Accessible Luxury’s Big Opportunity | The Week Ahead, BoF Professional


THE SHRINKING CENTRE

  • The brand Michael Kors is marking its 40th anniversary with a digital show on April 20

  • “Accessible luxury” brands have lost market share to both more-expensive and cheaper rivals

  • Handbags, a key category for these labels, are expected to see strong sales as lockdown restrictions ease

Michael Kors will be getting back to the designer’s roots with its latest collection launch, a New York theatre-themed digital event that doubles as the brand’s 40th anniversary celebration. It’s a time of transition for Kors, and the American accessible luxury category as a whole. The pricey but generally not too pricey brand, along with similarly positioned rivals like Coach and Kate Spade, is competing for a shrinking market, as wealthy consumers upgrade to luxury labels and the masses look for bargains. Piper Sandler’s latest survey of American teens illustrates what Michael Kors is up against: in 2018, 62 percent of respondents named Kors, Coach or Kate Spade as their favourite handbag brand, while 17 percent named a European luxury label. In the latest survey, the gap was much narrower, at 43 percent and 37 percent, respectively. Meanwhile, Shein, an online fast fashion retailer, cracked the survey’s list of most popular handbag brands for the first time.

It’s not all bad news. Kors might be grabbing for a smaller slice of the pie, but the pie itself is bound to get bigger as lockdowns lift and consumers seek out new heels and handbags. The long-awaited new silhouette — goodbye skinny jeans — appears to be gaining broader traction, a prime opportunity for brands that bridge the divide between runway fashion and everyday dressing. New leadership may be on the way, with former Coach head Joshua Schulman rumoured to be in line to head Capri, the parent of Kors, Versace and Jimmy Choo.

The Bottom Line: As Coach’s recent success with “Coach TV” shows, it is still possible for accessible luxury brands to win consumers’ attention. The greater challenge is convincing those customers to buy their bags at full-price boutiques instead of outlet malls and off-price stores.

DOES GUCCI NEED FIXING?

  • Kering, owner of Gucci, Balenciaga, Saint Laurent and other brands, reports first-quarter financial results on April 20

  • Last quarter, Gucci’s sales underperformed, amplifying concerns about slowing momentum at the brand

  • Last week, Gucci, which turns 100 this year, showed its latest collection, which included a collaboration with Balenciaga

Where LVMH, Prada and other luxury giants seem to have the post-pandemic wind at their backs, Gucci risks being left out of the party. It partly comes down to timing: Gucci dominated the end of the last decade, but momentum was starting to flag by early 2020. The pandemic wasn’t the best time for creative director Alessandro Michele to debut a new direction for the brand; a collection launched via a series of short films drew plenty of attention, but sales dipped in the fourth quarter. The temporary halt to global tourism took a big bite.

To be sure, Gucci still ranks second in Brand Finance’s annual ranking of the world’s most popular brands, behind Nike. And Michele is an expert at using that clout to draw attention to his creations; last week’s show, with its Balenciaga “hack,” was an online sensation the likes of which few other brands can match.

The Bottom Line: Gucci’s latest collection appropriately had a “rebirth” theme. Kering, which relies on Gucci for a majority of its revenue and profits, is no doubt hoping Michele’s latest stunt proves as effective at drawing consumers to stores as it did at drawing online views.

EXPOSING FASHION’S DARK SIDE

  • Fashion Revolution Week commemorates the anniversary of the Rana Plaza building collapse, where over 1,100 garment workers were killed

  • Activists use the week to draw attention to pressure campaigns on topics ranging from treatment of workers to fashion’s wasteful practices

  • The industry’s environmental record will also be scrutinised on Earth Day, which is April 22

Each April, Fashion Revolution Week unleashes a flurry of hashtags, petitions and events targeting the industry’s worst practices. But in truth, criticising fashion’s bad actors has become a year-round affair. In some ways, activists have momentum on their side. Consumers are better informed about the darker side of the fashion industry, and in surveys say brands’ behaviour affects their purchasing decisions (spending data is less conclusive on this front). At the same time, the disruption and economic devastation of the pandemic has created new challenges, particularly in the area of worker rights. When brands talked about “rationalising inventory” and “slimming SKUs” this past year, that often meant cutting ties with suppliers in developing countries, who in turn passed along the economic pain to their workers. Eliminating Xinjiang cotton linked to forced labour is also proving tricky, as brands must choose between alienating Chinese customers by boycotting the material, or Western consumers by failing to do so.

The Bottom Line: Activists have consumers’ attention, and many brands have devoted significant resources to addressing their worst excesses. But progress is uneven, and the industry is a long way from declaring victory on most fronts.

The Week Ahead wants to hear from you! Send tips, suggestions, complaints and compliments to [email protected].

GetResponse Pro

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *