Fashion, luxury and lifestyle news aggregator - January 2025

Posted: 03/02/2025

Retail’s ‘Golden Quarter’ disappoints but luxury shines bright

Data from the British Retail Consortium (BRC) painted a muted picture for the retail industry across the festive period, with sales growth of 4% year on year in the three months to December 2024, and total retail sales for the year increasing by a modest 0.7% from 2023. Helen Dickinson, chief executive at the BRC, said it was ‘a challenging year marked by weak consumer confidence and difficult economic conditions’ and that the ‘crucial ‘Golden Quarter’ failed to give 2024 the send-off retailers were hoping for’.

Lacklustre growth in the last quarter of 2024 finished ‘a weak 12 months for retailers overall’, part of which is attributed to a fall in the number of people going to bricks-and-mortar shops for a second year in a row. Boxing Day saw a 6.2% drop in the number of visitors to the high street. The New Year sales also saw a decline in footfall, with 4% fewer visitors to the high streets than the previous year.

However, the outlook looked brighter across the luxury sector. At the end of 2024, sales jumped 10% for Richemont, whose brands includes Cartier and Montblanc, bringing in £5.2 billion in revenue for the three months to December 31. As a result, Richemont’s shares rose by 16% at the start of 2025.

Fellow luxury conglomerates LVMH, Kering and Hermes also saw their share prices rise by 9%, 6% and 5% respectively, whilst Hong-Kong listed Prada’s shares rose by 4% in Asia. British retailer Burberry also saw an increase of 4% and Kurt Geiger enjoyed a record Christmas as December became the most profitable month in its history, seeing a 17% growth in direct-to-consumer business. Investors seem to be taking this as a sign that things are picking up in the luxury market after a ‘tumultuous 2024’.

A strong start to 2025 suggests that premium brands are likely to outperform the industry and that a luxury slowdown may be temporary and cyclical. However, the year ahead is expected to be challenging, so it remains to be seen whether top end brands can continue to navigate these pressures.   

Fashion and luxury forecasts for 2025

A number of retailers have already forecasted warnings for the year ahead. CEO of Next, Lord Simon Wolfson, issued a cautionary note regarding the retail giant’s sales and profit growth for the upcoming year. The warning comes in response to tax increases introduced in the UK Budget which, along with wage inflation, are expected to cost the retailer £67 million. To counter the impact, Next plans to implement operational efficiencies and slight price increases.

Other high street names voicing concerns for 2025 include Marks & Spencer, which is focusing on supply chain savings and operational efficiencies, and New Look, which is accelerating plans for mass store closures. In similar sentiment, Never Fully Dressed founder and CEO, Lucy Aylen, commented that ‘rising operational costs, fluctuating supply chains, and heightened consumer demand for sustainable practices all add complexity. We will be addressing these by building stronger supplier relationships and exploring more eco-friendly production methods’.

Several key trends and projections have been identified by McKinsey for the luxury sector in 2025:

• Growth projections: The global luxury market is expected to grow by 1% to 3% annually from 2024 to 2027. The US is anticipated to lead this growth, with a 4% to 6% increase, followed by China (3% to 5%) and Europe (2% to 4%).
• Category growth: Luxury jewellery and leather goods are expected to grow the most, from 4% to 6%, while apparel is projected to grow by 2% to 4%.
• Future strategies: With a slowdown in 2024, future growth is expected to come from volume increases rather than price hikes.
• Ultra-high net worth (UHNW) clients: UHNW clients account for 30% to 40% of luxury spending and are expected to drive 65% to 80% of growth. However, it has been suggested that this demographic plans to spend less on personal goods and more on home decor and travel in 2025.
• Regional growth: Significant growth is expected in Japan, the Middle East, and India, with India seeing the highest increase (15% to 20%).
• Consumer preferences: In-store experiences have reportedly worsened, with luxury consumers wanting to see more transparency in sourcing and production.
• Brand identity: A shift from brand heritage towards individual visions of creative directors may impact brand identity. The demand for newness has led to faster trend cycles and more collaborations, but risks blurring brand identities.
• Resale market: The luxury resale market is growing, driven by a desire for unique, affordable items. However, concerns about authenticity and reliability remain.

Adanola takes athleisure by storm

Last year, Manchester-based athleisure brand Adanola was ranked seventh on the Sunday Times’ list of Britain’s fastest-growing private companies. More recently Adanola has been described as a ‘northern powerhouse’, ‘the label everyone’s talking about’ and ‘at the top of its game right now’. The sports and loungewear brand, which targets women between the ages of 25 and 35 and is celebrating its 10th anniversary this year, now turns over £57 million net revenue and has more than doubled its operating profit for the year to April 2024 at £18.9 million.

With the majority of its products retailing between £30 and £80, Adanola, known for its ‘ADA’ branded attire, is ‘at a value advantage’ amongst the female athleisure sector and its costlier rivals, including the likes of Sweaty Betty and Lululemon. In fact, the brand has absorbed increases in material costs over the years instead of raising prices, with its signature ‘Ultimate Leggings’ retailing at £39.99, the same price as when they debuted in 2020.

The athleisure brand has now reportedly set its sights on US expansion, with local community events in Los Angeles and New York City, and a strategy of deploying ‘the highest echelon of influencer marketing’, including supermodel Kendall Jenner, who earlier this month collaborated on a 16-piece limited edition collection. It is also understood that Adanola has recently appointed advisers to seek out prospective investors to accelerate its growth plans.

Adanola’s future looks bright, and its next move is hotly anticipated. With its new permanent space opening in Manchester Trafford’s Selfridges in December 2024, and reports of a space opening in Oxford Street’s flagship store, perhaps bricks-and-mortar retail is also on the agenda.

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