Latest news with #Altagamma
Fashion Network
16-07-2025
- Business
- Fashion Network
Luxury fashion: what future for multibrand stores after a decade-long decline?
Squashed between luxury labels' boutiques and low-cost chains, such as Shein, Temu and Zara, independent multibrand retailers have gradually lost ground, and ceased to provide a market outlet for premium and mid-range brands. Having limited resources compared to large luxury groups, mid-size, emerging and new brands find it very hard to cope with the investment levels required to open stores, investments that are often unprofitable because they are way too high for these brands' size. 'These brands have positioning and durability problems. They have been penalised by the crisis of multibrand retailers, which used to play a crucial role in curating and discovering smaller labels, often less recognised by consumers. The role retailers play as talent-spotters is essential,' said Solca. 'Our customers don't need anything, but they're all looking for something. It's up to us to give it to them. Apart from those who already know which labels they love, there are other consumers, another 50% of the market, who are entering the luxury sphere now, and need to be guided, inspired. That's where our greatest challenge lies. To overcome it, multibrand retailers are sorely needed,' said Luca Lisandroni, co-CEO of Brunello Cucinelli, speaking at the Altagamma conference. 'Multibrand stores are very important, because they train our ability to listen. It's an extremely modern channel, much more relevant than we think, because it's an open system. It puts brands face to face with a different point of view, that of the retailers who select and interpret our collections,' he added. Among multibrand chains that are currently successful, the Bernstein study cited US group Mitchell Stores, and Sogo & Seibu from Japan, acquired by US investment fund Fortress Investment Group. Sogo & Seibu has successfully redesigned its flagship store in Ikebukuro in Tokyo, showcasing its range of men's and women's luxury ready-to-wear on the same floor. 'These two examples show how the traditional formula can be improved. There are also mass-market players, such as Inditex, which are successfully expanding into the premium segment. Finally, there are new players - online giants like Google, assisted by AI, or Amazon. Each in their own way, they're seeking to position themselves in fashion's medium and high-end segments. Adopting a hybrid physical/online format could enable multibrand retailers to make faster inroads into the premium segment, as shown by the merger between Amazon and US department store Saks. That's very interesting. In fact, it's opened the floodgates,' said Solca. Another interesting initiative is the partnership recently forged between Italian multibrand store LuisaViaRoma and the collective e-shop of the independent multibrand retailers affiliated with the Camera Buyer Italia (CBI) association, creating the first 100% Italian luxury marketplace. 'Major luxury labels owe a great deal of their success to Italian multibrand retailers. However, this channel has never been valued. The deal with LuisaViaRoma will enable us to create our own ecosystem and gain visibility,' said Maura Basili, president of CBI. Something to keep an eye on.
Fashion Network
16-07-2025
- Business
- Fashion Network
Luxury fashion: what future for multibrand stores after a decade-long decline?
Squashed between luxury labels' boutiques and low-cost chains, such as Shein, Temu and Zara, independent multibrand retailers have gradually lost ground, and ceased to provide a market outlet for premium and mid-range brands. Having limited resources compared to large luxury groups, mid-size, emerging and new brands find it very hard to cope with the investment levels required to open stores, investments that are often unprofitable because they are way too high for these brands' size. 'These brands have positioning and durability problems. They have been penalised by the crisis of multibrand retailers, which used to play a crucial role in curating and discovering smaller labels, often less recognised by consumers. The role retailers play as talent-spotters is essential,' said Solca. 'Our customers don't need anything, but they're all looking for something. It's up to us to give it to them. Apart from those who already know which labels they love, there are other consumers, another 50% of the market, who are entering the luxury sphere now, and need to be guided, inspired. That's where our greatest challenge lies. To overcome it, multibrand retailers are sorely needed,' said Luca Lisandroni, co-CEO of Brunello Cucinelli, speaking at the Altagamma conference. 'Multibrand stores are very important, because they train our ability to listen. It's an extremely modern channel, much more relevant than we think, because it's an open system. It puts brands face to face with a different point of view, that of the retailers who select and interpret our collections,' he added. Among multibrand chains that are currently successful, the Bernstein study cited US group Mitchell Stores, and Sogo & Seibu from Japan, acquired by US investment fund Fortress Investment Group. Sogo & Seibu has successfully redesigned its flagship store in Ikebukuro in Tokyo, showcasing its range of men's and women's luxury ready-to-wear on the same floor. 'These two examples show how the traditional formula can be improved. There are also mass-market players, such as Inditex, which are successfully expanding into the premium segment. Finally, there are new players - online giants like Google, assisted by AI, or Amazon. Each in their own way, they're seeking to position themselves in fashion's medium and high-end segments. Adopting a hybrid physical/online format could enable multibrand retailers to make faster inroads into the premium segment, as shown by the merger between Amazon and US department store Saks. That's very interesting. In fact, it's opened the floodgates,' said Solca. Another interesting initiative is the partnership recently forged between Italian multibrand store LuisaViaRoma and the collective e-shop of the independent multibrand retailers affiliated with the Camera Buyer Italia (CBI) association, creating the first 100% Italian luxury marketplace. 'Major luxury labels owe a great deal of their success to Italian multibrand retailers. However, this channel has never been valued. The deal with LuisaViaRoma will enable us to create our own ecosystem and gain visibility,' said Maura Basili, president of CBI. Something to keep an eye on.
