Due to the current cost-of-living crisis luxury brands are dealing with a decline in demand. As high fashion is not a requirement, the inflated prices and overall recession are all leading factors as to why a luxury slowdown may be approaching, if not already here.
We have conducted some research of business analytics and data that displays a potential recission of luxury goods.
‘The survey finds 53% of consumers plan to reduce their spending on luxury/premium or designer products. Mainstream fashion clothing and footwear purchases are also targeted for reduced spending by 41% of consumers, and travel is eyed for cuts by 43%.
“The cost-of-living crisis is having a material impact on how consumers purchase, both in-store and online,” said Sabine Durand-Hayes, PwC’s global consumer market leader, in a statement. “As prices rise, consumers globally are cutting back on non-essential spending, while spending more time looking for cheaper alternatives.”
Marco Bello | Reuters
LVMH's U.S. sales slid 1% in the second quarter from the prior-year period in the second quarter. ‘The luxury goods giant’s CFO Jean-Jacques Guiony said aspirational customers “are not shopping as much as they used to.”’ ‘The results from LVMH and Cartier owner Richemont have investors bracing for a potential luxury slowdown in the U.S.’
Peter Summers/Getty Images
‘However, unless part of the ultra-wealthy, some shoppers might be turned off by the increased prices the luxury world is seeing. Over the past two years, some items have gone up by 20 percent or more.’
‘But, in the long run, the future for the high-end industry is still bright: From now to 2030, sales are expected to increase by a whopping 60 percent. With a forecast like that, one slow year certainly isn’t the end of the world.’
The wobbly state of the current economy specifically within fashion portrays a higher need for circularity within the industry. Getting maximum usage from a fashion piece and giving it several lives and identities. For the everyday consumer, shopping second-hand may be more affordable, long-lasting, and effective.
‘In a circular economy for fashion, everyone has access to the clothes they need, when they need them. New business models give customers more flexibility on the clothes they'd like to wear and provide access to clothes that might not be affordable through traditional sales.’
Ellenmacarthurfoundation
According to Ellen McArthur Foundation ‘The value created for businesses is reduced costs of buying raw materials and making new products (even if more materials are used upfront to make products durable). The value for customers is getting access to goods at lower prices.’
‘The Circular Fashion Report provides insights into reducing system inefficiencies and pollution, achieving green production and water reduction, and implementing new production processes and solutions. This year, more than ever before, made us all realize that sustainability and circularity are crucial for our planet.’-
