Core Viewpoint - Berluti, a luxury brand under LVMH, remains profitable despite a decline in overall revenue for the group, showcasing its unique appeal and strong customer loyalty [3][4][29]. Group 1: Brand Performance and Financials - In the first half of 2025, LVMH reported a 4% decline in overall revenue and a net profit drop of over 22%, yet Berluti's CEO stated that the brand is thriving and performing significantly better than the average [3][4]. - Berluti's estimated annual sales are around €150 million, indicating its strong market position within the luxury sector [3][4]. Group 2: Brand Identity and Customer Perception - Berluti is perceived as a symbol of "old money," with its products serving as an identity marker for affluent individuals [12][13]. - The "Berluti Knot," a specific way of tying shoelaces unique to the brand, has become a subtle indicator of status among its wearers [12][9]. Group 3: Historical Context and Product Development - Founded in 1895 by Alessandro Berluti, the brand is renowned for its handcrafted shoes and unique Patina dyeing technique, which enhances the leather's natural luster [12][20]. - The introduction of the Andy Loafer in 1962, named after artist Andy Warhol, marked a significant product development that appealed to both the elite and the artistic community [19][20]. Group 4: Market Strategy and Customer Engagement - Berluti maintains a "low-key but high-profit" business model, focusing on a niche market of high-net-worth individuals, which allows it to avoid price wars and maintain high customer loyalty [29][30]. - The brand has shifted its strategy from expansion to enhancing customer relationships, offering services like "creative recycling" and online shoe care lessons to strengthen emotional connections with clients [31][33]. Group 5: Challenges and Future Outlook - As the luxury market evolves, Berluti faces challenges in appealing to younger, more diverse consumers who prioritize personalization and sustainability [28][33]. - The brand's traditional aesthetics and conservative values may struggle to resonate with the new generation of affluent consumers, raising questions about its future profitability and relevance [28][33].

Core Insights - Berluti, a luxury brand under LVMH, remains profitable even as LVMH's overall revenue declined by 4% and net profit fell over 22% in the first half of 2025, with estimated annual sales around €150 million [1][24] - The brand is recognized as a symbol of "old money" and has a unique identity tied to its craftsmanship and exclusivity, appealing to a select group of wealthy clients [1][24] - Berluti faces challenges as the luxury market shifts towards younger and more diverse consumers, questioning whether it can maintain its business model reliant on a small elite clientele [1][24][25] Company Performance - Berluti's CEO Jean-Marc Mansvelt stated that the brand is thriving and performing significantly better than the average within LVMH [1] - Despite LVMH's overall downturn, Berluti is one of the few brands that achieved profitability [1] - The brand's pricing strategy remains robust, with ready-to-wear shoes priced between ¥20,000 and ¥40,000, and custom lines reaching upwards of ¥100,000 [24][25] Brand Identity and Customer Base - Berluti is known for its unique "Berluti Knot" shoelace technique, which serves as a subtle marker of identity among its wearers [5][8] - The brand's history dates back to 1895, founded by Alessandro Berluti, and is renowned for its artisanal craftsmanship and the Patina dyeing technique [8][16] - Berluti's clientele includes influential figures from politics, business, and the arts, reinforcing its status as a luxury brand [16][17] Market Position and Strategy - Berluti has maintained a low-profile yet high-profit business model, focusing on a concentrated target market of high-net-worth individuals [24][25] - The brand has expanded into ready-to-wear clothing since being acquired by LVMH in 1993, aiming to become a comprehensive menswear luxury brand [21][24] - Berluti's sales strategy emphasizes customer loyalty and emotional connection, offering services like "creative recycling" and online tutorials to enhance customer engagement [27] Challenges and Future Outlook - The luxury market is evolving, with younger consumers seeking personalized and sustainable options, posing a challenge for Berluti's traditional aesthetic [25][28] - The brand's slow expansion and conservative product offerings may alienate a younger audience accustomed to fast fashion and trend-driven purchases [25][28] - Berluti's future profitability hinges on its ability to adapt to changing consumer preferences while maintaining its core values of exclusivity and craftsmanship [25][28]