Yahoo
12-07-2025
- Business
- Yahoo
Luxury Market Faces First Slowdown in 15 Years, Study Estimates 2 to 5% Decrease
MILAN — Trade wars, geopolitical tensions and the volatility of financial markets on a global scale are impacting luxury spending and the personal luxury goods segment is seeing the first slowdown in 15 years, excluding the COVID-19 pandemic, according to the spring 2025 Luxury Goods Worldwide Market study presented by Bain and Altagamma on Thursday in Milan. According to the report, the luxury industry registered a 1 percent decrease in 2024 turnover to 364 billion euros, compared with 369 billion euros in 2023. More from WWD Is Dua Lipa's Chunky Engagement Ring Inspiring a New Trend in Bridal Jewelry? G-Dragon and Jacob & Co. Unveil Limited-edition Pendant Inspired by His 'Peace Minus One' Philosophy Pomellato Looks to Brand's Three Key Decades for High Jewelry Collection For 2025, the study sees three potential scenarios unfolding: an in-year rebound with a market growth in 2025 on 2024 of between a 2 percent decrease and a 2 percent increase, with a 20 percent probability of occurrence; a continued slip with a decrease of between 2 and 5 percent, with a 60 percent probability of occurrence, and a demand dip of between and 5 and 9 percent, with a 20 percent probability of occurrence. Despite the slowdown, Matteo Lunelli, president of Altagamma, said the industry 'between 2019 and 2024 registered a total growth of around 28 percent so we are significantly above pre-pandemic levels.'Also, he pointed to the growth of markets such as the Middle East, Latin America and South East Asia, 'which show a remarkable dynamism.' On top of this, the expectation of 300 million new potential consumers in the next five years 'confirms the solidity of the fundamentals of this segment in the long-term.' The compound annual growth rate rose 6 percent in the 1996 to 2019 period, and was up 5 percent in the 2019 to 2024 period. Macroeconomic pressures and price fatigue weighed on consumer demand in the first quarter of 2024, which saw a decline of between 1 and 3 percent compared with the same period in 2023. There is a strong polarization between the performances of different brands, said Claudia D'Arpizio, global head fashion luxury at consultancy Bain & Co. and coauthor of the study. 'The strategies set in motion over the last years have resulted in sharp consumer alienation due to high price increases (45 to 50 percent of responders) and limited creativity injection (25 to 30 percent),' she said. 'Brands have started efforts to nurture desire through heightened experiential formats, and continued categories diversification, experiences that go beyond the product and a wave of creative change,' although the latter has turned off some consumers. Asked about these changes, D'Arpizio said a creative designer is 'one of the assets of a brand, they work in a team, they give direction, but brands need strategies, clarity, marketing, creativity alone is not enough. It's an important tool when aligned with the brand values to recreate the magic, but it's not fair to rely only on the creative designer' for success. Federica Levato, partner at Bain & Co. and coauthor of the study, said 'companies may fail but brands never die and it's a mistake when a creative director wants to [become more important than] the brand.' The industry has lost around 50 million consumers, the result of the crisis of department stores and e-tailers, and the increased scrutiny over the pipeline have created 'a perfect storm,' said D'Arpizio. 'Experiential goods continue to outpace tangibles.' Also, she highlighted that 'the difference between wealthy and poor is the biggest risk, associated to social injustice. Being a big and recognizable brand in China now is not that positive as ostentation is shunned.' In the first quarter, mainland China remained under pressure, the U.S. was still negative, and Europe and Japan slowed down, said Levato. 