Theory and practice of a new idea of brand extension

Once upon a time, there was brand extension: today, luxury brands, in order to reach and conquer new markets, have chosen to redefine themselves beyond the traditional creation of tangible products by promoting experiences. To do so, they are experimenting with a new kind of strategic marketing, entering the property development market


The need is always the same. The way to satisfy it changes and calls for a new idea of brand extension. In order to attack, conquer, and preside over new markets, luxury brands have bypassed the customary rules of brand extension, in the sense that they have codified new ones while keeping them always valid (moving from clothing to beauty, eyewear, giftware, etc.). What they are working on is a project to extend their offer beyond the prestige of the brand itself.

In other words, they want to activate an influence on shared values and moments. They no longer want to have ‘just customers’, but to create loyalty-building relationships that make consumers feel like members of new communities where they can experience new types of business. It is within this scenario that the new dimension of luxury in the real estate market fits.

A new idea for brand extension

More than design. More than architecture. Today, fashion labels have put down ever deeper roots in real estate. It is valuing the past, as demonstrated – for example – by LVMH’s purchase of the Castello di Urio on Lake Como and, in Milan, the Casa degli Atellani and the adjacent Vigna di Leonardo da Vinci. Operations that are part of a broader project to promote engaging experiential content. From a certain point of view, it is a response to the Gen Z consumer model for whom ‘true luxury’ goes (also) beyond a designer bag: it is an experience of discovery and well-being.

A new kind of strategic marketing

Following this track, the fashion system is experimenting with a new kind of strategic marketing. For instance, in its London shop, Saint Laurent (owned by Kering) started selling lifestyle products by collaborating with Bang & Olufsen, Baccarat, and JL Coquet. This translates into the fact that the same brand, when designing a real estate experience, can enter into all categories of the project. From building to interior design and home technology. An evolutionary process that we could call ‘luxury high tech‘. This is where fashion luxury is arriving and investing: in a sector where a more current and elevated dimension of desirability is needed.

Giving physical presence to brand values

“Real estate development,” explains EHL Insight, an analyst specialising in Hospitality, Business, and Education, “allows luxury brands to create a physical presence that embodies their brand values and reinforces their image. By creating unique and luxurious properties, luxury brands can attract high-end buyers who seek exclusivity and sophistication. Another reason why luxury fashion brands are entering the property development market is to diversify their revenue streams. By entering the property development market, luxury brands can create a stable and predictable revenue stream that is less dependent on fashion trends.

Furthermore, they can use their expertise in design and luxury to create unique properties that stand out in a crowded market. These properties are often designed and furnished by themselves, using the same materials and attention to detail found in their fashion products: assets for high-end buyers looking for an exceptional living experience‘. This demonstrates that we are witnessing a cultural shift between the creative workshops of fashion labels and architectural firms.

Rising prices and demand

“One of the biggest impacts that luxury fashion brands,” reads Archive Avenue, “have had on the property development market is their ability to command premium prices. Brands are associated with concepts such as exclusivity and sophistication, all factors that high-end buyers look for in a property. As a result, they can impose premium prices for their properties, often higher than other comparable properties in the same area’. For example, this happened with the Residences by Armani/Casa in Sunny Isles Beach, Florida.

Another impact of the entry of designer labels into the property development market is ‘the increase in demand for luxury properties. High-end buyers are attracted by the exclusivity and prestige associated with luxury fashion brands and the properties they develop. The success of these properties has led to an increase in demand, which in turn has led to an increase in prices‘.  More creative design Fashion and luxury brands have also had an impact on property design and aesthetics, where they have brought an unprecedented level of creativity and attention to detail.

Properties developed by luxury fashion brands are often designed to be works of art with unique and distinctive features that stand out from the crowd. This has led to a trend towards more creative and exclusive architecture, with developers and architects seeking to differentiate themselves from the competition and, therefore, having to enter the fashion mindset, borrowing choices and materials, such as leather, which allows for exclusive, creative solutions, essential to enhance, even in a new market dimension, the DNA of each brand.

In collaboration with Orietta Pellizzari (Cross-cultural fashion business advisor)