As luxury fashion experiences a global slowdown, Vegan Fashion Repository identifies five emerging tenets to sustain the luxury industry – despite, or perhaps because of, shifting global attitudes.
Luxury fashion is eating its own tail. Seasoned market analysts struggle to project a reliable recovery path for luxury demand, which faces a crisis of perception as much as economics. While Prada and Hermès reported impressive Q3 sales growth of 18% and 11,3% respectively in October 2024, LVMH and Kering both reported a disturbing decline. LMVH suffered a 5% drop in its fashion and leather goods division, leading to a 7% plunge in shares – a two-year low. Kering fared worse, with a 16% decline in Q3 sales, compounded by a 40% drop in shares since the start of 2024. Kering’s flagship brands Gucci and Saint Laurent reported declines of 25% and 12% respectively, triggering dramatic leadership reshuffles. On October 8th, 2024, Stefano Cantino was appointed the new CEO of Gucci. On November 18th, 2024, Cédric Charbit, former CEO of Balenciaga, was appointed the new CEO of Saint Laurent, and Gianfranco Gianangeli, former Chief Commercial Officer at Saint Laurent, was named the new CEO at Balenciaga. Expectations of these three luxury veterans to bring these powerhouses back on track are massive, to say the least.
It would be overly simplistic to attribute the general decline in the appetite for luxury solely to waning economic optimism across three major markets – the US, Eurozone, and China – and to assume this appetite will recover once conditions improve. What is clear, however, is that post-pandemic growth, or indeed any growth, is now a relic of the past. For nearly two decades, major luxury brands enjoyed uninterrupted and seemingly limitless global demand. This demand was so robust that each rise in production costs, inflation, or even the early impacts of the war in Ukraine was met with confident price increases, secure in the knowledge that consumers would still purchase. According to the data company Edited, average luxury prices have risen by 25% since 2019. The price hikes for handbags have been particularly striking. The annual double-digit increases that began in 2012 were exacerbated by a post-pandemic combination of inflation, surging demand, and rising costs associated with both production and brand positioning. As of November 2024, a medium Lady Dior bag commands a staggering price of $6,500 (all prices in US dollars). By comparison, the same bag cost $4,450 in 2019. At Chanel, the classic medium 2.55 flap bag now costs $10,800, up $600 from its 2023 price of $10,200 and nearly double the 2019 price of $5,800. In 2008, the bag was priced at approximately $2,500; had the price increased solely in line with inflation, it would now cost $3,720 in 2024.
Louis Vuitton took the trend to new heights with the launch of the Millionaire Speedy Bag in 2023, carrying an eye-watering price tag of $1 million. Escalating prices, coupled with a global policy aimed at curbing discount distribution, have rendered luxury fashion increasingly inaccessible to aspirational customers. This shift has transformed the global fashion narrative from being described as ‘sick’ and ‘amazing’ to terms like ‘insensitive‘ (The Guardian), ‘absurd,’ and ‘unethical‘ (The New York Times). “Industry-wide, the pricing has gotten truly absurd,” noted Bryan Yambao (@bryanboy), one of fashion’s first viral influencers, in a November 2023 Instagram post critiquing a $6,000 Miu Miu coat. The excitement surrounding Phoebe Philo’s debut under her namesake label was, to say the least, overshadowed by heated debates over the four- and five-digit price tags attached to accessories and coats, respectively. Such criticism, voiced by influencers and fashion journalists, who would typically be the first to applaud everything costing north of a few average monthly salaries, speaks volumes about the new zeitgeist.
