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Stay up to date on the latest in lifestyle and luxury in the weekly retail & consumer news roundup from Traub. This week, sports proves to be a unique opportunity for luxury brands, Macy’s closures will set off a wave of change at shopping malls, and more.
INDUSTRY NEWS
Left Behind in the Retail Real-Estate Comeback: Department Stores
Department stores are bleeding customers, and landlords no longer view them as magnets for shoppers. Discounters are underpricing them. Specialty stores are outmaneuvering them. And luxury brands are sometimes bypassing department stores to open their own shops.
Back To Bricks: Why Retail Strategies Are Returning To Stores
Data from the United States shows retail foot traffic grew almost every month in the year to May 2024 compared with the previous twelve months. And the industry has refocused on the enduring value of stores as pillars of brand identity, sources of inspiration, convenience and competitive prices for customers.
Ralph Lauren revenues up 1% on international growth, beating outlook
Europe and Asia led growth, and though direct-to-consumer was strong across the board, the US wholesale channel continues to lag.
As luxury growth slows, Japan is a silver lining
Japan emerged as the region with the strongest sales performance across the majority of luxury players who reported their Q2 results. Can it last?
A New Game Plan for Luxury Brands
Sports can help luxury brands effectively communicate their brand narrative. LVMH’s sponsorship of the Paris 2024 Olympic and Paralympic Games may have surprised many industry insiders. Nevertheless, it has proven to be a unique opportunity for the luxury conglomerate, not only to share the values and spirit of the Olympic Games but also to essentially provide a shop window—or even a billboard—to a global audience.
A Flurry of Investments Elevate the Status of Fifth Avenue as the Ritzy Thoroughfare Turns 200
The avenue has experienced major retail developments and property acquisitions at lavish prices by luxury conglomerates and no longer seems blighted by vacant storefronts.
Madison Avenue Finds a New Groove
Rents on New York City’s prestigious Upper East Side retail corridor are ticking up for the first time in a decade, as luxury stalwarts and newcomers alike look to tap into the neighbourhood’s affluent customer base.
Macy’s will set off a wave of change at malls, as it closes about 150 namesake stores across the country by early 2027. The department store operator has long been a mall anchor, with stores that range between 200,000 and 225,000 square feet. The former Macy’s boxes could turn into smaller retail spaces or spark more significant changes, such as tacking on apartments or demolishing the mall for a completely new development.
US Luxury Spending Down 11% in July, Says Citi
US consumers spent 11 percent less on luxury goods in July compared to the same month last year, Citi Research said Friday citing data from a panel of 10 million credit card-holders. The drop suggests further deterioration in luxury demand at the start of the third quarter: June’s credit card data showed a 7 percent drop. Luxury leather goods and ready-to-wear were the categories most impacted by the slowdown, with sales falling by 19 percent and 15 percent respectively.
Capri Holdings — the New York-based owner of Michael Kors, Versace and Jimmy Choo — reported sales fell 12 percent excluding currency shifts in the most recent quarter. ”We were disappointed in our first [fiscal] quarter results as performance continued to be impacted by softening demand globally for fashion luxury goods,” chairman and CEO John Idol said in a statement. “We are continuing to manage our expenses and inventory levels carefully in light of the challenging global retail environment.”
Where Does Accessible Luxury Go From Here?
This week, Coach owner Tapestry reports full-year results amid a slowing US economy and stalled takeover bid for Michael Kors parent Capri.Investors will be watching to see whether customers who are forgoing purchases from top luxury brands might still be in the market for a decent looking bag if the price is right. Conversely, accessible luxury brands’ reliance on lower-income, aspirational customers could pose a problem: in recent weeks, luxury groups pinpointed falling demand from that cluster as the principal issue in the United States.
Manolo Blahnik to Open Stores in Shanghai, Miami, Milan, Looks to Future Despite Luxury Slowdown
Like its luxury rivals, Manolo Blahnik saw sales and profits slide in 2023, but the London brand remains upbeat, with plans to open stores in new markets, including Shanghai, Miami and Milan.
‘Experience Is Not Expertise’: Why Rich, First-Time Hoteliers Are Failing So Spectacularly
A series of disappointing stays courtesy of wealthy but inexperienced owners has our editor at large recoiling from a growing blight in the travel industry.
American Fashion Soldiers Through a Volatile Market — For Now
The global stock market tumble this week raised alarm among economists over the likelihood of a US recession happening this year. The consumer economy, however, has held strong and the savviest retailers are still posting growth through offering a compelling value proposition.
Don’t Count on the Lipstick Index for the Next Recession
Hairline fractures are starting to appear in beauty’s “recession-proof” image, as consumers begin to seek out value over indulgence.
Warby Parker notches highest e-commerce growth in 13 quarters
With e-commerce revenue growth of 4.4% in Q2, the DTC eyewear brand is making progress against the goals it outlined at the start of the year and is on track to open 40 new stores by the end of the year.
Why luxury resellers and department stores are rekindling their relationship
Now that consumers are back out and about, both resellers and department stores are looking to rekindle sales as consumer spend continues to drag. Department stores are struggling to capture shoppers’ tighter dollars, operating on a wholesale model that’s showing its cracks. Resale, meanwhile, is fast growing, but has its own set of problems: profitability remains elusive given the high operational costs — including the limitations of online growth and logistical hassles of breaking into bricks and mortar. In this more fraught context, perhaps a link-up makes more sense than before.
Designer ‘dupes’ go mainstream as shoppers choose affordability over luxury
From leggings to lip gloss, there’s a dupe for almost any brand-name product. In many cases, buying a dupe is just more “financially responsible” at a time when many consumers feel cash strapped.
COMINGS & GOINGS
