Contrary to popular belief, the luxury sector does not perform badly when the economy is on a downturn. It is recession-proof, and actually does better. Sales CAGR for the 2007-11 period for Hermes has been at 15%, Gruppo Prada at 16% and LMVH at 9%. In fact, the last 3 years have seen immense growth, with the same companies recording CAGR of 22%, 27% and 18% respectively. In 2012 alone, the worldwide luxury market is estimated to have grown at 10%, with revenues reaching $275 billion. It is the third consecutive year that the Luxury sector saw a double-digit growth.
The growth has been driven by China dominated Asia-Pacific region, with 2012 growth rates at 18%. The Americas region is also a key driver, with growth estimated at 13%. Europe, reeling under a recession has grown slower than last year, but is still expected to have increased its luxury market by 5% in 2012. China is the key to the Global Luxury market. Not only do the Chinese buy a plethora of luxury goods at home, they spend a substantial amount on luxury goods as tourists. The Asian giant has actually overtaken Japan to become the #2 market after USA. One in four of the luxury goods purchased today is by the Chinese, and they are responsible for half of the luxury goods purchased in Asia, and one third of those purchased in Europe. Accessories are among the most popular luxury goods purchased, with just shoes and leather goods accounting for 27% of the market.
It is estimated that the market could grow to as much as $325 billion by 2015. E-Commerce, which grew at 25% in 2012, is expected to be a key driver of growth. To illustrate this point, the online market in China alone was at $6 billion in 2012. The opening of new retail stores in developing nations, including China, is another source of future growth. Nearly half of the luxury goods sold today is brought by consumers from emerging markets. But the biggest trend to look forward is the 'luxury experience. It is not just about a luxury item anymore, but the entire experience is what makes the difference. The total market for luxury, including 'experiences' is expected to touch $1.3 trillion in 2015. One such example is the fact that 40% of luxury goods are bought by tourists. 'Luxury tourism' through different experiences, including fine wining, dining and shopping could be one way ahead.
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Considering the important role that E-commerce and emerging markets are going to play in the future, an MBA in Luxury Management would position applicants effectively in this lucrative Business. As Europe is the epicenter of the luxury goods industry, most of the top programs are located there. The region offers experiential learning and industry contacts for fresh graduates.
Here are our top five picks for Luxury Management Program
1) ESSEC MBA in International Luxury Brand Management
ESSEC's 11-month MBA program in International Luxury Brand Management is taught in English, with a class size of 45 students, 90% of whom are international. The school is located in Cergy-Pontoise, just 35 minutes from central Paris, the heart of the fashion industry. The program was created in 1995 and maintains a strong Global focus. Some of Essec MBA’s partners and current contributors include Bacardi, Baccarat, Calvin Klein, Chanel, Estée Lauder, Gucci , L’Oréal , LVMH , Christian Dior, Dom Pérignon and Swarovski. The program offers specializations in fashion & accessories, watches & jewelry, fragrances & cosmetics, wine & spirits, hotels & real estate and cars & technology.
Students learn to tackle issues from global perspectives while weighing situations from business, financial as well as cultural paradigm. The program is divided into 5 parts - Introduction to Luxury & core MBA studies, Business Knowledge & Market trends, Luxury Brand Management & Semiotics, Luxury Sector Management and a two-month project. ESSEC's faculty is supported by visiting specialists as well as professionals.
Experiential learning is an important aspect of the learning process. Every February, a 12-day field trip is held that helps students learn from leading experts and executives, and offers a better understanding of the local markets. Recent trips include travel to Hong Kong and Dubai. A trip to Italy takes place in April, and students visit jewelry and fashion houses like Gucci, Bulgari, Fendi and Ferragamo.
Student teams complete a 2-month consulting project at a top luxury company with the Luxury Global Field Project, supported by a faculty member and a company manager. Past projects were completed in L’Oreal Luxe, PPR Luxury, American Express, Louis Vuitton, Chanel and Cartier. CEO seminars are usually held on Wednesdays, with speakers like Serge Brunschwig - COO of Christian Dior Couture, Daniela Ott - COO of PPR Luxury and Bruno Pavlovski - CEO of Chanel.
2) SDA Bocconi MBA - Luxury Business Management Track
SDA Bocconi's Full-Time MBA offers a highly evolved Track in Luxury Business Management (LBM). The program is conducted in Milan, a global fashion & design hub, with the world's highest concentration of fashion houses, showrooms, international events and outlets. The program is completed in 12 months and is taught in English with 73% international students in the class. What makes the LBM track unique is that it is taught at the offices of leading Italian fashion brand Bulgari.
The program is taught with the active involvement of Bulgari managers, giving students a highly real-world, market-oriented education. Students can choose two concentrations: Marketing or Innovation, and Finance or Entrepreneurship. The foundation courses include Fundamentals of Luxury Business Management, Design Management & Architecture of Collections, Product Development & Innovation, Manufacturing & Supply Chain Management and Sales & Channel Management. The advanced courses offered in the LBM program include Developing & Fostering Luxury Brands, Family & Luxury Business Insights, Strategic HR & Financial Issues in Luxury Business and Business Game.
The 8 -12 week Summer Projects can be completed at Bulgari, or other leading luxury companies. The value of the Luxury Business Management track can be seen from the fact that 14% of the MBA class of 2012 found careers in Luxury, Fashion & Design companies. SDA Bocconi also has one of the world's highest average base salary increase compared to pre-MBA earnings - 156% in 2012. Companies that hire include Adidas, Gucci, Guess, Levi Strauss & Co., L’Oréal, Louis Vuitton, Luxottica, Richemont and Yoox.
