This mirrors trends identified in the Bain & Co and Altagamma report, which also forecasts comparable slowdown, as summarized in our last digest.

China's luxury market, shows resilience with a projected 4-6% growth in 2024, buoyed by a quick economic recovery, strong consumer confidence, and supportive domestic policies. In contrast, the US luxury market anticipates a modest 2-4% growth, constrained by a mature market and cautious consumer spending.

Jewelry and watches are set to grow in luxury market share, surpassing handbags as the top category by 2023. This growth is driven by their perceived ability to retain value in uncertain times. As these luxury goods emerge as key categories, more brands are entering the market.

Luxury was the main segment driving economic profit, with luxury's EBIT margin reaching 25%, 5 p.p above pre-pandemic levels, thanks to an 18% revenue increase largely from effective pricing strategies.

However, mid-market (Excluding Inditex) and value segments experienced margin drops due to intense competition and cost increases.

Facing cost pressures and aiming to maintain profitability, companies are looking at price increases, with 25% of executives considering hikes above 5%.

Relying on price increases as a quick fix might boost short-term profits, but it risks damaging long-term growth and value creation, particularly for brands that haven't invested in their brand equity.

The report also highlights a renewed focus on brand marketing, moving away from performance marketing and building emotional connections with consumers, emphasizing long-term brand building and loyalty.

According to Julie Hoffman from Adobe, luxury consumers highly value seamless brand experiences that expertly integrate digital and physical experiences.

For them, loyalty programs transcend mere points or discounts. It's about exclusivity, like early product access, invite-only events, and customized experiences. These programs are designed to make customers feel valued and important, emphasizing a deep, personal connection with the brand.

Sustainability chapter: 87% of fashion executives anticipate significant impacts from sustainability regulations.

By 2024, self-regulation may become obsolete as new global rules affecting production, waste management, and the entire value chain are implemented.

When it comes to luxury and jewelry brands, WWF releases a rating for 21 brands.

Larger groups like Kering, Richemont, and LVMH perform better, yet no brand achieves top rankings, indicating a need for substantial improvement across the sector.

The report shows advancements in climate strategies and reporting, but points out gaps in supply chain transparency and stakeholder involvement.

1. From Loewe To Swarovski, hand-painted murals get a luxury upgrade.

2. Loewe 2022 sales up 37% to 626m€, gross profit rises 92%.

3. Shein confidentially files IPO for US expansion.

4. Golden Goose turnover grows 19% to €421M, eyeing €3B Milan IPO.

5. Farfetch considers going private; Richemont reviews the YNAP deal.

6. Missoni explores potential sale with Rothschild as advisor.

7. South-America Luxury Market Perspectives (Spanish Article)

8. Net-A-Porter debuts rental in partnership with By Rotation and HURR.

9. Online Jewelry & Watches UK: Top Stores & Market Share

10. From Miu Miu to Uniqlo: 2023 is the year of contradictions.

Fashion Tech

Gen AI’s Creative Crossroad: 73% of fashion executives said generative AI will be a priority for their businesses in 2024, but just 28% have tried using it in creative processes for design and product development and only 5% believe they have the capabilities to fully leverage it, according to the SoF 2024.

One last bite:

• Zara: The billion dollar missed opportunity. An in-depth UX review.

• Zara Launches on TikTok Shop.

• Bershka taps 3DLook for Fit Tech Experience.

• 60% of luxury shoppers use Pinterest to research luxury brands.

• Do Brands need Chief Digital Officers?

• Louis Vuitton is selling the Via Tile Mini Trunk NFT bag for US$6,500.

• Brand Engagement in the Metaverse: November 2023.

• The dos and don’ts of styling for the metaverse.

Until next time.Thanks for reading.

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The global luxury market is on track to hit €1.5 trillion by the end of 2023, with the Personal Luxury Goods market expected to grow by 8% over 2022.

However, a slowdown is projected for 2024, with growth anticipated to be between 1% and 4%, as reported by Bain & Co and Altagamma.

The report highlights growth across all luxury categories, driven by increased pricing, even as it impacts volumes.

Jewelry continues to shine. Expected to reach a market value of €30 billion in 2023 and becoming a key investment area during uncertain times.

The luxury industry is increasingly focusing on the fine jewellery, with major houses like Kering's Boucheron acquiring Parisian atelier to enhance craftsmanship and sustainability in their supply chains.

China will dominate the Personal Luxury Goods Market in 2030 accounting for America and EU will together account for nearly 40%.

American luxury market has underperformed against expectations of major luxury groups, and there's been a notable decline in Chinese consumer confidence, with high-net-worth individuals showing less interest in luxury goods.

Latest sign of Luxury Slowdown?

Richemont sales rose 6% to €10.22 billion in H1 2023, with net profit at €1.51 billion. Jewelry Maisons including Cartier and Van Cleef & Arpels, with sales up 10%, offsetting declines in watchmaking (-3%) and fashion (-1%).

Significant growth was seen in the Asia Pacific (+14%) and Middle East/Africa (+5%), while the Americas saw a 4% decrease.

The diamond market is facing a downturn.

Reflected in price trends: A 20% drop in polished diamonds and a 35% fall in rough diamonds, driven by economic uncertainty, shifting consumer preferences, the rise of lab-grown diamonds, market oversupply, and reduced demand.

Higlighted in the Digest #10. Sales of Lab-Grown have surged from less than $1 billion in 2016 to nearly $12 billion in 2022, accounting for over 17% of the total diamond market.

• De Beers' recent sales plummeted to an unprecedented low of $80 million, a drastic fall from their typical $400-$500 million range. Even offered buyers the option to purchase nothing and the company is now stockpiling unsold diamonds, a strategic response to the tumbling prices and shifting market dynamics.

