Week Eleven - Luxury Reloaded: Emerging Trends and Challenges Ahead
News in short
Italian fashion house Versace, owned by Capri Holdings Ltd, is at the centre of business and fashion conversations amid speculation of a potential change in ownership. Guided by financial advisors, Prada SpA has emerged as a leading contender to acquire the iconic brand.
News of Prada considering a bid sent Capri’s shares up by as much as 7.5% in pre-market trading in New York. Meanwhile, Versace reported a third-quarter revenue of $193 million, reflecting a 15% decline compared to the previous year. The company also disclosed an operating loss of $21 million, up from $14 million last year.
If Prada proceeds with the acquisition, it could bring Versace back under Italian ownership, preserving its heritage while steering it away from global conglomerate control.
Brands trying to reach the consumers of the future may need to move from TikTok to video games, as that's where Gen Alpha are spending their time. A recent study revealed that Gen Alpha, born between 2010 and 2024, is a generation of gaming enthusiasts who spend as much time gaming as they do on social media. With around $83.5 trillion in wealth expected to transfer to younger generations over roughly the next 25 years, establishing brand awareness through games for Gen Alpha could be crucial.?
Nearly 60% of Gen Alpha have discovered new brands through games and are more likely to buy from those featured in their favourite virtual worlds, highlighting a significant market opportunity. Games also allow brands to engage with Gen Alpha more effectively, leaving a more lasting impression than social media content.?
However, predicting Gen Alpha’s long-term behaviour remains challenging, and many games maintain closed ecosystems that resist brand intrusion. Yet, brands like Skechers and Balenciaga have successfully navigated this space. It remains to be seen if others will follow their lead and tap into this evolving digital playground.
After being found not guilty in his gun trial, ASAP Rocky has been named the first creative director of Ray-Ban. Set to launch his debut sunglasses collection in Spring 2025, he will not only design new products but also reimagine Ray-Ban’s flagship stores.
This appointment comes as Ray-Ban’s parent company, EssilorLuxottica, makes bold moves into streetwear, including its recent acquisition of Supreme. With ASAP Rocky on board, Ray-Ban aims to expand its Meta smart glasses production to 10 million units annually. Ray-Ban president Del Vecchio has even hinted at a potential collaboration between Meta, Ray-Ban, and ASAP Rocky. In his new role, ASAP Rocky will also be tasked with revitalising Ray-Ban Studios, the brand’s creative platform.
The Skiing retro aesthetic has recently dominated the fashion marketing landscape, from high street labels to designer brands wanting to leave their mark in the snow. Brands that previously had no ties to mountain sports are now at the centre of this marketing craze, and here’s why.?
The skiing industry has traditionally been largely occupied by wealthy individuals and clients, where luxury outerwear companies like the Moncler Group thrived. However, recently, a group of outsiders like Zara, Jaceqmus and Khiels have launched capsule ski collections and opened pop-ups/boutiques in the mountains. The brand's entry has to do with the sport’s growing audience and the allure of its retro winter vibe. As consumers increasingly prioritise experiences, brands like Zara capitalise on this by offering trendsetting ski designs at more accessible prices.
With the ski industry projected to grow to $5.7 billion by 2027, it’s clear that this retro-inspired momentum is more than just a fleeting trend; it's a strategic move that taps into both evolving consumer desires and experiences.
This week is Milan Fashion Week, and we have selected some of the upcoming designers making their debut this year.
First, Saman Loire
Saman Loire is a Neapolitan demi-couture label that sits between ready-to-wear and couture, focusing on organic raw materials. It also positions itself as a brand where men and women embrace aspects of the opposite gender. The show will be on March 3rd at noon.
Next, Francesco Murano
Francesco Murano draws inspiration from his time at the Carlo Levi Art School of Eboli, where he specialised in plastic and ceramic design. He then studied fashion design in Milan, and you can see how his studies have translated into his brand. His style features sculptural draping and blends baroque art and modern design. His show will be on February 27th at 5:00 PM.
Last but not least, Giuseppe di Morabito
Giuseppe di Morabito's style is very feminine and focuses on precise tailoring to enhance the female silhouette. This approach has attracted attention from major A-list celebrities, including Zendaya, Lady Gaga, and Kylie Jenner. His show will be on the 28th at 3:00 PM.
Spotlight - Luxury Reloaded: Emerging Trends and Challenges Ahead - LVMH Conference
On February 12th, 2025, Bocconi University hosted its annual LVMH Conference in collaboration with the luxury conglomerate. As part of their long-standing partnership, LVMH Group’s Academic Relations Director, Olympia Mantzourou, and Bocconi’s Associate Professor, Emanuela Prandelli, moderated the event. Prandelli, who directs the MSc programme in Fashion and Luxury Management at Bocconi’s SDA Management School, opened with a speech titled Luxury Reloaded: Emerging Trends and Challenges Ahead.
She opened by describing the past two years as a “rollercoaster” which resulted in an estimated loss of 50 million luxury consumers in total, a significant loss. Factors that contributed to this loss were far-reaching and widely different, but they can be grouped into two distinct issues: one, the global economic slowdown, and two, Gen Z and the younger generations’ shifting sentiment towards luxury.?
