MILAN (AP) According to a new report released on Tuesday by the Bain consultancy, the post-pandemic spike in worldwide sales of luxury handbags,
Shoes and clothing are expected to stagnate this year due to a crisis in inventiveness and price increases as firms shift their focus to the most affluent clients.
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In 2024, Bain anticipates flat global luxury sales after a modest decline in the first quarter, according to a report commissioned by the Altagamma group.
The firm pointed to economic instability in China that has resulted in a phenomenon known as ‘luxury shaming’
as well as political unpredictability in the United States during a year of presidential elections.
In addition to socioeconomic issues and escalating geopolitical tensions, the delay is partially ‘self-inflicted,’ according to Partner Claudia D’Arpizio of Bain.
She referred to the industry as being in a ‘creativity crisis,’ with several big fashion firms replacing their creative heads,
And a renewed emphasis on catering to the ultra-wealthy clientele at the expense of the aspirational middle class and Gen-Z youth who drove development before the epidemic.
For many of these brands, there is a lack of definition. They’re trying to get their bearings. Five or six major brands are undergoing a turnaround.
The Associated Press was informed by D’Arpizio that ‘this is not helping the overall excitement.’ This industry is driven by supply.
‘Tweaks’ in strategy and pricing are necessary, she added, adding that ‘you can’t grow without the middle class and younger generations.’
Gucci and Moschino are two well-known fashion businesses that have made runway launches of their new creative directions, and in September,
the new creative director’s first Valentino collection will be shown on the catwalk. The post needs to be filled by Chanel because the previous employee quit earlier this month.
Inflation is one-factor driving price increases, but D’Arpizio added that, in their quest for higher profit margins,
firms are also focusing on the estimated 6 million to 8 million consumers at the top of the pyramid. Less renewal has also been seen in the offers at the same time.
Customers become ‘upset and puzzled’ when they notice steep price rises for products that don’t exhibit much innovation and feel like something they’ve seen before.
Forecasts for flat global luxury sales come after a pent-up post-pandemic spending binge that saw sales rise 24% between 2021 and 2023 over the levels of 2019.
Due primarily to a rebound in American and Asian travel to Europe, sales of personal luxury items increased by 4% last year to 362 billion euros (about $388 billion) from 349 billion euros in 2022. Together with fine art,
automobiles, yachts, and luxury travel, the enormous global luxury sector reached a value of 1.5 trillion euros last year, underscoring the preference for experiences over material possessions.
While Europe continues to see good trends due to tourist spending and an increase in local consumption, particularly in French and Italian towns,
Japan is a bright spot with the return of international tourists and the yen at its lowest level to the US dollar in 20 years.
