The big branding story of the past year's recession has been the threat to the luxury category. Luxury, once thought recession-proof, seemed in danger this time around because of the broadening appeal of discount brands.

As Interbrand's Best Global Brands 2009 report, released today, observes:

In Western markets, the rise of the hi-lo consumers -- people who save on what is less relevant to them so they can indulge in what they find to be truly meaningful -- has made discount shopping not a sad compromise, but a joyful form of smart allocation.

Despite this pressure, the brand value of the luxury category in the Interbrand study actually grew in 2009. Individual brands were happy to stay flat in this environment, with Hermes up one percent, Gucci down one, and Prada and Louis Vuitton down two percent. (In the automotive sector, Ferrari was the only brand that didn't lose value.) Companies that had diluted their brand equity with moves toward the mainstream, like Armani and Tiffany, lost more ground.

According to Interbrand, luxury brands that target "wealthy connoisseurs" are most likely to prosper. Successful luxury brands set themselves apart using "authenticity, legacy, and excellence," the study concludes. European luxury brands who fared best this year -- LV, Prada, Hermes -- maintained their focus on craftsmanship and exclusivity.

Asian luxury trends have followed a different pattern. While political leaders, expected to be role models, have made a public show of shunning luxury, the public has not followed suit, and—in general—continues to spend.

It is no easy task for luxury brands to be accessible on the one hand and exclusive on the other. "Too high end to be mass, too mass to be high end" is a dilemma that tripped up brands like Armani. Those that fared better emphasize the "roots and meaning of their excellence" to reassure customers about their authenticity, value and relevance.