The global cooling
According to Bain & Company’s latest annual report, the global luxury market is experiencing its first slowdown since the Great Recession in 2008 (excluding the COVID-19 pandemic) and has already lost approximately 50 million customers over the past two years. The United States, which still accounts for the largest share of the global luxury market, has historically seen a decline in luxury sales during election years. This time, however, it will take something both impactful and unpredictable to rekindle the appetite for luxury and overcome the challenges of recent years. Across the Pacific, China – an essential driver of luxury brand sales since around 2010, thanks to rapid economic growth and aspirational consumerism – has seen a significant slowdown in 2024. Sales have declined by 20-22% compared to the previous year, as reported by Bain & Company. The Business of Fashion also reported economic confidence in China hit record lows in August 2024. In Europe and the Middle East, two violent conflicts near major markets provide no optimism for a tangible recovery in luxury demand. With little hope of a swift market rebound, luxury brands face the increasing necessity of rethinking their strategies.
According to McKinsey & Company’s analysis in September 2024 – using data from National Statistics Agencies, Eurostat, and the University of Michigan – consumer confidence, which hit its lowest levels since 2005 in the US, Eurozone, and China during 2022, continued to decline throughout the first half of 2024, sitting 10 to 30 points below 2019 levels. The annual State of Fashion 2025 report by The Business of Fashion and McKinsey & Company shows minimal prospects for improvement. Despite slight increases in confidence levels in the US and Eurozone from 2023, surveyed consumers overwhelmingly plan to cut back on discretionary spending, including fashion. Over 40% of shoppers in the US, UK, and Germany are already spending less on clothing, footwear, and accessories than they did a year ago, with over 80% planning to maintain or reduce spending in 2025. Worse still for the luxury sector, more than 70% of consumers intend to purchase off-price items over the next 12 months, with many pledging to continue even if their discretionary income increases. In the US alone, 64% of shoppers opted for off-price or dupes in Q3 2024. While half cited cost savings as their main motivator, 17% admitted they would continue to purchase dupes even if they could afford the original items.
If social media has done one thing right, it is enabling conversations that would previously be nipped in the bud. Public complaints about declining product quality – or outright faulty luxury goods sold at full price – have fuelled global disenchantment. For aspirational consumers, setting money aside for months or maxing out a credit card to own an item that soon deteriorates to resemble a dupe is not what they signed up for. Similarly, the post-pandemic overexposure has robbed many luxury houses of the exclusivity and social cachet they once commanded. Buying a statement piece from a luxury brand only to find oneself a walking advert is not exactly what an aspirational consumer signs up for as well.
Despite the increasing complexity and unpredictability of luxury demand, no universal playbook has been developed to provide global players with a set of dos and don’ts. Top luxury players such as Hermès and LVMH remain undeterred by the macroeconomic climate and are looking for other ways to sustain their luxury operations, such as focusing on novel products and technological innovations, or simply waiting it out in the firm belief that customers will eventually get used to higher prices. On the other hand, brands such as Mulberry, Michael Kors, Versace, and Burberry have revisited their original roots in ‘accessible luxury’ and re-focused their strategies on the disheartened aspirational customers. In response to criticism and falling sales, Versace has reduced its average prices, while Burberry pledged in November 2024 to price most of its handbags below $2,000. This shift reflects a growing global appetite for a ‘true value’ culture, where ‘price per wear’ becomes the decisive factor at checkout. Since luxury is inherently about providing ‘added value,’ redefining what that means seems a logical step for both consumers and the brands they engage with.
The five new tenets of luxury
Luxury, like any other fashion sector, must evolve with the times. Brands that can swiftly adapt to new trends, shifting consumer preferences, and market changes are far more likely to thrive. If recent disruptions in the global sales market have demonstrated anything, it is that aspirational consumers – those who save up for a statement piece or occasionally splurge beyond their means – remain the cornerstone of the luxury market. ‘To win back customers, particularly the younger ones, brands will need to lead with creativity and expand conversation topics.’ – said Claudia D’Arpizio, Bain & Company partner and leader of the company’s Fashion & Luxury practice.
