Latest news with #downturn
Forbes
5 hours ago
- Business
- Forbes
Is The Luxury Industry Facing An Identity Crisis?
The shares of LVMH, Louis Vuitton's parent company, are down 15% since the start of 2025. The luxury industry is on the verge of a necessary reset. LVMH's profits dropped 15% in the first half of 2025, with organic growth down 3%, and nearly all divisions reported flat or negative performance. As for Gucci-owned luxury group Kering, this year has been even worse: revenue is down 18% for Q2 with Gucci's sales plummeting by 25% and overall sales in Asia and Japan down as much as 29% in the first half of the year. Declining growth in the fashion division and the Asia-Japan geography seems to be a common denominator for both luxury groups, but these results signal a downturn that is persistent and increasingly difficult to dismiss, likely hinting at a deeper issue. Since 2021, luxury groups have focused on hyper-scaling growth, gaining market share and reach. They began turning heritage houses into mega brands with mass appeal. What these groups are now facing is not just the result of tariffs, inflation and geopolitical uncertainty. It is not a temporary dip in demand, but a clear sign calling for a reset. Luxury's biggest players have spent the past several years chasing scale, mass visibility, and short-lived cultural relevance — and are now facing the consequences. In this race for popularity and relevance, many lost the essence of what made them desirable in the first place: exclusivity, intimacy, and craftsmanship. Overexposure should not be part of a luxury brand's strategy. Hermès presents a striking contrast: while LMVH and Kering sales dipped, the most valuable and profitable luxury brand in the world saw its revenues rise 9% to 3.9 billion in Q2, with growth across regions, thanks to a very loyal customer base and exceptionally strong brand equity. Third Bridge analyst Yanmei Tang commented on the brand's performance: 'Hermès has consistently focused on scarcity, craftsmanship and brand equity, rather than chasing aggressive volume growth. Its approach appears well-suited to a market where high-end consumers are becoming more selective and emotionally connected to brands.' This scarcity approach means that unlike competitors, Hermès is not focused on store expansion nor product extension, which has always been what differentiates it from other brands. Its approach is deliberately restrained, with an intentional approach to marketing, focused on craftsmanship and storytelling rather than celebrity-infused campaigns or branded pop-up cafés. Compare that to Gucci. Once a highly popular brand amongst younger consumers across the globe, the Italian brand leaned heavily into hype and cultural moments. But what happens when the hype fades? Gucci is now facing a sharp decline in sales and consumer loyalty, struggling to regain relevance. The lesson is clear: overexposure and trend-chasing might bring short-term attention, but they rarely build long-term equity. Even brands currently riding high — like Miu Miu, one of 2025's most popular brands — should be cautious. Virality is not a strategy. While relevance can spark a moment, only authenticity can sustain a brand. Ultimately, today's luxury consumers are evolving. They are more selective, less trend-driven, and increasingly value emotional connection and long-term worth. They don't just want a product — especially if it comes with a significant price tag. They are looking to indulge, or invest, into something timeless, valuable and built to endure while making them feel special now and in years to come. This means focusing on craft, storytelling and exclusivity, and resisting the pull of aspirational appeal and mass visibility. Now is the time for luxury brands to return to their roots: focus on intention, intimacy and craftsmanship. Storytelling, through marketing, should honor a brand's legacy and values while driving desirability. What makes a luxury brand authentic if it is focused on trends, mass visibility and marketing activations often void of true meaning? What is really happening is that consumer sentiment towards luxury brands is changing: a growing fatigue and declining interest in spending more and more money for little novelty or something that feels like an investment with long-term value.
