Inside The Great Luxury Reset

Listen to and follow the 'BoF Podcast': Apple Podcasts | Spotify | Overcast Background:
Instead of his usual place in the host's seat, BoF founder and CEO Imran Amed appears this week as a guest in an interview with Jonathan Wingfield, editor-in-chief of System Magazine, alongside Luca Solca, senior research analyst at Bernstein — as featured in the debut issue of System Collections.
This conversation was recorded on March 14, about two weeks before Donald Trump's shock announcement of so-called reciprocal tariffs on countries around the world, most notably China.
Together, Amed and Solca explore major shifts in the global luxury market, the growing fatigue with high prices and mass production, and why creativity, innovation and strategic alignment between business and creative leadership are more crucial than ever.
'These companies are run by human beings, and if you don't give people incentives to change, they will kill you. If you see that you're making as much money as you like, and the business is as good as it ever was, then you probably will not change very much,' says Solca. 'I think that adjusting to a more normal environment is causing a lot of soul-searching and is getting these companies back in line.'
Amed adds: 'Where brands work best is where there is that impeccable alignment between the creative leadership and the business leadership. Many creative directors feel like a lot of decision-making and creativity is being dictated to them rather than being in conversation with them. And I think that's what we need to see now.' Key Insights: Excessive price hikes and product ubiquity are causing consumer pushback. Amed says, 'When customers look at a €10,000 bag that used to cost half of that, there's real pressure because the value proposition no longer adds up.' The industry's future success depends on brands' abilities to innovate and excite consumers. Solca stresses, 'If people need to pay these prices, they must be excited; they need to feel they haven't seen these products yet, and that they desire them.' Amed adds, 'Brands need to inject new creative energy to get customers excited again.'
In a stagnant market, luxury brands can no longer rely on organic demand and must instead compete aggressively for market share. 'In order to grow now, brands need to actively win market share from competitors,' says Imran Amed. This shift has forced operational changes across the industry. 'Fashion shows are getting smaller, not just for intimacy, but also to cut costs,' he adds. Luca Solca agrees: 'You need to take into account that a lot of the costs in this industry are fixed ... When sales decline by as much as 20 percent, you really need to cut the fixed portion of your costs.'
Maintaining exclusivity remains challenging yet essential. As Solca puts it, 'The nature of the industry is that you need to sell exclusivity or perceived exclusivity.' He warns that high visibility can backfire for smaller brands: 'We've seen it a number of times; smaller brands hit gold, but at one point, they succumb to that very success because they become too visible and people move elsewhere. They tend to be a bit of a flash in the pan or face a glass ceiling around €2 to 3 billion, which is very difficult to break through.'
Effective luxury strategies hinge on strong creative-business collaboration. As Amed explains, 'Where brands work best is where there is that impeccable alignment between the creative leadership and the business leadership.' He continues, 'Many creative directors feel like a lot of decision making, a lot of creativity is being dictated to them rather than being in conversation with them. And I think that's what we need to see now.' Additional Resources:

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Vox

7 hours ago

• Vox

The economic theory behind Trumpism

For more than half a century, the American right has preached the virtues of free markets and low taxes and deregulation. But a new wave of conservative thinkers are now arguing that Republicans have been wrong — or at the very least misguided — about the economy. This new economic thinking represents a break from what we've come to expect from the American right. Its proponents argue for a new strain of economic populism, one that departs from the GOP's past allegiance to big business and focuses instead on the working class. The question is, is it for real? Oren Cass is the founder of the think tank American Compass and the editor of a new book called The New Conservatives. He's also one of the most influential advocates of this conservative economic populism. Cass thinks the Republican Party has been too captive to corporate interests and market fundamentalism, and that conservatism needs a major reset, one that embraces American manufacturing and empowers workers. I invited him onto The Gray Area to talk about this new right-wing populism, what distinguishes it from the left, and whether the Republican Party is serious about adopting it. As always, there's much more in the full podcast, so listen and follow The Gray Area on Apple Podcasts, Spotify, Pandora, or wherever you find podcasts. New episodes drop every Monday. This interview has been edited for length and clarity. Back in 2018, you wrote: 'Our political economy has relied upon the insidious metaphor of the economic pie, which measures success by the amount of GDP available to every American for consumption. … But the things America thought she wanted have not made her happy.' Let's start there: What did we think we wanted, and why hasn't it made us happy? You're very perceptive to start there. We were just putting together this new book called The New Conservatives, which is an anthology of everything we've been doing at American Compass over the last five years. And I actually went back and grabbed that essay and made it a prologue to the book. Because exactly as you said, it is a starting point for the way I think about a lot of this. In my mind, what we saw go wrong in our economics and our politics is that we did come to think of consumption as the end unto itself. And to be clear, I love consumption as much as the next guy. I'm not saying we should go back and live in log cabins, but I think we assumed that as long as we were increasing consumption, as long as material living standards were rising, everybody would be happy and we could declare success. And it's important to say that, from a formal perspective, that is in fact how our economic models operate. Economists will tell you their assumption is that the goal of the economic system is to maximize consumption. And so that's where that economic pie metaphor comes from. Something that was so widely embraced across the political spectrum, across the intellectual spectrum, was this idea that as long as you're growing the economy, you're growing GDP, you don't really have to worry too much about what's in the pie or where it's coming from. You can always then chop it up and make sure everybody has lots of pie. And I think it's important to say that — and this is the point, that we got what we thought we wanted — it's important to say that that worked. That for all of the problems we have in this country, if you're only looking at material living standards, if you're asking how much stuff people have, how big their houses are, whether they're air-conditioned, even how much health care they consume, at every socioeconomic level, consumption is up. We did that. And yet I think it's also very obvious that that did not achieve what we were trying to achieve, that [it] did not necessarily correspond to human flourishing, did not correspond to a strengthening economy over time, that it certainly did not correspond to strengthening families and communities. And ultimately, it didn't correspond to a strong and healthy political system or democracy. And so there's obviously a lot of talk of, Okay, well, why isn't that right? Why did it go wrong? What do you do about it? The strange thing for someone like me is that American conservatism, certainly in my lifetime, has largely existed to reinforce the ideology you're rejecting here. Why do you think the political right has been blind for so long to the things you're fighting for now? There's a very interesting pivot point that you see around the time of the Reagan revolution. The coalition that Reagan assembled had these different elements. It had the social conservatives, who I would say are most closely aligned to a fundamentally conservative outlook on a lot of these questions. But then it brought to that the very libertarian free-market folks on the economic side, and the quite aggressive interventionist foreign policy hawks. And what all these folks had in common was they really hated communism and really wanted to win the Cold War and saw that as the existential crisis. But what happened is, within that coalition, a very libertarian free-market mindset was then imposed on the economic policy of the right of center, even when that was very much in tension with a lot of other conservative values. And you saw people writing about that from both sides. From one side, Friedrich Hayek, who is one of the ultimate carriers of this pre-market ideology, has a very famous essay titled 'Why I Am Not a Conservative,' emphasizing that what he calls faith in markets to solve problems and self-regulate was very much at odds with how conservatives looked at the world. And from the flip side, you had a lot of conservatives, folks like Yuval Levin, who prefer markets as a way of ordering the economy to other options, but recognize that markets are very much in tension with other values like family and community. And in some cases, markets even actively can undermine or erode the strength of those other institutions. Markets are also dependent on institutions. If you want markets to work well, you actually need constraints. You need institutional supports. And so that tension was always present. I think that the coalition made a lot of sense in the context of winning the Cold War. It made a lot of sense when markets in the middle of the late 20th century really did seem to be delivering on a lot of the things that conservatives really cared about. But I think it reached its expiration date and just lived on by inertia into the 2000s, into this era of radical embrace of free trade even with communist China and cutting taxes even in the face of big deficits. I can imagine a skeptical leftist hearing all of this and thinking it's just a rebranded democratic socialism. Why is that wrong? What makes this conservative? There's a real disconnect both on the ends and on the means. I think there's a very healthy contestation over what are the appropriate ends that we're actually building toward. And what you're seeing conservatives coming back to articulating a set of actual value judgments about, what do we think the good life consists of? I think there is a set of value judgments and preferences for, in many respects, quite traditional formations at the family level, at the community level. [For] saying that it is not merely a value-neutral choice — 'Would you rather get married and have kids or spend more money on