• Alrosa paused sales for two months in response to reduced demand.

• Gem Diamonds Q3 revenue fell 45% YoY.

Meanwhile:

1. Louis Vuitton unveils a one million dollar handbag.

2. Balenciaga launches a $925 Towel Skirt, sparking humor from Ikea.

3. Burberry might fall short of its FY24 revenue goals.

4. Shein aims for a $90 billion IPO valuation and considers acquiring Topshop.

5. Tory Burch is eyeing an IPO.

6. Tapestry cuts revenue forecast on soft US demand. Capri merger advance.

7. Pandora increases its annual forecast following a strong Q3.

8. Titan Co. in India reports a 19% rise in Q2 sales, reaching $1.03 billion.

9. Vestiaire Collective cuts H&M, Zara and more in expanded fast fashion ban.

10. Tom Ford discusses his career and the industry in a candid exit Interview.

11. Dolce&Gabbana's CEO Alfonso Dolce talks about the brand's future.

Fashion Tech

Roblox continues to lead in the digital landscape with 214 million monthly active users as of Q3 2023.

What do brands need to know? (Referring to Roblox's report)

• Integrated Brand Experience: Gen Z values digital fashion that aligns with physical offerings. Brands to offer products with a consistent presence across both digital and physical spaces.

• Financial Commitment to Digital Fashion: Gen Z is open to spending on digital fashion, favoring items that are unique and exclusive.

Google is launching advanced generative AI features to transform the way we shop for clothing and search for holiday gifts.

Users can create lifelike images of desired items, such as a sleek black dress or a vintage-style denim jacket. Google then searches its extensive shopping ecosystem to find real products that closely match these visually conceived items.

Meta and Amazon team up on new in-app shopping feature on Facebook & Instagram, this comes after TikTok expanded into E-commerce with TikTok Shop.

TikTok Shop gears up for expansion in the pre-owned luxury market and partners with Real Authentication for pre-owned handbag verification. The introduction of authentication guarantees aligns with initiatives previously undertaken by platforms like eBay.

One last bite:

• Hyperphysical luxury retail stores.

• How fashion brands can harness High-Tech tactics for boosting growth .

• Millions of Luxury products now come with unique Digital Passports.

• Web2: How Instagram, X and Snapchat are powering the digital fashion revolution.

Until next time.Thanks for reading.

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The polarization of the sector continues.

LVMH was the first to sound the alarm, revealing a near 6% drop in its stock price despite a 9% revenue boost in Q3. This unexpected downturn signaled a broader slowdown in luxury spending.

As the week unfolded, similar outcomes were reported from other luxury houses. While the more “quiet” luxury brands, such as Hermès showed resilience and impressive growth during this quarter (+17%), other brands like Gucci fell short of expectations (-13%). However, Kering’s jewelry brands, Boucheron, Pomellato, and Qeelin, seemed to hold their own.

Has Gucci reached a saturation point?

1. Is Kering Putting All Its Eggs in a Gucci Basket?

2. Trouble In The House Of Gucci.

3. Why Some Luxury Groups Are Doing Better Than Others.

Exposure to different customer segments, especially aspirational, is a big part of the story.

‘The Hermès Game’: Hermès has fared better than rivals this year following the sell-off in luxury stocks and sales have remained strong thanks to its premium positioning in the market.

ASOS delayed full-year results by a week and sales slump to continue as it is hit by nearly £300m loss. ASOS is reportedly exploring the possibility of selling its Topshop brand.

Shein latest headlines:

• Shein buys Missguided brand in first UK takeover for Chinese giant

• Authentic Brands announces a Forever 21 line is coming to Shein.

• Shein and Temu cease legal battles in the US.

• US Congress member seeks investigation into Shein.

Shaping the future of Jewellery consumption in China: 2023 China Jewellery Consumer Trends Report

Natural Diamonds:

• Popularity: Preferred by 51% of consumers.

• Symbolism: Celebrates significant life milestones.

• Value Perception: 74% consider natural diamonds more valuable than lab-grown diamonds (LGDs).

• Sentiment: 90% of female respondents have a positive association with wearing them.

  

  Pure Gold Jewellery:

• Usage: Worn daily by 61%.

• Cultural Significance: Deeply rooted in Chinese traditions and perceived as a store of value.

• Design Preference: 91% prefer jewellery incorporating Chinese cultural elements.

• Investment: 60% purchase for value preservation, accentuated by today's economic scenario.

• Demographic Appeal: Particularly favored by Gen Z (18-24 years).

Platinum. The Metal of Distinction:

Market Update: In Q2, India led in platinum jewelry sales growth of +23%. Japan and the US showcased resilience, while China faced challenges amidst economic slowdown.

• Research reveals that consumers 70% opt for platinum when given a choice.

• US-based brand "Platinum Born" has ventured into the UK, eyeing further retail expansion.

Meanwhile:

1. Hong Kong is the luxury market with the highest per capita expenditure.

2. No one wants to buy luxury goods online anymore.

3. Louis Vuitton, Gucci and Dior most searched luxury brands in 2023, according to Google data. Pandora is the most searched jewelry brand.

4. Prada Group sees slowing sales in Q3, but Prada (+13%) and Miu Miu (+49%).

5. Miu Miu Takes First Place on Lyst’s Hottest Brands Ranking for Q3.

6. How Adidas ignored a decade of misconduct from Kanye West.

7. Are Sky-High Valuations Back in Fashion? Alo Yoga Seeks $10B Valuation.

8. Beyond ‘quiet luxury’: Brunello Cucinelli’s billion-dollar growth formula.

9. Phoebe Philo: Does the world need another ‘exclusive’ brand?

FASHION TECH

Moving from Business As Usual to Innovation And Usual. The retail sector faces a looming annual tech investment deficit exceeding £22 billion.

