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This Week's Luxury Forecast

By Daphne Bennett

November 2024

 

While Tom Ford splashes out on a £104 million London mansion, the luxury industry is in a state of flux. As traditional luxury brands grapple with declining sales and shifting consumer preferences, particularly in China, a new wave of affordable luxury and fast fashion is reshaping the landscape. It's a tale of two markets: one defined by excess and the other by accessibility.




Ford's Empire Expands


Tom Ford the American fashion designer turned film maker turned real estate mogul, set a London property record for the year in acquisition, with a $104 million mansion in the Chelsea neighborhood. Ford’s purchase marks the UK’s biggest residential transaction of 2024; London’s luxury real estate market has been experiencing a decline in sales all year, due in part to upcoming tax increases on homes for wealthy expats in the country. This illistrated with the previous owner paying approximately $20 million (£16 million) for the property almost 20 years ago. Per The Times this sale has brought the value of his global property collection to $300 million.





Since the 2022 sale of his Tom Ford brand to Esteé Lauder company for $2.8billion, which continues it highly profitable beauty business aswell as owning the license for the eyewear and the outsourcing of the clothing accessory manufacturing run by ZEGNA group. Which explains why the last two collections of Tom Ford have been shown in Milan headed by the new designer Peter Hawking who started doing one season and then later taken over by the current creative designer Haider Ackerman.


Part of Tom Ford real impressive estate portfolio consists of LA, Santa Fe in Tx, Palm Beach Florida recently after the sale of his company in 2022 which made him a billionaire smartly put his money into property in Florida for the tax cut investment opportunity, over $50 million Jacquie O’nassiss Hamptons Home Lasata. I think we can consider Ford’s latest acquisition the home that Tobacco Vanilla and Black Orchid built, two of his most successful fragrances.



The Great Luxury Divide: Winners and Losers in a Changing Market

The luxury landscape is experiencing a curious dichotomy. While titans like Richemont owner of brands such as Van Cleef & Arpels, Cartier, Alaia and Cholé, German megabrand Hugo Boss, and Capri Holdings owner of owner of Michael Kors, Jimmy Choo and Versace grapple with declining sales, particularly in the Chinese market, with Richemont facing a double digit downturn of 28%.


Shein, the fast-fashion behemoth, is riding a wave of success, particularly in Europe, where sales surged by 68%. With an after-tax profit for the Dublin registered entity more than doubled to 99.5M Euros from 45.8M in 2022. So while the Chinese apetitie for luxury European brands appears to have stalled, Europe is on a new wave of Shein’s low price trend driven value proposition.


However, not all luxury brands are struggling. The Stalwart American brand, Ralph Lauren actually is raising its annual revenue outlook by 3-4% which the company is attributing not just to North American and European sales but healthy growth in Asia too and an increased demand around the holiday season.






Aswell, the Umbrian uber luxurious house of Brunello Cucinelli is also flying high. Underscoring their international demand is a new collection of cashmere abayas shown in Dubai for Spring 25’ signaling its international appeal.



Overall, this weeks luxury forecast seems to be undergoing a period of recalibration. While some brands are adapting to changing consumer behaviors and emerging markets, others are facing headwinds.The future of the luxury industry is uncertain pre-holiday season, but it is clear that brands must adapt to changing consumer preferences and economic conditions to survive and thrive.

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