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3) The International University of Monaco
The International University of Monaco's Graduate Business School offers Luxury Management courses in one of the best places to understand luxury - Monaco. This tiny city-state has among the highest concentrations of wealth in the world, and students do not just observe luxury, but get to live it. Monaco is also multicultural, with representation of over 100 nationalities, and is very close to world luxury centers - Milan and Paris. There are 3 Masters programs in Luxury Management - Master in Luxury Goods & Services, Master in Luxury Retail Management and Master in Luxury Hospitality & Event Management. All programs last for 16 months and are taught in English.
All three programs have a common core that includes courses like Accounting & Financial Management in the Luxury Industry, Luxury Service, Luxury Communication & Media Planning, Human resources in the Luxury Industry, Luxury Consumer Behavior, Industry Competitive Analysis and Marketing of Luxury Goods & Services. After the core curriculum, each program has its own specialization.
The courses covered under Master in Luxury Goods & Services include Luxury Distribution, Strategic Forecasting & Budgeting, Supply Chain Management, Luxury Product Development, e-luxury and capitalizing the Luxury Venture.
Master in Luxury Retail Management covers courses in Luxury Distribution, Luxury Sales Techniques, Developing an effective Selling Ceremony, International Business, Supply Chain & retail Stock Management and Retail Buying & Merchandising.
The third master's program - Master in Luxury Hospitality & Event Management include courses in Hospitality operations Management, Tourism Marketing and Sales, Sustainable Tourism, Event Management, Team Management, Hospitality Strategic Forecasting & Budgeting and Hospitality quality Systems & Processes.
The school conducts professional guest lecturers & CEO conferences, events & fairs, field trips, and a 6-month internship known as the Professional Immersion.
Master in Luxury Retail Management offers careers in fields like Brand management, Product development management, Business development Wholesale management, Merchandising, Customer relationship management, Marketing and Luxury e-commerce. Employment opportunities for the Master in Luxury Retail Management program exists in roles like Retail buyer, Retail manager, Area/Country manager and Store manager.
Master in Luxury Hospitality & Event Management gives students wide career choices in the global hospitality, tourism and events industries.
IUM also offers a special Career Track in Luxury Management through its AMBA accredited Monaco MBA program.
4) London School of Business & Finance
London School of Business & Finance offers a Global MBA with specialization in Luxury Brand Management. This is a 15-month, full-time program that can be taken up at the campuses in London, Birmingham or Manchester. The program aims to foster marketing, strategic management and research skills that will enable a career in managing international luxury brands. Graduates will be able to develop, implement and manage successful brand marketing campaigns for luxury goods and services.
The first three stages of the program cover core MBA subjects like Marketing & Business Environment, Accounting & Managerial Finance, Systems & Operations Management and Strategic Management & Leadership.
Stage 4 consists of two luxury options - Luxury Brand Management and Global Marketing Management. The former prepares students to manage a wide range of luxury products. It helps students assess the project life cycle, develop alternative methods to luxury brand management and assess current practices & implement improvements.
On the other hand, Global Marketing Management helps create effective strategies to deal with globalization. Subjects dealt with in detail include the international marketing environment, global strategies and the elements of successful global marketing plans.The program culminates in the Integrative Research and Consultancy Project. LSBF Luxury Brand Management alumni have found employment in the luxury industry as Marketing Communication Manager, Head of Product Development, Strategic Marketing Analyst and Luxury Brand Manager.
5) NYU Stern
New York University's Stern school of Business enables MBA graduates to take up a career path in Luxury and Retail, aided by its location in New York, and alumni in the field. It also has a Luxury Marketing specialization that offers courses like Luxury 2.0: Prestige Brands in a Digital Age, Retail Strategy, Advanced Marketing Planning (with approved luxury project), Brand Strategy (with approved luxury project), Creativity and Design and Doing Business in Italy: Luxury, Fashion & Design. Other specializations that help careers in the luxury field are Digital Marketing, Global Business, Product Management, Supply Chain Management and Global Sourcing.
Stern also holds the Annual Luxury and Retail Conference on topics such as brand equity and the effect of the global economic crisis on this sector. Speakers like Carol Hamilton - Luxury Products Division President of L'Oreal, Neil Blumenthal - CEO of Warby Parker and John McDonnell - COO of The Patrón Spirits Company have been featured. The Luxury and Retail Consulting Corp helps students get real-life experiences by consulting projects in the luxury industry. The Stern Consulting Corps Project with the Council of Fashion Designers of America (CFDA) has seen MBA students passing on advice to the new designers at the CFDA incubator. All these programs are run by the Luxury and Retail Club.
Stern’s MBA class of 2012 had 3% opting for work in the Luxury/Retail sector. Companies that hire from Stern include Burberry, Chanel, Gucci, Kate Spade, Mattel, Moët Hennessy, Tiffany & Co., Warby Parker and West Elm.
1) Essec MBA - Luxury Brand Management
2) SDA Bocconi - Luxury Business Management Track
3) Monaco's Graduate Business School - Luxury Management
4) London School of Business & Finance
5) NYU Stern Luxury and Retail
PWC - Market Vision Luxury Industry
Bain - Global Luxury Goods Market Growth