While omnichannel retailers ideally should dedicate 4-8% of their yearly revenue to technology, the majority invest merely 1.5-3%.

Time to take to TikTok Shop. As TikTok launches social commerce functionality, CommerceHub is making it quick and easy for brands and retailers to reach the platform’s engaged and growing audience.

The company is using artificial intelligence to scan videos, identify items, and encourage users to buy similar products through its e-commerce marketplace.

A new integration will allow TikTok advertisers to transfer leads to Salesforce Marketing Cloud in real time.

One last bite:

• WGSN owner to sell giant trends business to Apax in $1.70 billion deal.

• H&M has introduced Creator Studio, a platform that uses generative AI to enable users to create and print professional-grade designs on demand.

• An in-depth analysis of how fashion brands are entering Web3.

• How fashion is using generative AI in-house.

• Revolve drops three AI-generated fashion collections.

• Maison Margiela leaps into Web3 with gamified minting.

• Adidas x BUGATTI announces limited edition web3 collectibles.

Until next time.Thanks for reading.

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Is the Luxury Market facing a downturn? The boom in luxury goods is over as consumers pull back on their multiyear high-end spending spree.

The STOXX Europe Luxury 10 index, a key indicator of luxury market health, recorded its weakest quarterly performance since 2020.

Financial analysts are also adopting a more conservative stance on the luxury sector:

1. UBS is reducing its estimates because of slowing Chinese consumption.

2. Morgan Stanley cut 6% from its 2024 EPS forecast for luxury goods.

3. Bank of America has slashed its forecast by 7%.

LVMH stock fell nearly 6% following a Q3 revenue increase of 9%, indicating a slowdown in post-pandemic luxury spending amid economic uncertainties.

The trend also impacted other luxury brands like Kering, Hermes, and Richemont. They are reporting this week.

Amid China's market challenges, affluent elites continue their luxury spending, while the economically-strained middle class is more cautious. Affordable luxury brands like Michael Kors face declines, whereas Chanel is raising its premium product prices by 6-8%.

Latest insights from Amex Trendex report:

1. Quiet Luxury & Stealth Wealth: Focus is shifting towards craftsmanship and sustainability over designer labels.

2. High Buying Frequency: 80% buy luxury annually; 71% of Millennials and Gen Z prefer to buy over rent.

3. Popular Luxury Items: Top items are shoes, handbags, and jewelry, each at around 37%.

4. Quality & Values: 3 in 4 consumers value craftsmanship and sustainability; 70% opt for premium brands over fast fashion.

5. Key Attributes: Consumers prioritize high-quality products, brand values, and sustainability when choosing luxury brands.

Testing the waters with Lab-Grown Diamonds.

Sales of Lab-Grown have surged from less than $1 billion in 2016 to nearly $12 billion in 2022, accounting for over 17% of the total diamond market.

This trend is gaining widespread market acceptance: Pandora has twice upgraded its sales outlook, while De Beers has reduced the prices of mined diamonds by up to 40% due to declining demand.

Prada has introduced lab-grown diamonds into its fine jewelry collection just a year after its launch.

Similarly, LVMH has also embraced this innovation, offering its clientele high-end watches and jewelry adorned with lab-grown diamonds.

Go woke, Go broke. Victoria’s Secret reversal from its unsuccessful "woke" rebranding, is returning to its iconic "sexy" image. The revamped strategy aims to exceed $7 billion in annual sales through product diversification and a global store expansion, including 400 new locations.

The new strategy encapsulated by the phrase "sexiness can be inclusive," has already led to a 17% increase in stock price and a Q3 revised outlook.

Meanwhile:

1. How innovation is driving On’s meteoric rise.

2. By the numbers: How retailers stack up on inventory.

3. Recommerce economy is nearly worth 7 billion pounds in the UK.

4. Why KSA is pushing its fashion brands globally.

5. Could fashion week survive without sponsorships?

6. Farfetch: What Went Wrong? It has lost 97 percent of its market value in the last two years.

Fashion Tech

Gen Z is increasingly favoring user-generated content (UGC) games like Roblox and Fortnite over traditional games.

This trend has caught the attention of brands, leading to a surge in video game advertising. In the U.S., doubled from $3.1 billion in 2019 to $5.8 billion in 2022.

Gucci lead the pack for luxury activations on these gaming platforms, where brands can create fully immersive experiences that communicate their brand values in ways that resonate with the community.

Report: The State of Virtual Brand Experiences.

Adobe unveils a futuristic “digital dress” that changes patterns on the go, creating a smart material composed of reflective light-diffusing modules, transforming entire surfaces into dynamic content displays.

One last bite:

• WeChat Luxury Index 2023: How to Connect With 1.3 Billion Consumers?

• How AI and Brain Science are helping perfumiers create fragrances.

• Amazon wants shoppers to post influencer-style content.

• Stylitics rolls out AI-powered virtual closet.

• Peer-to-peer fashion rental marketplace Pickle picks up $8 million.

Until next time.Thanks for reading.

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"Girl Math" is more than a meme.It's about how Gen-Z and Millennials approach spending, especially in luxury.

From Cost-Per-Wear calculations to justifying splurges, it's reshaping consumer behavior and even influencing fintech trends while giving way to a new generation of collectors focused on craftsmanship.

These individuals place a premium on heritage, quality, and the brand narrative. As we highlighted in our previous digest, the power of storytelling cannot be underestimated.