vacations in Greece?' — that it is actually appropriate and necessary for the good society to say, No, one of these things is better than the other and more important and should be valued more highly. At the national level, you're also seeing a much more robust nationalism on the right of center. Conservatives recognize the importance of the nation and solidarity within the nation to functioning markets, to a functioning society, in a way that at least the modern left tends to resist in a lot of cases. Part of the case you're making is that there's an ongoing paradigm shift within American conservatism. When you look at what this administration is doing on the policy front, when you look at what the Republican Party is doing, do you see them moving in your direction? We're definitely moving in the right direction. On tariffs alone, [we could] spend a tremendous amount of time emphasizing the ways I think the problems that they're addressing, the direction they're trying to go, is the right one. On the specifics of how things are timed and what the levels are and so forth, what legal authorities you use for what, I have all sorts of thoughts on how it might be done better. But broadly speaking, to your question about the direction that things are headed, I think it's extraordinarily clear to me that the Republican Party and the conservative movement are shifting quite dramatically in this direction. One way to look at that is in terms of personnel. Trump has obviously been something of a constant over the last decade in Republican politics, but the distance from Mike Pence to JD Vance is pretty dramatic. The distance from [Secretaries of State] Rex Tillerson to Marco Rubio is pretty dramatic. The distance from the various secretaries of labor in the first term to a secretary of labor recommended by the Teamsters is pretty dramatic. Is it really, though? Rhetorically, yes. But substantively? If you want to know why I can't take this iteration of the GOP seriously, look at the domestic policy they just passed in the House. It's the same Republican Party. It's jammed up with a bunch of stuff that reflects conventional conservative priorities. It's not doing a whole lot to help working-class people. It's more tax cuts offset by more cuts to Medicaid and food stamps, which low-income people depend on. And the net result, as always, will be more upward redistribution of wealth. And on top of that, another $3 or $4 or $5 trillion tacked onto the deficit just for good measure. How can you look at that and feel like the GOP is genuinely pivoting in your direction? I've been extremely critical of the 'big, beautiful bill' — particularly of the deficit element — because I think if one is going to be a fiscal conservative, one has to not be adding to deficits right now. But a lot of the efforts to argue that things are not changing in the Republican Party strike me as a real disservice to people who are trying to understand where things are going. Elected political leaders are always going to be the lagging indicator of what's happening in any political party or political movement. They are by definition going to be the oldest, the ones who have been around the longest, the ones who have built their careers and ideologies and relationships around what was happening 20 or 30 years ago. And so if one wants to know what is passing in Congress today, then yes, you count the votes of the people in Congress today. If you want to know what's actually moving within a party or what's going to happen over a 10- or 15-year period, counting the votes today is just not what someone in good faith trying to understand the direction would do. The tariff regime, the trade war — that is a genuine shift. No doubt about it. It's not entirely clear to me how that helps poor and working-class people at the moment, but maybe I'm not seeing the whole picture. There's a very interesting economic debate to be had about whether it will work. I obviously have one very strong view. But it seems pretty clear to me that what they are trying to do is quite explicitly focused on the economic interests of workers. Another very interesting area — I mentioned some of the things that are going on on the labor front. One really interesting effort that's underway, and [Sen.] Josh Hawley is the leader of it, but Bernie Moreno, the new senator from Ohio, is the co-sponsor of it — they've taken the [proposed] PRO Act, which is the ultimate Democratic wish list of labor reforms, and they've chopped it up. And they've said, Look, some of these are perfectly legitimate and good ideas. Others of these we don't agree with. And we're going to start advancing the ones we think are good ideas. That's a dramatic shift in how you would see the Republican Party. I think you're seeing the same thing in the financial sector. There was a great example recently where a private equity firm that had bought out a bunch of paper plants was trying to shut down a paper plant in Ohio. And you literally had the Republican politicians out there at the rally with the union leaders, forcing a change and a commitment to at least keep the plant open for the rest of the year and try to find a transaction that would keep it open afterward. On family policy, in 2017 you had [then-Sens.] Marco Rubio and Mike Lee threatening to tank the entire tax cut bill to get an expanded child tax credit in it. Now it is an uncontroversial top priority that the child tax credit is not only kept at that level, but expanded further. And so even at the level of what is happening in legislation, it's clear that this is a very different party from 2017. If you look at who Trump has appointed, it's a very different set of appointments. If you look at the critical mass and sometimes center of gravity among the younger elected officials, the people coming into the Senate, it's a completely different set of priorities and policies from those who have been there for a long time. Like I said, I'm not convinced that the DNA of the party has changed, but I will grant that there are indications of a shift. I don't know what it's going to amount to, materially, but this is not the party of Mitt Romney. I think Trump has cultivated a very unique coalition, certainly much more working-class than the pre-Trump Republican Party. I don't know how much of that coalition is a function of Trump and how much of that coalition will fade when he fades. If the Republican Party does prove an unreliable vehicle for your movement, can you see a world in which you're working with Democrats? We do work with some Democrats. I think there are Democrats who are doing very good and interesting work. We recently had [Rep.] Jared Golden from Maine on the American Compass Podcast because he is the sponsor of the 10 percent global tariff legislation in Congress. One thing I always emphasize is that I think a healthy American politics is not one where one party gets everything right and dominates and the other one collapses into irrelevance. It's one where we actually have two healthy political parties that are both focused on the concerns and priorities of the typical American and are then contesting a lot of these very legitimate disagreements about ends and means. But based on what is happening in American politics today and the fundamental differences between conservatism and progressivism, I would expect that this is going to have the most success and salience and overlap in thinking on the right of center.

