With a growing number of European business schools launching degree programs and modules focused on the luxury goods industry, three experts tell us what students should expect from these programs, and how there's more to luxury goods than selling three thousand dollar handbags.
“The luxury industry is really prosperous”, says Maria Eugenia Girón, who teaches ‘Fashion, luxury and creative business entrepreneurship’ at Madrid’s IE Business School, and recently published ‘Inside Luxury’, an in-depth study of the industry.
“Its size is €170 billion, and 2010 has been a record year: LVMH, the world’s leading luxury products group, for example, recorded a 19 per cent increase in revenue, and a 29 per cent rise in profits”, she explains.
“In addition, new business opportunities are arising as a result of three important changes – the growth of Chinese consumption, the development of technology, and changes in consumers’ values. People are always attracted to industries that are growing.”
And yet, points out Luana Carcano, coordinator of the Bulgari Track in Luxury Business Management at Milan’s SDA Bocconi, “Luxury companies are asking for special profiles, and are not able to find them even in the top business schools.
“Luxury goods require special managerial competences”, she adds, “Because they aren’t chosen for their functionality, but for their symbolic value.”
“Luxury brand managers can’t just value the profitability of a product: they need to anticipate what that product will add to the brand image”, observes Ryan Pleva, who took the Luxury strategy Certificate at HEC Paris in June 2010 and is currently working at L'Oreal’s Division Luxe.
But exactly what expertise is necessary to start a career in this sector? According to Carcano, “It’s important to understand the different competitive rules of the various luxury businesses – cars, hospitality, food, or yachts, etc. – and to be able to decide whether you need to use general or specialist managerial tools. Plus you need to be international, open-minded, flexible, and a team-worker.”
For IE Business School’s Prof. Girón, the challenge for everyone who holds an executive position in this industry is to “transform creativity into profitability”. More precisely, “This sector… needs people that are able to manage teams that integrate these two very different profiles, the analytical and the creative one”.
Prof. Girón thinks that in this specific area, it is very important that business schools have connections with top-level brands: “Learning from people that work in the industry, and that deal with its problems prepares students to confront new problems when they arise”.
SDA Bocconi’s Carcano agrees: “As a top business school in Europe, we already have all the academic expertise. But we chose to partner with Bulgari because companies want a combination of theory and practice”.
The focus on practice is one of the aspects of the HEC Certificate that Pleva enjoyed most: “In class we discussed every aspect of the business – from creativity, to wholesale markets, to maintaining a consistent image between different brands.
“Thanks to the partnership with PPR (owner of the Gucci group); we had the chance to work on a consulting project with the brand.”
Luxury degrees are becoming a speciality of European business schools. ESCP Europe, ESSEC, and University of Monaco also offer luxury-focused courses.
“The industry is based in Europe, even if consumers are now more numerous in Asia. European business schools give students the chance to learn close to the industry headquarters,” explains IE Business School’s Professor Giron.
HEC Paris’ Pleva confirms this. It was while doing public relations for beauty and fashion companies in New York that he realized that, even if New York is a big market, most of the creations come from Paris. It was then that he decided he wanted to be at the centre of the industry.
So what differentiates IE Business School, SDA Bocconi and HEC Paris when it comes to preparing students for the luxury good industry?
According to Girón, the main attraction of IE Business School’s programme is its focus on entrepreneurship: “The approach we have taken is to understand where changes in the luxury industry are coming from, with the purpose of identifying opportunities for creating new businesses”.
The School also has an elective dedicated to sustainable luxury, where students learn how to address the new consumers’ values.
SDA Bocconi’s program is offered as a specialization within its prestigious full-time MBA. "It’s not a new program,” says Carcano. “The track in partnership with Bulgari is a new addition, but our MBA is at its 36th edition.”
“We approach luxury with a broad perspective, from luxury goods to luxury services, including spas, hospitality and private banking. Our students are trained as general managers; all the different managerial disciplines are touched in the programme.”
Pleva describes his year at HEC Paris as, “The most exciting educational experience I’ve ever had”, thinks the school’s great advantage – other than its location – is its alumni network, which include many people working for luxury companies, as PPR CEO Francois Pinault.
To anyone who wants to work in the luxury industry, he advises: “You have to make sure you know a wide range of products and brands, and to understand how they position against each other. After the year at HEC Paris, I realized I was able to synthesize my knowledge about the sector, and talk in-depth about it at interviews.”