Where Does Accessible Luxury Go From Here?

Recently, luxury fashion giants, including LVMH and Kering, have raised concerns over a decline in global demand, reflecting broader economic uncertainties. Factors such as stagnating real estate values in China and inflated living costs post-Covid are shifting consumer spending habits. Aspirational buyers are leaning towards experiences like dining, travel, and wellness instead of high-priced handbags, making it challenging for accessible luxury brands to retain their appeal.

This scenario presents a crucial moment for Tapestry, the umbrella company for Coach, Kate Spade, and Stuart Weitzman, which is set to report its quarterly results amidst a softening US economy. Investors are particularly interested in the company’s effectiveness at limiting markdowns during this downturn, as well as the potential impact of its stalled bid to acquire Capri Holdings, the parent company of Michael Kors.

The accessible luxury segment has notably struggled, with Capri’s sales plummeting by 12% in the previous quarter, highlighting a significant threat to brands targeting lower-income aspirational shoppers. In stark contrast, Ralph Lauren posted steady growth, signaling that not all accessible luxury brands are equally vulnerable.

Interestingly, in Europe, brands like Polene and Sézane are gaining traction, indicating that there remains a demand for new and innovative accessible luxury products. As Tapestry navigates its current hurdles, the market will closely monitor whether it can adapt and thrive against a backdrop of shifting consumer priorities and economic challenges. The future of accessible luxury will depend on its ability to resonate with today’s consumer while maintaining brand value and exclusivity.