Who Won the Fashion Month debuts?

• Peter Hawkings at Tom Ford: His collection was consistent with the brand's identity but did not indicate any significant changes or forward-looking elements.

• Sabato De Sarno at Gucci: Well-received for its wearability and mass appeal. The collection also positively impacted Kering’s share price.

• Daniel Lee at Burberry: Lee's second collection. While the collection had a darker, grungier tone, it was criticized for its high price tags and lack of accessories.

• Upcoming Talent: Seán McGirr, formerly of JW Anderson, is set to take over from Sarah Burton at Alexander McQueen. His appointment has generated some controversy.

Must Read Reports:

1. How brands are keeping the Pandemic Jewellery boom going.

2. Fashionpile Ultra-Luxury resale report.

Shoplifting has become a growing issue in various markets. It’s not a US problem. In the UK, businesses lost $2.13 billion last year, with a 27% spike in thefts.

In response to this:

• H&M is hiring additional security staff.

• Zara found that the shoplifters had successfully outsmarted its newly implemented security system.

• Primark along with other retailers, is taking a unique approach by equipping their staff with body cameras to deter theft.

One of the most underrated issues in retail theft is internal: employees stealing from their stores. This accounts for nearly 29% of all loss-related shrinkage.

Boohoo facing challenges. Reported a 17% revenue drop in its 2023 H1 to £729.1 million. Additionally, has downgraded its guidance due to weakened consumer demand and the need to lower prices amid Shein pressure (to reach 2.2% market share in the UK).

Meanwhile:

1. Ralph Lauren is stepping down as a CEO.

2. Moncler X Adidas Originals Collection.

3. Mango shuts down its marketplace after two years of operation.

4. Prada to design the spacesuits NASA Artemis III mission to the moon.

5. Peloton and Lululemon partner for apparel and fitness, following #LULU layoffs and discontinuation of mirror product line.

6. Bucherer exclusive partnership with Mytheresa for its fine jewellery.

7. Tous hires Rothschild to strategize growth and plan for Partners Group exit.

8. Pandora partners with BFC's Fashion Awards and sees a 7-9% CAGR by 2026.

9. ASOS sales fell -13% in Q4, but the CEO says it's on the right path.

10. Coty makes debut on Paris stock to strengthen European presence.

11. Golden Goose takes a step towards 2024 IPO at a US $10 billion valuation.

Fashion Tech

Smart glasses are gaining traction in the fashion industry, with multimodal AI significantly enhancing their capabilities beyond mere visual augmentation and blending technology with fashion, making them a stylish accessories.

This goes beyond simple visual cues to include voice commands, touch gestures, and even contextual awareness, making the glasses more versatile and functional:

1. Meta has launched new eyewear, the Ray-Ban Meta glasses with an embedded AI assistant, blending style, and tech.

2. Amazon is also making waves with its Alexa-enabled smart glasses Echo Frames, offering seven new styles in collaboration with Carrera.

   

One last bite:

• Louis Vuitton lands on Discord for its treasure NFT Trunk holders.

• Maybelline ups its Reddit investment after experiencing high engagement and enters Roblox.

• Mango launches Lisa, the company’s own generative AI platform.

• Snap to close AR division for enterprises months after launch.

• Hugo Boss is creating workwear for the metaverse.

Until next time.Thanks for reading.

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Burberry for Breakfast. The brand took over London streets during LFW, transforming various elements of the cityscape into brand's symbols, including renaming Bond Street tube station to "Burberry Street,". The change led to confusion and complaints, as people missed their stops, mistaking the newly branded station for a different location.

A new era and creative vision for Burberry: How Burberry evolved from humble raincoat.

Fashion week or Fashion “weak”? New York's fashion scene faces criticism for its lack of innovation, as established designers increasingly stick to tried-and-true formulas instead of pushing creative boundaries.

In Milan, independent labels are rising in prominence as Sabato de Sarno's debut marks a new sober chapter for Gucci: timeless and classic aesthetic.

While the collection offered versatile pieces, it lacked a “wow” moment and fell short in the accessories. Is this Kering's strategic reset following a 14% sales drop in the last quarter?

In London, Chinese designers steal the spotlight at London Fashion Week, and JW Anderson innovatively transforms hardened plasticine clay into wearable hoodies.

Wake-up call: storytelling matters.

1. How are luxury brands supercharging for their seemingly ordinary products?

2. Gen Z. Why brands have to add value and not just show up.

3. Your strategy needs a content Strategy.

4. Case Study.The Essential Brand Marketing Guide.

5. Why your brand’s story matters now.

Shein ramping up UK expansion. Reportedly in talks to acquire UK-based Missguided from Frasers Group. This comes just two years after Shein entered the British market, where it has recently reported £1.1 billion in sales.

On the legal front, the company is taking its competitor Temu to court in London over allegations of copyright infringement. To optimize its supply chain, Shein has overhauled its shipping strategy for quicker deliveries to the U.S.

The brand unveiled new collections through a special live stream: “SHEIN Live: Front Row”

“Top 250 Fashion & Beauty Retail Europe” Report ranks Shein sixth among European e-retailers, closely following Zalando and ahead of Vinted.

H&M sales flatlined (LC) in the latest quarter after its biggest rival Inditex cheered a stronger performance (profit +40% in H1).

Inditex's strong financial position will allow it to keep prices stable or even cut them.

The flexibility in pricing could be a strategic move to gain market share as consumer spending weakens.

The Swedish company to extend it’s “pre-loved” experience in the UK and reverse course on charging UK shoppers for in-store returns just two days after the initial announcement.