The search for a new definition of luxury is, at its core, a quest for an aesthetic that resonates with these aspirational attitudes. While such attitudes may have been dampened by rising prices and pessimistic economic projections, they persist, and can be harnessed if a reimagined vision of luxury emerges. From hype and access management to offering compelling value propositions, mastering these interconnected elements could be the key to reinventing luxury fashion. Spoiler alert: these elements are so closely intertwined that it is a case of either mastering them all or leaving the task to others.
A C C E S S
According to Benjamin Paulin, head of the French design house Paulin, Paulin, Paulin, which has perfected the art of product access management, “When you can protect your product, you can stay longer [on the market].” Access lies at the very heart of luxury, and managing it effectively is a direct antidote to the overexposure that has plagued the sector. It is time for luxury brands to return to the drawing board and define exactly who their ideal clients are, delving deeply into their existing target demographics instead of casting a wide net for anyone who can afford a $600 keychain or smartphone case. Burberry’s downward spiral over the past decade serves as a cautionary tale for luxury brands contemplating uncharted customer segments at the expense of their core audience. Once a brand that capitalised on the best of British music, art, and technology under Christopher Bailey’s tenure as creative director, Burberry lost much of its charm and familiarity by focusing on introducing “new brand codes and signifiers,” in the words of its current CEO Joshua Schulman.
Since a well-defined customer base tends to be relatively narrow, it is only reasonable to expand within the same category. This involves maintaining strong engagement with existing customers while proactively targeting specific groups within younger demographics—those with the greatest potential to become future loyal clients. An added benefit of this approach is the expansion of social media reach, a critical metric of success for any brand’s marketing efforts. This is precisely what Miu Miu has achieved, both for itself and for the Prada Group, with Miu Miu’s impressive 105% sales surge serving as a key driver behind Prada’s overall remarkable figures. The ‘steppingstone’ philosophy aimed at Gen Z, exemplified through ultra-premium fragrances, is also being mastered by Loewe and Bottega Veneta. These brands excel at layering experiences onto their products, evoking strong emotional connections and create meaningful connections.
Curated shopping—designed to focus on the shopping experience itself—is a major expression of access management and a crucial element of building authentic, targeted customer relationships. Consumers are increasingly aware of their purchasing power and their ultimate control over selecting products that truly resonate with them. For a brand to significantly boost its sales, it must demonstrate an in-depth understanding of market specifics and take deliberate steps to celebrate local voices. This involves translating global, ubiquitous items into something distinctive enough to reflect local culture and sensibilities. Luxury players have made strides in courting local customers by creating elevated shopping experiences that incorporate culturally specific references, immediately recognised and appreciated by targeted groups. These efforts underscore an understanding of the importance of tapping into local sensibilities. However, success requires more than simply hiring local artists or designers; it demands a deeper, more strategic effort to translate these collaborations into sustainable growth and tangible sales figures.
A R T
In recent years, all major luxury players have embraced artistic collaborations, which have evolved from a ‘trend’ into a defining feature of the industry. Brand-artist partnerships, widely covered in the press and across social media, include notable examples such as Gucci with Karen Wazen, Chanel with local shoe designer Amina Muaddi, Dior with Latifa Al Shamsi, and Louis Vuitton with Mohammed Sultan Al Habtoor. In the Chinese market, Dior’s high-profile exhibition ART ‘N DIOR at the West Bund Art Center in Shanghai showcased masterpieces by Chinese artists Yang Mian, Zhang Ruyi, and Liu Wa, each offering their personal interpretations of the Lady Dior handbag (notably, the same handbag that saw a dramatic price surge over the last decade). Similarly, Hermès and Gucci presented The Artist Is Present exhibition in Shanghai. However, Cartier arguably excelled most by co-curating the Cartier and the Palace Museum Craftsmanship and Restoration Exhibition with Beijing’s Palace Museum. This project was a seamless alignment of the brand’s identity and expertise while honouring local heritage, rather than merely chasing viral social media moments.
