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Time of India
43 minutes ago
- Business
- Time of India
Tariff threats, wars will slow but not collapse global luxury sales in 2025, new study shows
Global sales of personal luxury goods are "slowing down but not collapsing," according to a Bain & Co. consultancy study released Thursday. Personal luxury goods sales that eroded to 364 billion euros ($419 billion) in 2024 are projected to slide by another 2% to 5% this year, the study said, citing threats of U.S. tariffs and geopolitical tensions triggering economic slowdowns. "Still, to be positive in a difficult moment - with three wars, economies slowing down, inequality at a maximum ever - it's not a market in collapse,'' said Bain partner and co-author of the study Claudia D'Arpizio. "It is slowing down but not collapsing." Alongside external headwinds, luxury brands have alienated consumers with an ongoing creativity crisis and sharp price increases, Bain said. Buyers have also been turned off by recent investigations in Italy that revealed that sweatshop conditions in subcontractors making luxury handbags. Sales are slipping sharply in powerhouse markets the United States and China, the study showed. In the U.S., market volatility due to tariffs has discouraged consumer confidence. China has recorded six quarters of contraction on low consumer confidence. The Middle East, Latin America and Southeast Asia are recording growth. Europe is mostly flat, the study showed. This has created a sharp divergence between brands that continue with strong creative and earnings growth, such as the Prada Group, which posted a 13% first-quarter jump in revenue to 1.34 billion euros, and brands like Gucci, where revenue was down 24% to 1.6 billion euros in the same period. Gucci owner Kering last week hired Italian automotive executive Luca De Meo, the former CEO of Renault, to mount a turnaround. The decision comes as three of its brands - Gucci, Balenciaga and Bottega Veneta - are launching new creative directors. Kering's stock surged 12% on news of the appointment. D'Arpizio underlined his track record, returning French carmaker Renault to profitability and previous roles as marketing director at Volkswagen and Fiat. "All of these factors resonate well together in a market like luxury when you are in a phase where growth is still the name of the game, but you also need to make the company more nimble in terms of costs, and turn around some of the brands,'' she said. Brands are also making changes to minimize the impact of possible U.S. tariffs. These include shipping directly from production sites and not warehouses and reducing stock in stores. With aesthetic changes afoot "stuffing the channels doesn't make a lot of sense,'' D'Arpizio said. Still, many of the headwinds buffering the sector are out of companies' control. "Many of these (negative) aspects are not going to change soon. What can change is more clarity on the tariffs, but I don't think we will stop the wars or the political instability in a few months,'' she said, adding that luxury consumer confidence is tied more closely to stock market trends than geopolitics. President of Italian luxury brand association Altagamma Matteo Lunelli underlined hat the sector recorded overall growth of 28% from 2019-2024, "placing us well above pre-pandemic levels." While luxury spending is sensitive to global turmoil, it is historically quick to rebound, powered by new markets and pent-up demand. The 2008-2009 financial crisis plummeted sales of luxury apparel, handbags and footwear from 161 billion euros to 147 billion euros over two years. The market more than recovered the losses in 2010 as it rebounded by 14%, with an acceleration in the Chinese market. Similarly, after sales plunged by 21% during the pandemic, pent-up spending powered sales to new records.
