Impact on Luxury Goods Market

Fantastic report! The 2025 report "Luxury in Transition: Securing Future Growth" on enduring growth in luxury in 2025 which is dependent more and more on quality, sustainability, craftsmanship and long-term value. Key insights: →After a 2% contraction in 2024—the first in over a decade—both brands and consumers are being challenged to rethink what luxury means in a world that demands responsibility. →Sustainability is an economic lever: As Bain states, decarbonisation is not a cost burden—it’s an investment in resilience. Brands that lead in carbon reduction are already seeing benefits in consumer trust, operational efficiency, and premium positioning. →Craftsmanship underpins long-term value: In a saturated market, the luxury that lasts—through superior materials, artisan techniques, and timeless design—is what retains customer loyalty and brand equity. →Circularity is good business: Business models that include resale, repair, and rental are gaining traction. These not only extend product life and reduce waste, but also deepen engagement and open new revenue channels. →Generational shift is reshaping demand: With Gen Z and Millennials now driving over 70% of luxury growth, their values—authenticity, transparency, and environmental responsibility—are reshaping the sector. →Geographic rebalancing opens new opportunities: As 50 million consumers exit mature markets, growth is accelerating in Southeast Asia, India, and Latin America—regions where sustainable luxury holds distinct appeal. Additional highlights: Decarbonisation is emerging as a financially sound strategy for fashion brands. Research indicates that most fashion companies can reduce their greenhouse gas emissions by over 60% at a cost of less than 1–2% of their revenues, making significant environmental impact achievable with modest investment. According to another report, companies leading on climate action, including fashion brands, reported financial gains equivalent to over 7% of annual revenues, driven by operational efficiency, product innovation, and increased customer loyalty. The economic case is clear: investing in sustainability—especially through decarbonisation and long-lasting craftsmanship—is not only a moral imperative, but a commercial strategy for long-term success. Report: Bain & Company / Data sources: McKinsey & Company, Boston Consulting Group (BCG) #sustainableluxury #decarbonisation #craftsmanship #longtermvalue #luxurystrategy #circularbusiness #esg #bainreport #futureofluxury

Luxury watches are not slowing down. They are being forced to evolve. Luxurynsight's latest report shows a category under pressure: Swiss watch exports fell -1.7% YoY to CHF 25.6B, with China down -12.1%. And yet, growth is not gone — it is shifting. India rose +8.1% and the UAE +3.5%. → The market is weaker. ↳ But the real story is redistribution. Then comes pricing. → Gold surged +65%. → Average retail prices increased +6.3% between 2024 and 2025. → The sector is absorbing a -13% USD/CHF move and 39% US tariffs on Swiss exports. → This is not normal inflation. ↳ It is structural pressure. Which is why the most interesting shifts are strategic: Brands are rethinking leadership. They are moving into fiction, streaming and gaming. And boutiques are turning into experience-led destinations instead of pure retail spaces. Luxury watchmaking is no longer competing on heritage alone. It is now competing on three fronts: → pricing power → cultural relevance → experiential retail The brands that can balance all three will define the next phase of the category. Link to the full report in the comments.

