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The post-pandemic surge in global sales of luxury handbags, shoes, and apparel is set to stall this year, according to a new study by the Bain and Company consultancy. Amid a creativity crisis and price hikes, brands are shifting focus to the biggest spending customers.
The consultancy cites political uncertainty during a presidential election year in the United States, as well as economic uncertainty in China that’s brought on a phenomenon of “luxury shaming.”
Beyond socioeconomic factors and rising geopolitical tensions, the slowdown is also partly “self-inflicted,’’ says Bain partner Claudia D’Arpizio. She cites a “creativity crisis,’’ in the sector, as a number of major fashion houses are transitioning creative directors, and putting a new focus on super-wealthy customers. That comes at the expense of the aspirational middle class and Gen-Z youngsters who fueled growth before the pandemic.
“There’s been a little bit of lack of excitement on the creative part,” says D’Arpizio. She also says some “tweaks” are needed on strategy and price points.
Steep price increases for items that don’t show significant innovation and feel like something they have seen before leave customers “upset and puzzled.” On the shopping streets of Rome, buyers say they are frustrated. “Even the big brands aren’t coming up with great ideas anymore, they’ve all stalled a bit,” says shopper Cristiana Cimmino.
“This is also noticeable in the mass market, which usually imitates high fashion. However, since there’s nothing new to imitate, it has declined. Unfortunately, high fashion isn’t inventing anything new anymore.”
Shopper Adam Sammy is more optimistic. “These brands can raise the prices and people will pay for it. So, as long as the consumer is paying, the brands can keep raising it, right? So, it doesn’t matter what we feel,” he says.
Last year, sales of personal luxury goods grew by 4% to 362 billion euros from 349 euros in 2022, due largely to a resurgence of U.S. and Asian tourism to Europe fueling purchases.
Add in luxury travel, fine art, cars, and yachts, the vast global luxury market expanded to 1.5 trillion euros last year—highlighting a trend toward experiences over tangible goods.
This article was provided by The Associated Press.