Five Aspects Of Luxury Growth On The Road To Growth

It is reported that the shrinking demand in China, the continued strength of the US dollar and the Paris terrorist attacks that shocked the world made 2015 a year for Prada, Burberry and Cartier owners Richemont to forget.

Asian sales fell sharply, and Prada shares fell to a record low in December 16th.

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Its $3000 brand name had to be withdrawn from the showcase because there was no sales.

At the same time, Prada sharply cut costs and launched more parity products.

Prada is not a case, but a common phenomenon in the global luxury industry.

The market outlook in 2016 is slightly better, but not much.

Clothing and other expensive goods

The growth rate will not exceed 4%, although it is better than the increase in 2015 (1%), but it is only half of the average annual growth rate of the market in the past five years.

At present, the scale of the market is 278 million dollars.

The following are five aspects that luxury manufacturers should strive to cope with on the road to slower growth.

Takeover pactions

Fabrizio Ferraro, a professor at IESE business school, points out that the scale of M & A pactions may be more than 2 billion 500 million euros (US $2 billion 700 million) this year under the combined effect of abundant cash reserves, rising interest rates and the pressure of some independent enterprises.

Brands like Balmain, Dolce, Gabbana, Furla, Lanvin, Longchamps, Maurice Lacroix and Parmigiani may attract some buyers including French luxury group Kering.

Earlier last year, media reports revealed that Kering had already had unofficial discussions with potential acquirers about the sale of its sports brand Puma.

In the market that sports apparel is greatly squeezed by fashion brands, the sports brand of luxury group may be a drag on the overall valuation of Kering, with the premise that its gross margin is far less than that of luxury goods.

Ferraro expects more private equity firms to launch buyout deals.

However, if the environment deteriorates further, larger pactions will be withdrawn.

Valentino and Versace are likely to make initial public offerings (IPO).

"There will be more mergers."

Digital driving

Fflur Roberts, director of Euromonitor luxury research department, pointed out that luxury manufacturers are coming late in the face of "online parties" in every corner of the world.

Nevertheless, the growth rate of Internet sales is still more than two times the overall market growth rate.

Brands such as Hugo Boss and Mulberry realized that if we want to have a place in the highly competitive market, we must take the Internet seriously.

Apart from highly paid executives who have rich experience in technology industry, some luxury brands are advertising on the Internet.

It is reported that the global luxury goods giant LVMH employs Ian Rogers, a former Apple Corp executive, as the new chief digital officer of the group, which formally took office in October.

This is one of the most notable digital business hiring activities in the luxury industry.

Some analysts point out that the move is aimed at strengthening LVMH's leadership in the field of digital luxury goods.

"Luxury brands must make their online experience more exciting," Roberts said.

Retail restart

Slower sales growth has forced LV and Burberry to reduce the number of retail outlets and close some stores.

The 2014 China luxury market report released by Bain earlier this year showed that the mainland China's luxury market for the first time showed negative growth in 2014, down 1% from 2013.

In 2014, luxury stores also closed the most stores. Hugo Boss closed 7 stores, Ferragamo and Zegna closed 6, and Burberry closed 4.

Insiders estimate that luxury brands will continue to adjust their distribution in 2015, including closing discount stores and authorizing stores.

Up to now, some luxury brands have released their own plans to shut down stores or stores.

Olivier Abtan, partner of Boston Consulting group, points out that luxury brands will have to withdraw funds from some stores, especially in developed markets such as Europe.

These brands must redecorate their shops and improve their services.

He said, "luxury brands must improve their retail sales by restarting sales methods such as old ones."

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Technological innovation

Technology and fashion are not directly related, but they can change the pattern of the fashion industry.

We are not just talking about tigers' smart watches or Hermes version of Apple Watch.

Recently, the first smart watch Connected, released by Swiss luxury watch maker tiger Heuer, although it sells for up to $1500, is still in short supply.

According to foreign media reports, Connected watches have received more than 100 thousand orders worldwide. In order to resist rising consumer enthusiasm, tiger Connected has to suspend sales on line and open retail stores only to consumers.

Apple smart watch Apple Watch launched early, sales have not seen much improvement, although the new product was scheduled to debut at the conference, but failed to cause much concern.

In addition to the new watchband design, the most striking Watch related news on the conference is to work with the famous luxury brand Hermes and apple to launch the Apple Watch with the Hermes design strap.

The design of the watch is single band Watch, double circle strap and bracelet strap, and is equipped with a variety of colors.

The price ranges from 1100 to 1500 dollars.

Levi Strauss and Google have cooperated in the research and development of smart clothing products.

It is understood that this new technology developed by Google's advanced technology project department is named "jacquard project". This technology can be used to make conductive fabrics into any type of textiles to make intelligent fabrics. It can also add small button size calculation system to clothes, and wearable technology can be integrated into jeans, jackets, shirts and even underwear.

J. Walter Thompson trend forecast department heads Lucie Greene pointed out that technology will be integrated into our ready-made garments and accessories.

From an innovative point of view, we are just beginning. "

Tight cowboy and car wash skirt

Katherine Ormerod, editor in chief of Lyst, a social shopping and bookmarking website in the fashion industry, points out that finally, tight jeans will be less and less.

The industry believes that in 2016, it may be a year when the "elastic compact cowboy is finally destroyed".

In many fashion autumn exhibitions, you can see the current ultra - popular car washes.

Why is it called car wash skirt? It is like a clean skirt for skirts and skirts. It's like a cleaning roller for automatic washing. The wild elements of skirts from spring and summer are like Tassels and asymmetries. In autumn and winter, you can find that from Christian Dior to Proenza Schouler, there are car wash skirts on many designer brands. Qiu Dongxiu, whether knee or ankle length, plain or printed, leather or satin, is telling us that we should first catch up with fashion and buy a car wash skirt first.