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London’s luxury sector relies on local museums, galleries and other cultural spaces to attract affluent consumers, but cultural institutions rely on luxury brands to attract new audiences. The demise of the British brand, according to a report released earlier this month by Walpole, the British trade association that oversees products.
While this linkage is mutually beneficial, the report warns that the luxury goods market, which contributes $106 billion to the UK economy, could be at risk if arts funding continues to decline. (Government spending on culture in the UK has fallen by £2.3 billion since 2011.)
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The findings come amid a global slowdown in luxury goods sales, with analysts at Bain Consultancy predicting growth of 0-4% in 2024 in June.
It’s not completely doom and gloom for the British luxury market. Walpole’s report argues that as London’s personal wealth increases, London’s luxury business should be on a growth trajectory. Around 80% of London’s 227,000 wealthy people told Walpole that they expected their disposable income to remain flat or increase in 2024. And real estate consultancy CBRE Group recently reported that retail investment rose 71% in the second quarter. In 2024, sales of properties worth over £15m have soared by 25% on last year. Both of these figures suggest that London’s wealthiest people remain financially stable.
In a note to the report, Walpole chief executive Helen Brocklebank said: “The factors that have shaped London’s luxury goods market are closely linked to its role as a ‘cultural transmitter’. ” He added that companies moving away from luxury accumulation and toward experiential luxury could be important to maintaining their position. “Much of London’s global soft power comes from its creative industries,” Brocklebank added.
The report states that London’s museums and galleries drive significant traffic to London’s luxury brands, with the Victoria and Albert Museum’s 2023 Coco Chanel exhibition alone attracting more than 400,000 visitors, and the museum’s They claim that this is contributing to an increase in the number of visitors. Meanwhile, in September, the V&A announced that Manolo Blahnik is the sponsor of an upcoming exhibition about 18th-century French queen Marie Antoinette. The announcement came a month after Manolo Blahnik suffered a 10% drop in sales, but it wasn’t the first time the shoe designer had leveraged European high culture to its advantage. In 2019, the designer teamed up with London’s Wallace Collection for an exhibition that combined the brand’s shoes with the institution’s paintings. Attendance reportedly jumped 30 percent that year.
The report cites more than a dozen similar examples of successful collaborations between art and luxury goods. Walpole argues that such high-end cultural events and art sales offer economic opportunities for luxury brands by attracting wealthy international tourists. Bain figures show high-end foreign tourists in the UK spend 14 times more than the average non-British tourist, with those from the US spending the most. However, with visitor numbers expected to plateau this year at around 38.7 million (and spending falling), the UK will be “effectively trying to attract” “high value” visitors from other countries. Walpole warns that there is a risk that they will not be able to compete with the competition.
Walpole’s report also warned of the risks of ignoring living artists. Cultural experts and financial consultants surveyed say cuts in public funding and a decline in formal arts training are hurting the city’s ability to maintain its creative workforce.
After a report last year revealed the dire financial situation facing London’s artists, Justin Symonds, the city’s deputy mayor for culture and creative industries, said the loss of studio space for artists was linked to gentrification. He told the Guardian that this was due to the location. “In London and other cities with thriving cultural lives, much of what we all hold dear does not have the protection it needs,” Simmons said.
And during last year’s edition of Frieze London, CEO Simon Fox told WWD that the fair was working with the Mayor’s Office to address challenges in London’s arts ecosystem. “We are helping the city maintain its pre-eminence as the cultural center of Europe,” he said. (Endeavor, Frieze’s Los Angeles-based parent company, has been financing Tate’s acquisitions on the first day of the trade show for the past decade.)
The question of London’s viability as an arts capital has been at the center of art world conversation lately, with Frieze London and the newly rebranded Art Basel Paris facing off at back-to-back fairs earlier this month. . The consensus among many artists, dealers and market analysts is that London is becoming less important. In a preview for Frieze, Nigerian-British artist Yinka Shonibare told The New York Times that the energy that built London’s contemporary art scene in the 1990s and early 2000s is fading. When artists are deprived of space and gradually pushed out of the city, the effect is stifling, he says.
“The sector has become static,” he said, adding: “Things are moving away from London.”
Frieze co-founder Matthew Slotover, who was interviewed by Walpole for the report, disagrees, saying that London’s arts audience is broader than other places it competes for sales and attendance. he claimed.
“Someone said recently that there are 500 people in London who take art seriously, but only 500,000 people are involved in it,” he said. “There are 5,000 players in New York who are serious about their art. That’s it.”