The ultimate aim for a label to seek artistic input is to enhance the cultural authority of a brand’s customers by drawing on an artist’s vision and expertise, which is then imbued into the luxury product itself. ‘Art has always been synonymous with luxury. In this context [fashion], it takes on a new dimension because we can wear it directly. This awareness alone sets a new standard for what luxury means,’ says artist and designer Robert Kuta, founder of Kuta House, in Vegan Fashion Repository’s report and playbook for vegan fashion for 2024–2025. Just as an artistic layer transforms a shopping experience into an act of art appreciation, wearing a product touched by an artist elevates the act into a form of performance. However, only brands with a strong identity can credibly position themselves as artistic authorities. Gucci exemplified this during Alessandro Michele’s tenure (now at Valentino), where partnerships with artists like Ignasi Monreal and Alex Merry garnered an unprecedented following. Michele’s distinctive ability to evoke and respond to the zeitgeist’s uncanny elements helped establish an ‘aura’ of artistic authority around the brand. This ‘touch’ is what currently sets Miu Miu and Loewe apart from other brands struggling to maintain relevance. From Miu Miu’s collaborations with contemporary artists and literary clubs to Jonathan Anderson’s captivating Challengers costumes, both brands have successfully contextualised themselves within the cultural zeitgeist. ‘Anderson speaks Internet as well as he does fashion, and his chosen slang is often normcore – the more normal, the better,’ writes José Criales-Unzueta for Vogue after watching the film earlier this year. ‘The more ordinary, the easier it is to add meaning to.’ This essentially makes Anderson a natural post-postmodernist, and a 21st-century designer could hardly wish for higher praise.
A U T H E N T I C I T Y
The quest to identify and capitalise on what truly resonates with the current zeitgeist is, at its core, a quest to align with customers’ perception of authenticity. This has grown increasingly complex with the explosion of user-generated content over the past decade. Beyond the social media buzz, this shift has fostered global conversations around challenging topics and encouraged engagement with uncomfortable issues. Traditional luxury often justifies its reluctance to engage with the sustainability movement by clinging to a perception of timelessness, framing sustainability pressures as a fleeting trend (if luxury had its way). However, the October 2024 discovery by Milanese prosecutors of labour exploitation within the supply chains of several luxury brands, including Armani and Dior, highlights that the era of luxury brands staying out and above of the ethical debate – and scrutiny – is effectively over.
The global decline in enthusiasm for luxury fashion can be attributed to a broader search for what holds genuine value – yet another post-postmodernist whim of whims. Here, ethical, sustainable, and value-driven offerings find fertile ground. This is why luxury brands like Gucci and Tory Burch are tentatively exploring vegan fashion through premium collaborations. The narrow yet rapidly growing market for products that are both luxurious and cruelty-free has allowed vegan brands such as Giulia & Romeo and Rooney Mara’s Hiraeth Collective, alongside designers like Alfredo Piferi and Sarah Regensburger, to chart new territory. In doing so, they are redefining what a ‘statement piece’ means in today’s world. Having an added ‘ethical’ – or even ‘spiritual’ – dimension as an uncompromised brand value offers not just an identity but an anchor, allowing brands to tell stories that resonate authentically, provided they reflect the leadership’s genuine values. “In the future, the most successful brands will be those whose founders or leaders are transparent enough to show how they live alongside their business,” says Roman Raibaudi, founder and designer of Roman Raibaudi, in Vegan Fashion Repository’s report and playbook for vegan fashion for 2024–2025.
This paradigm shift is likely to drive more consumers towards vegan fashion, particularly as they become increasingly informed and concerned about ethical business practices. “Authenticity in this alignment strengthens consumer trust. Avoiding greenwashing is imperative: only developing strategies or products through trends that can be genuinely supported by processes and partnerships consolidates brand credibility,” notes William Cantú, assistant professor at the Polytechnic University of Leiria and IADE – Universidade Europeia in Lisbon, for the same report. As environmental awareness grows, consumers are looking to spend their money on more than just an item—they want products that add meaning to their lives and align with how they see themselves.
