Do you think luxury will be relevant in few years from now ?

[CrazyCool01]

Hi All!

* Resale market being dead,
* super fakes everywhere,
* Brands churning out bags like fast fashion,
* sky high prices for bags
makes me question if Luxury will even be relevant in few years time !?


We were all so caught up with luxury shopping during the pandemic but now the resale market/global economy have taken a hit!

Am seeing Chanel classic flaps struggling to sell some even for 7000AUD ! Do you think luxury bags will be relavant in few years time ?

 

[Sferics]

Yes.

 

[inverved]

Your post reminds me of this YouTube video, which is very thought provoking:




To answer your question, it depends. For the younger generations, they will want to build a collection and for the older folk, they are more likely to enjoy what they have. With that being said, it doesn't mean the reverse couldn't be true, as everyone is at different stages.

I'm actually considering culling half of my luxury bag collection but need more time to think on it before taking the plunge. I've never had sellers remorse in my selling history, so I want to make sure I'm 100% on all five bags that I'm contemplating letting go.

To add to this, in the last year or two I've sold all my designer shoes except one, as no-one is interested in buying black Gucci Aces, so I will wear them into the ground instead. I can't justify spending thousands on shoes anymore (especially as a hard wearer) and the painful aspect is if I did decide to let them go, would only recoup around half or less what I paid.

However, in the last year, I have purchased three Cartier pieces. I think in general, jewellery and watch sales have been quite steady during the pandemic, which is where I feel people are leaning more towards, rather than bags, shoes and RTW, which seem a bit "overdone".

 

[papertiger]

Luxury is such a wide sector. It's basically the top-end of everything. People can always go for cheaper/more accessible but most people will want something special at some point of their lives like a wedding, to celebrate a birthday, a cruise, the iconic shoes (he/she bought diffusion copies of and were disappointed by). The limited edition of their favourite bag, an artwork they never thought would come on the market, the most amazing car he/she had ever seen. One of the problems we've had is all luxury is chasing the same consumer (upturn in luxury Q2, '23 - apparently down to tourist spend in Europe and continued growth in China (Amed, BoF:28 July '23)) Hedge funds are still hugely investing in luxury resale companies (although that 'bet' inflates and overheats the market). Too many unskilled, inexperienced people trying to jump on that band wagon. Unfortunately, there is also a growth in the luxury grey-economy. There is no single luxury consumer, there are many many types, that's what we/business sometimes forget.

I do think there are too many seasonal luxury fashion products on the market at any one time (including accessories) and too many brands are reliant on their sales/outlets to off load overstock. It's more the parent companies that are too greedy, they expand companies to far too fast, then reinvest in another that's not as large, just to create more profit (Jewellery 'experts' Richemont selling diamond Cartier watches on N-a_P (YNAP) online along with 70% clearance and multi-packs of knickers (underpants) LVMH buy Tiffany (and start selling Nikes) now Gianvito Ross, Kering buying 1/3 Valentino and Creed). Luxury is not just available through those companies though.

* Resale market being dead.
It's only dead if people are stupid enough not to factor depreciation into their purchases. I don't think the car resale market is dead just because I can't get what I paid.
* super fakes everywhere
Buy direct from boutiques. The fake/superfake market is not a luxury market, unless accidentally, in that case it's a case for fraud.
* Brands churning out bags like fast fashion
Agreed, some do. But sometimes it's actually hard to get the right specs combo. I've missed-out on lots of bags because I wanted to be sure (H/Gucci/BV).
* sky high prices for bags
Agreed, prices are ridiculous and for most, unjustifiable. I hope that means people hang on to the one's they have already and look after them. Some don't need new more new bags, and I also hope younger people will create their own fashion trends, stop feeling pressured to buy (in some countries they take out loans).

