Luxury Goods Are Facing A Global Crisis Of Liquidation.

The two poles of the luxury market are now being challenged. The weak performance of Cox and Mike Coles reflects a slowdown in US income growth, despite its economic recovery. The luxury industry now relies on middle class consumption, but the latter finds that their ability to buy affordable luxury goods has declined.

FT Business of Luxury Summit, the international top fashion brand industry, was recently held in Morocco. "What keeps me awake at night is how society will deal with structural unemployment and jealousy, hatred and class struggle," Rupert said at the meeting. He talked about his fears that artificial intelligence would stifle employment. "Rich people will not want to show off their wealth. If your child's good friend's parents lose their jobs, you will not want to buy anything gorgeous.

Personally, there seems to be no revolutionary change. People are still driving to the hotel with Ferrari (Ferraris). The port is full of multi deck deck yachts, and some yachts have helicopter landing pads. Ralph Lauren (Ralph Lauren) once told Rupert: "you are as paranoid as I am." The latter conclusion is: "if you are moderately paranoid, you will survive."

But not because you are paranoid means that people will buy as many watches as you used to. Even though Rupert's dystopia nightmare has not yet come true, the luxury industry began to crack after 20 years of prosperity. During the past 20 years, global luxury sales fell only two times (in 2003 and 2008-2009 respectively), and then rebounded rapidly.

A crack appeared on the market of Michael Kors, Coach and Kate Spade, which were sold by American companies such as affordable luxury, which has grown strongly since 2010. Coles announced last quarter Same store sales A drop of 6% is due to a drop in the number of tourist purchases in the United States, and consumers are switching from buying watches to buying jewelry at lower prices. Its sales also declined.

The second crack that worries the luxury industry is China. Luxury goods And fashion sales are sluggish. This is the result of anti-corruption by the Communist Party of China. Bain Bain (Co & amp; Co) expects that sales of luxury goods in China will decline in the past years, and China has been the biggest luxury sales growth market for many years.

In Morocco, you can hear the word "discount" loathing by designers everywhere. "We Chinese demand a discount," said Sir David Tang, founder of Shanghai Tang and British contributor Deng Yongqiang Sir. We like discounts! "He recalls talking about shopping in Europe with one of the wealthiest ladies in China. The woman said, "how much discount? I want to get the sales tax back."

Compared with the European market, China's luxury goods market is sluggish and expensive, which makes Gucci (Gucci) and other brands have to sell at half price to attract customers back to their expensive flagship stores. Jiang Shan, Prowon Consulting, said: "the good times for luxury goods in China are over. I don't know when it will return to its old glory -- perhaps never. " Prowon Consulting is a Shanghai based company that provides shopping advice to the rich.

However, the luxury industry has not collapsed. Bain's data show that last year, global sales of luxury goods increased by 2% to 223 billion euros, and the market size was three times 20 years ago. But the luxury industry is doubtful about its ability to resist financial gravity. Luca Solca, an analyst at Exane BNP Paribas, Paris, France, warned: "it needs new growth frontiers very much."

One hope is to expand network sales. After the merger of Yoox in Italy and the Net-a-Porter of the Net-a-Porter, an online retail platform was created. Rupert appealed to the French luxury group, LVMH and Kering to join the platform. Brand store sales now account for 32% of luxury goods sales, while e-commerce accounts for only about 6%, so there is room for growth.

but Rupert It is right to feel uneasy about the overall situation. Over the past 20 years, the depth and breadth of the fashion and luxury market has increased. Not only the rich, but also the middle class are eager to buy high-end and desirable products. Watches and jewellery, such as "hard luxury", as well as Chanel (Chanel) handbags and other accessories are popular as fashion symbols.

There are still many millionaires and billionaires in the world - ever before. But China's anti-corruption campaign shows that sudden changes in conspicuous consumption may take place.

Perhaps there will be a larger market for subtle products: buying simple jewellery instead of luxury jewellery, buying Audi instead of Ferrari (although Ferrari plans to make initial public offerings), buying silver watches instead of gold watches. Yachts are difficult to disguise, but they can sail outside public beaches.

From an optimistic point of view, a settlement will prompt designers to create new works, Mario Testino, Burberry Mario, when it comes to the work of some fashion photographers, regretfully, "they are keen on such poor and unimaginative poor creation." By contrast, his work is sunny and optimistic. Mario, they may have been told.