Yahoo
5 hours ago
- Business
- Yahoo
Gucci owner Kering's Q2 2025 revenue plummets 18%
French luxury group Kering, owner of Gucci and Yves Saint Laurent, has reported a 18% downturn in its revenue for the second quarter (Q2) of 2025 to €3.7bn ($4.27bn), with a comparable basis decrease of 15%. This reported revenue includes a negative impact from currency fluctuations amounting to 3%. The company's directly operated retail network experienced a 16% drop in sales on a comparable basis, consistent with its first-quarter performance for the year. Within regional markets, North America saw a 10% reduction and Asia-Pacific witnessed a 19% decrease in sales, both showing some improvement over the previous quarter. However, Western Europe's sales decreased by 17%, and Japan faced a steeper decline of 29%, largely due to a significant fall-off in tourism. The French luxury house posted net income attributable to the group of €474m in the first half (H1) of the year. During the second quarter of 2025, Gucci experienced a 25% decrease in sales on a comparable basis, with its directly operated retail network sales falling 23%. Yves Saint Laurent also reported a downturn in the same period, with sales dropping 10% on a comparable basis and a 12% decline in its directly operated retail outlets. Conversely, Bottega Veneta saw a slight increase in revenue, with a 1% rise on a comparable basis. Kering's Other Houses showed a 16% decrease in revenue on a comparable basis during the second quarter, with varying results across individual brands. In the first half of 2025, Kering revenues fell 16% to €7.6bn. Kering chairman and CEO François-Henri Pinault stated: 'The first half of 2025 has been a period of momentous decisions for Kering. On the governance front, I recommended to the board of directors, which has agreed, that we entrust the role of Kering CEO to Luca de Meo, while I will retain the chairmanship. 'On the operational and financial fronts, in a particularly tough market environment, we continued to streamline our distribution and cost base, and, executing on our roadmap, we took decisive steps to strengthen our financial structure. Though the numbers we are reporting remain well below our potential, we are certain that our comprehensive efforts of the past two years have set healthy foundations for the next stages in Kering's development.' In response to an unpredictable economic and geopolitical landscape, Kering states that it is actively pursuing its strategic goals focused on sustainable profitability and growth. The group is intensifying efforts to foster the expansion and success of its brands while firmly committing to enhancing operational efficiency. "Gucci owner Kering's Q2 2025 revenue plummets 18%" was originally created and published by Retail Insight Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
6 days ago
- Business
- Yahoo
Dow slashes dividend, reports bigger-than-expected loss; shares fall
(Reuters) -Dow Inc (DOW) reported a bigger-than-expected quarterly loss on Thursday and halved its dividend amid a prolonged industry downturn, sending shares of the chemicals maker down over 7% in premarket trading. Global chemical companies are feeling the pressure to reassess strategies, with higher production costs in the Euro region, lackluster demand and stringent environmental regulations. Quarterly net sales from Dow's packaging and specialty plastics segment, its largest by revenue, fell 8.9% to $5.03 billion from a year earlier. The Michigan-based company reported an adjusted loss of 42 cents per share for the second quarter ended June 30, compared with analysts' average estimate of a loss of 17 cents per share, according to data compiled by LSEG. Dow declared a quarterly dividend of 35 cents per share. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Reuters
6 days ago
- Business
- Reuters
Dow slashes dividend, reports bigger-than-expected loss
July 24 (Reuters) - Dow Inc (DOW.N), opens new tab reported a bigger-than-expected quarterly loss on Thursday and halved its dividend amid a prolonged industry downturn, sending shares of the chemicals maker down over 7% in premarket trading. Global chemical companies are feeling the pressure to reassess strategies, with higher production costs in the Euro region, lackluster demand and stringent environmental regulations. Quarterly net sales from Dow's packaging and specialty plastics segment, its largest by revenue, fell 8.9% to $5.03 billion from a year earlier. The Michigan-based company reported an adjusted loss of 42 cents per share for the second quarter ended June 30, compared with analysts' average estimate of a loss of 17 cents per share, according to data compiled by LSEG. Dow declared a quarterly dividend of 35 cents per share.
CTV News
16-07-2025
- Business
- CTV News
‘A downturn that is really starting to wreck havoc:' New condo sales in GTHA continue decline as developers cancel more projects
Condominiums and the CN Tower are shown along the Toronto skyline on Tuesday, April 25, 2017. THE CANADIAN PRESS/Cole Burston The Greater Toronto and Hamilton Area new condominium market saw just 502 sales in the last quarter, prompting one real estate analysis firm to speak out about what it says is a 'downturn that is really starting to wreak havoc.' The number was included in Urbanation's latest report, released Tuesday. The firm said that the 502 new condominium units that changed hands in the second quarter marks a decline of 69 per cent compared to the same time period last year and represents a 91 per cent drop compared to the 10-year average. 'The market has entered a phase of the downturn that is really starting to wreak havoc. Project cancellations are mounting, construction starts are collapsing, jobs are being lost, buyers are losing a lot of money, and developers are facing difficulties with closings,' Urbanation President Shaun Hildebrand said in an analysis accompanying the data. The GTHA condo market has been sluggish for much of the past year, with a Royal LePage report released earlier this week showing that the median price of a GTHA condominium unit fell 5.6 per cent year-over-year to $699,700. The median price of a single-family detached home decreased 1.2 per cent year-over-year to $1,448,700, according to the same report. Urbanation said in its analysis that four proposed condominium buildings were cancelled in the second quarter alone, bringing the number of cancelled developments since the start of 2024 to 21. The firm said that the cancellations of those projects will result in the loss of 4,412 housing units. Developers also appear to be holding off on new projects, with Urbanation's data suggesting that only three projects started presales this quarter, representing just under 900 units. Inventory levels, however, continue to soar amid soft demand. 'The GTHA had a record-high 2,478 new condominium apartments that were completed and available for purchase from developers as of Q2-2025, a 102 per cent increase from a year ago and more than five times higher than the level from two years ago,' Urbanation said. Note that this figure doesn't fully account for all completed units that were pre-sold but the purchaser has yet to close. Meanwhile, sales by developers in completed new condo projects totalled 131 units in Q2-2025, resulting in 60 months of supply for standing inventory on the market.' The price per square foot of condos also saw a six per cent decline from last year and a 16 per cent drop from two years ago, Urbanation said. In his analysis, Hildebrand said that while an eventual reduction in the completion of new condominium buildings 'should help to alleviate some pressure, the near-term will remain very challenging' for the new condo market.
