Behind the Q3. The Hermès resilience and the vanishing Gucci aspirationals.
Digest #11 Troubles in the house of Gucci, Fashion tech sees underinvestment and TikTok's AI now scans videos promoting similar clothing for e-shopping.
FASHION
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?
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.
Consumers prefer natural diamonds and believe natural diamonds hold an unrivaled position of prestige. 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:
Hong Kong is the luxury market with the highest per capita expenditure.
Louis Vuitton, Gucci and Dior most searched luxury brands in 2023, according to Google data. Pandora is the most searched jewelry brand.
Prada Group sees slowing sales in Q3, but Prada (+13%) and Miu Miu (+49%).
Miu Miu Takes First Place on Lyst’s Hottest Brands Ranking for Q3.
How Adidas ignored a decade of misconduct from Kanye West.
Are Sky-High Valuations Back in Fashion? Alo Yoga Seeks $10B Valuation.
Beyond ‘quiet luxury’: Brunello Cucinelli’s billion-dollar growth formula.
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.