📗 // When reading H1 2025 earnings of LVMH and others it became clear that "luxury" is at a crossroads.. I analyzed 19 reports to share my findings with you 👇 The market is facing its "biggest potential setbacks" in +15 years.. Last week I shared Part 1, and the response was immense. So here's Part 2: 1️⃣ Emotional purchases > functional luxury in uncertain times. → Richemont: Q1 revenue +6% to €5.41bio = specialized portfolios perform well in turbulent markets ↳ 💍 Jewelry +11% / Cartier +35% in value = true luxury experiences continue to find customers, regardless of economy ↳ ⌚️ Watches -7% / reflects broader challenges for Swiss watchmakers (& US tariffs won't help) + watches started losing investment appeal with secondary market prices falling up to 40% 💡 Paradox: the more turbulent the market, the more emotional luxury consumers get in spending. They don't stop buying.. 2️⃣ The Chinese are buying, but not at home. → -22% decline in H1 2025 = the end of luxury's most important growth engine of the last 20 years → Demographic divide: ↳ +40y: -10% of luxe spending ↳ -35y: -35% = young consumers don't view luxe spending as aspirational + Western brands are not the symbols of "success" anymore. 💡 The Chinese are seeking authenticity > status signaling... CULTURAL RESONANCE will be key the next decade! → Chinese tourism boosts foreign markets: ↳ 🇭🇰 HK: +8% luxury retail ↳ 🇯🇵 JP: +15% from Chinese tourists = spending didn't disappear, it relocated where Chinese are more comfortable with luxury consumption 3️⃣ India, a new market for (accessible) luxury? → Titan Company Limited: +18% jewelry / 49% international growth → kalyan jewellers: +31% / Candere By Kalyan Jewellers e-commerce up 67% 💡 Important for the next 10y: young demographic + increasingly growing market for accessible luxury ($200-$2000 price point) + rising disposable income + Indian diaspora in developing countries YET cultural resonance is more important than prestige positioning! 4️⃣ A massive shift from Wholesale to Experiential D2C is happening. 🟢 Companies with strong D2C are thriving (Richemont 69% D2C, Hermès, Tiffany & Co.) 🟡 Those transitioning are seeing profit improvements (SMCP – Sandro, Maje, Claudie Pierlot, Fursac) 🔴 Those depending on wholesale are struggling (FERRAGAMO, Zegna) ↳ Ferragamo Q2 wholesale decline exceeded 30% = not a shift, but a collapse! 💡 We'll see more focus on own experiential D2C, and less wholesale partners (fewer, most profitable ones). Consumers buy experiences, not products! Own operations = control over the full customer experience. 5️⃣ Middle market squeezed out. → Accessible luxury struggles: Burberry -6% → Fast fashion & ultra luxury WIN! 💡 The middle ground is disappearing. Consumers either trade up, or down to fast fashion... / LAST PART COMING NEXT WEEK / 💬 Comment "LUXE" and I will DM you the earnings cheat sheet, including links to all earnings & press releases.

The modern luxury industry did not see this coming. The secondhand market rewrote the rules, and it's time for brands to recognize the cold, hard facts. "In 2024, it hit an estimated €48 billion, growing 7% year over year — actually outpacing the sales of new luxury goods. That's not a small trend; that’s a full-on shift." Source: Bain and Co Hard luxury (meaning watches and jewelry) continues to dominate, making up about 80–85% of total second-hand sales. Jewelry is exploding, but even secondhand apparel is picking up speed. Secondhand has become the gateway into luxury for new, aspirational buyers. When their dream product feels out of reach at retail, resale offers the perfect, accessible alternative, and not just for budget reasons. Brands are catching on. Instead of fighting it, some brands are launching their own platforms and rethinking their brand as an ecosystem rather than a single sale. I truly believe the brands that master resale, authentication, and inventory control will be the ones who build deeper, longer-lasting customer relationships. The future of luxury isn’t just about selling new, it’s about engineering value across a product’s entire lifetime.

Is 'quiet luxury' losing its voice to logo-centric luxury? The past few years have seen 'quiet luxury' reign supreme, with understated elegance and minimalistic aesthetics favored by brands like Brunello Cucinelli, Loro Piana, and The Row. However, recent market analyses reveal an unintended consequence: minimalistic designs have made luxury brands vulnerable to easy replication by fast-fashion and mass-market competitors, leading to potential brand dilution and consumer confusion. According to a recent Bank of America analysis cited by MarketWatch, the popularity of quiet luxury has allowed for increased imitation by lower-priced competitors, weakening brand differentiation and potentially diluting the market value of premium labels. In response, luxury powerhouses such as Gucci, Louis Vuitton, and Chanel are pivoting back to their roots—embracing bold logos, vibrant branding, and unmistakable visual identities. Gucci has reinvigorated its iconic "GG" monogram, Louis Vuitton is emphasizing its classic LV branding in recent collections, and Chanel continues to spotlight its iconic interlocking "CC" logo. This strategic shift isn't merely aesthetic; it's a calculated response to protect brand heritage, clarify brand distinction, and reinforce perceived exclusivity and value. How do you see this shift impacting luxury consumer behavior and brand strategy? #LuxuryFashion #RetailTrends #BrandStrategy #LogoDesign #LuxuryMarketing

