The market for luxury brands like Gucci and Burberry continues to shrink.
Transcript:
Conway Gittens: Wall Street had a down day Thursday. In a speech, Federal Reserve Chairman Jerome Powell said the Federal Reserve doesn’t have to be in a rush to lower interest rates. Meanwhile, Walt Disney topped quarterly forecasts due in large part to success on the big screen and with its streaming business.
All eyes now turn to Friday’s retail sales report.
Sticking with retail, 2024 is not likely to be a great year for high-end consumer product brands. The market for global luxury products such as Gucci, Louis Vuitton, and Burberry is on track for an annual 2 percent drop. That would make this the worst year since the global financial crisis back in 2008; excluding the year of the pandemic lockdown.
According to Bain & Company’s Annual Luxury Report, demand is lackluster due to global unease and changing tastes within a specific age group. “This trend – particularly acute among Generation Z, whose advocacy for luxury brands continues to decline – has led to a shrinking luxury customer base by a magnitude of about 50 million over the last two years.”
The findings were backed up by dismal results out of Burberry. The fashion house posted a 20 percent drop in sales for the second straight quarter.
But it’s not all doom and gloom out there in luxury world, small luxuries such as beauty products, luxury perfumes, pricey eyewear, and jewelry are still holding strong in the U.S. and Europe.
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