2 days ago
Luxury for (slightly) less as fashion houses cut prices
F ashion executives usually spend July and August pool-prowling in Ibiza or in the mansions of the Hamptons, playground of New York's elite. Not this year. After a spring/summer season of discontent, the bosses of the biggest European luxury brands are at their desks in Paris and Milan sweating to put their maisons in order.
Post-pandemic price increases — in some cases, doubling the cost of popular items, notably handbags — have triggered a widespread customer backlash. Consultants at Bain & Company estimate that 50 million consumers have turned their backs on the global €364 billion (£313 billion) personal luxury-goods industry over the past five years, and forecast a further decline this year of up to 5 per cent.
The demand slump could not have come at a worse time. China, the engine of the global luxury goods business, has stalled, with low or no growth in the high-end segment. Brands that have carefully created an image of craftsmanship and heritage, notably Italy's upscale Loro Piana, have been tarnished by revelations of abuse of workers. And France and Italy, the homes of luxury, were threatened by tariffs of up to 30 per cent on imports to the US, later reduced to 15 per cent.
