Last week I wrote that luxury is a bastard of a sector, a mongrel that throws together industries with nothing normally to say to one another, and that the confusion over what it even means suits an awful lot of people rather well: companies, consultants, even the people who teach it for a living. The customer, as ever, foots the bill. But anyone who thought to resolve that confusion at the opposite extreme, with a framework, a KPI, the one statistic sharp enough to strip human judgement out of the decision altogether, would be making just as serious a mistake.

Let me be quite clear about this: I have no wish to be taken for yet another evangelist of the framework that solves everything, the KPI that will save your life, the statistic that does your thinking for you. That is not my view at all, and I say so with a certain professional awkwardness, given that I use those very analyses for a living. I do not believe in scientific management as a rule, and still less when it is applied to luxury: the kind of prescriptive modelling that promises to deduce the right decision from a set of rules, as though taste were simply a badly solved equation. Real science is a different matter entirely. Luxury is not deterministic, and anyone selling certainty in this field is lying, quite possibly to themselves as well, which is almost worse. Instinct, sensibility, vision, talent where it exists, these remain essential tools for anyone working in the sector, every bit as much as a deep knowledge of the products themselves, of how distribution works, of pricing.

There is a symptom of the same problem coming straight out of the business schools: the growing emphasis on brand, fair enough in itself, tends to come at the expense of the product, its materials, its aesthetics, its design. The reason, I suspect, is simpler and more embarrassing than anyone likes to admit: those teaching luxury often know remarkably little about the product itself. They are generalists, trained to apply the same rules to every industry, when real luxury, the kind built on genuine excellence in materials and craftsmanship, demands specific expertise, sector by sector, starting with the product. How many people teaching fashion or luxury could tell two kinds of leather apart? Could they say whether the buttonhole on a Chanel jacket was stitched by hand or by machine, whether a piece of jewellery design is genuinely original or borrowed wholesale from somewhere else? Not many, I’d wager. So, unable to talk about the product, they talk about the brand instead.

I have watched the cost of this illusion play out up close, in the collapses I also describe in the book: Neiman Marcus, Matches Fashion, Bally, Roberto Cavalli, Escada. Five different names, the same underlying story. In not one of these cases did the disaster stem from some financier indifferent to luxury in the abstract, the villain of the films. It always comes down to an unequal fight: on one side a financial model expressed in precise figures, on the other someone who was supposed to defend the value of the brand armed with nothing but their own sensibility, a refined intuition that, to the other side, simply could not be argued with, in the most literal sense of the phrase. And nearly every time, whoever was right on the substance still lost, because they had no language equal to the one being used against them. Being right is not enough if you cannot make your case in your opponent’s own tongue.

Luxury management is not a science. Nor is it an attempt to reduce the creative act to a sum, to a repeatable procedure: creativity remains a personal proposition, drawn from years of accumulated culture and instinct, not from an algorithm. It is something more modest, and for that very reason harder: making your choices open to argument on grounds others can share, rather than imposing them by authority or having them accepted out of sheer deference. Every anchor you choose, every weight you give a variable, is an arguable decision, never an objective measure handed down from on high. The moment one of these tools stops being argued over and turns into a target to be maximised mechanically, it betrays the very thing it was meant to protect: a score can climb while the product improves not one bit. The hollowing-out does not come only from cynical marketing: it also comes from a notion of “science” that, taken literally, does more harm than the ignorance it was meant to cure.

The Edge of Chaos

So where, then, does the real need for order lie, if it is neither relativism nor scientism? In a narrower, more uncomfortable space than either, of course: anything else would be too convenient by half. Complexity theory, Chris Langton’s work on cellular automata in particular, captured an idea I use often to explain luxury to people expecting a binary answer, black or white, as though the market were a light switch: a fully ordered system, its codes frozen solid, cannot renew itself; a fully open system, with no discipline at all, collapses into chaos, into noise, into dilution. The living zone, the one that processes information without losing its shape, sits at the edge between the two: not a fixed point you plant a flag on, but a moving equilibrium to be renegotiated daily.

Gucci’s story over the past decade illustrates this swing better than any boardroom slide could. Under Frida Giannini the brand was coherent but stagnant, close to the ordered pole: safe, predictable, steadily less relevant, the sort of brand that never puts a foot wrong and, precisely for that reason, no longer moves anyone. Under Alessandro Michele it swung towards the edge of chaos, a reinvention of its codes so drastic that it delivered spectacular growth, until it overshot the critical point and hardened into a formula of its own: maximalism itself becoming a uniform. Sabato De Sarno’s correction tried to steer things back towards order, but overcorrected in the other direction and paid for it in revenue, rather like someone swerving hard to miss a pothole and landing in the ditch on the far side. This is not a string of individual errors: it is proof that the edge of chaos is not a spot you find once and hold forever. It has to be rediscovered every time, which is exactly why what is needed is discipline rather than a fixed rule. Discipline does not mean standing still; it means recognising when you have drifted too far in either direction.

The companies that have grasped this show it in their numbers, not in the language of their annual reports. Hermès keeps the Birkin all but out of reach and lets that discipline fade only gradually towards scarves and perfume, never breaking the thread that ties the two ends together: scarcity as a discipline, not a marketing gimmick. Ferrari consistently refuses to lend its name to product categories outside its core, however tempting the money on offer, and one has to wonder how many other companies would hold the line against the same temptation. Burberry, by contrast, came close to wrecking its own symbolic capital by licensing its check pattern indiscriminately, before a drastic overhaul of its portfolio: decades of reputation spent within a few careless years, with no discipline of gradient to speak of. Rebuilding it will take decades, if it happens at all. Gilt Groupe died of the same disease at the opposite end of the spectrum: the relentless discounting that had built its traffic sat in direct contradiction with the pricing discipline luxury demands. Chaos, too, presents a bill when there is no discipline behind it.

This is not merely an aesthetic or philosophical concern for people who enjoy nuance: discipline shows up on the balance sheet, which happens to be the only argument that ever truly moves a board. A one-dollar rise in brand value is associated, on average, with 1.76 dollars in additional revenue, and companies that keep their brand consistent over time deliver stock returns above the benchmark, with lower volatility to boot. Numbers any CFO would be glad to frame. But the link breaks down the moment revenue grows without a matching gain in coherence: that, not growth itself, is where the real risk hides, the risk that boards tend to overlook until it is too late to do anything but manage the fallout.

Why It Pays

That is why I wrote an entire book on how to measure this balance, not merely describe it. Not because I believe luxury can be reduced to an algorithm, I would make a poor witness for my own case, but because the alternative, letting every decision remain a private intuition beyond question, is precisely the mechanism that has betrayed it. Luxury does not need science. It needs someone willing to keep the conversation open, every single day, about where its own boundaries lie. The day that conversation stops, whether from laziness or arrogance makes no difference, is the day the betrayal happens.