Chanel foresees a challenging year for the leisure sector.
In the midst of the decline in global economic growth, Bruno Pavlovsky, the chairman of fashion at Chanel, warned the style and luxury goods industry to prepare for a challenging year.
Pavlovsky discussed the upcoming difficulties for the business while speaking at Chanel’s Metiers d’Art demonstrate in Manchester.
The tough economic conditions that are present in every nation on earth will definitely have an impact on the luxury sector, according to Pavlovsky, adding that luxury is not protected from the economy and that the situation will be more difficult the following year than it was in 2023.
According to Chanel’s style chief, the company saw a decline in both new and repeat customers ‘ business foot traffic and sales this year. The high rates of inflation in the US and Europe, as well as China’s unheard-of youth unemployment, were blamed for this pattern.
After a period of stagnation in the previous quarter, luxury sales in America increased by 2 % in its third quarter of the year. During the months of April to June, the growth of revenue for luxury brands in Europe decreased to 7 % from the previous 19 %. Regarding this drop, Pavlovsky remarked that it is a common occurrence because luxury goods are unable to experience ongoing double-digit growth.
Concerns about the future of the luxury sector have also been voiced by another pleasure firms, including LVMH and Gucci. These businesses have seen slower sales development or revenue declines as a result of concerns about inflation and the crisis. For instance, Richemont, the owner of Cartier, recently released its half-year results, showing that the Americas region saw a 17 % decline in sales of luxury watches worldwide.
The solid growth of extravagance goods sales in the post-COVID- 19 pandemic period is good over, according to an HSBC market analyst, and luxury is no recession-proof. SOURCE: Chanel Foresees a Hard Year for the Pleasure Sector