When LVMH's Chairman Goes Shopping for Chinese Brands, You Know Something Has Shifted According to the Japanese Times, Bernard Arnault, one of the world's richest men and chairman of LVMH went to Shanghai in September. Everyone expected him to visit LVMH, Christian Dior Couture, and his empire's boutiques in China's most prestigious malls. Instead, he went shopping for Chinese brands. He bought two handbags at Songmont, a minimalist leather goods label. He spent half an hour at Laopu Gold, a homegrown jeweller positioned a few doors from Cartier and Van Cleef & Arpels, reportedly muttering words like "exquisite" and "interesting." Here's Why That Matters: China's $49 billion luxury market is fundamentally changing. While LVMH is down 30% from its 2023 peak and Kering has plunged 60% since 2021, Chinese luxury brands are exploding. Laopu Gold's e-commerce sales are up 1,000%+ in the last two years Songmont's online bag sales are up 90% Meanwhile, Gucci's online bag sales in China, down 50%+ But here's what most analysts are missing. This isn't just about pricing. Yes, Songmont's bags sell for $421 vs. Hermès' $8,016. But Chinese consumers aren't just choosing cheaper, they're choosing culturally relevant. As Jacques Roizen from Digital Luxury Group said: "Chinese beauty brands aren't competing on price, they're building rich brand universes and prioritising storytelling." I Wrote About This Exact Shift in The Luxpreneur. Luxury isn't one dimensional. What signals status, aspiration, and belonging shifts dramatically across cultures. Western luxury brands assumed Chinese consumers would forever chase European logos as tickets to sophistication. They were wrong. Modern Chinese shoppers as well as shoppers from other cultures want brands that reflect their identity, not someone else's definition of prestige. This is what Diversity in Luxury Actually Looks Like. Not just diverse faces in campaigns. Diverse definitions of luxury itself. Chinese brands defining luxury through their cultural lens. Middle Eastern luxury buyers seeking brands that understand their values. African aesthetics informing design, not just "inspiring" European collections. When Bernard Arnault spends half an hour in a Chinese jewellery store, he's not being polite. He's watching the future and it doesn't all speak French. The Question is are we watching a temporary slump, or the beginning of a truly multipolar luxury landscape where cultural authenticity beats European heritage? #LuxuryBranding #TheLuxpreneur #DiversityInLuxury #ChinaLuxury #LVMH #CulturalRelevance #LuxuryStrategy

Luxury brands are increasingly relying on U.S. consumers to drive growth, especially as the Chinese market faces economic challenges. LVMH, the €350 billion industry leader owning brands like Dior and Louis Vuitton, has significant exposure to the U.S. market. Swiss luxury group Richemont reported a 22% growth in U.S. sales, boosting global sales by 10% and surpassing expectations. Despite high prices and interest rates, U.S. consumers have shown resilience, maintaining robust spending levels. In November 2024, retail sales surged more than anticipated, driven by strong motor vehicle and online purchases. The U.S. economy expanded at a 2.8% annual rate in the third quarter, supported by strong consumer spending. Analysts remain cautiously optimistic, noting that while the U.S. market presents significant opportunities, luxury brands must innovate and adapt to sustain growth amid evolving consumer behaviors and economic conditions. In this context, the new report “Evolve or Fade Away: Enriching Luxury Heritage in the AI Era,” a collaboration between IBM and Vogue Business, highlights how luxury brands can leverage AI to remain competitive. From AI-driven personalisation and sustainability initiatives to operational excellence, the report explores how technology can help luxury brands blend heritage with innovation. Released during the National Retail Federation and previewed in a fireside chat with Vogue Business US Editor Hilary Milnes, the report underscores the importance of embracing AI to enhance the artistry, exclusivity, and legacy of luxury brands. As the industry evolves, such strategies will be crucial to navigating a rapidly changing, increasingly digital market. #EvolveOrFade #AI #LuxuryInnovation #Sustainability

