"The holiday shopping season is
hitting its apex. And do you know what I, a longtime fashion editor, will not
be buying my loved ones this year? Big-name luxury fashion. I’d sooner set my
eyebrows on fire.
Why am I betraying the industry to
which I’ve dedicated the better part of the past 20 years of my life, you might
wonder? Let me tell you a story.
When, for the Fall 2023 season, Marc
Jacobs reissued the runway-show version of his Kiki boots — a sought-after,
supple-leather style that I’d been lusting after since their 2016 debut — I
found a way to squeeze them into my budget. I’d had a tumultuous few months,
and I figured I’d treat myself to something I’d treasure forever. Something
that would last.
They did not. The right heel cap
fell off after a handful of wears, revealing a flimsy plastic cavern. I got it replaced,
only to have a four-inch platform base snap off like a rotting tree limb days
later. Timber! Two passers-by heaved me up, and I limped home, barefoot. In
February, I demanded a refund, which I promptly put toward much-needed physical
therapy.
My experience sums up everything
that’s gone wrong with what once served as semiotic shorthand for the good
life. In recent years, luxury of all kinds has become obscenely, disgracefully,
inconceivably costly. And the price hikes we’ve seen are steeper than what
inflation would dictate. What’s worse? As costs climb, quality hasn’t. In fact,
it’s largely declined.
“Luxury is in chaos,” said Gill
Linton, a fashion and marketing expert and a co-founder of luxury vintage
platform Byronesque.
I’d go a step further. Luxury is in
a death spiral. After a decade of nearly unfettered growth, the sector is
bombing across the globe. Analysts point to less-affluent buyers reining in
their spending and slowing demand in China. I believe there’s another culprit:
a growing realization that many luxury houses have broken the principles that
made them so successful. These hoity-toity brands, which cheapened their
essence and eviscerated their desirability with down-market celebrity
partnerships, licensing deals and influencer advertising, have no one to blame
but themselves.
This started at the source of so
many modern woes: social media. For those not glued to TikTok or “The
Kardashians,” social media, helped along by reality TV, has instigated a
frenetic game of one-upmanship in which top social-media content makers aim to
project wealth while outdoing themselves and their competition. This means
flaunting luxury goods in posts that are then spread widely by algorithms. Kyle
Richards, a cast member of “The Real Housewives of Beverly Hills,” has become
infamous for hitting the gym with a difficult-to-get Hermès Birkin bag — which
costs anywhere from five figures to hundreds of thousands — dangling from her
arm.
At the same time, the rich were
getting richer — and more people were joining them. According to Swiss bank
UBS, there were 7.64 million millionaires in the United States in 2000. By
2023, we saw that number nearly triple.
For those who aren’t comfortably in
the millionaire class, technology offers a solution. The exploding popularity
of financing apps such as Klarna and Afterpay — online lending services that
allow users to break payments up into installments — has ushered in a whole new
era of “buy now, pay later.” It’s stigma-free layaway for nearly any item.
Nobody has to know, and you get the product up front.
Suddenly, brands accustomed to
catering to a select few found themselves pursued by a surfeit of less
discerning customers — some literally children — seeking a status boost for
their own social media profiles. Meantime, the platforms continue to both stoke
class anxieties and offer a seemingly unlimited amount of data on what to want
next. Confronted by hordes, companies tried preserving their images the one way
they knew how: jacking up prices. In doing so, they followed the longstanding
“Veblen goods” principle.
Derived from the economist Thorstein Veblen’s “The
Theory of the Leisure Class,” written in 1899, it states that demand for luxury
goods will actually increase as their prices increase, because such hikes thin
the herds and make scarce goods that much more desirable.
Which prices have skyrocketed? The
better question is which haven’t.
From October 2019 to April 2024, the
cost of Prada’s popular Galleria Saffiano bag increased 111 percent. In the
same period, the cost of Louis Vuitton’s canvas Speedy bag doubled, and Gucci’s
Marmont small matelassé shoulder bag went up by 75 percent. Chanel is
particularly notorious: Its iconic medium 2.55 leather flap bag, which cost
$5,800 in 2019, will now set you back $10,800 — and is increasingly the subject
of quality complaints.
What about that perfect exotic
backdrop to show off your new goods? A thousand bucks for a night in a normal
hotel room, once unheard-of, is surprisingly common. Rooms at the sought-after
Amangiri resort in Utah started at around $1,800 a night in 2018. Now they
start at $3,509. Jaclyn Sienna India, founder of a travel and lifestyle firm
that caters to individuals and families with a minimum net worth of $100
million, notes that the prix fixe menu at the exclusive Ibiza restaurant
Sublimotion was about $1,675 a head in 2022. Today, she said, it’s $2,380.
