Threat Trends

3 mins

Data Breach: 5 Key Impacts for Luxury Brands

In the high-stakes and high-costs world of luxury brands, the recent data breach affecting the Dorben Group, a key partner for esteemed names like Valentino, Creed, and Michael Kors in Latin America, raises a poignant question: What is the true cost of a security breach for a luxury brand? With information from 790,000 customers exposed on a hacker forum, including names, emails, phone numbers, and addresses, the potential repercussions extend beyond the immediate breach.

The true cost involves recognizing the substantial impact of lost business expenses, covering disruptions, revenue losses and costs to acquire new customers. In 2023, despite a 9.7% increase in detection costs to USD 1.58 million, lost business costs remain significant at USD 1.30 million.


Grasping the complete costs of reputation damage specifically, both short and long-term, can be challenging to quantify. However, here's a concise list of the top five concerns.

1. Targeting High Net Worth Individuals:

Luxury brands, by nature, collect substantial amounts of personal data to provide a tailored customer experience. This data often belongs to high net worth individuals, making it an appealing target for cybercriminals. The risk lies not only in the potential compromise of sensitive information but also in the subsequent reputational damage.

2. Ransomware Attacks On the Rise:

The luxury sector becomes an attractive target for ransomware attacks, driven by the belief that brands are much more likely to pay ransoms than risk damaging customer relationships by releasing compromised data. The consequences of such attacks: disruptions to production, to distribution and general business interruption can in themselves result in reputation damages.

3. Data Privacy Breaches and Regulatory Fallout:

The collection and processing of personal data exposes luxury brands to a myriad of regulatory considerations, (such as GDPR in Europe). Breaching data protection obligations can lead to fines, legal costs, and further reputation damage. Navigating the complex regulatory landscape becomes crucial for brands aiming to protect both their bottom line and their image.

4. Supply Chain Vulnerabilities:

Luxury brands face cyber risks not only internally but also through their supply chains. Partners involved in production or distribution may have their own cyber vulnerabilities, leading to potential disruptions. The interconnectedness of networks further amplifies the risk, as malware can migrate through shared systems, even if a brand's internal controls are robust.

5. Long-term Financial and Legal Issues resulting in further Perception Damages: 

Beyond short-term costs associated with getting operations back on track, luxury brands may face enduring legal challenges and fines from regulatory investigations. The process can be prolonged, consuming business time and incurring significant legal expenses. Third-party liability claims may add another layer of financial strain, necessitating a comprehensive approach to mitigating long-term consequences. Additional recovery necessities only increase the likelihood of future customers becoming aware of the breach.

How to Protect Your Company:

Depending on the organization’s current maturity level, organizations should mature toward CTEM by leveraging existing and new technology. Hadrian helps your organization achieve that by automating the entire external exposure management lifecycle, from initial asset discovery to risk remediation.

Reach out to a member of the team today.

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