A reduction in consumer spending due to inflationary pressures was an issue globally, but for luxury, Chinese consumers slowing down on buying posed the biggest issue. Since Chinese consumers’ explosive entrance into the luxury market, the industry has long relied on Chinese consumers to absorb the supply of goods, and this reduced capability has led to massive amounts of excess inventory. Traditionally, fashion brands can heavily discount these goods, but this can have the opposite of the intended effect in luxury, where exclusivity and scarcity are paramount to its ethos. There are signs that the situation in China might improve, with the government implementing various policies to stimulate the economy and encourage consumers to return to stores. However, over-reliance on Chinese consumers remains risky. At the same time, the government is actively working to shift consumer preferences towards domestic rather than international brands. International household-name brands now face greater competition from upcoming Chinese companies, who understand their customer base better and appeal to them on patriotic and cultural grounds.?
While the decline in sales in China and broader macroeconomic challenges like high inflation are largely beyond the industry’s control, they are only part of the story behind the current weak consumer demand for luxury goods. A significant factor lies in Gen Z’s growing disinterest in luxury, an issue that the industry does have the power to address.
Pinpointing the exact reason Gen Z is shifting away from luxury is challenging, but Professor Prandelli highlights several issues that could be contributing and some consequent strategy shifts. Reduced traffic from store walk-ins has been one of these new issues, with customers now preferring to shop online. Walk-ins remain crucial for three reasons: they encourage higher purchase rates than websites, reduce return rates—thereby lowering overhead costs—and maintain the luxurious feel of the overall shopping experience. Brands have also become overly dependent on their iconic items, which has only been exacerbated by social media oversaturation of those products as well. Diversification whilst also making their most iconic products more difficult to obtain by raising price points and reducing inventory are easy ways to combat this, a strategy we see Hermès increasingly employing in regards to its Kelly and Birkin bags, which some clients now wait up to months for an opportunity to buy.??
Another prominent issue, though much more difficult to solve, is the sentiment amongst Gen Z that there has been widespread creative flattening across luxury’s biggest brands. Social media oversaturation and brands’ reliance on iconic products have contributed to this, but a deeper problem lies in the weakening of designer identities. Creative directors are experiencing shorter and shorter tenures, often being replaced before they can establish their vision. The same handful of designers cycling through top houses has reinforced the impression that these brands are interchangeable, eroding both brand identity and individual designers’ reputations. Similarly, the pressure of short tenure has led many directors to resort to creating many archival and referential looks, evoking the brand’s past rather than pushing it in a new direction, leaving Gen Z disenchanted. Some analysts go even further, suggesting this disinterest stems not only from creative fatigue but from a broader shift in consumer behaviour, with Gen Z buyers giving preference to “experiences” over material goods.
After critically evaluating these challenges, Prandelli identified four key recommendations to enhance customer experience. Given Gen Z’s preference for experience over products, brands should prioritise refining the customer “journey” and “experience” rather than first altering their product offerings. First is Phydigital positioning–a seamless omnichannel customer experience will regain customer attention where brands must become content creators. Louis Vuitton comes to mind, which found a core leitmotif of travel, exhibiting a high level of consistency which ties products together and reinforces its image to LV’s target audience. In regard to the online shopping experience, digital twins, personal avatars, virtual try-ons, conversational commerce, and VR stores are all tools that should be harnessed, particularly as walk-in traffic continues to decrease. Personalisation is another way to achieve a luxury experience for customers virtually. Recent AI developments allow for large-scale customisation, allowing consumers to connect with the brand in a financially feasible way. Product customisation is one such example, which has the additional benefit of fighting against counterfeits.?
To better attract Gen Z consumers, luxury brands can focus on two key areas: product variety and price-to-quality ratio. Expanding product variety involves offering a wider range of merchandise across different price points. For example, Miu Miu—a brand popular among young consumers—offers products from as low as €25 for a perfume to as high as €16,000 for a wool coat. Additionally, brands can enhance variety by catering to local tastes, creating special collections, or modifying existing products to resonate more with specific cultural preferences. Alternatively, focusing on price-to-quality ratio can also appeal to Gen Z. With social media making product origins and materials more transparent, younger consumers are increasingly value-conscious. Emphasising authenticity, artisanal craftsmanship, and high-quality, hand-made items can enhance perceived value and encourage purchases.
In conclusion, reclaiming the 50 million luxury customers will be a formidable challenge, but Prandelli’s insights offer a strategic roadmap. By embracing technological advancements and focusing on greater attention to detail (both in the customer experience and product offerings), luxury brands can better align with evolving consumer expectations. While challenges persist, LVMH and its industry counterparts remain optimistic about the future, confident that innovation and meticulous craftsmanship will drive a revival in demand.
Tune in next time for more!
Yours,
The Debrief Team
BS4F, active since 2013, is one of the leading fashion associations with the mission of bringing students closer to their professional career aspirations in the fashion and luxury world.