Fashion United
3 hours ago
- Business
- Fashion United
Why Kering founder Pinault chose Luca de Meo as CEO
French luxury group Kering appointed Luca de Meo as its new chief executive officer. François-Henri Pinault stepped down after more than 20 years. Why did the Kering founder consider the Renault boss the best candidate to lead the company into a new phase of growth after the disappointing business performance of recent quarters? Long process "The group's performance over the past two years has not met our expectations, nor the immense potential of our houses," Pinault admitted during a conference call with analysts on Tuesday, April 10, 2024. The appointment of a group CEO marked the conclusion of a long process that began in early 2023. After 2022 – according to the founder, the best year in Kering's history – it became clear to him that the company had reached a phase that required a new organisational structure. Therefore, in 2023, Pinault appointed Francesca Bellettini and Jean-Marc Duplaix as deputy CEOs to make "significant changes" to the group. Duplaix assumed the new role in addition to his existing management of operations and finance. Bellettini was previously head of fashion house Yves Saint Laurent. Since then, there have been hectic times at the top of the fashion houses belonging to Kering. At Gucci, former Balenciaga creative director Demna Gvasalia followed Sabato de Sarno. Pierpaolo Piccioli took over the creative direction at Balenciaga. The top positions at the maisons were not spared either; at Gucci, Stefano Cantino was recently appointed CEO, and at Saint Laurent, former Balenciaga boss Cédric Charbit holds the top job. These are just a few of the recent management changes. Pinault considered these personnel changes and organisational measures already underway to be the absolutely necessary foundations that had to be laid before de Meo took office. De Meo would now have to deal with the measures already initiated on cost structure and refinancing in the short term in his new position. More importantly, however, de Meo needed to look to the future and think about the long-term perspective. What might Kering's profile look like in the next 10 to 15 years? This is a question Pinault hoped his new CEO would answer. De Meo was therefore expected to present a strategy for the group after taking office. Why an industry outsider? But why was this task given to a manager who could look back on a more than 30-year career in the automotive industry but had no experience in fashion? Initially, the candidate profile Pinault was looking for was not surprising in many respects. It was to be an experienced manager with in-depth knowledge of brand management and international experience; managing a global listed company was an additional criterion. Given the significant changes in the fashion industry, the candidate should have already demonstrated agility and the ability to deal with change. Most importantly, however, Pinault wants the future CEO to bring a fresh perspective to the luxury market: "The ability to bring a new vision to the sector and to our group was a key requirement." It was precisely the structural changes that went beyond the previous cyclical developments in the luxury industry that required a new way of looking at things, Pinault said. The former head of Kering seemed to be hoping for similar success from de Meo's appointment to the one he had with the group's transformation from 2010 and the repositioning of Gucci. As a newcomer to the fashion industry, he had been in a "strong position" to navigate phases of new structural change in the industry. Can Pinault let go? Pinault was also keen to stress that he was not hiring a "fireman" but someone to lead the group's "next chapter of growth". "He will have all the power and authority I had as CEO when I ran the group. So he will set his own priorities, keeping in mind the organisation of the group and the key position of the group," the Kering founder said. With de Meo taking office on September 15, the roles of chairman of the supervisory board and CEO would be separated. Both roles had previously been held by Pinault. He now wants to be "fully involved in the strategic direction of the group" as chairman of the supervisory board. Nevertheless, he vowed not to interfere in the new CEO's decisions on the business model and key personnel. However, it appears that the previous co-CEOs, Duplaix and Bellettini, could remain in their positions for the time being to help the CEO, who is new to the industry. When asked by an analyst whether the previous structure with the two could be maintained, Pinault replied: "He doesn't know the luxury industry, so we need strong support and a lot of expertise around him. And we have that within the group, starting with Jean-Marc and Francesca." Open points De Meo's salary is not yet known but will be discussed at a supervisory board meeting on July 29 before the annual general meeting voted on it on September 9. It will also be interesting to see what long-term vision de Meo will present after Pinault had already initiated many changes in the past two years – starting with the key positions at many fashion houses, such as those of former flagship Gucci. "Having the right people in the right place in the group so that when a new CEO comes in, everything works and runs," Pinault explained his approach. Until de Meo took office, there would be no slowdown in the action plans already initiated at the brands. Was still-Kering-boss Pinault really concerned with putting everything in order in the group before his successor arrived, or was it an attempt to quickly get involved himself? Given this already laid foundation, the question also remains as to what extent the new group CEO, de Meo, could still get involved. This article was translated to English using an AI tool. FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@
