The high prices for energy and food are forcing more and more people to tighten their belts. But the crisis has so far passed many luxury goods manufacturers such as Dior, Cartier or Louis Vuitton. They also achieved double-digit growth rates in the first nine months of this year.
The boss of the champagne manufacturer Moët-Hennessy, Philippe Schaus, recently reported in an interview that most of the house’s top champagnes are practically sold out.
The management consultancy Bain
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This is how the French luxury empire LVMH, which includes fashion icons such as Dior and Louis Vuitton, reported champagne brands such as Moët
The competitor Richemont, which brings together well-known brands such as Cartier, Montblanc and IWC under its umbrella, increased its sales by 24 percent to 9.7 billion euros between April and September. The French luxury group Kering, with brands such as Gucci, Saint Laurent, Balenciaga and Bottega Veneta, grew by 23 percent in the first nine months of this year and achieved sales of 5.1 billion euros.
Bain’s experts are convinced that, despite the danger of a recession, luxury manufacturers will continue to improve in the coming year – albeit more slowly. Last but not least, the industry benefits from the increased enthusiasm for luxury among younger generations.
The expert responsible for the luxury business at McKinsey, Achim Berg, sees it very similarly. He is convinced that even in a recession, luxury manufacturers will prove to be very resilient. However, according to Nielsen’s analysis, the luxury market will no longer have the double-digit growth rates of 2021 or 2022 in the coming year. “Whoever says that rich people always have money, and that’s why luxury will continue, is making it a bit too easy.” , says the industry expert. That’s true at the upper end of the luxury segment. But in recent years there has been a certain democratization of luxury. Borrowing from streetwear and the casual trend, luxury manufacturers have succeeded in significantly expanding their customer base in recent years.
customers
“Many younger customers in particular have discovered the luxury brands for themselves. This is now a relevant market segment for many luxury companies. And here they too will feel the declining desire to consume in the population,” predicted Berg.
Fernando Fastoso, who has held the first professorship for brand management for luxury brands in Germany at Pforzheim University since the 2020/2021 winter semester, also recently predicted that rising inflation would affect demand for luxury, especially among the middle class, who consume luxury on special occasions. “Less impact can be expected from the luxury consumption of the upper classes as they enjoy greater economic stability.”
Industry insider Berg believes that the second-hand market for luxury items could benefit from the looming recession in the near future. “The desire is there. People want to continue buying luxury items, even when money is tighter.” Ten years ago, a fake product would have done for some of the new target groups of luxury manufacturers. Today they wanted the original. “For many people today, luxury products are a means of self-expression. They will not want to do without them even in the recession.”
In the long term, the luxury industry sees itself on the upswing anyway. The experts at Bain expect global sales of personal luxury goods to increase from around 353 billion euros at present to up to 580 billion euros by 2030.