Note: Retailers lose US $100 billion annually to return fraud.

Primark to upgrade profit outlook driven by strong Barbie T-shirt sales and a strategic 7% price increase.

Spanish retailer Mango has brought its online e-commerce platform to 22 new countries, predominantly Africa.

Meanwhile:

1. Golden Goose's H1 sales up 21% to €276.4m.

2. Zegna H1 net profit +148% to €52m. Sales +24%.

3. Mytheresa reports 15% GMV growth as it focuses on big-spending clients.

4. Puig plans a 2024 IPO with a valuation of up to €8 billion.

5. Secret Sales acquires Spanish retailer Dreivip, expanding in Europe.

6. Monica Vinader was named Jewellery Brand of the Year.

7. Pandora and Thomas Sabo rank as the second most successful e-commerce brands in the Premium and Luxury category.

Fashion Tech

Technology gets a spotlight at the Fashion Week. Both London's Digital Fashion Week and NYFW are treading carefully with Web3, yet the digital frontier remains promising.

From blending gamers with high fashion (Twitch streamers sitting in Gucci front row) to leveraging Web3 technologies, digital pioneers are setting the pace for the industry's future.

Within the emerging innovation stage, cosmetics recommenders, 3D garment modeling, and in-store theft monitoring are disruptive technologies that are in the early stages of application and should be tracked closely.

Bain & Company's “Toward the Boutique of the Future” report highlights the role of technology in enhancing luxury retail.

Customers prefer physical stores for personalized service but dislike waiting times, which tech can reduce. However, there's resistance to self-service technologies in luxury settings, as customers value human interaction

Algorithmic solutions are increasingly used for efficient stock allocation as retailers face the complex task of managing inventory during seasonal transitions and the aplication of generative pricing strategies.

One last bite:

• Sabato de Sarno debuts as Gucci's creative director at Milan Fashion Week with a metaverse collection called 'Ancora' in the Gucci Town on Roblox.

• Diesel teams up with DressX to launch new digital wearables in DressX.

• Panerai banks on the blockchain as a counterfeit solution.

• Snap unveils AR tools to attract more beauty brands to its AR experiences.

• eBay offers luxury consignment service in a direct challenge to The RealReal.

• 10 Predictions for the future from the CEO of Roblox.

Until next time.Thanks for reading.

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It's not just about labels anymore. True luxury remains exclusive and the concept of "Niche Luxury" is emerging.

Consumers now seek styles that stand out, leading to the introduction of unique, high-priced niche products.

For instance, Jacque Marie Mage sunglasses, priced between $750-$2.300.

In an era where individuality eclipses status, referred to as the ‘literally me’, attitudes toward singledom are evolving, taking the rise of “Solo Fulfilment”. Brands must adapt leveraging on-demand manufacturing and zero inventory models.

Affordable luxury customers feel the squeeze. Economic challenges have impacted the spending habits of the HENRY (High Earners Not Rich Yet), this group is now gravitating towards resale platforms like The RealReal (Making resale into a scaled, profitable business is challenging).

The differentiation between "Affordable" and "Accessible" luxury is becoming more pronounced.

Luxury retailers are flocking to India, targeting the country's burgeoning affluent class. India's online fashion sector is set to reach $35 billion by 2028, growing at a 25% CAGR.

Major shift in the diamond market. India's diamond exports show lab-grown diamonds surging from 1% to 9%. As shared in last week's digest, lab-grown diamonds now account for 10% of sales, with an expected market value of $55.5 billion by 2031.

High jewelry is evolving. The landscape is shifting as brands like Louis Vuitton, Dior, and Gucci aggressively enter the fine jewelry space. Even fashion-centric brands like Bottega Veneta and Balenciaga are venturing into fine jewelry.

Signet Jewelers makes a strategic acquisition with SJR National Retail. The company anticipates a decline in engagements due to the pandemic's impact on dating behaviors, eyeing a $1.2B opportunity in jewelry repair services.

Aurate is redefining its wholesale approach with bespoke partnerships. Each collaboration births a unique collection, presenting a unique way to scale both the brand and retail ends.

Meanwhile:

• Swatch is at it again. Blancpain x Swatch.

• Amer Sports, owner of Salomon, files for IPO at a $10B valuation.

• L'Occitane halts trading after owner shelves take-private deal.

• Louis Vuitton takes over the mega building on Champs Elysee.

• Primark expands its click-and-collect service.

• Zara launched and expanded it’s pre-owned platform to France.

• FENTY x PUMA is back. Rihanna returns to the product franchise.

• Up to 50% of today's luxury brands are potentially disappearing by 2030.

Fashion Tech

The BoF introduces The Brand Magic Index to measure if a brand's self-view aligns with customer perceptions using AI-driven analysis.

Top brands like Miu Miu and Giorgio Armani are in sync, while others are in transition. Michael Kors, Gucci, and Diesel are the least aligned.

Luxury brands are exploring the potential of ad-supported streaming as a marketing channel.

Luxury brands such as Louis Vuitton and Bulgari are advertising on platforms like Netflix, but advertisers prefer free platforms like YouTube for their large audiences.

Pinterest has emerged as the go-to fashion destination for Gen Z as well as a trend-forecasting resource for brands and retailers.

The visual search platform announced industry-first body type technology, making its content more body-positive.

One last bite:

• Bella Hadid into an A.I.inspired alien for the latest Marc Jacobs campaign.

• L'Oréal patents Biomarker/Aging correlation for personalized skin care.

• The Estée Lauder and Google partners to explore the use of Generative AI.

• Top fashion schools are future-proofing their curriculums with AI and Web3.

