The luxury crisis rocking the fashion world, with The Business of Fashion’s Imran Amed
Jan 10, 2025
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Imran Amed, founder and editor-in-chief of The Business of Fashion, dives into the luxury fashion industry's chaotic landscape. He discusses unprecedented price hikes and CEO turnover, dubbing it a ‘full-blown luxury crisis.’ Amed shares insights on brands entering the Indian market and utilizing AI for competitive advantage. He also critiques the gap between sustainability claims and practices, while highlighting the growing influence of consumers over 50. Finally, he reflects on the innovative strategies of challenger brands reshaping sportswear.
The luxury fashion industry is facing a crisis characterized by leadership turnover and the need for innovative strategies due to shifting consumer preferences.
An aging demographic over 50 offers significant market potential, prompting brands to adapt their marketing strategies and appeal to older consumer needs.
Deep dives
Leadership Turnover in Fashion
The fashion industry is currently experiencing an unprecedented wave of leadership turnover affecting both creative and business sectors. Major brands such as Gucci, Burberry, and Givenchy have seen significant changes, signaling a potential reckoning in an industry that has been accustomed to established figures. This turnover is not merely a routine reshuffling but appears to be a reaction to the changing dynamics of consumer preferences and market demands. New leaders are emerging, yet they often come from a homogeneous background, raising questions about diversity and innovation in a field that primarily targets diverse consumer bases.
Crisis and Innovation in Luxury Fashion
The luxury fashion sector is grappling with one of its most severe crises since the Great Recession due to multiple factors including a slowdown in the Chinese market and waning consumer confidence among aspirational buyers. The conventional business model that thrived on exponential growth is faltering, prompting brands to reassess their strategies as they encounter a marketplace that is evolving. The questioning of ethics and sustainability practices combined with a consumer backlash against inflated pricing is forcing luxury brands to innovate. Noteworthy examples include Miu Miu and Hermes, which continue to grow by creating timeless, high-quality products that stand apart from mass-market trends.
Emerging Markets and Consumer Demographics
The aging population, particularly those over 50, represents an overlooked market ripe with opportunity for the fashion industry. As this demographic possesses considerable disposable income and changing lifestyles, brands that cater to their needs are likely to succeed in established markets like Western Europe and North America. Discussions around the actress Michelle Yeoh, who has become a brand ambassador for major labels, highlight how brands can appeal to older audiences by showcasing role models who break the stereotype associated with aging. This shift in focus could redefine fashion marketing strategies to include styles and products that resonate with older consumers.
Challenges for Global Brands Amidst Economic Changes
The potential return of tariffs under a new Trump administration presents a significant challenge for the fashion and retail sectors, especially those relying on global supply chains. Brands are actively reevaluating their pricing architecture to adapt to ongoing economic fluctuations, marked by inflation and changing consumer sentiments. The emergence of challenger brands like On and Skims, focusing on product innovation and cultural relevance, underscores a shift away from legacy giants such as Nike and Adidas, which have been criticized for their lack of innovation. As the industry faces these challenges, companies must embrace adaptive strategies that prioritize consumer engagement and creativity to thrive in this competitive environment.
In recent months, the fashion industry has seen unprecedented price hikes, CEO turnovers, sustainability back-peddling, and more — culminating in what The Business of Fashion’s Imran Amed is calling, a ‘full-blown luxury crisis’. Amed joins Rapid Response to take us inside the industry chaos, and share his insights and predictions for the year ahead. Plus, he shares how the savviest brands today are finally cracking into the Indian market, finding a competitive advantage with AI, and taking inspiration from Oscar-winner Michelle Yeoh.