Sustainable luxury is emerging as a pivotal differentiator for brands, demanding genuine research and responsiveness to the diverse needs of their customer base across marketing and product development. In a market flooded with generic luxury items, consumers increasingly value brands that champion inclusivity and represent a broad spectrum of identities and backgrounds. As some luxury brands lose their edge and grow increasingly homogenous, they risk being outshone by those offering more than just exorbitant price tags. Vegan fashion—particularly in the premium segment that emphasises local artisanal traditions, ethical production, and sustainable materials—has the potential to fill this void. By weaving artisanal quality and compelling narratives into their products, these brands might uncover the new recipe for exclusivity and sophistication in the evolving luxury market.
P E R S O N A L I T Y
In the 19th century, the rapidly expanding ready-to-wear menswear market soon made men from all walks of life appear strikingly similar at first glance. The distinguishing mark of an English gentleman of higher status (and income) was a coat crafted from the finest wool and tailored with a bespoke fit—details only discernible upon closer inspection. Today’s boom in second-hand shopping was born out of a practice of sourcing and purchasing luxury items at a fraction of their original price, often with the trade-off of minor imperfections and signs of wear. In this context, wearing a luxury item that isn’t a perfect fit, though elevated to the realm of fashionable oversized chic, often signals a pre-loved shopping spree focused on securing the brand above all else. Off-price, pre-loved, and dupes shopping are trends expected to endure, even as some economies show signs of recovery. ThredUp’s 2024 Resale Report estimates that by 2025, second-hand items will account for 10% of the global apparel market, with the second-hand apparel sector projected to grow three times faster than the overall global market. By 2028, it is expected to reach USD 350 billion, with Future Market Insights predicting further growth to USD 652.3 billion by 2032. While the pre-loved or ‘vintage’ aesthetic carries a certain nostalgic charm, the reasons for choosing pre-loved extend well beyond financial concerns. “Nostalgia, represented by an appreciation for second-hand practices, and the pursuit of sustainability emerge as cultural symbols of resistance to fast fashion’s disposable and ephemeral logic,” says William Cantú. This resistance reflects the zeitgeist, where the search for personal sartorial expression pushes consumers beyond the generic offerings of fast fashion into rediscovering items steeped in someone else’s past, while simultaneously exploring their own identity.
In the world of luxury fashion, however, the pursuit of personal expression inevitably intersects with the amount spent to achieve it. Bespoke quality stands as one of the final strongholds of traditional luxury. When other markers of luxury—such as exclusivity and originality—become less reliable, impeccable craftsmanship remains at the heart of the sector. Consumers have always been drawn to well-made, unique items that convey rarity and prestige. In a time dominated by the rhetoric of ‘my truth,’ bespoke or perfectly tailored items speak to a deeper sense of exclusivity than merely owning a limited-edition piece, no matter how scarce the quantity.
The paradigm of ‘new luxury’ is intensely personal, transcending monograms on handbags. Brands can embrace this shift by offering repair and size adjustment services, fostering a deeper emotional connection with customers. These services transform ownership into a more meaningful relationship, where the luxury of an item is measured not just by its initial price tag but by the stories it accumulates over time. Time, in this sense, becomes an intrinsic component of luxury—defined by the care and attention invested by the owner to preserve the item’s narrative. Though luxury brands have quietly offered repair services for years, the elevation of repair into a mark of the ‘new cool’ is now bolstered by compelling financial data. Technology platforms, startups, and enterprises specialising in repairs—such as Sojo, Save Your Wardrobe, and The Restory—have collectively raised millions of dollars in recent years. “Repair […] is actually incredible when it comes to building brand value as well,” said Josephine Phillips at BoF Voices in November 2024. Her company, Sojo, has gained significant momentum in London as 2024 comes to a close, demonstrating that repair and rejuvenation are not only sustainable but commercially powerful trends reshaping the fashion market.
