Global Brands Battered by Financial Fiascos

24 September 2008

LONDON: The debacle of toppling  investment banks, mortgage lenders and insurance giants has sliced an estimated $50 billion (€34.02bn; £27.05bn) from the combined value of the world's top one hundred brands during September to date.

So reveals a report published this week by Brand Finance for

The study (which takes into account the downfall of US mortgage giants such as Fannie Mae and Freddie Mac plus the expected rescue of HBOS by Lloyds TSB) sheds light on the extent of the credit crisis' impact on the globe's top 100 brands.

As an indicator of the severity of September's plunge, the aggregated devaluation of brands during the preceding eight months was $67bn – bringing the total loss for 2008 so far to $117bn.

Among the brands included in the casualty list are Citibank, Goldman Sachs, JP Morgan, UBS and AIG. Others hit include Deutsche Bank and Credit Suisse.

But Bank of America, which bought Merrill Lynch following its shares freefall, has retained brand value, while HSBC has remained resilient.

Comments Brand Finance's UK managing director Oliver Schmit:  "HSBC is an interesting example of a company that has really focused on its brand, it stands for something with consumers. Some say it is time to focus on the business basics but it is also a time where customers need to rely on brands."

Schmit points to the robustness of brands such as Virgin and Vodafone, which have rigorously managed their brand image globally, contrasting with the piecemeal approach of many other companies.

Retail, he said, is the only sector that has not seen a decline in the past few weeks, with US giants like Wal-Mart and Target increasing their brand values thanks to consumers' perception that they offer value for money in tough times.

Coca-Cola too is another example of a brand that remains strong despite the credit crunch. Likewise, luxury marques such as Gucci and Louis Vuitton are insulated because they are highly aspirational.

Despite which, Schmit opines, their brand values are likely to decline because not all their customers are recession-proof, with a knock-on adverse effect on the firms' longer term revenue forecasts.

He added: "We think that coming out of the other side of the economic downturn, brands from emerging markets such as [Indian conglomerate] Tata may be able to capitalise on their position by improving and globally marketing their brands."

Data sourced from; additional content by WARC staff