Canada News.Net
11 hours ago
- Business
- Canada News.Net
Gucci slump, Valentino risks await Renault's de Meo at Kering
PARIS, France: Luxury group Kering's decision to tap Luca de Meo as its next chief is being seen as a daring but necessary attempt to halt a dramatic decline in fortunes at Gucci, the once high-flying French conglomerate. Sources said Francois-Henri Pinault, who has led the group since 2005, is expected to hand over operational reins to the current Renault CEO. The move comes after years of underperformance at Kering's flagship brand, Gucci, and ballooning debt from aggressive acquisitions. De Meo's track record in reviving Renault has impressed investors, but many acknowledge that restoring Kering's shine — especially Gucci's — will be an even more formidable challenge. "It's a bold move ... We now have a CEO (de Meo) who is a great professional," said Ariane Hayate, European equity fund manager at Edmond de Rothschild. "There's now a real willingness by Francois-Henri Pinault to take a step back after years of underperformance." Kering's shares surged more than 12 percent this week, and they are on track for their most significant daily gain since 2008. Analysts and investors say the appointment hints at deeper troubles across Kering's portfolio — beyond Gucci — and signals the company's intent to take drastic action. One large European investor said the group's problems "are bigger than perceived from the outside." De Meo is likely to accelerate Kering's cost-cutting plans, which include store closures, layoffs, and real estate sales. These plans aim to reduce its net debt of 10 billion euros (US$11.6 billion). Another pressing task will be steering the group's acquisition of the remaining 70 percent of Valentino. Kering bought 30 percent of the brand in 2023 for $1.9 billion, with an option to purchase the rest in 2028 — or potentially as soon as May 2025, depending on deal clauses. "Coming from outside the industry, de Meo's learning curve is going to be super steep, but at the negotiating table, he could do well," said one person familiar with Valentino. De Meo's biggest test, however, remains Gucci, which has faltered since designer Alessandro Michele's exit in 2022. Investor hopes were dented further with the appointment of Balenciaga's Demna as creative director. Despite his lack of luxury sector experience, de Meo joins a list of high-profile cross-industry leaders who have successfully steered fashion giants. Robert Polet, Leena Nair, Benedetto Vigna, and Sergio Marchionne all made similar jumps — and thrived.
Qatar Tribune
13 hours ago
- Business
- Qatar Tribune
Vietnam cracks down on fake goods as United States tariffs loom
Agencies Since the United States accused Vietnam of being a hub for counterfeit goods, Tran Le Chi has found it increasingly hard to track down her favorite fake Chanel T-shirts, Gucci sunglasses and Louis Vuitton handbags. As Vietnam's government tries to head off President Donald Trump's threatened 46 percent tariff, it has launched a crackdown on fake products - in part to show responsiveness to US concerns. Now there are streets filled with shuttered shops in Hanoi and rows of closed stalls at Saigon Square shopping mall, a major clothing market in Ho Chi Minh City - the kind of places Chi used to go to buy her latest gear. 'The clothes help me look trendy,' Chi told AFP. 'Why would I care if they are fake or not?' Chi - a betting agent for an illegal game known as lo-de, where punters predict the last two lotto numbers of the standard daily draw - said she had never paid more than $40 per 'designer' item. 'Only the super-rich people can afford the real ones,' she added. 'They're not for people like us.' Communist-run Vietnam is a manufacturing powerhouse that produces clothing and footwear for international brands, with the United States its number-one export market in the first five months of 2025. But it also has a thriving market for counterfeit goods. In a report published by the US Trade Representative in January, Saigon Square shopping mall was flagged as a major market for the sale of fake luxury items including handbags, wallets, jewelry and watches. The report noted government efforts to stamp out the trade, but said 'low penalties have had little deterrent effect' and 'counterfeit products remain rampant'. Shop owner Hoa, a pseudonym to protect her identity, said almost all of the fake Nike, Lacoste and North Face products she sells in her shop in Hanoi's old quarter are from China - but tagged with a 'Made in Vietnam' label to make them seem authentic. She insists that all her customers know what they're getting. 'My clients are those who cannot afford authentic products,' Hoa said. 'I've never cheated anyone.' Hanoi and Washington are in the thick of trade talks, with Vietnam doing everything it can to avoid the crushing 46 percent tariff that could come into force in early July. Vietnam's trade ministry ordered authorities in April to tighten control over the origin of goods after the Trump administration accused the country of facilitating Chinese exports to the United States and allowing Beijing to get around tariffs. The public security ministry also said there would be a three-month-long crackdown - until mid-August - on counterfeit goods. Nguyen Thanh Nam, deputy head of the agency for domestic market surveillance and development, said last week that in the first five months of the year, more than 7,000 cases of counterfeit products worth more than $8 million had been discovered. He added that 1,000 fake Rolex watches had been seized from Saigon Square shopping mall. Mounds of vitamins, cosmetics and sweets - seemingly also counterfeits - have appeared at waste grounds outside cities including Hanoi, Ho Chi Minh City and Danang, while fake electronics including Marshall speakers and smartwatches have been confiscated.
