[theqoo] 'WHO EVEN BUYS LOUIS VUITTON NOWADAYS?"...

Due to disillusionment over ultra-fast price hikes, a quarter of the net profit of the "luxury empire" has been wiped out.

The Wall Street Journal reported that investors are increasingly skeptical, questioning whether this is a temporary issue or a long-term trend. Meanwhile, the so-called “dupe consumption” is seeing a boost as a result.

The global luxury goods industry is taking a hit in sales due to shifting trends, including the departure of younger consumers. Industry insiders are closely watching whether this is a temporary phenomenon or a sign of a broader trend, specifically, whether the MZ generation (Millennials + Gen Z), who emerged as key spenders in the luxury market after the COVID-19 pandemic, are now becoming disillusioned with rapidly rising luxury prices and pulling away for the long term.

Wall Street Raises Doubts About Luxury Brands' Profitability

According to a Wall Street Journal (WSJ) report on the 27th (local time), LVMH (Louis Vuitton Moët Hennessy), the “luxury empire” that owns brands such as Louis Vuitton and Dior, announced last week that its revenue for the first half of the year fell 4% compared to the same period last year. Net profit dropped by a significant 22%. On the French stock market, LVMH shares had declined 23% as of July 25.

Chairman Bernard Arnault told the WSJ in an interview after the earnings announcement that he views the recent weak performance as a temporary issue. However, the WSJ noted that investors are growing concerned that something more serious may be going wrong.

UBS stated, “Investors have been waiting for a recovery in European luxury brands' performance for the past two years,” adding that “they are beginning to worry about potential structural shifts affecting the long-term appeal of the luxury sector.” Italian luxury brand Moncler also reported a 1% drop in second-quarter revenue compared to the same period last year.

MZ Generation Shifts Toward Value-for-Money

Consulting firm Bain & Company said there’s no clear evidence that major luxury brands are losing ground to small emerging labels. However, WSJ pointed out that amid aggressive handbag price hikes during the pandemic, consumers are turning their attention to areas they believe offer better value for money.

Jewelry brands that didn’t significantly raise prices over the past four years have avoided sales slumps. Richemont, which owns Cartier, saw an 11% year-on-year increase in its jewelry division’s revenue.

The aggressive price hikes in the luxury industry, widely shared on social media, have also contributed to diminishing appeal among the MZ generation. In major luxury markets such as South Korea and the U.S., young consumers are increasingly interested in “dupe consumption”, purchasing affordable alternatives that still offer a “luxury-like” aesthetic.

source: https://n.news.naver.com/mnews/article/015/0005163340

original post: here

1. It's because it's not pretty

2. The biggest reason is how the quality-price value keeps dropping 

3. Nobody buys bags anymore, we shifted towards luxury jewelry instead

4. I never understood why people even buy those 

5. Anyways, they're made in China

6. Can LV do something about the smell of their bags.. 

7. The logo isn't associated with luxury anymore, but just something cheap 

8. There are way better cheaper alternatives, so why?

9. I feel like Rolex will trend downwards too..

10. The quality is sh*t ㅋㅋㅋㅋ CS is sh*t

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