*makes me question if Luxury will even be relevant in few years time !?
Define "relevance"?
Markets only expand, contract or change.
LVMH, Kering, Richemont, Prada Group, Michael Kors Group et al could all do with new strategy and new business models (and they KNOW it) that's for sure. I do think luxury shopping has got way too complicated: https://forum.purseblog.com/threads/luxury-shopping-is-just-too-complicated.1061243/
The resale market will continue, even if only vintage fairs in church/town halls or friends' swap parties. Small online consignment do really well if they know what they're doing. If these huge consignment platforms falter, it will be their ridiculous size that's made them susceptible. Reputation is everything in resale.
Luxury after-sale care and service market(s) may grow to deal with people not selling/buying new so often. That would be great!

 

[Sibelle]

I think there will always be a market for luxury goods. For me personally it will not be relevant anymore. I think I want to spend my money for different things in the future, mostly travel .

 

[papertiger]

Your post reminds me of this YouTube video, which is very thought provoking:




To answer your question, it depends. For the younger generations, they will want to build a collection and for the older folk, they are more likely to enjoy what they have. With that being said, it doesn't mean the reverse couldn't be true, as everyone is at different stages.

I'm actually considering culling half of my luxury bag collection but need more time to think on it before taking the plunge. I've never had sellers remorse in my selling history, so I want to make sure I'm 100% on all five bags that I'm contemplating letting go.

To add to this, in the last year or two I've sold all my designer shoes except one, as no-one is interested in buying black Gucci Aces, so I will wear them into the ground instead. I can't justify spending thousands on shoes anymore (especially as a hard wearer) and the painful aspect is if I did decide to let them go, would only recoup around half or less what I paid.

However, in the last year, I have purchased three Cartier pieces. I think in general, jewellery and watch sales have been quite steady during the pandemic, which is where I feel people are leaning more towards, rather than bags, shoes and RTW, which seem a bit "overdone".

Do you really think she's though provoking?

That influencer is dangerous!!!!

She's takes people's fears and talks cr*p. Happily it doesn't look like she has many followers - but she's so un(der)educated, her rants are totally without evidence. All for clicks. The equivalent of a tabloid, she's just jumping on the de-influencing trend. Her display of H bags and herd of Rodeos is the only indicator she is a Hermes collector.

I always what's reported on in the media with a grain of salt, luxury is totally bound-up with society's inert misogamy, finger pointing of what they think is 'bourgeoise' capitalism, wastefulness, greed etc. The haters managed to get put most the furriers out of business, which included skilled people who knew how to repair and clean specialist garments. Now they are coming after exotics, and then it will be diamonds, watches, then leather, and then luxury altogether. I don't want to buy fast fashion or sportswear constantly, I don't want to wear plastic (vegan) shoes even if they're recycled from bottle-tops. Luxury, is sustainable, it should be the benchmark of sustainability. The uneducated should read something other than the tabloids before commenting on luxury.

My cat knows more about luxury than she does (he's sleeping on a cotton Gucci garment bag presently).

Golden nuggets:
Take your pre-loved Hermes bag to get it Spad and if they do it it's probably real.
...And, if they take it in (SAs are not authenticators) and then don't Spa. Like what? Get it confiscated and destroyed (as re the paperwork you're asked to sign)? How are you going to get your money back from the reseller then?
LV and Chanel probably own super-fake bag factories
Are F'ing kidding me? LV and Chanel make £$EBillions, they don't need to do anything more, they hardly have enough time to manage the business they do have. Why would they risk it? They have 0 incentive.
Outlet bags are the same as fakes
That's not what a 'certain' reseller in Australia is being investigated for (that inspired the vid). Outlet bags are authentic. The resale market has always been 'buyer beware'.
There's no way of telling if a bag is a made for outlet bag.
Yes, there is. I've never been to a Gucci outlet in my life and own no outlet bags, but even I know how to spot a made for outlet bag, it's clearly marked inside.
All brands are the same (Jessie hardly mentions Prada without Gucci, H without Chanel)
They are completely different enterties, with totally different business models (Gucci earns 50% of it's revenue from B2B just for a start)
All authenticators are the same.
No, they're not. Specialist authenticators working in the industry for 10 years + are not the same as recruits that have been given training for 2 weeks and are let loose on multiple brands.
Superfakes are the same quality as the authentic stuff
She makes it sound like Hermes is a cult (she says she'll buy and collect even though she thinks Hermes is a complete con)
Who's forcing her to buy anything? (Don't store bags with twillies on BTW)
Luxury is not special.
Who's forcing her or any of her followers to buy anything? What are they even watching the vid? To make them feel they're not missing out on anything and giving her more money to buy another H Rodeo?

Who's taking who for a ride here?

 

[onlyk]

Hi All!

* Resale market being dead,
* super fakes everywhere,
* Brands churning out bags like fast fashion,
* sky high prices for bags
makes me question if Luxury will even be relevant in few years time !?


We were all so caught up with luxury shopping during the pandemic but now the resale market/global economy have taken a hit!

Am seeing Chanel classic flaps struggling to sell some even for 7000AUD ! Do you think luxury bags will be relavant in few years time ?

Great question and great points you listed! Safe to say better be more cautious when buying especially on high price items like over $4,000 or $5,000. I'm still buying but not much and not as frequently as used to be before 2022.

 

[Love Of My Life]

Luxury will likely prevail because there will always be a new customer on the horizon to attract.
Those that started buying the brand(s) likely will continue perhaps & expand into other categories
that brand offers perhaps being more selective as to what they purchase, but the generations
under them will have or have a different concept of what luxury is about & may not want to be
reminded that their "grandma" wore this designer bag or had a closetful of clothes, shoes,
accessories & home goods.
No crystal ball.. Resellers as well as auction houses perhaps will rethink their strategies down
the road including LVMH & Kering.

 

[880]

IMO, it’s a cycle. There was a point during Covid when resale Birkin 30s and K28s were a bargain, and then the market corrected. As we left Covid SIP, premier retail boomed, and the trend is cautious but not pessimistic. I don’t find the resale market dead, as there are still bargains to be had. It’s my understanding from my financial person that economy/inflation is somewhat stable (even if interest rates remain relatively high for a little while longer). And, there is continued interest in luxury items from a certain segment. Premier big brands are not the only measure of luxury. There is also interest in premier small artisans whose work can rival the big brands in price and that is of top quality.

 

[starsandhearts]

I do not think luxury is going anywhere. For hundreds of years there was always something that people found luxurious. There was always people that can afford and not afford it. I've said this in another post I do think luxury and contemporary products are oversaturated. There are some celebrities and influencers to me that cheapen the product. If they say in a video, "I've received this as a gift" I know I will definitely not being buying that product. It is a turn off. Brands like Teddy Blake, etc. I am on ban island but I do have a list of handbags that do not have a brand.

 

[lill_canele]

A few years? Yes, luxury definitely will still be relevant.
That timeframe is too short to make that kind of judgement.

Children as young as 16 are now buying luxury and with our life span being extended to an average of 75-85 years (depending on the sex and country), and the highest spending age groups being 25-65 years (though mostly 35-55), we have ~3 generations of time to buy lol.

Even as my generation grows older and slows down, the next generation has no problem taking over

Maybe in a millennia things will be different but even then, I’m sure luxury in in of itself will still prevail, in whatever shape or form it takes.

 

[DILF]

If you'd like a well-researched YouTube video on the subject, I highly recommend Patrick Boyle's "Is the Luxury Goods Bubble About to Burst?"

Here's the Too-Long, Didn't-Read version:

-The personal global luxury goods market has seen amazing growth over the last 25 years, reaching an all-time high of $358 Billion in 2022.

-By definition, luxury goods shouldn't be something everyone has, but more and more people of different ages and income brackets are getting caught up in the world of high-end goods, driving the industry to an incredible boom.

-After an economic contraction as the world locked down in early 2020, the luxury sector took off in a big way in 2021, as shoppers flushed with savings, government cheques, investment and crypto gains indulged themselves buying cars, jewelry, clothing, watches, handbags and more (remember the long lines?).

