Loewe: Luxury and Sustainable Management

Abstract

The sustainable luxury—the one that requires from organizations, a social and environmental performance of real excellence throughout the value chain—local “contents” based on culture should not be absent. Thus, sustainable luxury also means craftsmanship and innovation of the different nationalities, preserving the local cultural heritage. Loewe, an organization belonging to the LVMH group since 1996, is the leading brand of luxury leather in Spain and its name is related to the “masters of leather.” At a global level, Loewe is in the luxury sector having started as a leather craftsman association in downtown Madrid in 1846. The development and manufacture of products offered by Loewe are carried out in Spain and shipped to the main markets in Europe, Japan, China, and the rest of Asia. Its products also include, beyond fragrances made at LVMH group, licensed sunglasses. Despite the fact that this brand was given a recognition as Lifetime Contribution to sustainable luxury Development within the framework of the IE Award for Sustainability in the Premium and Luxury Sectors on July 2, 2014, this case analyzes the company under the model of sustainable value creation developed by Professor Stuart L. Hart (Hart in Harvard Bus Rev 75:66–76, 1997; Hart in Capitalism at the crossroads. Wharton School Publishing, Upper Slade River, 2005; Hart in Capitalism at the crossroads—aligning business, earth, and humanity. Wharton School Publishing, Upper Slade River, 2007; Hart and Milstein in MIT Sloan Manage Rev 41:23–33, 1999; Hart and Milstein in Acad Manage Executive 17:56–67, 2003) that integrates four aspects: environment, innovation, stakeholder management, and potential for growth. To develop this case, the author collected background and information of the company from corporate documents (2013 Sustainability Report and the document “Traditional Values and Commitment to the Future” from 2012). This source was supplemented with interviews with members of the company’s sustainability team. Loewe creates sustainable value through different sustainable practices that add value to the brand. They are energy efficiency, quality and environmental value products, supply chain management and dialog, diversity integration, acquisition of new capabilities for sustainability, and at strategic level, Loewe develops a sustainable vision going forward realizing its growth potential.