Kuwait Times
18 hours ago
- Business
- Kuwait Times
Vietnam cracks down on fake goods as US tariffs loom
HANOI: Since the United States accused Vietnam of being a hub for counterfeit goods, Tran Le Chi has found it increasingly hard to track down her favorite fake Chanel T-shirts, Gucci sunglasses and Louis Vuitton handbags. As Vietnam's government tries to head off President Donald Trump's threatened 46 percent tariff, it has launched a crackdown on fake products - in part to show responsiveness to US concerns. Now there are streets filled with shuttered shops in Hanoi and rows of closed stalls at Saigon Square shopping mall, a major clothing market in Ho Chi Minh City - the kind of places Chi used to go to buy her latest gear. 'The clothes help me look trendy,' Chi told AFP. 'Why would I care if they are fake or not?' Chi - a betting agent for an illegal game known as lo-de, where punters predict the last two lotto numbers of the standard daily draw - said she had never paid more than $40 per 'designer' item. 'Only the super-rich people can afford the real ones,' she added. 'They're not for people like us.' Communist-run Vietnam is a manufacturing powerhouse that produces clothing and footwear for international brands, with the United States its number-one export market in the first five months of 2025. But it also has a thriving market for counterfeit goods. In a report published by the US Trade Representative in January, Saigon Square shopping mall was flagged as a major market for the sale of fake luxury items including handbags, wallets, jewelry and watches. The report noted government efforts to stamp out the trade, but said 'low penalties have had little deterrent effect' and 'counterfeit products remain rampant'. Shop owner Hoa, a pseudonym to protect her identity, said almost all of the fake Nike, Lacoste and North Face products she sells in her shop in Hanoi's old quarter are from China - but tagged with a 'Made in Vietnam' label to make them seem authentic. She insists that all her customers know what they're getting. 'My clients are those who cannot afford authentic products,' Hoa said. 'I've never cheated anyone.' Rolex watches, Marshall speakers Hanoi and Washington are in the thick of trade talks, with Vietnam doing everything it can to avoid the crushing 46 percent tariff that could come into force in early July. Vietnam's trade ministry ordered authorities in April to tighten control over the origin of goods after the Trump administration accused the country of facilitating Chinese exports to the United States and allowing Beijing to get around tariffs. The public security ministry also said there would be a three-month-long crackdown - until mid-August - on counterfeit goods. Nguyen Thanh Nam, deputy head of the agency for domestic market surveillance and development, said last week that in the first five months of the year, more than 7,000 cases of counterfeit products worth more than $8 million had been discovered. He added that 1,000 fake Rolex watches had been seized from Saigon Square shopping mall. Mounds of vitamins, cosmetics and sweets - seemingly also counterfeits - have appeared at waste grounds outside cities including Hanoi, Ho Chi Minh City and Danang, while fake electronics including Marshall speakers and smartwatches have been confiscated. Police have not specified the origin of the goods, but Vietnam was Southeast Asia's biggest buyer of Chinese products in 2024, with a bill of $161.9 billion. Nguyen Khac Giang, visiting fellow at the ISEAS-Yusof Ishak Institute in Singapore, said that although there were other aims of the drive, including improving Vietnam's business environment and formalizing the retail sector, 'the campaign plays a role in Vietnam's strategy to appease the US'. 'The effort partly reflects Vietnam's intent to show responsiveness to US concerns,' he said. But for Hoa, her livelihood is on the line. Her shop has been closed for almost two weeks and she has no idea how to restart the business. 'I have sold these sorts of clothes for a decade and experienced no problem at all. Now they crack down on us, it's hard to figure out how I continue,' she said.- AFP
