Blog: Leonie BarrieSlowdown hits luxury goods

Leonie Barrie | 28 April 2008

Gucci’s higher than expected fall in first quarter sales is being seen as a first sign that the slowdown in consumer spending has finally hit the luxury sector. The fashion and accessories brand, which is owned by French retailer PPR, last week said like-for-like sales had dropped 3.3% in the quarter.
 
Part of the problem seems to be that Gucci is more exposed to mature markets in the US and Europe which have not only been hit hardest by global economic woes but also by a brake in tourist spending. It has also admitted to some disruptions in its US supply chains.
 
Confirming these trends is the latest Luxury Consumption Index from Unity Marketing, which has dropped to a historic low of 54.4 points after a survey revealed 41% of luxury consumers expect to spend less on luxury in the coming year.

The doldrums in the US luxury market is expected to continue for at least the next six months, with consumers particularly resistant to marketing efforts by luxury firms. Unity Marketing suggests irresistible ‘buy now’ offers could help jump-start businesses – such as special sales or limited time discounts on selected products. 

There is also a bright spot in the home luxury goods arena. Presumably since luxury consumers can't sell their homes, they are investing in enhancing their existing living spaces until the housing market rebounds. 

PPR Q1 revenues up 20% as Gucci sales slow


BLOG

Vietnam's textile-garment plan hits hurdles

domestically-made textile inputs remains a major problem that continues to hinder clothing manufacturers in the country....

BLOG

Levi Strauss leads on green supply chain in China

Sustainability remains top of mind for the industry with Levi Strauss, Adidas and C&A ranked amongst the leading brands to have made progress in environmental supply chain management in China over the...

BLOG

UK clothing exports to US to be hit by further 25% duties

Cashmere jumpers, anoraks and swimwear made in the UK and exported to the US are among products being hit by an extra 25% tariff as part of the ongoing dispute between the US and the EU over aircraft ...

BLOG

New US trade trends taking shape?

In a reversal of trends seen in July, the three Central American countries that are the largest suppliers of clothing to the US – Mexico, El Salvador and Honduras – saw a dramatic fall in shipments in...

just-style homepage



Forgot your password?