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A LV or Hermes bag is luxury and definitely not fashion. But I suppose Luxury Houses like Gucci that depends on creative directors and yet charge an arm (for a bag), can be considered "luxury fashion"?
YTD, LVMH's share price has dropped ~40% and is almost 60% from its ATHs from 3-4years ago. That's a strong market signal as post covid investments come online and start to corrode the operating leverage it once enjoyed from earlier price increases. The younger Chinese embracing crocs clogs as "ugly chic" is probably another thing to worry about...
As luxury fashion loses its shine, Uniqlo and Zara are winning over shoppers
After years of price hikes, luxury brands have pushed their luck a little too far. Customers who can no longer stretch to Louis Vuitton and Gucci are taking their money elsewhere: fashion’s mid-market, where brands like Uniqlo and Zara are having a moment.
That’s an unusual state of affairs. Mid-market fashion, broadly defined as apparel worth between US$50 (S$64) and US$300, has suffered — alongside mid-market hotels and mid-market restaurants — from being less alluring than luxury brands and more expensive than the pile-em-high brigade. But luxury maisons have miscalculated and hiked prices more than their customers can stomach. A fifth of them, presumably those for whom a Lady Dior bag is an indulgence rather than a staple, have deserted high-end stores since 2022, according to analysis by Bain & Co.
Can luxury win back the customers it priced out? Investors seem to think not: five years ago, Fast Retailing’s premium to LVMH was roughly a third, on a forward price-to-earnings basis. Now, it is well over double, according to S&P Capital IQ.
https://cnaluxury.channelnewsasia.com/ob...ara-295836
YTD, LVMH's share price has dropped ~40% and is almost 60% from its ATHs from 3-4years ago. That's a strong market signal as post covid investments come online and start to corrode the operating leverage it once enjoyed from earlier price increases. The younger Chinese embracing crocs clogs as "ugly chic" is probably another thing to worry about...
As luxury fashion loses its shine, Uniqlo and Zara are winning over shoppers
After years of price hikes, luxury brands have pushed their luck a little too far. Customers who can no longer stretch to Louis Vuitton and Gucci are taking their money elsewhere: fashion’s mid-market, where brands like Uniqlo and Zara are having a moment.
That’s an unusual state of affairs. Mid-market fashion, broadly defined as apparel worth between US$50 (S$64) and US$300, has suffered — alongside mid-market hotels and mid-market restaurants — from being less alluring than luxury brands and more expensive than the pile-em-high brigade. But luxury maisons have miscalculated and hiked prices more than their customers can stomach. A fifth of them, presumably those for whom a Lady Dior bag is an indulgence rather than a staple, have deserted high-end stores since 2022, according to analysis by Bain & Co.
Can luxury win back the customers it priced out? Investors seem to think not: five years ago, Fast Retailing’s premium to LVMH was roughly a third, on a forward price-to-earnings basis. Now, it is well over double, according to S&P Capital IQ.
https://cnaluxury.channelnewsasia.com/ob...ara-295836
I am not a certified financial advisor and so nothing of what I say should be construed as financial advice. Please consult a certified financial advisor for advice instead.
