There have been several discussions about this topic online, particularly among YouTubers and influencers. The conversation has even spilled over to TikTok where multiple content creators are discussing that these high end fashion brands are coming into their “flop era.”
LVMH’s share results
Reports state, demand for high-end brands is improving but not as quickly as hoped. European luxury shares fell after LVMH’s mixed results, with sales rising just 1% in the fourth quarter. Operating profits dropped by 20% due to high fixed costs and one-off expenses like sponsoring the Paris Olympics.
Despite improved U.S. business, demand in other markets remains weak. The conglomerate’s fashion and leather goods division is shrinking. Founder Bernard Arnault is considering investing in U.S. production facilities. LVMH indicates that 2025 may see improvements, but recovery will take time.
The end of luxury in 2025?
YouTuber Jessiestyle states there are an abundance of bags all over the world. Furthermore, the decline in quality for these pieces could also be another factor. She then went on discussing how in the previous decades, craftsmanship was more towards the bespoke end.
Unfortunately, despite the higher price tag today, most designer items are “common” with them being mass produced.
Stella McCartney leaving LVMH
Stella McCartney is repurchasing the minority stake held by LVMH in her namesake brand, which she founded. She will continue to advise LVMH CEO Bernard Arnault on sustainability issues.
McCartney’s label was previously associated with LVMH’s rival, Kering. In 2019, she moved her brand from Kering to LVMH. This announcement comes amid a downturn in the luxury industry, with smaller brands struggling more than those catering to wealthier customers.
What will be the future outlook of these luxury brands? Will they be able to sustain their business with their new high prices coupled with their alleged quality decline?
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