From Prada’s momentum to Hermès’ resilience: luxury brands navigate a changing market in 2024
As 2025 approaches, fashion is at a pivotal moment. Next year promises to be the beginning of the “heavy lifting” of growing the luxury goods sector, with the inevitable snag of “luxury fatigue” in the media (note to the media: please, (Let’s skip that heading so we don’t complicate matters.) .
Tomorrow’s growth strategy will not reflect yesterday’s growth strategy. With door expansion and relentless price hikes, that’s no longer possible. Instead, brands need to streamline (yes, we said that) and, most importantly, take risks. This impression encourages leaders to resist the urge to cut marketing budgets. This is a tempting but short-sighted action in difficult times. Marketing is a key lever for success, especially as the industry refines its DNA for a new era.
Looking back, 2024 wasn’t the most memorable year for creative stories we’ve seen since our inception. Probably because the budget was cut and the emphasis was placed on events. Whatever the reason, this is puzzling. Despite the digital age giving brands unprecedented direct reach, lookbooks disguised as campaigns have become the norm. Brands need to rediscover the courage to tell bold 360-degree stories. Risk in creativity always proves its worth, and when the clouds clear, it yields huge rewards. The message here is simple. Embrace that growth with confidence.
numbers don’t lie
The decline in LVMH, the world’s largest luxury goods stock, has been particularly notable this year. Once Europe’s most valuable publicly traded company, LVMH was dethroned by pharmaceutical company Novo Nordisk A/S in mid-2023. The company’s stock price fell 19% in 2024, its worst annual performance since the 2008 financial crisis, and its valuation multiple was below its average over the past six years. Kering’s share price has plunged even further, falling 40%, while brands such as Salvatore Ferragamo and Hugo Boss face an uphill battle to meaningfully rebuild.
Despite widespread turmoil in the luxury goods market, the year also featured outstanding performances from Prada, Ralph Lauren and Hermès. Prada recorded a significant 40.02% rise in its share price as it refocused on youthful, contemporary appeal through Miu Miu, whose creative direction and commercial strategy gained significant traction globally. did. And Prada, its main brand, isn’t doing too badly either. Ralph Lauren rose a whopping 58.3%, supported by strong demand in North America and Europe and strategic execution in direct-to-consumer. On the other hand, Hermès maintained stable growth with an increase of 11.74%. These companies have demonstrated that a focus on tradition, innovation and customer-centric strategies can deliver strong results even in difficult economic times.
Hopes for a recovery in luxury goods now hinge on signs of economic recovery in the United States as a new administration takes office. Although markets were briefly buoyed by optimism about the next president, risks loom large. Last week’s rate cut failed to satisfy investors and caused a sharp selloff across U.S. markets. Meanwhile, in China, where a weak economy and rising prices have dampened appetite for luxury goods, concerns about a renewed trade war and weak consumer sentiment portend turmoil ahead.
Full recovery may take time and 2025 could be a year of transition for many luxury goods sectors as consumers increasingly scrutinize the money-to-value equation.
Long-term vision over short-term profits
While it’s easy to be pessimistic about short-term signals, it’s best to take a broader perspective. Quarterly earnings often obscure the long-term value a brand can provide. Change takes time. After all, it can take 24 months just to roll out a new logo, let alone reposition a brand for growth.
These periods of reflection and refinement are essential for brands to rethink their DNA, make necessary but difficult choices, and ultimately create the clearest value proposition and the boldest, most impactful marketing. This is an opportunity to launch a campaign and get back into the market. If history is any guide, this process will pave the way for stronger and more resonant growth.
Impression is ready to inspire, inform and support the industry through the ups, downs and everything in between. Dear Luxury Community: Wishing you a year of practical health and long-term success. Stay focused, be bold, and lead. we have your back.
Sincerely,
kenneth richard
main impressionist
impression