'After the war between Israel and Iran broke, there's been a wave of cancellations of trips into Europe over the past few days for fear of terrorist attacks.' U.S. and China are 'twin giants with parallel pains, bruised but not broken by pressured consumption,' said Levato. The U.S. is facing monthly swings with tariffs-induced volatility impacting consumers' willingness to spend, and while China has had six consecutive quarters of negative growth, it is still above pre-pandemic levels with an additional market value of around 15 billion euros in 2024 compared with 2019. However, now the middle class in China is 'lost,' said Levato. There are some bright signals on the horizon with high-spending customers still resilient in the U.S. and accessible luxury brands and outlets gaining traction. In China, new local luxury brands are emerging. In Europe, ready-to-wear and jewelry are top categories, and ethically priced items are outperforming. In Japan, limited editions are helping to maintain brand heat, as are beauty and jewelry. There is a growing interest in secondhand jewelry. Levato said the United Arab Emirates are 'still roaring,' fueled by hyper tourism, positive momentum in Qatar and Bahrain, and unmatched growth promises in Saudi Arabia, while Kuwait is on a more cautious path. In Latin America, which is showing widening footprint, Mexico is outperforming, followed by Brazil. In South East Asia, Singapore and Indonesia are leading growth, followed by Vietnam and the Philippines while Thailand is more polarized. Jewelry, eyewear and apparel are keeping momentum as high-low is a driver of resiliency. The sale of fragrances is growing, skin care is flat and makeup is decreasing. Between 25 and 30 percent of brands are reinforcing entry prices, said D'Arpizio. Watches, leather goods and footwear continue to decline and traction is only led by newness in creativity. 'The cross-generational reshape of the value system and the brands' value proposition weakening lead to a white space for new entrants,' contended D'Arpizio. There is growing addressable wealth with around 20 percent growth in the number of high-net-worth individuals, who are growing at the fastest pace, according to the study. The average income growth worldwide will stand at between 3 and 4 percent. The study urges brands to refocus on basics, such as lasting, creative and high-quality products; to foster relationships and favor reach over push, expanding toward untapped audiences, and to deliver flawlessly customer-centric experiences.
Fashion Network
09-07-2025
- Business
- Fashion Network
Luxury sector faced with flight of aspirational clients, dissatisfaction of top-tier ones
The luxury industry, currently disrupted by unfavourable economic conditions and growing geopolitical tensions, is also having to adapt to the whims of a rapidly changing clientèle. Aspirational clients are increasingly disenchanted with luxury, and this is having a profound impact on the market. In parallel, top-tier clients (or very important clients, VICs), whose numbers greatly increased in the last few years, are dissatisfied with the performance of luxury labels. These were the main findings of the 'True-Luxury Global Consumer Insight 2025' study carried out by Boston Consulting Group (BCG), which was presented on Tuesday in Milan during a conference organised by Altagamma, the association of Italy's top luxury labels. For the second consecutive year, the high-end luxury market posted a revenue drop (down 2% in 2025 as in 2024). The reasons were the diminished appetite of Chinese consumers, decreasing interest on the part of the newer generations, whose purchasing power has shrunk, and especially a downturn in purchases by aspirational consumers. In 2013, the latter accounted for 74% of the total luxury market's value, but in 2024 they accounted for only 61%, a loss of 13 percentage points in 10 years, and a phenomenon that inexorably seems set to continue. In recent years, the purchasing power of aspirational clients has decreased, while the price of luxury goods has skyrocketed. According to the BCG study, nearly 35% of clients in this cluster said they have stopped or reduced their luxury purchases in the last 12 months, while 65% said their expenditure will remain stable or diminish in the next 12 months. The study also showed that this loss in luxury revenue benefited other sectors. For one-fifth (22%) of aspirational clients, it turned into savings. For the remainder of the cluster, it shifted to more urgent expenditure categories like health and well-being (13%), purchases of pre-owned luxury goods (13%), or other expenditure. 