Vuitton Makes its Money with Handbags

Louis Vuitton makes the majority of its profits on handbags and loses money on high-profile, luxury apparel. Per an article in Bloomberg Businessweek, this is apparently common for many luxury fashion houses.

“[Analyst Luca Solca of Exane BNP Paribas] estimates Vuitton loses than … $118.1 million a year on ready-to-wear, which generates less than €450 million of the brand’s $8 billion to $9 billion in annual sales.”

The strategy of maintaining both is that the runway is where high-end brands create the buzz and attention required to sell handbags. In other words, expensive marketing.

fashion economics
Source: Robert Williams and Carol Matlack | "Vuitton Knows Fashion Is a Money Pit—and Keeps Throwing Money in It" | Bloomberg Businessweek | 08/24/2017 | Visit