The Glamour Dims as Luxury Fashion Sees Decline in Sales Growth

The glamour dims as luxury fashion companies see a decline in their sales growth during the third quarter of this year.

Money is tight around the world at the moment. Today, consumers’ habits are a reflection of that. Especially since witnessing the current decline in LVMH shares last week. “The company failed to meet analysts’ sales expectations, reporting a small 9% increase in the third quarter, which was considerably smaller than the 17% increase that the conglomerate experienced in Q2 2023,” reported Hypebeast. Since last week, the value of LVMH stocks fell even more to 667 EUR, an eight-euro decline. 

The past few years of lockdowns and travel restrictions on Chinese tourism to Europe and the U.S. forced luxury fashion companies to shift their consumer focus unexpectedly. Many luxury fashion companies relied heavily on U.S. and European consumers to rectify the void made by the lack of spending from Asian markets. “Some analysts have turned cautious on the luxury sector, with UBS last week reducing its estimates to account for the risk of slowing Chinese consumption,” explained Reuters for Business of Fashion. The apprehensive future of China’s recovery is not the only concern analysts have. 

According to Fortune, Gen Z is another group of consumers playing a considerable role in luxury spending. Nearly 70% of luxury fashion consumers in 2022 were Gen Z. “To attract and keep them engaged, luxury brands are rapidly having to move beyond the traditional notions of luxury–such as status, legacy, prestige, and heritage,” the outlet stated. Several of these traditional aspects were recurring themes in recent Spring/Summer 2024 collections at fashion weeks. Brands like Gucci, Burberry, and Helmut Lang are venturing toward their heritage roots. Gen Z consumers are pursuing second-hand and vintage luxury markets. 

Though many luxury fashion companies’ Q3 sales growth was not the outcome they expected, there is one thing to find comfort in. Luxury, especially luxury fashion, will never cease to exist. Hiccups come and go. The unexpected decline could bring a fresh perspective on redefining luxury fashion.