HermèsKnown for the classic Birkin bag, Hermès took second place on the list.

Gucci/handoutGucci rounds out the top three of most powerful luxury brands.

We’ve heard it all about the recession. Consumers are employing new tactics for saving money in tough economic times. They’re also cutting back on excessive spending and looking for more deals when making purchases.

But where does that leave the luxury brands – Prada, Gucci and Louis Vuitton, to name a few? Can people still justify those expensive purses and designer footwear when the economy is in a state of turmoil?

In short, yes. Though the luxury industry has fallen by 3% as a whole, some brands have rallied by adopting unique strategies to make sure they stay on top.  Some turned to online advertising, others chose to concentrate on investment pieces that people could use to supplement their wardrobe, and still others tried more innovative approaches for their brands.

Global brand strategy and financial consultancy firm Millward Brown Optimor ranked the world’s most powerful luxury brands from an economic angle, taking into consideration both their current value and demand which will lead to future profit.
1. Louis Vuitton – Taking the No. 1 spot again, Vuitton’s value rose 2% to $19.78 billion. The company focused on heritage travel pieces last year, appealing to those already committed to the brand.

2. Hermès – Hermès stayed at No. 2 from last year and rose 8% in 2009 to $8.46 billion. It's 71% family-owned, which means there is strong control over the brand and it’s only sold in the company’s own stores.

3. Gucci – Rounding out the top three and keeping its spot from last year, Gucci’s value rose to $7.59 billion, a gain of 2%. In a bid to get a hold of the secondhand market, it entered a partnership with Christie’s to have the auction house appraise vintage products.

4. Chanel – Chanel also kept its spot from last year, despite an 11% drop in value to $5.55 billion. Though people still bought bags and fragrances, the loss could be attributed to a drop in sales of ready-to-wear items.

5. Hennessy – Hennessy rose one spot on the list, losing only 1% of value and coming in at $5.37 billion. The cognac company is popular in countries such as China.

6. Rolex – As people bought less expensive jewelry, the luxury watch company suffered last year. It only dropped one spot on the list, but is now valued at $4.74 billion, a 14% loss.

7. Moët & Chandon – Moët & Chandon went down 12% in value to $4.28 billion, but rose a spot on the list and is still the best-selling champagne brand.

8. Cartier – Another jewelry retailer to suffer, Cartier dropped a list spot and 19% of its value. Now estimated at $3.96 billion, the company lost money both in its own stores and at third-party shops.

9. Fendi – Fendi lost 8% of value to $3.20 billion, but kept its ninth-ranked position. The company looked to the worldwide market to increase sales. In the U.S., Fendi is known for its purses, but the ready-to-wear line is superpopular in Asia.

10. Tiffany and Co. – The only new entry on the list, Tiffany and Co. managed to rise to $2.38 billion, a 6% gain. It looked more toward the world market, but the company’s success is also down to not offering discount prices. 

Read more: http://www.nydailynews.com/money/2010/04/29/2010-04-29_vuitton_herms_gucci_the_top_ten_luxury_brands.html#ixzz0mXloy7qp