Gucci Valigeria, Paris Saint-Honoré. The brand was cited by NewStore as a omnichannel leader.
Dominique Maître for Gucci
Fashion
Top-tier Luxury Spending Forecast Still Looks Rosy
“It’s probably not worth their while to be the richest person in the graveyard.”
That revelation is why top-tier consumers are fueling luxury sales in the sector, according to Luca Solca, who summed up the global luxury market Thursday night at a French American Chamber of Commerce event in New York. Just how long that mindset will last remains a matter of debate, the Bernstein senior analyst said. High-end demand in Europe and the U.S. is still very healthy after two strong years of sales. Inevitably though, this post-pandemic euphoria will normalize, Solca added.
The freewheeling spending is being driven mostly by “how people feel, what they want to do and what they want to spend money on,” Solca said. Even if some consumers’ see their stock market portfolios decreasing, they “don’t care and want to have a good time” after experiencing two terrible years due to the pandemic, Solca said. As many are eager to be out and about again, the demand for new dresses, shoes and handbags is outweighing jewelry purchases, which spiked due to gifting during the pandemic and continue to show strong results, he added.
Before the pandemic, Chinese shoppers accounted for 30 to 33 percent of luxury consumers; American consumers comprised 22 percent, and European ones accounted for 18 percent. More recently, the surge by American and European shoppers in the past two years has taken some of the overall market share from Chinese consumers, however, with the lifting of lockdowns in China in the past few months, the expectation for 2023 “is a very strong rebound for Chinese luxury spending,” Solca said, adding that estimates that that market could grow at 7 percent seem “very low,” based on feedback from companies in China that have indicated the potential to double or triple sales in their own stores there. The rebound sparked by Chinese consumers is expected to extend into next year, which would be conducive to sustaining “above-average demand for the industry,” as in double-digit percentage gains on average this year and next, he said.
To highlight “how thin the penetration of Chinese demand is, Solca noted how Louis Vuitton indicated in 2018 that it had 5 million Chinese consumers globally, representing .03 percent of the population in China.
Noting how that may bode well for the stock market, Solca said he has never been so busy speaking with investors in the last 20 years.
Referring to Global Blue data, Solca said that between 2019 and 2022 the top spenders globally have grown between 2.6 and 2.7 times and the bottom spenders have grown by about 30 percent. With the return of shoppers from China, who can now travel more freely, luxury stores, including some that already have waiting lists and require appointments, could potentially get very crowded, he said. “This could cause the service levels of our industry to get worse. They are already poor, frankly with the queuing [that is sometimes] required in front of the stores, and waiting forever to get what you want.”
“The industry is building on a paradox, by selling the perception and illusion of exclusivity while growing exponentially,” Solca said. Modern luxury brands have reconciled that by never discounting “to maintain that perception of exclusivity while selling as much as they possibly can,” he said.
Not anticipating a slowdown in American or European luxury spending anytime soon, Solca noted how the luxury industry in Europe is considered as strong as the technology sector there. “LVMH has the largest market cap in Europe today,” he said.
The greatest risks to the luxury market are geopolitical developments — namely if the relationship between the U.S. and China continues to deteriorate, and international trade suffered, with sanctions applied to China. “This would be a very good day to buy luxury goods stocks, because they would fall a lot,” he said.
Another challenge for retailers is how social media and online information and interest are deterring some from in-store visits. That means stores need to be more exciting and engaging — hence the influx of pop-ups and limited-edition designs — and the added fixed costs of such endeavors. That is also leading to greater consolidation and the “big companies get bigger and smaller brands struggling to stay in the game, because they don’t have the ability to spend more and human resources to dedicate towards all of these new fronts that have been emerging,” Solca said.
The uptick in top-tier luxury spending has lead to dedicated VIP rooms, and soon by-appointment VIP stores, Solca said. Increasingly, luxury brands are reducing wholesale accounts to avoid competing with them, building their own direct-to-consumer and maintaining full-price shopping. Gucci, Prada and Burberry, for example, have halved their wholesale presence, Solca said.
Afterward, he spoke with WWD about how luxury brands need to be integrating and upstreaming manufacturing so that they produce goods directly to secure capacity and to claim that ESG criteria. “The time of greenwashing is over. Companies need to be true to what they say. That is the best insurance policy. That is the best guarantee — that you are respecting the environment and the workers as well.
Luca Solca
Photo Courtesy
He also spoke about how luxury brands are seeing robust sales from their top-shelf spenders, while also using their advertising and social media to cast a wider and more diverse net. “They use different categories for different customers. All of the luxury brands are getting into beauty because that is the luxury of the poor so you give that to the masses,” he said, noting how couture, the most expensive products, uphold a brand’s highest standard. “[Luxury] brands are going into beauty and couture to be different things to different people,“ Solca said.
There’s a battle for attention that is going on, too. “Why do these collaborations like the one with all the polka dots [that Louis Vuitton] with Yayoi Kusama? To attract attention,” Solca said.
“Who you are and how important you are in the world is probably more important than the technical skills that you bring to the job of designing whatever line you are responsible for because you have very strong teams behind you any way,” he said.
Beginning March 30, vintage collector/filmmaker/author and Hollywood royalty Liz Goldwyn is auctioning off a time capsule of 1990s-early 2000s anti-fashion history: pieces from New York designer Susan Ciancolo.
Made using deconstructed and reconstructed upcycled garments and textiles, Ciancolo’s 11 Run collections produced from 1995 to 2001 were one-of-a-kind, handcrafted alternatives to the prevailing Gap khaki and slick minimalist fashions of the time.