-The luxury sector's momentum kept going into the first quarter of 2023, achieving 9-11% growth over the prior year according to Bain & Company. But there have been some recent signs of weakness: Prices for luxury Swiss watches on the secondary market (as tarcked by the Bloomberg Subdial Watch index) are near the lowest level seen in nearly two years. Prices of luxury watches peaked in February 2022 following an unprecended surge in demand during the pandemic.

-Switzerland's Richemont (Cartier and VCA) fell more than 10% on Monday last week after reporting slightly lower than expected first quarter sales. Richemont's overall sales grew 19%, but sales in the US (the luxury sector's biggest market by sales) turned negative compared with the same period last year.

-A significant portion of growth in the luxury sector comes from middle- and low-income shoppers. Americans with a household income of less than $50K make up for 27% of regular luxury goods consumers according to GlobalData, which is almost as big a group as shoppers in the bracket up from them with incomes of up to $150K.

-While Americans of all income groups were buying more luxury apparel during the pandemic, purchases by individuals making $40K or less rose 365% higher at the end of 2021 than they were in January 2020, before lockdowns began in the US.

-Price of luxury goods spiked an average of 25% since 2019. Chanel recently pushed back from customers after raising the prices on some of its handbags by more than 70% since 2019.

-According to Bain & Company Research, Gen Zs (aged between 11 and 26), are making their first luxury purchases at the age of 15. They project that millennials and younger generations will make up 80% of luxury spending by 2030.

-According to the same research firm, 70% of sales growth in luxury leather goods last year was explained by price increases, with only a small percentage being explained by increased sales volume.

-The term "Veblen Goods" is used by economists to describe goods whose demand increases as their prices rise. Hermès is an example.

-Rolexes make up 42% of the global luxury used watch sales market by value, so their exclusivity is an illusion.

 

[Kevinaxx]

Hi All!

* Resale market being dead,
* super fakes everywhere,
* Brands churning out bags like fast fashion,
* sky high prices for bags
makes me question if Luxury will even be relevant in few years time !?


We were all so caught up with luxury shopping during the pandemic but now the resale market/global economy have taken a hit!

Am seeing Chanel classic flaps struggling to sell some even for 7000AUD ! Do you think luxury bags will be relavant in few years time ?

You’re looking at it from a micro level.

Luxury is such a wide sector. It's basically the top-end of everything. People can always go for cheaper/more accessible but most people will want something special at some point of their lives like a wedding, to celebrate a birthday, a cruise, the iconic shoes (he/she bought diffusion copies of and were disappointed by). The limited edition of their favourite bag, an artwork they never thought would come on the market, the most amazing car he/she had ever seen. One of the problems we've had is all luxury is chasing the same consumer (upturn in luxury Q2, '23 - apparently down to tourist spend in Europe and continued growth in China (Amed, BoF:28 July '23)) Hedge funds are still hugely investing in luxury resale companies (although that 'bet' inflates and overheats the market). Too many unskilled, inexperienced people trying to jump on that band wagon. Unfortunately, there is also a growth in the luxury grey-economy. There is no single luxury consumer, there are many many types, that's what we/business sometimes forget.

I do think there are too many seasonal luxury fashion products on the market at any one time (including accessories) and too many brands are reliant on their sales/outlets to off load overstock. It's more the parent companies that are too greedy, they expand companies to far too fast, then reinvest in another that's not as large, just to create more profit (Jewellery 'experts' Richemont selling diamond Cartier watches on N-a_P (YNAP) online along with 70% clearance and multi-packs of knickers (underpants) LVMH buy Tiffany (and start selling Nikes) now Gianvito Ross, Kering buying 1/3 Valentino and Creed). Luxury is not just available through those companies though.