Is Luxury’s Slowdown a Warning Shot for the Rest of Retail? The luxury sector has always felt like retail’s most secure tier—recession-resistant, brand-obsessed, and built on scarcity and storytelling. But the headlines tell a different story. Gucci. Kering. Burberry. Rolex. Brands once seen as invincible are slowing down. Sales are softening. Consumer loyalty is wavering. Value perception is under review. And while this might seem like luxury’s internal crisis, it’s something more: A warning shot for the rest of retail. If it’s breaking at the top, mid-tier can’t afford to look away. Here’s what this moment should be telling us: Brand fatigue is real. You can’t scale your way out of diluted messaging. And when identity fades, customers go quiet. Promotions ≠ loyalty. Luxury rarely discounts—yet even their loyalty is weakening. Mid-tier brands built on markdowns have an even steeper hill to climb. Scarcity still sells. Limited drops, regional exclusives, and early access for loyalists; these tactics don’t require a luxury price point. They just require intention. Operational discipline = brand equity. When inventory misses or service slips, it’s not just a logistical problem; it’s a brand one. Your brand’s identity is your last real moat. And if you're trying to appeal to everyone, you’re slowly becoming irrelevant to everyone. It seems like it is not a smart business strategy to be the best at everything And if that’s not enough pressure, enter tariffs. New U.S. import duties on European fashion and luxury goods are pushing brands like Louis Vuitton and Hermès to raise prices in the U.S. market. Even loyal customers are flinching. For mid-tier players with global sourcing? This is fuel on an already smoldering fire—raising costs, shrinking margins, and forcing uncomfortable choices on price and product. Luxury has fallen before. In the '90s, Gucci was drifting until Tom Ford reshaped it into a cultural force. In the 2000s, Burberry lost its edge until Christopher Bailey brought it back through modern British storytelling. Even Chanel and Louis Vuitton have weathered reinvention cycles. The lesson? Luxury survives through reinvention. It stumbles when it forgets what made it valuable in the first place. So what now? -Recenter on the core customer -Build intentional scarcity into your calendar -Communicate when there’s something worth saying -Turn every store and every experience into a brand signature -Create timeless product—less noise, more resonance This isn’t about panic. It’s about preparation. Luxury is flashing a signal. Not of collapse—but of saturation, fatigue, and possibly misplaced confidence. Retailers take note, before the headlines start sounding more familiar than expected. #RetailStrategy #LuxuryTrends #BrandLeadership #ConsumerBehavior #MidTierRetail #Tariffs #BrandDiscipline #Scarcity #RetailTransformation

The Quiet Power Shift in the Luxury Sector: Why 1% Now Holds All the Cards The rules of the game in the luxury sector are being rewritten – not for the masses, but for the select elite. While headlines warn of slowing demand, a radical change is taking place: 1% of luxury goods buyers now generate 23% of market value. In uncertain times, brands are making a calculated bet: Go Narrower, Go Deeper. The new luxury economy Hermès' $20,000 Birkins bags still sell out instantly, with a waiting list of several years, while affordable luxury brands struggle for discounts. Brunello Cucinelli's ultra-luxury cashmere business grew 17% last quarter, ignoring mass appeal. American Express has revamped its Platinum Card, emphasizing private jet programs and backstage experiences rather than points. What is really changing? It's not just about price tags – it's about rethinking value: Exclusivity as currency: limited editions are now more important than logos (see Rolex's deliberate scarcity) Accessibility instead of ownership: the rise of private clubs such as Soho House and Aman Resorts The concierge economy: Louis Vuitton's bespoke ateliers now account for 30% of revenue. In turbulent times, depth trumps breadth. Brands that thrive today are not chasing large numbers of customers – they are cultivating fewer, wealthier ones. What are your thoughts? Is this focus on the 1% sustainable or will it backfire? Let's discuss.