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Redefining the Essence of Sustainable Luxury Management: The Slow Value Creation Model

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Sustainable Management of Luxury

Abstract

This chapter aims to provide the luxury industry and academia with a value creation model, the SLOW (Sustainable Luxury for Overall Well-being) that represents different types of sustainability engagement relevant to luxury industry dynamics. The SLOW model focuses on sustainability strategies and sustainable practices of luxury goods/services companies based on a value creation model that takes into consideration both shareholder value and social value. The vertical axis is built on the luxury goods/services company’s need to manage the business with added shareholder value while the horizontal axis is built on the company’s need to create social value, as necessitated by today’s societal and environmental challenges. The four plots that represent different types of sustainability engagement in the luxury industry are Self-indulgent Luxury, Refined Luxury, Thoughtful Luxury, and Sustainable Luxury for Overall Well-being, respectively. The SLOW value creation model is a theoretical contribution that helps understand and differentiate between four different types of sustainability engagement that lead to varying degrees of shareholder value and social value. The model sets the stage for further empirical research in the sustainable management of luxury.

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Notes

  1. 1.

    Total Shareholder Return (TSR) is a metric that encompasses all sources of value that accrue to shareholders, such as changes in sales, margins, and valuation multiples, along with all sources of free cash flow to investors and debt holders, such as changes in dividends, net debt, and the number of shares outstanding.

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Authors and Affiliations

  1. Business School Lausanne, Lausanne, Switzerland

    Gulen Hashmi

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  1. Gulen Hashmi
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Correspondence to Gulen Hashmi .

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  1. Center for Studies on Sustainable Luxury , Buenos Aires, Argentina

    Miguel Angel Gardetti

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Hashmi, G. (2017). Redefining the Essence of Sustainable Luxury Management: The Slow Value Creation Model. In: Gardetti, M. (eds) Sustainable Management of Luxury. Environmental Footprints and Eco-design of Products and Processes. Springer, Singapore. https://doi.org/10.1007/978-981-10-2917-2_1

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