Week Ten - Winter Recap
News in short
French fashion brand Jacqemus is set to enter the beauty market through a new partnership with cosmetics giant L'Oréal. This collaboration marks Jacquemus's first venture into beauty products, backed by one of the industry’s biggest players. As part of the deal, L'Oréal has acquired a minority stake in Jacquemus, underpinning a long-term beauty partnership.
Jacqemus’s founder Simon Porte Jaquemus has protected his brand’s independence since its founding in 2009, but last year expressed that a deep-pocketed backer was needed to take the business to the next level. L’oreal’s investment comes at a pivotal time for Jacqemus, who is battling a time of uncertainty post-pandemic and an increasingly choppy luxury market dominated by conglomerates.?
For L'Oréal, the partnership strengthens its push into prestige beauty. The company recently took a minority stake in luxury fragrance house Amouage, and the upcoming Jacquemus beauty line will join its Luxe division, home to brands such as YSL, Prada, and Valentino. With Jacquemus’s strong social media presence and Gen Z appeal, the collaboration signals a bold move into the future of luxury beauty.
China’s luxury market saw an 18% to 20% decline in 2024, signalling the end of a phase of rapid expansion, according to consultancy Bain & Company’s latest China Luxury Report. Sales are expected to remain stagnant this year.
The downturn has affected discretionary spending, especially personal luxury goods, a market that accounts for roughly one-third of global luxury sales. Consumer confidence in the world’s second-largest economy remains fragile, weighed down by a prolonged property crisis and ongoing job security concerns. At the same time, a sharp rise in overseas spending is reshaping where and how luxury consumers are choosing to shop.
According to Bain Consultancy, luxury goods are forecast to decrease in 2025 for the first time since the Great Recession. This downturn, expected to result in a 2% sales reduction from 369 billion euros in 2024 to 363 billion euros in 2025, stems from elevated pricing and worldwide unrest.
The situation may worsen with Trump's proposed tariffs, which could impose up to 20% on imports, potentially making European luxury goods significantly more expensive in the US. This would challenge an already struggling market. However, strategies such as relocating production to the US or boosting sales to American tourists in Europe could mitigate some of these impacts.
After a brief and challenging tenure, Sabato de Sarno is stepping down as Gucci's Creative Director, just ahead of the Milan Fashion Week. Appointed in 2023, de Sarno's vision aimed to reestablish Gucci's iconic, universal appeal with a restrained, sartorial aesthetic. Despite these efforts, Gucci has faced significant commercial challenges, with a notable 18% drop in revenue in the first half of 2024 compared to the previous year.
De Sarno's departure underscores a tumultuous period for the brand, which has seen several executive changes since 2023. The brand, under Kering, now faces crucial decisions about its future direction. With industry speculation widespread about potential successors, Gucci's next moves are eagerly anticipated.
As Gucci prepares for its upcoming fashion show without de Sarno, the fashion world is keenly watching what will come next for the brand. This marks a pivotal moment for the brand as it navigates through these transitions. As the fashion community looks on, the question remains: who will take the reins and successfully steer Gucci back to its former glory?
The European Commission is planning to suggest a prohibition on the usage of PFAS, commonly known as "forever chemicals," in consumer goods, specifically in clothing.?
Perfluoroalkyl and Polyfluoroalkyl substances (PFAS) are a class of thousands of chemical substances which have been manufactured. These substances have sparked widespread concern over their accumulation in ecosystems, potable water sources and within human physiology.?
This restriction is a significant step in reducing PFAS emissions, as PFHxA is often used as a substitute for the already-banned Perfluorooctanoic Acid (PFOA). Based on the scientific assessment of ECHA's Committees, the ban has successfully passed scrutiny by the European Parliament and the Council. This move supports the transition to a more environmentally friendly and sustainable fashion industry.
The luxury sector's crisis over the past two years is well-documented, yet while some brands have managed to minimise losses, two of fashion’s biggest players—Gucci and Dior—are still reporting much larger financial declines. Both had further to fall than other brands: Gucci saw its profits double from around €4bn in 2015 to €8.3bn by 2018, while Dior's profits nearly doubled as well, reaching an estimated €11.9bn two years ago, up from €6.4bn pre-pandemic. However, the scale of their losses cannot be fully explained by the industry's general downturn.
Kering reported a 25% decline in Gucci’s sales in the third quarter of 2024, signaling a troubling outlook for the company if Gucci fails to regain its footing. While Kering is a fashion conglomerate, it is less diversified than Dior’s parent, LVMH, which has been able to absorb Dior’s financial struggles. Brands like Louis Vuitton and Loewe have posted positive growth despite the economic slowdown. Dior's estimated losses are concerning, but they only account for 12% of LVMH’s total group sales. In contrast, Gucci’s challenges are far more critical for Kering, as its profits represent 61% of the group’s revenue during the same period.
Analysts cite sluggish creative output, a shift away from the 'loud luxury' trend, the overall state of the industry, and rapid price hikes as key factors behind Gucci and Dior’s struggles. Both brands have attempted to address these issues through management changes: Gucci’s creative director, De Sarno, exited, and Miu Miu’s former chief joined Dior as managing director. However, these changes are too recent to have had a noticeable impact on revenues this quarter.
Following Galliano’s departure in December, Maison Margiela has appointed Glenn Martens as its new director. Martens, previously the artistic director of Diesel (part of the OTB Group), was credited with driving a 13.15% sales increase in 2023. This growth is largely fuelled by the high-spending Gen Z consumers, who now represent 35% of Diesel’s clientele.?
Last year, Diesel hosted a notable open fashion show in Milan, emphasising its innovative approach to attract young consumers to the brand. Given that Maison Margiela is also part of the OTB Group, this appointment is viewed as a strategic move that may be linked to the rumoured IPO of the group in 2026. However, amid ongoing challenges in the luxury sector, the timing of this IPO remains uncertain.?
Last year, Martens concluded an 11-year tenure at Y/Project, during which he transformed the label into a prominent fixture at Paris Fashion Week. With a proven track record at both Diesel and Y/Project, he now steps into the role at Maison Margiela. He inherits a legacy sculpted by John Galliano and Martin Margiela, two icons of haute couture. His challenge will be to honour this storied legacy while innovating the brand with his own creative spirit.
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.