'Aspirational clients still account for more than half of the market's total value. Labels cannot afford to do without them,' said Luca Solca, an analyst at Bernstein. Given the context, 'the resale channel might provide a means of keeping some of these clients, and/or of drawing them towards luxury labels,' said Enrico Galliera, head of sales and marketing at Ferrari, one of the speakers at the conference organised by Altagamma for the 11th edition of the Altagamma Consumer & Retail Insight survey. 'Some of our clients first came to us when they bought a second-hand [Ferrari]. It's an access channel we're monitoring closely. It's true that aspirational clients are currently prudent and hesitant, but we aren't always capable of identifying them and scouting them out. What we're doing is tapping alternative categories, for example our ready-to-wear line, to get them acquainted with our world. We're also trying to get in touch with young consumers,' said Galliera. 0.1% of clients spend more than €50,000 per year Aspirational clients at the bottom of the pyramid, who spend less than €2,000 per year on average, account for 90% of personal and experiential luxury consumers, while top-tier clients, at the pyramid's top, who spend over €50,000 per year with an average spend of approximately €350,000, account for only 0.1% of the total. However, while the aspirational clients' share of personal and experiential luxury expenditure fell from 65% (worth €479 billion) of the market's value in 2013, to 55% in 2024 (when it was worth €563 billion), the share of expenditure by top-tier clients soared, from 12% (€88 billion) in 2013 to 23% (€236 billion) in 2024. Being greatly exposed to aspirational clients has had repercussions for the majority of labels. 'The more labels are dependent on this type of consumer, the more they are exposed to their volatility, and the more they have suffered,' said Filippo Bianchi, one of the BCG study's authors. 'The luxury expenditure of this cluster of consumers is deeply linked to economic cycle fluctuations, while VIC expenditure is inversely related to them, because it is based on the clients' wealth status,' he added. Nevertheless, the study showed that the situation could change in the next 18 months, with the propensity to buy luxury goods increasing by 10% for aspirational clients and by 36% for top-tier clients. The fact remains that the latter feel they aren't valued enough by labels, and might choose to spend their money elsewhere. 'The number of top-tier clients went from 750,000 in 2023 to 900,000 in 2024, so 150,000 new clients entered the luxury sector's top end. Yet labels are still struggling to find, engage and segment them,' said Guia Ricci, the BCG study's other author. 'VICs are chiefly based in North America, and beyond there in Europe and Asia-Pacific, a region where the value of their luxury expenditure is growing vigorously, especially in India, Indonesia and Thailand. They are increasingly attracted by experiential luxury. It is a must for labels to understand what these consumers' interests are and how to approach them in the experiential segment, maybe through partnerships,' she added. The study highlighted the four main issues that are causing top-tier clients to become disenchanted. Firstly, they are bombarded by messages coming from countless labels, with no personalisation whatsoever. Secondly, top-tier clients regard their in-store experiences as too noisy and not discreet enough, as the VIP spaces that used to be reserved for them have lately been vanishing. Thirdly, top-tier clients said that, while craftsmanship is a key purchase driver, product quality is often not as high as expected, even for bespoke products. Finally, the majority of top-tier clients think that their status as important people isn't recognised enough, and the service they receive isn't of a sufficient standard. Indeed, the study found that 70% of potential VICs aren't correctly identified by labels because of the way the latter's CRM/segmentation works. Luxury labels are therefore urged to re-focus on client relations, perhaps helped by AI, to concentrate on experiences, to better monitor product quality and their supply chain, and to implement all these policies assisted by more granular data analysis and more sophisticated consumer segmentation, in order to better recognise their top-tier clients.
