Why Luxury Conglomerates Are Failing Gen Z

Missing the Mark: Why Luxury Conglomerates are Failing to Capture the Next Generation of Consumers

Extortionate prices, quality, and ethical concerns about over-consumption are but few of the reasons that younger buyers and pulling back

The latest financial quarter was not kind to the giants of luxury. Rather than a one to two per cent decline in sales, as forecast by analysts, LVMH's fashion and leather goods sales backslid by an alarming five per cent. Over at Kering, the drop was considerably worse, well into double digits at 14 per cent, primarily driven by a 25 per cent slump in sales at the company's main moneymaker, Gucci. Global luxury slowdown? It looks like it. Whilst there are a plethora of immediate economic reasons for the poor figures, a glaring structural issue stands out: luxury conglomerates haven't figured out how to tap into the next generation of spenders. Although Gen Z's pockets weren't deep enough to concern the Arnaults and Pinaults a few years ago, this is rapidly changing – Gen Z is growing up and, by 2030, they're expected to account for almost a third of the luxury market