As we all know, the end of luxury, a term coined by Super Dacob, a YouTuber, has already arrived. It appears that spending is down throughout the world and for several reasons. And one of the most obvious and discussed reasons is the fact that the prices have gone through astronomical levels along with poor resale value.
According to the Business of Fashion, in July, U.S. consumers spent 11 percent less on luxury goods compared to the same month last year, according to Citi Research, which analyzed data from 10 million credit card holders.
Luxury spending down by 11%
This decline, following a 7 percent drop in June, signals a further weakening in luxury demand as the third quarter begins. Leather goods and ready-to-wear categories were hit hardest, with sales dropping by 19 percent and 15 percent, respectively.
Jewelry sales fell 6.5 percent, while luxury watch sales surprisingly grew by 10 percent. Citi analysts noted that inflation and eroding savings have particularly impacted lower-income consumers, weakening demand in entry-level luxury categories.
Additionally, Redditors are fearing that this will tank the stock prices for Kering and LVMH. There are alleged stories that these luxury brands are participating in third party sales from as low as 50% off on their merchandise. Furthermore, the Redditor adds that Louis Vuitton is now akin to a supermarket for “luxury” products.
Regardless, there are further discussions regarding the issue where some claim that these brands are not for the ultra wealthy. But one thing is for sure, the middle class and upper middle class have relatively stopped purchasing from these brands.
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