• The rise of "hyper verticalization". Brands are creating unique digital experiences by combining fashion with music, gaming, sports, and art.

Until next time.Thanks for reading.

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The US economy shows resilience with Q2 GDP at 2.1% despite inventory drawdowns. July consumer spending hits a 6-month high.

Hong Kong's retail sales in July surged 16.5% YoY, marking the 8th month of growth. Boosted by tourism revival.

The Global Cosmetics Market is set to grow at 5% CAGR, reaching a staggering $663 bn by 2031. The Asia-Pacific region, driven by rising living standards and evolving consumer preferences, is expected to dominate this growth.

1. French cosmetic exports surge by 15.6% YTD. The American market is leading the growth. One in every five products from France is exported to the U.S.

2. China beauty brands ambitions to go global. LVMH next big bet with products made from traditional Chinese Medicine.

3. African brands expanding their reach into new territories with ancient ingredients and setting new trends.

The Body Shop exploring selling Natura. Why does no one know what to do with The Body Shop? This move followed L'Oréal's acquisition of Aesop to Natura & Co in a $2.5 bn deal.

Observation: Hyperphysical pop-ups. High fashion meets Luxury Tourism.

Pop-up stores are revolutionizing retail by offering immersive brand experiences. Merging fashion with experiential retail, they captivate shoppers by narrating brand stories in transient spaces.

Chanel to open beauty-themed retro diner pop-up to celebrate fragrance launch.

Can Lab-Grown Diamonds go mainstream? Lab-grown diamonds now constitute 10% of diamond sales, with a projected value of $55.5 billion by 2031. Pandora has expanded its lab-grown collection, with prices starting at £225. Swarovski is also taking its collections global.

Harrods has introduced the "Handbag Clinic" to its iconic London store, offering luxury handbag restoration and resale services. This move aligns with Harrods' strategy to cater to luxury consumers, as seen with the upcoming launch of "The Residence" its exclusive 250 members club in Shanghai.

Meanwhile:

• The court isn't just for sports anymore. Tennis is the new luxury fashion playground.

• Lululemon's Q2 revenue rise by 18% to $2.2 billion, prompting plans to open 55 new stores this year and expand internationally.

• Lanvin Group posts 6.4% revenue growth in H1 FY23.

• Kering released a €3.8 billion bond to fund its acquisition of perfume brand Creed.

• Luxury brands expand accessibility: 54% are now available at major retailers like Nordstrom and Farfetch.

Fashion Tech

The EU's Digital Services Act (DSA) now mandates large online platforms to offer users a content feed that doesn't utilize personal data for customization.

This shift may alter how brands and marketers engage with audiences, especially if they rely on algorithmic suggestions for visibility.

With the potential for reduced reach and precise targeting, brands might pivot towards direct channels and prioritize more organic, engaging content.

Captivating you at every turn. Predictive AI fine-tunes inventory, while generative AI crafts dynamic in-store displays. Together, they redefine the in-store experience, promotions, and customer satisfaction.

Order placed? Expect a bonus. Dive into why brands are pouring resources into post-purchase technology.

One last bite:

• What to know about EU’s upcoming Digital Product Passport.

• Brands are increasingly testing out virtual sizing tools.

• Music merch gets the tech treatment. Integrating apparel with unique digital assets and pre-sold tickets.

• Copy, the First AI-powered fashion magazine.

• Adidas Unveils NFT Artist RESIDENCY with Plans for Physical Collaborations.

Until next time.Thanks for reading.

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An Elephant in the room. Shein goes omnichannel by acquiring roughly a third of Sparc Group, partnering to offer Forever 21 clothing and accessories on the platform. From the US to Africa, Shein is the most downloaded shopping app on ZAF.

Facebook, Instagram and TikTok want On-Platform commerce. Tiktok to remove it’s integration with Shopify and on track to lose more than $500M$ for it’s online shopping expansion in the U.S.

Zara is the only Spanish brand to be featured in Kantar BrandZ Global 2023, ranked #94 and seeing a 28% value drop. The Inditex company has been named the UK's top clothing brand, while UK retail performance is expected to dip in Q3.

In case you are traveling, Spain remains the most affordable EU country for fashion, being 13% cheaper than the European average. Denmark's +30% vs. EU.

U.S. retailers face a $740B inventory challenge according to McKinsey. Intensified by the pandemic and supply chain disruptions. As costs rise and warehouses max out, it's time for a strategic rethink on inventory management.

Fashion's pulse has shifted. Vintage is the new luxury, as sustainability becomes paramount while 'Quiet Luxury' might sound cliché but it dominates the resale market, with Gen Z investing fervently in resold status symbols.

Secondhand luxury holds promise, but there are several key challenges to overcome.

Meanwhile, the emergence of 'super fakes' poses a challenge; these impeccable designer imitations blur the lines of authenticity, enticing Gen Z with a taste of luxury at a fraction of the price.

Better returns than traditional investments. The Knight Frank Index has included the Luxury handbags class for the first time. The report is worth reading.

Meanwhile…

• Early 2000s fashion is still on the rise today. Y2K-style runner by Bottega Veneta and New Balance sues Golden Goose for copying ‘dad shoes’.

• Nike's longest stock slide since it was listed 43 years ago and the biggest indicator of weakness comes from a key supplier in Taiwan.

• Rolex acquires Bucherer. Despite the merger, Bucherer will retain its name and operate independently.

• Versace has wiped its social media slate clean, suggesting an announcement or change may be imminent. What’s next after its acquisition?

• Between two worlds. Why pixels are popping up in fashion and the increasing integration of digital elements in fashion.

• Store associates are the new influencers. This approach has proven effective in engaging customers and building community.