* Resale market being dead.
It's only dead if people are stupid enough not to factor depreciation into their purchases. I don't think the car resale market is dead just because I can't get what I paid.
* super fakes everywhere
Buy direct from boutiques. The fake/superfake market is not a luxury market, unless accidentally, in that case it's a case for fraud.
* Brands churning out bags like fast fashion
Agreed, some do. But sometimes it's actually hard to get the right specs combo. I've missed-out on lots of bags because I wanted to be sure (H/Gucci/BV).
* sky high prices for bags
Agreed, prices are ridiculous and for most, unjustifiable. I hope that means people hang on to the one's they have already and look after them. Some don't need new more new bags, and I also hope younger people will create their own fashion trends, stop feeling pressured to buy (in some countries they take out loans).

*makes me question if Luxury will even be relevant in few years time !?
Define "relevance"?
Markets only expand, contract or change.
LVMH, Kering, Richemont, Prada Group, Michael Kors Group et al could all do with new strategy and new business models (and they KNOW it) that's for sure. I do think luxury shopping has got way too complicated: https://forum.purseblog.com/threads/luxury-shopping-is-just-too-complicated.1061243/
The resale market will continue, even if only vintage fairs in church/town halls or friends' swap parties. Small online consignment do really well if they know what they're doing. If these huge consignment platforms falter, it will be their ridiculous size that's made them susceptible. Reputation is everything in resale.
Luxury after-sale care and service market(s) may grow to deal with people not selling/buying new so often. That would be great!

it is a very wide sector. It’s also very much marketing driven. We all know marketing (among others) are the first to be cut during tough times.

My cat knows more about luxury than she does (he's sleeping on a cotton Gucci garment bag presently).

Too cute.

I’m sure luxury in in of itself will still prevail, in whatever shape or form it takes.

Luxury is another term for premium/mark-up (that may or may not be supported with construction, material, design etc to match the premium).

The personal global luxury goods market has seen amazing growth over the last 25 years, reaching an all-time high of $358 Billion in 2022.

this sounds like cbnc tbh. every other few weeks or months depending.

70% of sales growth in luxury leather goods last year was explained by price increases,

It’s like the never ending dog chasing tail. Prices go up but so does wages. Wages go up but so does prices. At the end of the day you’d hope wages will outpace consumer goods but sadly no.

purchases by individuals making $40K or less rose 365% higher at the end of 2021 than they were in January 2020, before lockdowns began in the US.

Partly because of price increases (I wonder what falls under that luxury apparel) but also sad read. There are a few exceptions but majority of folks in this income bracket, shouldn’t be looking at anything considered a “luxury” when it comes to merchandise/apparel. Consumer staples and savings.

 

[papertiger]

If you'd like a well-researched YouTube video on the subject, I highly recommend Patrick Boyle's "Is the Luxury Goods Bubble About to Burst?"

-Price of luxury goods spiked an average of 25% since 2019. Chanel recently pushed back from customers after raising the prices on some of its handbags by more than 70% since 2019.

Thank you for this

I'm not dismissing the lux price rises, they've been ridiculous and noticeable due to huge figures to start, but just to put the above in context: On average, since '19, my supermarket food bill (UK) has gone up by between 30% - 50%. We are not talking a luxury supermarket either. Some people are also having to sell their homes (in a slow market) because their mortgages have risen so steeply (interest rates put up as a counter measure to inflation).

Luxury is another term for premium/mark-up (that may or may not be supported with construction, material, design etc to match the premium).

RTW is a mine-field. There used to be clear distinctions between couture, high-fashion and luxury fashion. Now (fashion) all shows are mostly just marketing for the brands add-ons, licence deals and entry level products (the traditional high mark-up level) RTW is left looking good for web-streaming on tall, willowy models or secondarily celebs on the red carpet but does not translate well to top quality clothes, top quality fabrics to be appreciated by connoisseurs. The new RTW high fashion market will more readily buy a printed 'technical fabric' (industry blurb for 'mixed fibre') tee-shirt for $600 rather than a tailored dress or jacket for $3000 (the brand no longer having an on-site atelier).

