The Aspirational Luxury Shopper Has Left the Building, and Nobody Knows Where They Went
HSBC now expects luxury sector sales growth to fall under 3% this quarter, down from 7% last quarter, as inflation finally catches up with shoppers who used to stretch for a logo.
The luxury industry's less-wealthy, more-aspirational shoppers, the ones who buoyed the category through years of post-pandemic growth, are pulling back, and HSBC now projects luxury sector organic sales growth will fall under 3% this quarter, down sharply from 7% the quarter before. Richemont, Cartier's parent company, is the exception, with growth projected near 13%, while most of the sector blames tough comparisons, weak European tourism, and what HSBC calls a consumer "feel-good factor" that "isn't at its best."
Janus Henderson points to three straight years of slumping luxury demand following a stimulus-fueled, trade-up-happy post-pandemic surge, with brands' own price increases doing a lot of the damage by pricing out exactly the shoppers who had made luxury feel more democratic. Department stores have it worse: Saks Global, parent of Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, filed for bankruptcy earlier this year and emerged about six months later, with analysts still unconvinced about its long-term prospects. Add in geopolitical uncertainty and sluggish demand out of China, and the sector's recovery story keeps getting pushed to next quarter.
Source: Retail Dive
Kyle Duford, Founder & Editor, BRNDWIRE. More from Kyle →