Fashion Tech

• Generative AI is revolutionizing the UK's retail sector, with a whopping 93% of retailers amplifying their AI investments.

• Ralph Lauren unveils a virtual concept store, the ‘888 House’.

• The Fabricant Unveils ‘Primal Rave’ Collection at NYFW

• Claire’s builds on Roblox investment with new the partnership.

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China has lifted its group tour ban to 78 countries, sparking optimism in the tourism and retail sectors.

From boom to uncertainty. China's growth is slowing and it’s housing market is not good. Brands face challenges in navigating the changing landscape.

Snapshot of Chinese luxury customers: Nearly 30% of Chinese luxury consumers spent $2,800 or more on high-end products in 2023.

Following in the footsteps of other leading brands, Gucci partners with JD.com to launch its first digital flagship store on the platform.

Meanwhile, South Korea's luxury market is booming! Projected growth at 7.7% CAGR, reaching $160.4B by 2027. They outspend Chinese consumers by over 5 times.

Fashion brands are steering South Korean shoppers away from US sites, curbing access to lower prices.

Balenciaga's new Hourglass XS handbag goes metallic. New trend? Priced at $22,840.

Emerging brands like Represent (StockX 385% Sales increase in 2023), Sp5der, and Denim Tears are shaking up the streetwear market according to StockX Report.

Running such as Asics and On Running are emerging as streetwear sensations, On Holding's reported Q2 +52% Sales increase.

Gorpcore trend, with its rugged and outdoorsy aesthetic, is taking the mainstream. Brands like The North Face, Patagonia and Teva lead the charge, while luxury brands are quickly jumping on the bandwagon.

The lastest to report weak revenue in the US: Farfetch's Q2. Full-year sales outlook lowered by $500M to $4.4B.

Fashion Tech

Believe The Hype. Everything You Need to Know About AI and Fashion but soon turning down? Generative AI peaks on Gartner's 2023 Hype Cycle for Emerging Technologies, signaling transformational impacts within 2-5 years.

For all those Gen-AI early adopters. Brands must tread it carefully due to Intellectual Property, financial and significant ethical risks.

Quick Take. How to supercharge AI luxury shopping and 5 Startups about future of sites, making E-Commerce more personal, engaging, and effective.

Virtual humans are gaining traction in 2023. China is witnessing a surge in AI-generated humanoids for liveshopping while global influencers emulate being NPC.

Last bite:

• Two worlds, one ownership. Adidas x BAPE NFT Exclusive Drop.

• Taobao to arm apparel retailers with AI technologies

• In-Seam, connecting stylists and shoppers, bags $2 million in funding.

Until next time.Thanks for reading.

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The world’s most sustainable fashion week: Copenhagen leading the way by embracing zero-waste shows and recycled fashion.

A look behind the scenes of Zalando returns. Reselling, donating and wholesaling.

Farfetch is shutting down its Beauty Division, launched in April 2022. The company faced challenges in gaining traction in the beauty market.

From “Should we be doing this?” to “How do we do it?”. How Luxury Finally Cracked TikTok.

Tapestry to acquire Capri (Michael Kors, Versace, and Jimmy Choo) for $8.5B. Combined revenue of $12B aiming to compete with European luxury giants LVMH ($79B) & Kering ($20B).

American brands like Michael Kors target a broader audience with affordable options, whereas European brands prioritize exclusivity and high price points. This European strategy sidesteps brand dilution and margin issues, casting doubt on the American growth model.

Other operations:

• Advent $1B deal for Zimmermann.

• Douglas plans IPO at $7.7B valuation.

Bain & Company Infographic about luxury resilience.

• Brands maintain entry-level prices while emphasizing exclusivity.

• Visible discounts limited; loyal customers get special deals.

• Luxury brands adapt quickly, focusing on differentiation and shorter lead-times.

Fashion Tech

Fashion execs can’t stop talking about AI. Brands extensively exploring AI's potential, frequently mentioned during earnings calls. Broader adoption or a strategy to impress investors?

McKinsey estimates generative AI could boost profits in the fashion sector by up to $275 billion in the coming years.

The dilemma of luxury innovation. Some pioneering in new tech spaces, many are cautious in digital transformation, but all need a coherent content strategy to align with brand values and user needs.

Digital product creation (DPC) is reshaping the fashion industry, enhancing products & consumer experiences. While many start with 3D tools, true leaders see the bigger picture, integrating with PLM & addressing challenges.

Meanwhile:

• Crocs & NFT Doodles Collaboration.

• Fashion gaming platform Drest has spotlighted CPHFW by introducing Scandinavian brands as avatar wearables.

• Giant Barbie in Dubai.

Until next time.Thanks for reading.

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Zalando, reported a Q2 net profit of €56.6 million, marking a 304.2% increase from PY. Despite a 2.5% sales drop, the company's revenue stood at €2.556 billion. Higher ASP due to new brand additions like Lululemon and Lancôme.

Birkenstock gears up for a September IPO, potentially valuing the iconic sandal maker at over $8 billion. Boosted by high-fashion collabs and a 29% revenue rise, the brand continues its upward trajectory.

Prada goes in beauty, venturing into makeup and facial care.

Zara expands its Pre-Owned platform across Europe, promoting sustainability by allowing customers to resell, repair, and donate clothes. Launched last year in the UK, it aligns with other retailers like Zalando in the secondhand market trend.

Millions of low-cost fashion products are showing up in thrift stores. Is secondhand truly sustainable or just a band-aid solution? As big brands jump into resale, it's crucial to distinguish between genuine eco-efforts and greenwashing. 🌍♻️

Driven by consumer demand and regulatory pressures, luxury Fashion brands are increasingly incorporating repair services, either through in-house programs or collaborations with third-party refurbishment companies.