Fashion Network
09-07-2025
- Business
- Fashion Network
Luxury sector faced with flight of aspirational clients, dissatisfaction of top-tier ones
The luxury industry, currently disrupted by unfavourable economic conditions and growing geopolitical tensions, is also having to adapt to the whims of a rapidly changing clientèle. Aspirational clients are increasingly disenchanted with luxury, and this is having a profound impact on the market. In parallel, top-tier clients (or very important clients, VICs), whose numbers greatly increased in the last few years, are dissatisfied with the performance of luxury labels. These were the main findings of the 'True-Luxury Global Consumer Insight 2025' study carried out by Boston Consulting Group (BCG), which was presented on Tuesday in Milan during a conference organised by Altagamma, the association of Italy's top luxury labels. For the second consecutive year, the high-end luxury market posted a revenue drop (down 2% in 2025 as in 2024). The reasons were the diminished appetite of Chinese consumers, decreasing interest on the part of the newer generations, whose purchasing power has shrunk, and especially a downturn in purchases by aspirational consumers. In 2013, the latter accounted for 74% of the total luxury market's value, but in 2024 they accounted for only 61%, a loss of 13 percentage points in 10 years, and a phenomenon that inexorably seems set to continue. In recent years, the purchasing power of aspirational clients has decreased, while the price of luxury goods has skyrocketed. According to the BCG study, nearly 35% of clients in this cluster said they have stopped or reduced their luxury purchases in the last 12 months, while 65% said their expenditure will remain stable or diminish in the next 12 months. The study also showed that this loss in luxury revenue benefited other sectors. For one-fifth (22%) of aspirational clients, it turned into savings. For the remainder of the cluster, it shifted to more urgent expenditure categories like health and well-being (13%), purchases of pre-owned luxury goods (13%), or other expenditure. 'Aspirational clients still account for more than half of the market's total value. Labels cannot afford to do without them,' said Luca Solca, an analyst at Bernstein. Given the context, 'the resale channel might provide a means of keeping some of these clients, and/or of drawing them towards luxury labels,' said Enrico Galliera, head of sales and marketing at Ferrari, one of the speakers at the conference organised by Altagamma for the 11th edition of the Altagamma Consumer & Retail Insight survey. 'Some of our clients first came to us when they bought a second-hand [Ferrari]. It's an access channel we're monitoring closely. It's true that aspirational clients are currently prudent and hesitant, but we aren't always capable of identifying them and scouting them out. What we're doing is tapping alternative categories, for example our ready-to-wear line, to get them acquainted with our world. We're also trying to get in touch with young consumers,' said Galliera. 0.1% of clients spend more than €50,000 per year Aspirational clients at the bottom of the pyramid, who spend less than €2,000 per year on average, account for 90% of personal and experiential luxury consumers, while top-tier clients, at the pyramid's top, who spend over €50,000 per year with an average spend of approximately €350,000, account for only 0.1% of the total. However, while the aspirational clients' share of personal and experiential luxury expenditure fell from 65% (worth €479 billion) of the market's value in 2013, to 55% in 2024 (when it was worth €563 billion), the share of expenditure by top-tier clients soared, from 12% (€88 billion) in 2013 to 23% (€236 billion) in 2024. Being greatly exposed to aspirational clients has had repercussions for the majority of labels. 'The more labels are dependent on this type of consumer, the more they are exposed to their volatility, and the more they have suffered,' said Filippo Bianchi, one of the BCG study's authors. 'The luxury expenditure of this cluster of consumers is deeply linked to economic cycle fluctuations, while VIC expenditure is inversely related to them, because it is based on the clients' wealth status,' he added. Nevertheless, the study showed that the situation could change in the next 18 months, with the propensity to buy luxury goods increasing by 10% for aspirational clients and by 36% for top-tier clients. The fact remains that the latter feel they aren't valued enough by labels, and might choose to spend their money elsewhere. 'The number of top-tier clients went from 750,000 in 2023 to 900,000 in 2024, so 150,000 new clients entered the luxury sector's top end. Yet labels are still struggling to find, engage and segment them,' said Guia Ricci, the BCG study's other author. 'VICs are chiefly based in North America, and beyond there in Europe and Asia-Pacific, a region where the value of their luxury expenditure is growing vigorously, especially in India, Indonesia and Thailand. They are increasingly attracted by experiential luxury. It is a must for labels to understand what these consumers' interests are and how to approach them in the experiential segment, maybe through partnerships,' she added. The study highlighted the four main issues that are causing top-tier clients to become disenchanted. Firstly, they are bombarded by messages coming from countless labels, with no personalisation whatsoever. Secondly, top-tier clients regard their in-store experiences as too noisy and not discreet enough, as the VIP spaces that used to be reserved for them have lately been vanishing. Thirdly, top-tier clients said that, while craftsmanship is a key purchase driver, product quality is often not as high as expected, even for bespoke products. Finally, the majority of top-tier clients think that their status as important people isn't recognised enough, and the service they receive isn't of a sufficient standard. Indeed, the study found that 70% of potential VICs aren't correctly identified by labels because of the way the latter's CRM/segmentation works. Luxury labels are therefore urged to re-focus on client relations, perhaps helped by AI, to concentrate on experiences, to better monitor product quality and their supply chain, and to implement all these policies assisted by more granular data analysis and more sophisticated consumer segmentation, in order to better recognise their top-tier clients.