Part of New York’s downtown art scene, Ciancolo produced her collections with a collective of family and friends, and presented them in shows akin to happenings with films shown, aerialist models hanging from the ceiling, or in a temporary restaurant in a gallery, as examples. Goldwyn produced some of those shows and walked one, alongside model Frankie Rayder, artist Anh Duong and actress Julianne Nicholson.
Goldwyn met Ciancolo in 1996, when she was working in costume and conservation at Sotheby’s New York, and the two became muses for each other. Together they created garments such as a tiered denim skirt now in the Metropolitan Museum of Art’s Costume Institute permanent collection, as well as a 1998 custom dress that was on view as part of the “In America: A Lexicon of Fashion” exhibition.
Goldwyn and Ciancolo, who works as a fine artist now, partnered for the auction with the Bridget Donahue gallery and Special Offer Inc., an up-and-coming media company that produced a video with archival footage of the shows and commentary about those bygone days.
“You feel like you are seeing a love letter to New York in the 1990s,” said Goldwyn, whose most recent book, “Sex, Health and Consciousness: How to Reclaim Your Pleasure Potential” (Sounds True) came out in October.
A Susan Ciancolo Run collection auction piece.
Over the years Goldwyn has amassed a fashion archive with thousands of garments and accessories, with a special focus on Yves Saint Laurent, Sonia Rykiel and Ciancolo.
“I liked the artistry of it and she had a whole world which was kind of cult-like. I definitely fell under the spell. She had all these women artists, models and musicians working and collaborating alongside her, it felt supportive and we had an artistic shorthand,” said Goldwyn. “It was fun also to be in the world of Sotheby’s and having access to archival treasures, and taking something to her to see what she’d do with it.”
There are 56 pieces being auctioned at liz.run, including a corset-like “I Love New York” T-shirt, deconstructed dresses, a multipiece burlesque costume, and a set of Barbie dolls with miniature Run collection clothing. The videos and commentary will live on online after the auction ends mid-April, like a museum show that lives digitally.
“I don’t think anyone would see her clothes and think corporate suit, but there are some things in the sale that were my corporate, uptown looks. I would go from Canal Street where we both lived to Sotheby’s auction house looking like my dress was caught in the escalator,” said Goldwyn.
“It’s so funny to me how Gen Z and Millennials have this obsession with that time period, I think they are wanting to recapture a time before social media,” she said. “In terms of fashion it was so different…you didn’t have the shows online…and there was a scrappiness…it was pre-designers being traded like chess pieces by big corporations.”
All bids will start at $111. “I want it to be accessible because when I started collecting, it was a dollar a pound,” said Goldwyn. “I think there is something cool to having an entry point accessible to more people.”
Earlier this year the TikTok star “Tami Elizabeth” was more than surprised to see what appeared to be her likeness on a Shein dress.
In response to that, she claimed to have emailed the company inquiring about the artist and sending two cease-and-desist letters after receiving guidance about that from an attorney. The stylist and designer, whose given name is Tamara Strzelecki, said she was startled again after receiving an invitation to collaborate with “Shein Curvee” as an influencer.
The TikTok standout first spoke with WWD in January about the situation. On Thursday, she shared with WWD an email exchange from a Shein Curvee address that was dated March 16. The email read in part, “We @SHEIN are launching our newest clothing brand and we noticed you have been a fan of our work and we have observed your profile and you’re qualified for a collaboration with us.” In exchange for tags, the email offered Strzelecki free monthly packages of eight items of her choice, and discount codes to share among other incentives.
Aside from being a popular TikTok personality with 7.9 million likes, Strzelecki has a profitable online business, Sugs’ Shoppe. Although it has been up-and-running for 15 years, it became successful last year after one of her getting-ready videos — for a visit to her therapist — went viral with more than 1 million views.
Regarding the offer of a Shein Curvee collaboration, she told WWD, “I am a size 2, not curve material. I replied with a photo of me in the dress and stated I had reached out multiple times to request more information about the design and I get sent a collaboration offer?” and shared her email response to that address.
TikTok star “Tami Elizabeth” wearing the dress that she claims bears her likeness.
Photo Courtesy
Asked about the offer, Emily Workman, director of corporate communications for the Shein Group, said Thursday, “While we can confirm there was no outreach to this individual regarding a partnership with Shein, we have been made aware of recent email scams falsely claiming to come from our company. We encourage others to stay vigilant regarding emails claiming to be from Shein offering or soliciting services.”
As for whether Shein would comment regarding Tami’s claims that her likeness was used for a dress and cease-and-desist requests sent to the company earlier this year, Workman said, “We don’t have anything to share at this time.”
Asked about Shein’s explanation, Strzelecki said, “I can’t verify if the company was really Shein or not. I just received the email with Shein Curvee, the one forwarded to you. It’s the only correspondence I have received from anyone at Shein.”
Meanwhile, Shein is gearing up to host the first Shein x Design Summit in Los Angeles on April 1. The fast fashion retailer plans to host hundreds of designers and artists for showcases, panels and networking opportunities with such fashion insiders as LaQuan Smith, Maeve Reilly, Oscar de la Renta’s and Monse’s Laura Kim and Hilldun Corporation’s chief executive officer Gary Wassner. The event is also meant to introduce scores of independent designers to the company’s incubator program Shein X. George Chiao, U.S. president of Shein, noted that the aim is to onboard 1,000 designers this year to the program. “Thousands” of others have already cycled through, since the incubator’s 2021 debut, he said.
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