Luxury Turns the Page
What happened: Luxury earnings offered more than a few glimmers of hope that the long downturn is approaching an end. Coming on the heels of mostly well received designer debuts in Milan and Paris, the industry has laid the groundwork for a recovery.
By the numbers: LVMH shares shot up 13 percent after the group returned to growth (though the fashion and leather goods division’s sales fell slightly). Kering shares have nearly doubled off their spring lows; the group reported smaller-than-expected losses in the third quarter and announced the sale of its two-year-old beauty unit to L’Oréal, unwinding one of its more ill-fated investments. Even long-suffering Ferragamo defied forecasts and eked out some growth. The story was the same at most brands: early signs of a recovery in China and a surprisingly resilient US consumer lifted results above often rock-bottom expectations.
Cautious optimism: Before breaking out the champagne, we must note that it’s the same few brands — Hermès and Miu Miu among them — reporting actual growth. LVMH and Kering’s fashion sales declines are narrowing, but they’re still falling (and Kering’s stock rally likely reflects confidence in the group’s new CEO rather than any material change in its fortunes).
Executives were careful not to oversell China’s rebound; Hermès’ CFO called it “very slight” while Prada CEO Andrea Guerra said the boom times are never coming back to what had been the industry’s primary growth engine. The shows were only the first step in shaking the narrative that luxury fashion is tired, overpriced and shoddily made.
Mission partially accomplished: Better for the new designers’ collections to hit stores next year in a market on the upswing than the reverse. Investors are clearly convinced the industry has turned the page on a bleak chapter. Consumers may take some more persuading.
Shopping Recommendations Are Big Business
What happened: ShopMy, which sets up influencers with affiliate links, sponsored posts and other opportunities, raised funding at a $1.5 billion valuation.
Instagram’s plumbing: If you’re not an active participant in the creator economy, the five-year-old platform and its rival, LTK, fall squarely in “biggest company you’ve never heard of” territory. But they’ve arguably done more to shape how brands, influencers and consumers interact on Instagram and TikTok than even the Kardashian family.
A productive rivalry: Intense competition between the two is also regularly changing how social media works. LTK helped make affiliate links ubiquitous on Instagram, and was rewarded with a SoftBank investment at a $2 billion valuation in 2021. ShopMy’s innovation was in offering more detailed data on exactly which creators were driving sales for brands, as well as giving them more tools to connect directly. LTK has tried to get into the content game with a social app of its own, while ShopMy is playing more directly in e-commerce by helping influencers set up online shops. Both have new competition in Sephora and Condé Nast, which have their own spins on the concept.
New entrants: ShopMy’s biggest competition may not be LTK or Sephora, but OpenAI. The AI giant in late September announced it had partnered with Etsy and Shopify to not just recommend products, but complete purchases, too. ChatGPT lacks the personality of your typical fashion influencer, and the interface can’t compete with Instagram’s visuals or storytelling. But people looking for the best underwear or bed sheets don’t necessarily need all that. And Olivia Jade won’t do your shopping for you.
Everyone’s an AI Artist Now
What happened: OpenAI launched Sora 2 on the heels of Meta’s Vibes, putting the ability to create AI-generated video in the hands of the masses for the first time. This, more than ChatGPT’s shopping agent, is the reason influencers and brands should be sweating.
Hold on a second: These apps are fun to play with, but are a ways away from producing professional-quality content. It took me all of 15 seconds to create a realistic looking, though utterly inane, “commercial” for Fiorucci, though the inscrutable tagline “Craves the Doy” would probably alert viewers that something was amiss. I also recreated the red bathroom that served as the backdrop to Valentino’s Autumn 2025 show, and a recent ad for its collaboration with Vans.
Art (poorly) imitates life: I picked those labels for my experiment because they’ve recently used AI to create effective, even artistic ads that are authentic to their brands. More are likely to follow in their footsteps; after all, using generative AI to flood that red bathroom, as Valentino did, requires fewer wetvacs afterwards.
The problem arises if consumers’ feeds are flooded with slop — low-grade photos and videos full of uncanny imagery and phrases like “craves the doy” — that features real brand names, logos and products. If consumers don’t trust what they see, or are primed to spot and reject anything that smacks of AI, it will add one more barrier between brands and their customers.
A Trade Truce?
What happened: The US and China are close to a deal that would reset trade relations after months of escalation.
Back from the brink: The most recent escalation began in mid-October, when China imposed new restrictions on the export of critical rare earth metals, and President Donald Trump retaliated by threatening 100 percent tariffs on Chinese goods, effective Nov. 1.
While both sides’ threats had the potential to rattle the global economy, markets remained calm throughout, as investors gambled one side, or both, would blink. Those bets appeared to pay off this week, as Trump and his Chinese counterpart, Xi Jinping, touted a forthcoming agreement.
Right back where we started: Details remain hazy, but in broad strokes, both sides appear to be backing down to positions they held around the start of the second Trump administration. Chinese goods will still face some tariffs, a headache for plenty of fashion retailers but not the fatal one a 100 percent levy represented.
Shrugging it off: Global trade flows and retail sales have proven surprisingly resilient amid all the turmoil. Many fashion companies have pursued a mix of mitigation, price increases and spending cuts. That’s resulted in layoffs and inflation, with more of both likely on the way.
However, a growing number of retailers, including Adidas last week, say they’ve successfully factored the new tariff regimen into their balance sheets, and feel confident enough in the situation to raise their profit outlook.
That optimism will be tested in the coming weeks, as China’s Singles Day on Nov. 11 offers a read on consumer sentiment there, while holiday shopping kicks off in the US. The outlook for both is grim: Deloitte is predicting Americans will spend 10 percent less on gifts this year.
Accessories Overload
What happened: Whether it’s fragrance, bag charms or scrunchies, consumers are going crazy for garish little luxuries, even as they queue for hours for a shot at snagging rare discounts on grey sweaters from minimalist standard bearer The Row.
Minimalism, meet maximalism: These two seemingly contradictory impulses are linked, and point to a big opportunity for the industry. In an uncertain economy, consumers believe they can stretch their fashion budget further by investing in pricier “staple” garments which they can then accessorise with various hats, scarves, belts and baubles that telegraph a more individual style.
Little items, big spending: This trend is providing a big boost to jewellery sales, which are up 13 percent in June from a year earlier according to Circana. Fragrance is getting a similar bump, as consumers now routinely layer on multiple perfumes before leaving the house rather than embracing their “signature” scent; sales in the mass end of the category shot up 17 percent in the first half of the year.
That sort of growth is hard to ignore. Brands such as Reformation have launched jewellery, and some labels’ marketing features bag charms almost as prominently as the bags themselves. Luxury brands can also sell bag charms and other accessories to aspirational customers who can no longer afford their bags and ready-to-wear.
Staying power: No trend lasts forever. But jewellery and even bag charms are versatile enough to survive into the next fashion cycle, if not at the excessively stacked levels seen today. That makes these categories a relatively safe investment, both for brands and consumers. Well, maybe not the toe rings and scrunchie charms.