Online shoppers are getting promiscuous. With inflation affecting spending power, consumers are hopping between brands seeking the best deals. Given the rising costs of acquiring new customers, it's crucial for brands to retain current ones and emphasize loyalty. Traditional points-based loyalty systems are no longer effective.

Are we falling into the screen? Hyperrealism in fashion.

The sports-inspired clothing market is booming, driven by a blend of fashion and sportswear. Brands are innovating to cater to health-conscious consumers. The global market is projected to reach $233.4 billion by 2028.

Fashion Tech

The Rise of virtual try-on technology is transforming the online shopping experience, addressing the challenges of fit and appearance that many shoppers face.

The metaverse's adoption remains limited among businesses. Despite the hype and Meta's $36 billion investment, the metaverse hasn't lived up to its promises. Lacoste unveiled its New Virtual Store 🐊 Immerse yourself.

Fashion NFTs Fizzled. Brands are exploring practical uses for technology in supply chains, loyalty programs and assigning digital identities to physical items.

Gaming as a Branding Platform. Brands are increasingly merging the digital and physical realms, offering products that have a presence in both worlds. Ralph Lauren is intensifying its engagement with the popular game Fortnite, launching its own island within the game and released a limited-edition physical version.

🎙️ On the latest Wavebreak Podcast episode with Charles Gorra, CEO of REBAG on how emerging technologies, especially AI, are shaping the future of luxury commerce.

Until next time.Thanks for reading.

"Barbie pink" has become an overwhelming trend.

The Barbie movie's record-setting opening was accompanied by a wave of Barbie products, thanks to Mattel's extensive marketing strategy with countless products and collaborations capitalizing on the color. From Zara x Barbie, Balmain and Vans to Burger King Brazil Unveiling a 'Barbie' Burger With Pink Sauce.

Loewe, crowned as the hottest brand globally by the Lyst index, previously held by Prada.

Adidas scores a hit with first batch of unsold Yeezy shoes in May. The Three Stripes received over $560 million in orders for inventory it had originally planned to write off. Next relaunch will take place starting on August 2.

Winter is comming. Retailers are preparing for an inflationary autumn, adjusting strategies by revamping outerwear offerings and postponing product launches. UK retail sales experience the fastest decline since 04.2022. Retailers pare back suppliers orders and brace themselves for another sales contraction.

Luxottica, maker of Ray-Ban and Oakley sunglasses, been sued for supposedly colluding with rivals to hike prices by up to 1,000%.

H&M has sued Shein for design infringement. Shein planning a NYSE listing, aims to surpass Inditex and H&M's combined turnover by 2025.

“Who sayed that Luxury is slowing down?” Half-year results:

• Hermès experienced a substantial 27.5% increase in sales , reaching €3.32bn, reflecting global demand for luxury goods.

• Prada also reported strong performance with a +17% rise in profits, particularly from Asia and Europe.

• Moncler saw a 24% sales surge in the same period, breaking past the €1bn milestone.

• LVMH, however, faced a contrasting situation. Although it reported a +15% uptick. The U.S. market is a weak spot, demonstrating a broader slowdown in luxury demand in the region.

• Kering, has acquired a 30% stake in Valentino for €1.7 billion. This comes after a disappointing round of earnings, particularly for Gucci, 1% decline in earnings YoY.

Aspirational luxury shoppers, typically making a few entry-level purchases a year, have cut back on spending, especially in the US.

Millennials and Gen Z are reshaping the luxury market with their increased spending and high demands. Expected to represent 75% of luxury goods buyers by 2026, driving new trends such as the resale and rental of luxury goods. BCG x AltaGamma Report.

LVMH signs a major deal with the Paris 2024 Olympics, further deepening its ties to the world of sport. The deal promises high-profile exposure for LVMH's brands during the games, includes designing medals, dressing the French delegation, and supporting select athletes.

Still Shinning? US jewelry trends show a decline in precious stones and metals, with a rise in semi-precious stones like Garnet and Cubic Zirconia. Quartz, offering diamond-like sparkle, sees a 44% surge in demand.

Thredup estimates that the global secondhand market will grow to $248 billion by next year and to $351 billion by 2027.

Mid-tier luxury watches including Omega and Cartier are outperforming as high-end pre-owned Rolex, Patek Philippe, and Audemars Piguet models see falling prices (-16% YTD).

Pre-loved Hermès bag prices, being sold for +500% than their original retail price. This trend is enabling consistent price increases for luxury brands. (The Fresh Kid)

Tennis clothing is trending on and off the court. In the US, sales have risen by 15% in the past year, with the sector growing by 38% compared to three years ago.

Quiet Luxury for all. HBO's "Succession" S4 sparks a 684% surge in Google searches for "quiet luxury", a minimalist, branding-free lifestyle fashion trend with high-quality materials and neutral colors. Sofia Richie, becoming the face of the quiet luxury, shared that she's working on a new clothing line.

Fashion Tech

Rubi Laboratories has developed in partnership with Ganni and Walmart a new cellulose fiber with a negative carbon footprint, turning carbon emissions into textiles.

Zalando launches size recommendations based on customers’ own body measurements. Only By taking two photos. Previous size advice feature has already cut size-related returns by 10%.

Desigual launches a on-demand collection of custom apparel created by artificial intelligence. Check the collection.

DressX, a digital fashion retailer, has raised $15M in a Series A round. Check it’s founder interview about ”Why big fashion and luxury brands are entering web3”.

Until next time.Thanks for reading.

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