Value of Top 500 Brands Falls by $67bn

17 October 2008

LONDON: The world's top 500 brands posted a $67bn (£38.9bn; €49.9bn) decline in value from January through September this year, with low-price specialists like Wal-Mart prospering as luxury operators stuttered, according to a report by London-headquartered global research consultancy Brand Finance

Cumulatively, the top 500 brands fell in value by 4.2%, with the level of decline increasing from an estimated loss of $50bn made earlier this year.

Wal-Mart has replaced Coca-Cola as the world's number one brand – rising in value by 9% to $42bn – as changing consumer spending patterns favoured brands that offer the best value for money.

McDonald's brand value also rose by 9% to $23bn, with Johnson & Johnson posting strong figures as consumers increasingly focused on looking after their own wellbeing.

Asian brands including Indian conglomerate Tata, the Bank of China and electronics specialist Samsung also enjoyed increases, as did Russia's Lukoil.

By contrast, Starbucks, Nike, Coca-Cola and L'Oréal all saw their valuations fall due to the challenging market conditions they each now face.

The value of the retail sector increased by 9.1% – largely driven by budget brands – with the oil and gas sector also improving as ExxonMobil, BP, Chevron and Shell all registered double-digit improvements.

Unsurprisingly, the net worth of the financial services sector decreased, while the enterprise value of the top 100 brands fell by 13.3% (or $1.6 trillion) over the nine month period.

Brand valuations are calculated via the widely used Royalty from Relief methodology, which assumes that a company does not own its brand name, and then calculates how much it would have to pay to license it from a third party.

Data sourced from Times of India; additional content by WARC staff