Yahoo

a day ago

• Yahoo

Spotify Stock Has Soared 57% in 2025, but Here's 1 Big Reason Investors Should Be Cautious

Spotify operates the world's largest music streaming platform, and it's investing heavily in technology to maintain its edge over the competition. Spotify continues to deliver strong financial results, driving its stock to a 57% gain in 2025 already. Spotify stock is now extremely expensive by at least two widely used valuation metrics, which could limit its upside from here. 10 stocks we like better than Spotify Technology › The S&P 500 (SNPINDEX: ^GSPC) was down by as much as 15% earlier this year on the back of simmering global trade tensions, which were ignited by President Trump's "Liberation Day" tariffs in April. The index has since recovered its losses, and it's now sitting on a modest year-to-date gain of 2%. But investors who bought Spotify (NYSE: SPOT) stock at the start of the year have earned an eye-popping 57% return as of this writing (June 18). In fact, the stock never dipped into the red at all, despite the turmoil in the broader market. Shares of the music streaming giant are now trading at a record high, and while the company's future looks extremely bright, there is one glaring reason investors should be cautious from here. According to Statista, Spotify has a 31.7% global market share in the music streaming industry. It's a long way ahead of Tencent Music in second place, with 14.4% of the market. Most music streaming platforms feature very similar content catalogs, so they have to compete with one another on price, technology, and by offering other content formats. That's why Spotify invested heavily to become one of the world's top podcast platforms. Plus, during the first quarter of 2025 (ended March 31), the company said users spent 44% more time watching video content compared to the year-ago period, so it introduced a new compensation model to encourage creators to make video versions of their podcasts to capitalize on that engagement. This new system paid out over $100 million during the first quarter alone, which could result in a flood of new content from creators who want to earn more money. Spotify is also investing heavily in artificial intelligence (AI) to deliver the best user experience from a technological perspective. AI is a big part of the platform's recommendation engine, because it quickly learns what each user likes and feeds them more of it. But Spotify has also launched a series of user-facing features powered by AI like AI Playlist, which can generate a list of songs based on a simple prompt from the user, whether it be a movie, feeling, animal, or even a color. These AI features are designed to keep users engaged so they spend more time on the platform, which increases the chances Spotify becomes something they can't live without. At the end of the first quarter of 2025, Spotify had 268 million paying subscribers, and 423 million free users monetized through advertising. The paying subscriber base is growing slightly faster, which is a big positive because it accounts for 90% of the company's revenue. According to Wall Street's consensus estimate (provided by Yahoo! Finance), Spotify could generate a record $20.5 billion in revenue during 2025, which would be a 13.7% increase from the prior year. Analysts then expect revenue to come in at $23.7 billion in 2026, representing an accelerated growth rate of 15.7%. But the real growth story is on the bottom line, because Spotify is carefully managing its costs to drive profitability. The company's total operating expenses fell by 2% during the first quarter, which helped send its free cash flow soaring by a whopping 158% year over year to $615 million. Wall Street thinks Spotify will deliver $10.33 in earnings per share (EPS) in 2025, which would be a 63% jump from last year. Analysts will then look for $14.88 in EPS in 2026, representing a further 44% growth. 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Simply put, Spotify stock just doesn't seem like a great value for investors who want to see gains in the next couple of years. But the picture might look a little different for investors with a longer-term horizon, because CEO Daniel Ek previously issued a forecast suggesting the company could achieve $100 billion in annual revenue by 2032. That would be a fivefold increase from where Spotify's 2025 revenue is expected to come in, so its stock actually looks cheap right now from that perspective. However, several things can change over the next seven or eight years -- new competitors might emerge, and technologies like AI could change the way we consume content entirely. As a result, buying Spotify stock at the current level still takes some resolve. Before you buy stock in Spotify Technology, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Spotify Technology wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $659,171!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $891,722!* Now, it's worth noting Stock Advisor's total average return is 995% — a market-crushing outperformance compared to 172% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of June 9, 2025 Anthony Di Pizio has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Spotify Technology and Tencent. The Motley Fool has a disclosure policy. Spotify Stock Has Soared 57% in 2025, but Here's 1 Big Reason Investors Should Be Cautious was originally published by The Motley Fool

