The dream is eternal and knows no limits, and the luxury industry is its most fervent ambassador. However, the climate of economic uncertainty is leading players to redouble their efforts to develop an offer that includes customers from both sides of the price spectrum. To accompany this accelerated rebalancing, an unprecedented mercato of top talent is being organized.
How can we reduce the economic uncertainty affecting the luxury sector, where a wait-and-see attitude is far from being the sole preserve of the less fortunate? Dilute the risks by offering products and services that satisfy the desires of both the wealthiest and the less affluent, aspirational clientele. This is the price of desirability across the ages.
The results for the first quarter of the year also offer some interesting insights into consumer trends. Since 2020, the global luxury market has shown several contradictory trends. Indeed, high-end customers have successively favored homewear, skincare, then the return of formal wear, and finally make-up…
But more than ever, 2023 was the year of high-value-added items such as watches, jewelry and, of course, leather goods.
After a first section devoted to the economic results of the major luxury brands for their 2023 financial year, let’s take a look at the tactics they are currently deploying, whether to expand into new universes or strengthen their management teams.
The rise of new market segments
In an unstable economic context, luxury customers seem to prefer investing in pieces that are free from fashion trends. More sustainable consumption, as it were. In the age of Quiet Luxury, perhaps it’s a question of choosing luxury items whose value won’t deteriorate in a few months. To wrest growth points, the luxury sector has once again had to innovate, with a strategy of brand elevation across the board, and not just on price.
The development of more exclusive ranges in fine jewelry, accessories and perfumery should show its first effects this year.
But at a time when the socio-economic balance seems more fragile than ever, luxury is also doing its utmost to avoid excluding too many people from its creations and its narratives, veritable enchanted parentheses in the midst of the world’s upheaval. Luxury has therefore also redoubled its efforts in niche markets, aimed at the offspring of its clientele, be they young children or… animals, but also at the younger generations who prefer immersive, less carbon-intensive experiences, with the hotel-restaurant industry and the art of the table as the new arbiter of elegance and conviviality.
As the purveyor of dreams, luxury has not forgotten its economic pragmatism, strengthening its strategic positions through vertical integration operations or beefing up its management teams, preparing to face headwinds that are likely to be far more unpredictable in 2024. The sector has also seen an unprecedented mercato of talent in key functions, from design and top management to communications and marketing.
A number of brands have renewed their management teams: Chloé, Stella McCartney, Chanel France, Aura Blockchain, Raffles, Accor, Orient Express, Tom Ford, Lalique Group, De Beers Brands, Nyx…
This is also the case at Kering, whose CEO François-Henri Pinault has appointed his right-hand man and deputy CEO Jean-François Palus to head Gucci “for a transitional period”, following the announcement of the group’s disappointing results for the first half of 2023. Yves Saint Laurent’s CEO, Francesca Bellettini, has also been appointed Kering’s deputy CEO, in charge of the Houses’ development.
Time for major maneuvers
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Featured photo: Photo montage © Stella McCartney campaign; Kering’s new Italian headquarters; presentation of the Dior haute joaillerie collection Les “Jardins de la Couture” on the shores of Lake Como; galette des rois at the Lutetia; Devotion Dolce & Gabbana fragrance; Quiet Luxury by Getty Images
