Luxury fashion is having a bad month
From Oscar's mishaps to major lawsuit rulings, fashion houses have been going through it recently
SUPRISE UPLOAD: Normally I only write one newsletter a month, but thanks to both an uptick in subscribers and fashion developments worth writing about I’m going to trial an extra post mid-month. Let me know if there’s anything you want me to cover in the upcoming issues!
2023 was the year of luxury fashion. Finally free of pandemic troubles and out of reach from ultra-fast fashion market poachers, many luxury brands saw record profits and increasing consumer interest. Established markets like the US and China appeared fully recovered after recent struggles, whilst emerging markets like Vietnam offered additional opportunities for capitalist-hungry CEOs.
Now, in the first quarter of 2024, they’re more likely feeling as fragile as Emma Stone’s Oscars Dress after the month they’ve had.
My main drive to write this story was the disappointing results of Remake’s annual Fashion Accountability Report. The lack of progress towards any semblance of sustainability is not surprising at this point (the highest score being 40 out of a possible 150 only made me audibly sigh once), but what did throw me slightly was LVMH’s incredibly low score, especially when compared to rival Kering’s.
Whilst Kering (owner of brands such as Gucci, Balenciaga and Alexander McQueen) had made it into the top 10 brands, LVMH - owned by one of the world’s richest men - is firmly sat in the bottom half of the list. Bernard Arnault sits at the helm of the biggest fashion house, ruling over Louis Vuitton, Tiffany&Co, Loewe and Loro Piana*, to name a few. (*Remember that name)
In a series of ironic events, LVMH’s poor sustainability results were released days before a star-studded ceremony held by French President Macron to award Arnualt with the Grand Cross of the Legion d'Honneur - the highest civilian honour in France. Not a week later more news came out; this time linking his ultra-luxurious, uber-expensive knitwear brand Loro Piana to unpaid labour exploitation in Peru, where they source the world’s most expensive wool. I have no doubt that if this news had broken two weeks before, the ceremony would have still gone ahead - after all, Peru is so far away from France and the economic boost Arnault provides there. Why make a fuss about unpaid farmers in the Global South when LVMH provides hundreds of jobs to the people of France?
It seems US lawmakers don’t quite agree with this logic, and are now demanding answers from LVMH’s CEO for Lora Piana’s exploitation. Despite the industry’s lack of sustainability progress, it’s encouraging to see governments and lawmakers calling out brands with increasing frequency. If only they had the same eagerness to speed up the glacial pace of regulation and legislation.
Despite beating LVMH’s sustainability progress store, Kering hasn’t come out of this month unscathed. News came this past week that the fashion house expects Gucci’s profits to drop by up to 20% this first quarter - news which caused their market shares to tumble 12% in a day. Nevermind that they are still profiting by billions of dollars; capitalism demands constant growth or investors will jump ship.
Speaking of capitalism, it seems lawmakers are setting their sites on Hermes and the elusive Birkin. An “Anti-Competitive” lawsuit has sparked fierce debate over whether the brand can (or should) require customers to purchase several other items before being rewarded with the chance to buy a Birkin.
Cavalleri and Glinoga claim that Hermès implemented “a scheme to exploit the market power” of its Birkin bags by “requiring consumers to purchase other, ancillary products from [it] before they will be given an opportunity to purchase” its most coveted creation
I can see both sides of this. Whilst the idea of forcing customers to buy more in order to get what they came for is pro-consumerism to the extreme and we should all be angry that any brand has such a policy in place, anyone can get their hands on a Birkin at any time via a resale platform. This policy is unique in almost forcing people to shop secondhand, and the positives of that are obvious.
Once again, I think it demonstrates how varied and changing new legislation will be in the future - will Hermes, a brand that has built itself on this strategy of luxury and customer loyalty, be forced to completely restructure itself? Will France’s new €5 Bill start a war on fast-fashion of the same magnitude as the war on cigarettes?
If nothing else, I think this month has exposed luxury fashion brands for the frauds they are. However much they portray themselves as exclusive or cater only to the uber-wealthy (one bomber jacket on Loro Piano is retailing at close to £10k), profiting off the exploitation of the Global South makes them no better than the fast fashion brands they so often look down on. It may even make them worse, since there’s absolutely no excuse of challenging profit margins from the sale of a £10k sweater to stop you paying the wool farmers.
But will our society’s collective admiration of wealth get in the way of demanding reformation? Guess we’ll have to wait and see.
Until next time!
Katie