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Lessons from luxury · Part 3 of 3

Heritage, Quality, Innovation: Why Great Brands Need All Three

A lesson from my years at LVMH, and how new brands can build their own version of heritage

Richard Gustafson, Founder, RG Partners · 9 min read · October 17, 2026

Some lessons stay with you because they are complicated. Others stay because they are simple enough to apply to almost every decision you make afterward. One of the most useful of my career came during my time at LVMH, when Bernard Arnault spoke to our team about what makes truly great product. His point, as I remember it, was that great product rests on three things: antiquity, meaning heritage; quality; and innovation. And he was clear that you need all three. Two out of three is not enough.

It echoed something he had said publicly some years before, in a 2001 Harvard Business Review interview, when he described the paradox at the heart of the industry's rare "star brands": they must be timeless and modern, fast-growing and highly profitable, all at the same time. Timeless and modern in the same breath: that tension is the whole idea.

Three entries in the same account

In the first article of this series I described brand equity as a balance sheet account, built by deposits and drawn down by withdrawals. Arnault's three elements map closely onto how that account actually works.

Heritage is retained earnings. It is the accumulated balance of every good decision a brand has made: the products that held their value, the promises that were kept, the codes customers learned to recognize. It is the reason a brand can launch something new and be taken seriously on the first day.

Quality is the audit. It confirms that the balance is real. A customer who examines the stitching, wears the coat for ten years or has the watch serviced is, in effect, checking the books. If the product does not live up to the story, the audit fails, and the balance is restated downward, often sharply.

Innovation is investment. It keeps the account earning interest. Without it, the balance does not collapse overnight. It simply stops growing, while competitors and changing tastes quietly erode its real value.

Seen this way, it is clear why two out of three is not enough.

What happens when one is missing

Heritage without innovation becomes a museum. The brand is respected but not desired, admired by people who already know it and ignored by the next generation. Many old names have faded this way, not because they lost their history but because they stopped giving anyone a reason to care about it today. The account is still in credit, but it earns nothing, and each year it is worth a little less.

Innovation without heritage becomes novelty. It can generate attention and early sales, but it struggles to hold value because there is nothing underneath it. Customers enjoy it, then move on. Fashion is full of names that were the talk of a single season: a large, visible deposit with no account to hold it.

Heritage and innovation without quality is the most dangerous combination of all. A great story and a fresh idea will persuade a customer to buy once. If the product does not live up to the promise, the story starts to work against you, and the customer feels misled. This is the withdrawal that does the most damage, because it draws on the heritage and the innovation at the same time.

When all three are present, they reinforce one another. Heritage gives innovation meaning. Innovation keeps heritage alive. Quality makes both believable.

For established brands: heritage is a responsibility

For a brand with decades or more behind it, heritage is an enormous advantage, but only if it is treated as something active. Across the established houses I have worked with, from Ralph Lauren and Gucci to the LVMH group and Prada, the ones that used their history well did not simply repeat it. They reinterpreted it.

That means knowing your archive deeply: the founder's original intent, the signature codes, the craft techniques, the moments that defined the brand. It also means having the confidence to ask what those codes mean now, for customers who were not born when they were created.

Louis Vuitton offers perhaps the clearest example, and one with a strong Japanese thread. Founded as a trunk-maker in 1854, the house owned one of the most recognized monograms in the world. When Marc Jacobs became creative director in 1997, he introduced ready-to-wear and began treating the monogram as something to reinterpret rather than merely preserve. In 2003 he invited the Japanese artist Takashi Murakami to redraw it in a multicolored palette. Purists were uneasy. Customers, not least in Japan, were not. The line ran for more than a decade and introduced the house to a generation that had seen the classic monogram as their parents' brand. The heritage was the canvas, the innovation made people look at it again, and the quality of the product made it worth buying. All three were present.

Gucci shows both sides of the same lesson. From 2015 Alessandro Michele returned to the house's archive codes, the horsebit, the web stripe and the GG pattern, and reinterpreted them with such energy that the brand's growth became one of the defining stories of the decade. In later years, as those same codes appeared on more and more product, the house had to live with the effects of that exposure, and its revenue fell by more than a fifth in 2024. Heritage reinterpreted is a powerful deposit. Heritage overextended becomes a withdrawal.

The risk for established brands is not usually losing their heritage. It is hiding behind it: assuming that history alone will carry the business while quality slips or innovation stalls. Heritage earns you attention. It does not guarantee you the next sale.

