Aston Martin Lagonda (LSE: AML) stock has almost doubled in value over the past 12 months. We are still looking at a fall of more than 80% since flotation in 2019, mind. And where the AML share price goes in the coming years will depend a lot on the company’s long-term strategy.
We’ve received fresh hints of that in the firm’s appointments of new board members, which I find very interesting. New to the board are Natalie Massenet, founder of Net-A-Porter, and Marigay McKee, formerly of Harrods, Saks 5th Avenue, and Estée Lauder. The development strikes me as especially noteworthy for a company that’s seen by many as essentially making big boys’ toys.
For one thing, it’s a very welcome development to see more women in guiding positions of UK companies in general. Despite some advances, there is still far too much of the old boys’ club approach at the top of British business for my liking. Anyway, that’s a rant for another occasion.
Marketing expertise
Before I get back to Aston Martin and the AML share price, another more general thought strikes me. I reckon any company that wants to establish a brand can learn from the fashion business. Successful fashion brands have some of the very best marketing behind them, and there’s surely a big overlap with any up-market brand.
Am I saying that Aston Martin cars are fashion items? Well, I don’t want to insult anyone who buys them for their performance, their quality of construction, their pedigree… But they do come with a big helping of the same prestige that attaches to the world’s top fashion brands.
The Stroll direction
Major shareholder and leader of the consortium that rescued the company, Lawrence Stroll, certainly understands that. He’s been big in a number of fashion businesses in his time. And he said he wants to make Aston Martin “one of the greatest luxury car brands in the world.”
Not one of the world’s best cars, or one of the world’s leading automotive engineers, I note. No, it’s all about the brand. And that’s what fashion is all about too. And it hints at another direction Aston Martin might be heading, one that is attracting speculation.
Look at what Ferrari is doing. You can buy Ferrari watches, Ferrari perfumes, Ferrari clothing, trainers, keyrings, hats, wallets, bags… The Ferrari accessories store is filled with fashion items. Will Aston Martin follow in that direction? Well, the company would need to get its car production in order first — Ferrari has that nicely sewn up.
AML share price future
But I’d be very surprised if the AML share price isn’t also driven, in the long term, partly by a portfolio of fashion items. It surely has the potential to expand the brand’s appeal enormously, beyond the select few who can afford the cars. And margins would presumably be high.
Does this make me want to buy AML shares? Not just now, no. There’s a long way to go before we’ll see if Lawrence Stroll can guide Aston Martin to success. But I’m definitely watching.