Major lux labels pushing sports and casual wear on us NOT because of a 'cool' or young demographic, but because lux RTW needs to either be as commercially viable as a lipstick or doesn't need to be sold at all a) it's is not the core product of a leather-goods house (LV, Gucci, Prada, etc) for it's party wear only (Oscar de la Renta, Erdem, Valentino) disguises easy-to-make-sportswear as 'street' or conceptual (Balenciaga, LV men's, Vestment) or all of the above (Balmain, Dolce) b) 'high fashion' is reduced to prints and/or logos on basic/easy to produce shapes in basic materials (Dior, Hermes, LV Mens) and across the board, green-washing, virtue signalling blurb that lets lux designers get away with inferior materials under the guise of ESG (Oscar de le Renta, Balmain and many others).

Only from my observation, but only Chanel and Saint Laurent seem to care about their quality anymore - and then not everything, but the prices are sky-high. It's notable they have really strong cosmetics and fragrance lines ether through licence deals or in-house to support their fashion and a loyal client base that regularly buys. Interesting, I think luxury beauty buyers, young and older care, demand and are exacting about quality, value for money more than any other lux consumer.

RTW is high-profile but it's not high importance.

Basically, these companies are just too BIG anyway. Raising prices will only get them so far in terms of profits if the quality isn't reflected in the price longterm.

Pressuring a younger demographic that (quite rightly) have no loyalty to anything or anyone or pandering to them is a very dangerous game.

We've had huge expansion of ****-brand luxury due to developing markets (Eastern Europe '90/00s and China/Asia 00s/10s) but the African, Indian sub-continent and S. American markets are going to be much harder for luxury as the brands don't understand the respective cultures or the populations existing, smaller luxury businesses that cater to their respective domestic markets. It's about time LVMH, Kering, Richemont et al re-thought, luxury is not McDonalds.

 

[Liberté]

* sky high prices for bags
Agreed, prices are ridiculous and for most, unjustifiable. I hope that means people hang on to the one's they have already and look after them. Some don't need new more new bags, and I also hope younger people will create their own fashion trends, stop feeling pressured to buy (in some countries they take out loans).


Luxury after-sale care and service market(s) may grow to deal with people not selling/buying new so often. That would be great!

Paying more for items, keeping them longer and having them repaired (like pre-WW2), is great sustainability, and some luxury brands are in a great position to take advantage of this trend, like Hermès. Actually the ability to take something back to a store to have something repaired is a major reason why Hermes items feel more valuable. I love the idea of smaller businesses with more bespoke options and sometimes shop with them, but you can't rely on them being around for a long time and it can be a hassle to have things serviced, even if the products is better value and the shopping experience much nicer and involved.

-The luxury sector's momentum kept going into the first quarter of 2023, achieving 9-11% growth over the prior year according to Bain & Company. But there have been some recent signs of weakness: Prices for luxury Swiss watches on the secondary market (as tarcked by the Bloomberg Subdial Watch index) are near the lowest level seen in nearly two years. Prices of luxury watches peaked in February 2022 following an unprecended surge in demand during the pandemic.

Thank you for sharing!

The resale frenzy with retail items selling for more than what they do in store is a pretty recent phenomenon, not sure if that will last forever. The internet has completely changed resale. No more than 15 years ago you could get watches from sought-after brands for relatively cheap at auctions and second hand stores, and it was much easier to find sought-after items on sale. I "have" to wear a watch for work, but they don't really serve much of a purpose for most people wearing them rather than as a fashion accessory, and I'm not sure wrist watches will be worn by most people other than as an eccentricity in 50 - 100 years...

-According to the same research firm, 70% of sales growth in luxury leather goods last year was explained by price increases, with only a small percentage being explained by increased sales volume.

There were some complaints in the French media many years ago by some local sub contractors that had 1 - 3 of the luxury conglomerates as their only clients. Their business was suffering a lot even if the conglomerates were doing well, precisely because volume was down dramatically.