EU Business News May 2017

12 EU BUSINESS NEWS / May 2017 , powerful auto brand. Shell invests heavily in campaigns that position it as an innovative provider of the clean energy solutions of the future. As part of its ‘Make the Future’ initiative, Shell enlisted the help of six popstars from around the world for its ‘Best Day of My Life’ video, which became one of the most viral ads of 2016. Telecoms Second placed Vodafone had a more difficult year; even when measured in sterling its brand value declined (by 9%). Fellow telecoms brand BT fell even further, dropping 28% following its accounting scandal and the ongoing Openreach saga to £8.8 billion. Banking HSBC, in third place, is also down, though by just 1%. HSBC is going through a period of consolidation. At the domestic level, over a quarter of its UK branches have been closed in the last two years as digitisation and online banking become more prevalent. Internationally, HSBC’s Brazilian business was sold to Bradesco. The $5.2 billion sale represented a $1.7 billion loss which hit HSBC’s profitability in 2016. Stuart Gulliver will persevere with the cost savings however, having achieved economies of $2.8 billion this year. HSBC’s marketing communications have shifted to reflect its more focused approach. The ‘World’s Local Bank’ message, conveyed to such great effect by outgoing Marketing Director Chris Clark for so many years has been replaced with campaigns that now focus more on HSBC’s role in facilitating personal and business ambitions. Banks are of course at risk from Brexit. Theresa May’s apparent tough negotiating line may mean that passporting rights are at risk. Stuart Gulliver has indicated that over 1,000 jobs are likely to be moved to Europe once Brexit takes effect in 2019. Barclays appears to have been harder hit, with a jump in its applied discount rate reflecting its exposure to the uncertainties of the operating environment for UK financial services, leading to a brand value drop of 7% to £10 billion. Retail/apparel The apparel sector has been marked by a stark online/offline divide. The continued scandals surrounding Sports Direct have contributed to a 5% brand value loss. With Mike Ashley facing a Select Committee and heavy media scrutiny over the working conditions at its Shirebrook warehouse as well as its alleged attempted surveillance of MPs, Sports Direct’s brand dropped in value to £1.16 billion. In contrast ASOS has staged a revival after a series of unfortunate events including a major warehouse fire. ASOS is benefitting from its international expansion and the exponential growth of ecommerce. The retailer’s brand rose by 29% over the past year to £710 million. Airlines Three airlines made the UK 150 this year, led by British Airways with a brand value of £2.9 billion. However, the longer-term shift towards low cost airlines combined with weakened consumer spending power in long-haul locations is evident. British Airways and Virgin Atlantic are both down, by 7% and 15% respectively. In contrast Easyjet is up by 60% to £1.34 billion. As consumer budgets for holidays remain tight and people look closer to home for their breaks, Easyjet’s brand could add further value, though even on short haul flights, the weakened pound threatens a reduction in foreign travel. Fastest growing brand Lynx is Britain’s fastest growing brand, up 91% to £2.1 billion. Unilever decided to ditch the increasingly anachronistic ‘lynx effect’ campaign that was seen to be out of touch with the modern male. It has performed an almost complete reversal of its previous identity, with a series of new campaigns designed to portray a “radical and progressive view on masculinity”. Despite initial cynicism from marketing pundits, the approach appears to be paying off.