I N N O V A T I O N S
In the realm of innovations in user experience, augmented reality (AR) and virtual reality (VR) have become exciting arenas for luxury brands vying for customer engagement. A new interdependence has emerged, holding significant promise for recalibrating the global luxury experience. While the buzz surrounding the democratisation of digital experiences—enabled through strategic partnerships between luxury brands and tech companies—is designed to spark a global desire for luxury goods, the strategic management of accessibility will ensure sustained demand in the long term. Balenciaga, in collaboration with Apple Vision Pro, became the first luxury brand to present its Spring 2025 collection in Shanghai to logged-in audiences across China, Hong Kong, Japan, Singapore, Australia, Canada, France, Germany, and the United Kingdom. Gucci, meanwhile, has also utilised Apple Vision Pro to enhance storytelling, drawing on its extensive archive to craft immersive experiences previously reserved for select designer executives. This approach aims to revive the brand following its sales downturn in 2024. Digital audiences can explore Gucci’s annals, delving into the heritage of the maison’s iconic Bamboo 1947 bag. Users navigate a digital rendition of the Palazzo Settimanni in Florence, accessing portals that reveal the bag’s original creative process. On a more product-focused level, Chanel has introduced the Première Sound necklace – a $16,400 sautoir necklace-watch equipped with headphones, offering a tech-enhanced revival of a 1987 classic.
Innovative materials, production technologies, and impactful digital experiences have long been intertwined with luxury, requiring significant investment to implement. According to Federica Levato, partner at Bain & Company and leader of its EMEA Fashion & Luxury practice, a growth-focused strategy for luxury brands will demand mastery of both the industry’s foundational pillars and ‘tech-enabled flawless execution, with AI playing a paramount role across most areas of the value proposition.’ Integrating cutting-edge technology, whether in design, user experience, or product innovation, alongside relevant and compelling communication, can set a luxury brand apart.
However, not every brand that invests in advanced technologies will see their efforts directly translate into increased sales. Yet every brand achieving sustained growth has effectively harnessed innovative technologies. The key lies in leveraging a strong brand identity, built on a robust blend of creative strategy and experience management, and expressing this identity through products and initiatives that are as inventive as they are imaginative.
Innovative and costly-to-develop materials represent the greatest potential for luxury and vegan fashion to join forces. The most exciting material innovations are emerging from research projects aimed at creating a new generation of materials capable of replacing both animal- and fossil-derived ingredients, thereby minimising environmental impact. Stella McCartney has long been at the forefront of this movement, reaping the rewards of her bold decision to pioneer innovative and cruelty-free materials before any of her contemporaries. The very commitment that once made her appear as an outlier among luxury brands has, over the past decade, become the defining factor of her label’s distinctive appeal. Meanwhile, many of the same players who dismissed her experiments now struggle to distinguish themselves from one another.
Prada has embraced Econyl, a recycled nylon derived from waste, as part of its response to the global plastic and waste crisis. The brand has pledged to use only recycled nylon across its product range. Similarly, Burberry is recalibrating its pursuit of the ‘new’ by investing in innovative materials that complement its heritage. Examples include launching a blended scarf made from 70% wool and cashmere and 30% Brewed Protein™, as well as partnering with Mediterranean Agro Technologies (Magtech), Europe’s first hydroponic cotton producer, to create a fabric combining hydroponic and organic cotton. While 2024 marks the early stages of luxury and designer brands experimenting with the reinvention of luxury’s core tenets, some have already made significant strides. Brands like Ganni, Christian Siriano, and Patrick McDowell are incorporating cutting-edge sustainable materials such as Cycora®, Simplifyber, Oleatex™, Circ Lyocell, and Forager. These innovations not only underscore their commitment to sustainability but also serve as tools for crafting unique brand identities and gaining both a competitive and narrative advantage.
Data Source and Further Reading