Today's innovation is tomorrow's heritage

There is a point here that is easy to miss. Much of what we now call heritage began life as innovation.

Japan's own luxury history illustrates this well. In 1893 Kokichi Mikimoto succeeded in producing the first semi-spherical cultured pearl, a breakthrough much of the jewelry trade at first regarded with suspicion. More than a century later, that innovation is the foundation of one of Japan's most respected luxury houses. Grand Seiko was launched in 1960 to prove that a Japanese watchmaker could match the precision of the Swiss. Its later Spring Drive movement, a hybrid of mechanical and electronic technology, was new to the industry. Today the founding ambition and the innovation are both part of what a customer is buying.

Innovation becomes heritage, but only when the quality is good enough for it to last.

For new brands: the heritage of motivation

This is where the lesson becomes even more interesting. Many of the founders and leadership teams I advise today run young brands. They sometimes assume that because they have no century-old archive, the heritage part of the framework does not apply to them.

I see it differently. A new brand cannot have antiquity, but it can have origin. Its heritage is the story behind its motivation and its passion: why the founder started, what problem or frustration they could not stop thinking about, what standard they refused to compromise on, what they love about the craft, the material or the customer. That story, if it is true and told well, does for a new brand what history does for an established one. It is the opening balance of the account.

The Japanese designer Akira Minagawa founded the label now known as minä perhonen in 1995 with the stated aim of building a brand that would last at least a hundred years. That single intention shaped what followed: original textiles designed in-house, long relationships with mills and workshops, and pieces made to be worn for years rather than seasons. Three decades on, the brand has a heritage, and it was built deliberately, from its founder's motivation outward.

Every heritage brand was once a new brand with a founder and a reason. The houses we admire today began with someone who cared intensely about doing something better or differently. New brands are writing the first chapter of their own heritage now, and the choices they make early will become the story others tell later.

What a new brand cannot do is rely on that story alone. An opening balance is small. Without a long track record, the origin story has to be proven again and again by the product itself. That is why, for new brands, quality and innovation carry so much of the weight.

Quality and innovation do the heavy lifting

For a young brand, quality is the evidence that the passion is real. If a founder says they started the company because they could not find a product made to the standard they wanted, the product had better meet that standard every time. Customers forgive a new brand for being small. They do not forgive it for being careless. An established house can survive a disappointing season on the strength of its balance; a new brand has no such cushion.

Innovation is what earns a new brand its place. Established houses already own the classics. A newcomer has to offer something they do not: a new material, a new way of making, a new service model, a new point of view on an old category. The innovation does not have to be dramatic. It has to be meaningful, and it has to connect back to the founding motivation, so that customers can see the new idea comes from the same place as the story.

The same logic serves established brands looking for a second chapter. Moncler was founded in 1952 near Grenoble as a maker of mountaineering equipment. It had decades of heritage but risked being seen as a one-product company. Its Moncler Genius project, launched in 2018, invited a series of designers to reinterpret what the house had always made. It was innovation rooted firmly in origin, and it renewed the conversation about the brand without abandoning what it stood for.

A simple test

Whether I am advising an established house or a startup, I find it useful to ask three plain questions about any product, collection or launch:

  • Heritage: Does this connect clearly to who we are and why we exist, whether that is a hundred-year history or a founder's reason for starting?
  • Quality: Would we be proud for our most demanding customer to examine this closely, use it for years and tell a friend about it?
  • Innovation: What does this offer that did not exist before, or that no one else offers in quite this way?

And a fourth that brings the three together: will this launch leave the brand's equity account stronger or weaker five years from now?

If the answer to any of these is weak, the product may still sell. But it is unlikely to build the kind of brand that lasts.

The lesson I keep coming back to

What I appreciated most about that conversation at LVMH was its balance. It let no one off the hook. Creative teams could not lean on history, product teams could not cut corners on quality, and no one could chase newness for its own sake. All three had to be true at once.

Years later, I still find it one of the clearest ways to judge whether a brand is building something durable. For established brands, the work is to keep heritage alive through quality and innovation. For new brands, it is to build a heritage of their own, starting with an honest story of why they exist and proving it with every product they make. In both cases the aim is the same: an account that grows a little every year, and that the next generation of leaders is proud to inherit.

Sources

Perspectives are signed opinion pieces. The views are the author's own.