Hamilton Spectator

2 days ago

• Hamilton Spectator

Don't regulate us like radio, music streamer Spotify tells CRTC

OTTAWA - Music streamer Spotify says Canada's federal broadcast regulator shouldn't impose rules meant for radio on streaming services. Appearing before a CRTC hearing Friday, company representatives compared regulating Spotify like a radio station to treating Uber like a horse and buggy operation. 'To apply yesterday's tools to today's platforms risks dulling Canada's success on the global music stage,' said Xenia Manning, Spotify's director of global music policy. 'It is essential to assess whether a real problem exists that justifies regulatory intervention. In our view, the evidence is clear. There is no market failure in audio streaming that would warrant intervention by the CRTC.' In its written submission, Spotify argued the CRTC doesn't have the jurisdiction to extend rules governing commercial negotiations and disputes in the broadcast sector to online players. Spotify said the Broadcasting Act doesn't give the CRTC the authority to 'regulate the terms of trade between online undertakings, including good faith negotiations and commercial disputes.' It said the CRTC's proposals 'would see it imposing dispute resolution and commercial negotiation requirements on online undertakings that are plainly outside the scope of broadcasting.' The CRTC is holding a hearing on market dynamics as part of its work to implement the Online Streaming Act, which updated broadcasting laws to capture online platforms. During the hearing, large telecom and broadcasting companies like Bell and Rogers called on the CRTC to loosen existing rules for traditional players. They took aim at regulations governing how cable channels must be packaged and disputes about carriage of cable channels. Bell, which appeared Wednesday, asked the CRTC to get rid of the rule the regulator implemented nearly a decade ago requiring companies to offer a $25 basic cable package. In its opening statement Friday, Rogers asked the CRTC to dramatically reduce regulation of cable companies. Colette Watson, president of Rogers' media division, said less than half of Canadian households now subscribe to cable, satellite or IPTV service. 'Canadian ownership groups cannot survive another decade of disproportionate regulation,' she said. The CRTC is holding a series of hearings as part of its work under the Online Streaming Act. Spotify, along with Amazon and Apple, is fighting in court an earlier order requiring streamers to make CRTC-ordered financial contributions to Canadian content and news. This report by The Canadian Press was first published June 20, 2025.