Rise of lifestyle brands

LIFESTYLE brands have overtaken luxury brands as the best prospect for  growth in the retail sector, according to research by retail analysts at Conlumino.

Conlumino found that consumer spending on lifestyle brands is likely to grow by some 277% in Asia-Pacific by 2018.

In its research commissioned by international law firm Pinsent Masons, Conlumino highlighted the extraordinary potential for growth of lifestyle brands at home and overseas, particularly as the product category has overtaken luxury brands as the next key battleground in the international retail market.

The report said lifestyle brands tend to offer premium products priced to be more accessible to mid-market consumers.These brands appeal to shoppers by suggesting a certain identity, embodying an attainable lifestyle for consumers with increasing levels of disposable income.Examples include Mulberry, Nespresso and Cath Kidston.

The Conlumino report said there is growing appetite for British lifestyle brands at home and abroad. For example, Hong Kong- and Japan-listed Fast Retailing has approached UK-brand Cath Kidston’s private equity backers to acquire a 65% controlling stake in the company.

Cath Kidston sells home furnishings and related goods with an emphasis on floral prints. With 75 outlets, most of which are outside the UK, Cath Kidston has an established presence in Malaysia, Hong Kong, Indonesia, Singapore, Japan, Taiwan, Thailand, South Korea and China.

According to Conlumino, lifestyle businesses tend to be more nimble compared to the luxury sector as the market is bigger and fast-moving. Luxury brands require significant fi nancial backing to develop and maintain, meaning that associated marketing and store costs are hefty.

Pinsent Masons warned that brands looking to capitalise on potentially lucrative markets must exercise caution. What is more challenging is getting the entry strategy right. As the Hong Kong market amply demonstrates, luxury brands have established relationships with many of the biggest local players who can open doors and plug brands said  Peter Bullock, partner at Pinsent Masons.

“Lifestyle brands will need to carefully examine access points, contractual arrangements, intellectual property, financial and potential equity investment to tap into international opportunities without diluting their brand and losing control.”