel invested in Kenissi, the movement manufacture of TUDOR, Rolex’s sub-brand. It’s clear that fashion companies want to be more highly regarded in this field and they are doing so through investments and acquisitions.

Our program is closely tied to Van Cleef & Arpels, an haute joaillerie and haute horlogerie brand with centuries as a leading brand in this sector. This relationship allowed us to spend time at L’École des Arts Joailliers, the jewelry-making school founded by Van Cleef & Arpels in 2012. The entire class learned about four elements of the savoir-faire and toured the jewelry exhibit that was showing at the time, about which you can read in this blog post. In May, we travelled to Switzerland to visit the Omega SA Manufacture, where we also met with the decision-makers as we have with our other company visits. In the past, there have been capstone consulting projects for both watch and jewelry companies, or one that bridges the two, such as Cartier.


Wines & Spirits

Last, but certainly not least, is the luxury wines & spirits sector. Half of conglomerate LVMH’s acronym stands for Moët Hennessy, demonstrating how important this sector is in the luxury world. Pursuing our MBA in the country that produces some of the finest wines & spirits worldwide and in the city that home to the global headquarters of LVMH allows participants of this program to tour vineyards and Champagne caves, to learn about the very detailed processes from selecting grapes through the various stages of fermentation and aging, and to discuss with top executives about trends and forecasts for the industry.

Another luxury sector that was born from its relation to royalty, in wines and spirits, many leaders have very old roots, such as Moët & Chandon, which was founded in 1743 and soon became the supplier of Champagne to royal and aristocratic families. Hennessy holds a similar place in the Cognac market with 254 years in existence and more than 40% of the worldwide market share. Hennessy is owned partially by LVMH and Diageo, another significant player in the market. ESSEC’s relationship with LVMH, particularly their brand Krug Champagne, offers participants the opportunity to have a direct connection to this very powerful name in the industry. Another corporate partner of ESSEC’s, Champagne Collet, provides participants the chance of touring not only the champagne caves open to the public, but also the production facility that is only regularly accessible to employees. You can read more about our visit in this blog post.

These four sectors, while distinct, almost always have endless connections between them. There are individual brands that act in multiple categories, conglomerates with brands in various sectors, and a significant portion of those working in the luxury industry have worked in more than one of these four sectors. This element of professionals with experience in different facets of the luxury sphere is particularly important. Coming into any aspect of the luxury business from an outside industry is a difficult transition, in that there are certain nuances and particularities that just aren’t present elsewhere. But once you have an understanding of what it really means to work in luxury and probably an expansive network across the sectors, it’s easier to transition between them.

Upon applying to ESSEC Business School for the Global MBA in Luxury Brand Management, it helps to have an idea of which of these four interests you most. If you’re not sure, start reading publications, such as the Business of Fashion or other sector-specific magazines, to understand the challenges and opportunities in the four luxury sectors today.

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