Webranking 2016-2017 fashion and luxury sector: Still a long way to go for fashion and luxury groups to become credible communicators

The 1st edition of Webranking to exclusively look at Europe’s luxury and fashion (L&F) industry shows that L&F groups must increase their efforts to demonstrate long-term financial credibility, sustainable business practices, and innovation capability to an ever-demanding group of stakeholders. The research is conducted by Lundquist in collaboration with Comprend.

 

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Spotlight on digital transparency in the luxury and fashion sector

 

The luxury and fashion industry has undergone a series of dynamic changes in the past 20 years. Economic trends, digital transformation, demographic restructuring, and evolved consumer habits have created a new competitive landscape where traditional strategies will not be enough to maintain healthy growth and profitability. To see how the industry is responding to these challenges, Lundquist, in collaboration with Comprend, has recently launched the 1st edition of Webranking sector report focusing exclusively on Europe’s fashion and luxury sector.

 

Webranking is a useful barometer of evaluating corporate communications and allows us to compare its approach with other industries. Webranking evaluates almost 1,000 corporate websites annually, measuring content against the expectations of critical audiences (investors, analysts, business journalists and jobseekers are surveyed each year). Think of it as a transparency stress test.

 

As the first analysis concentrating on Europe’s luxury and fashion (L&F) sector, the research examined the 29 largest European (L&F) groups listed on the stock market (including L’Oréal, Luxottica, H&M, Christian Dior, Hermès, etc), as well as 10 non-listed companies (such as Versace, Calzedonia, Furla, Max Mara, etc), on how they address critical information via their digital corporate channels.

 

By evaluating the quality of corporate websites, the research’s objective is to promote a digital culture within companies and to help them understand how to meet the growing expectations of stakeholders. The criteria in the protocol are based upon the needs and expectations of stakeholders through annual surveys to investors, journalists and jobseekers; half of the maximum score (50 points out of 100 for listed companies; 40 points out of 80 for non-listed companies) is considered the threshold of passing the test at which companies respond adequately to capital market’s demands.

 

On the road toward credibility: listed groups take the lead, non-listed groups lag behind

 

The research suggests that nowadays only selling a dream, representing a lifestyle and neglecting the power of digital media are no longer enough for luxury and fashion brands to remain successful. Instead, Europe’s fashion and luxury groups are urged to embrace digitalization, social responsibility, and sustainability, in order to survive the mounting market competition and the changing consumer culture.

 

 

Listed L&F companies analysed in the research perform more satisfactory than there non-listed peers, with six companies passing the stress test, a majority classing in the held back category (48%), and the last 31% failing the test. The top three companies in this category are Luxottica from Italy (64.18 points), as well as two Finnish companies Amer Sports (62.8 points) and Fiskars (59.7 points).  Higher scores for listed companies within this group may also be due to more stringent legal and transparency requirements imposed by market compliance agencies.

 

 

On the contrary, most of the non-listed L&F companies obtain disappointing scores. With none of the companies passing the 50 points threshold, the average number of points of the ten companies considered is 12 points..The highest scoring company here is Swiss-based sports brand Intersport Holding with 19.6 points, followed by two Italian companies OTB Diesel (19.1 points) and Percassi (15.0 points).

 

 

How to attract social-caring investors and to retain talented jobseekers?

The research reveals the disappointing reality that most luxury and fashion companies fail to provide sufficient and adequate information on their corporate website.

 

For example, only 16 listed companies provide updated annual reports, and only 1 non-listed company details its ownership structure. Out of 20 listed companies outlining their corporate strategy on the website, only 4 of them provide concrete actions on how to do so. Few brands publish information about internal compliance. With the consumer increasingly conscious on governance issues, presenting informative, transparent, credible information on the corporate website is critical to building trust amongst stakeholders.

 

Commitment to CSR low amongst most groups

From reducing carbon emissions and mitigating the environmental impact of textile production to strengthening fair labour practices and addressing workers’ rights, the fashion and luxury industry should do more to address the issues facing their industry. Yet among the 29 listed companies we researched, only five are publishing up-to-date data for more than one environmental area. None of the 10 non-listed companies presents any type of CSR strategy.

 

Today’s companies, however, need to respond. Stakeholders, from investors to consumers, are attaching more importance on how retailers and brands operate regarding issues such as water consumption, waste disposal, health and safety standards, and stances on diversity. Jobseekers are also taking issues such as model diversity, treatment of workers, discrimination, wage, working hours into consideration instead of simply chasing the big names. Shareholders are increasingly looking at succession planning as a way for the company to outline the longevity of a brand (think Giorgio Armani, Christian Dior, Channel, etc).  

 

There is therefore a clear disparity between what the companies deliver on their websites and what investors, stakeholders, and jobseekers are expecting to see, posing serious challenges for effective communication between the European luxury and fashion industry and their key stakeholders.

 

Download the Webranking 2016-2017 Fashion and Luxury Executive Summary

 

About the research

 

Webranking by Comprend is Europe’s most in-depth analysis of online financial and corporate communication. Now in its 20th edition, the European study ranks the largest listed companies in Europe. The full ranking will be published on Comprend’s website.

 

Webranking by Comprend surveys more than 800 websites across the globe using criteria that are based on the views of people who actually use corporate information. Every year an exclusive panel of about 450 analysts, investors, shareholders, job seekers, journalists and other stakeholders are asked what information and services are the most important to them.


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Latest news

Webranking 2016-2017 fashion and luxury sector: Still a long way to go for fashion and luxury groups to become credible communicators

The 1st edition of Webranking to exclusively look at Europe’s luxury and fashion (L&F) industry shows that L&F groups must increase their efforts to demonstrate long-term financial credibility, sustainable business practices, and innovation capability to an ever-demanding group of stakeholders. The research is conducted by Lundquist in collaboration with Comprend.

 

Read our whitepaper here

 

Digital transparency test for non-listed companies continues into fourth year – inclusions & deadlines

In line with increasing demands for accountability and transparency, Webranking by Comprend will continue to include and assess major non-listed companies in Italy and Switzerland. The ranking is conducted by Lundquist.

 

Noting the pivotal role that Italy’s and Switzerland’s non-listed companies play in their respective economies, this is the fourth year that Webranking takes an in-depth look at a section of companies that have an important impact on society, culture and economy.

 

Webranking by Comprend is Europe’s most in-depth annual analysis of online financial and corporate communication, covering the largest companies by market capitalization and largest non-listed companies in Europe and globally. Find out if your company is included below.

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