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Fashion, luxury and lifestyle news aggregator - February 2024

Posted: 29/02/2024

Hermes outperforms luxury rivals

French luxury group Hermes has reported better than expected profits of €4.3 billion, representing an increase of 28% compared to 2022, whilst its luxury counterparts, including fashion group Kering, face dwindling sales.

Kering’s top label, Gucci, saw its overall performance fall by 4% year-on-year in the final quarter of 2023, which perhaps ironically represented an improvement on its 7% year-on-year decline in the third quarter. Francois-Henri Pinault, chief executive officer of Kering, said that moving forwards the group was focused on ‘revitalising Gucci’, its flagship brand, including by naming a new designer, and described 2023 as a difficult year which did not meet the conglomerate’s expectations. Indeed, sales at other Kering owned brands, including Bottega Veneta and Yves Saint Laurent, were also down 8%.

In contrast, earlier this month Hermes announced ‘outstanding sales’ for 2023 and Q4, with its shares hitting a record high and full-year revenue increasing by 21%. It credits its success to ‘the loyalty of local clients’ and ‘the dynamic of tourist flows’. Beyond this, the maker of the famous Birkin and Kelly bags has anchored itself in the luxury market through the ‘quality and scarcity of its flagship leather goods’.

In store, Hermes adopts a decentralised approach to its operations, leaving its sales managers and associates with an unusually broad discretion as to how and to whom its goods are sold, and by bolstering personal relationships with its clientele. But whatever the reason for the group’s performance, described as in a ‘different league’ entirely to its rivals, the success at Hermes will be spread throughout its workforce with the recent announcement of a €4,000 bonus being awarded to each of its 22,000 employees worldwide.

That being said, it does appear that other luxury brands, including the likes of LVMH, which owns Louis Vuitton and Christian Dior, are ‘starting to stage a comeback’ – LVMH in fact posted a 10% rise in fourth-quarter sales, despite reporting in October that its growth had significantly slowed, panicking investors and prompting a $245 billion sell-off across other luxury players.

A retail rebound in January?

Following reports of mixed results on retail spend over the festive period, it seems that the start to 2024 has been difficult for retailers as predicted, with the ‘hangover of low consumer confidence’ remaining prominent.

Despite January’s traditional high street sales, Britain’s larger retailers confirmed that sales growth slowed last month, due to higher living costs, adverse weather conditions and transportation strikes. In the UK, total retail sales increased by 1.2% year-on-year in January, against a growth of 4.2% in the same month last year, and below the 12-month average growth of 3.4%.

The high street’s performance was also lacklustre, and online operators saw another month of negative results with online sales falling from 26.8% in December to 24.8% in January. Helen Dickinson OBE, chief executive of the British Retail Consortium, commented that ‘milder temperatures meant clothing sales performed poorly, particularly winter clothing and footwear’, but that it was ‘better news for health and beauty products which continued to sell extremely well’.

A touchdown for fashion retailers

Following the Kansas City Chiefs win at the Super Bowl earlier this month, are US sporting extravaganzas the next big thing for UK retailers to tap into? Although traditionally viewership figures in the UK have been negligible in comparison to the US, it is reported that the Super Bowl has become ‘a cultural phenomenon on this side of the Atlantic’. This year, Taylor Swift is credited as causing a 203% surge in the Super Bowl’s addressable UK audience and fashion labels were ready to capitalise.

Swift, who on game-day wore a top from Australian designer Dion Lee, is reported to have garnered $1.5 million in media impact value for the brand. The buzz around her custom red and white Chiefs puffer jacket worn at an earlier game also caught the NFL’s attention and ultimately resulted in an official licensing agreement with the designer, Kristin Juszczyk.

Last year’s Super Bowl saw a 15 minute musical half-time performance by Rihanna generate a 100% increase in revenue for outdoor brand Salomon, after she wore its Cross Low sneakers from its collaboration with French luxury fashion house Margiela. Replicas of Rihanna’s red monochrome Loewe jumpsuit also sold out in less than 24 hours of hitting online stores.

With Google experiencing a 115% spike in searches for ‘how to style a football jersey’, it is perhaps no surprise that retailers are incorporating US sports into their fashion catalogues. Boohoo, for instance, released an NFL-branded collection for the Miami Dolphins, New York Giants and Las Vegas Raiders. Elliott Matthews, managing director of NFL licensee, Poetic Brands, which works on the NFL ranges for Boohoo, commented that UK consumers are more design-led in their purchases, driven by colours and logos, as opposed to their US counterparts who buy based on team loyalty. Ahead of this year’s Super Bowl, he predicted sales of NFL clothing to double compared to last year.

Football clubs this side of the Atlantic are also getting involved. In recent months, Paris Saint-Germain collaborated with French-founded lifestyle apparel and accessories brand Blvck Paris, entwining the retailer’s monochrome design with the emblematic elements of the team. Crystal Palace was also the first club in the Premier League to hire a creative lead, Kenny Annan-Jonathan, to develop supporter apparel in the club’s shops and online store.

Interestingly though, British Vogue described Formula 1 as ‘the sports world’s most stylish event’. But regardless, with the UEFA Euros and Paris Olympics set to make 2024 an ‘epic year for sports’, there are clearly ‘bigger opportunities ahead’ for retailers to prosper from the fusion of fashion and sports.

The rise of digital designers at London Fashion Week

February is the month of the ‘Big Four’ fashion weeks, which kicked off on Friday 9 February in New York. This year, London Fashion Week celebrated its 40th anniversary and the British Fashion Council (BFC) announced that animal fur was banned from its schedule. The week comprised a digital-physical (or ‘phygital’) hybrid, with a number of AI-generated outfits being showcased, demonstrating the BFC’s growing support for digital designers ‘as the next frontier’ of innovation.

The benefits of technology in fashion are widespread – from new and emerging digital designers who are no longer inhibited by entry barriers including the costs associated with fabrics/materials and production runs, to big design players, such as Marc Jacobs who last year used ChatGPT to generate his Fall 2023 show notes.

Overall, though, it seems many designers are tentative about using AI in their creative processes – of a handful of creatives asked at New York Fashion Week this month, almost all noted ‘curiosity and openness’ to AI-informed text and image-generation tools, but many also endorsed ‘the traditional analogue methods they already know and love’.

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