Under the Veblen Goods principle,
shoppers should view luxury brands’ higher prices as a sign that the goods are
precious and hard to obtain. The problem is that neither of those is the case.
Luxury has become nearly ubiquitous.
Open Instagram and everyone has a Louis Vuitton Speedy, or a Chanel Boy Bag or
some other instantly recognizable four-figure-plus purse from a mainstream
luxury label. Some of that comes from the rise of resale (people disposing of
their used luxury wares, usually at deep discounts) or dupes (similar-looking
copies that trade for far less). And a growing number are superfakes — highly
convincing counterfeits that seemingly offer similar quality for a fraction of
the cost.
On top of all of this, some luxury
purveyors also began expanding their product categories and selling overstock
via off-price outlets. Boutiques that were once decadent salons offering
fittings to clients when they sipped champagne are now tourist destinations for
the rich and the upper-middle class, trading in wallets and key chains, which,
despite their comical price tags, are among the cheapest options. We are mere
minutes away from a Chanel- and Gucci-packed outlet store popping up in a
mid-tier strip mall near you.
For a while, it worked. After the
pandemic, newly minted millionaires were eager to spend and show off. The
Chanels and Vuittons jacked up prices “so the ‘wrong’ people stop buying,” said
Erez Yoeli, a research scientist at M.I.T.’s Sloan School of Management. But
part “of the pressure in the marketplace comes from the fact that you do have
to be legitimately better,” he said. “And if you’re not, you’re going to suffer
the consequences.”
They weren’t better. Ms. India, the
founder of the travel and lifestyle firm, found that service at many top-tier
hotels nose-dived during the pandemic, partly from staffing shortages, and has
yet to recover.
And how about those $10,000 handbags? Taleen Akopyan, who with
her husband has worked as a cobbler and a leather restoration expert for the
past four decades, said her business has shifted from bags that are 50 years
old and still in good shape to brand-new Chanel, Louis Vuitton and Guccis that
need help after a few wears. “There’s definitely a quality deterioration across
the board,” she said.
It had to end. By many measures, the
luxury market is in free-fall.
LVMH and Kering, which owns brands
including Gucci, Balenciaga and Yves Saint Laurent, reported losses this year.
Same goes for Burberry; Richemont, which owns Alaïa, Cartier and Chloé; and
Capri Holdings, owner of Michael Kors, Versace and Jimmy Choo. A fall study
from the management consulting company Bain predicted that 2024 would be the
first year of luxury slowdown since the 2008 financial crisis (excluding the
pandemic). Certainly the luxury sector tends to be one of the first hit by a
slowing economy. But many of the reasons for today’s problems the companies
brought on themselves.
Some brands are responding by
dropping prices, which risks turning a luxury label into a line that’s carried
by outlet malls and desired by virtually no one. Investors shouldn’t have
lauded Burberry’s new C.E.O., Joshua Schulman when in November he announced
that among other adjustments, the brand would be reducing the prices of its
handbags.
Perhaps the most egregious sign of
the problem is the fact that luxury goods are winding up on the shelves of
discount outlet stores. Dumping excess product in less-than-glamorous locations
can be so destructive to a brand’s perception that some companies used to
literally set excess product on fire to avoid such a fate. And yet, according
to Bain, at the end of 2023 that’s exactly where about 13 percent of all luxury
goods were purchased, compared with 5 percent a decade earlier.
Some brands are trying to hold the
line. In a July interview, LVMH chief financial officer, Jean-Jacques Guiony,
implied that price increases won’t “end just because the aspirational customers
are a little under pressure.” Fun fact: LVMH’s fashion and leather-goods sales
did a 5 percent belly flop in 2024’s third quarter.
So perhaps pressure isn’t
so much the problem as subpar, overpriced goods, like the $2,816 Christian Dior
bags that were discovered to have been made in an Italian sweatshop for around
$57.
What happened to these
once-prestigious bastions of craftsmanship and fabulousness? The eponymous
founder of Louis Vuitton was born into a family of artisans in 1821 and
dedicated his life to studying and perfecting trunk-making. Chanel was founded
by Coco Chanel in the early 20th century and brilliantly designed sporty wares
for women that freed them from corsets. Christian Dior invented the “New Look”
in 1947, an immaculately designed, hyperfeminine silhouette that was a return
to belle epoque glamour after the austerity of World War II. These brands and
their peers long upheld the traditions and standards of their founders — until
they didn’t.
When short-term bottom lines matter more than history and
heritage, corners get cut, the soul gets snuffed out, and the product becomes
trash in a fancy box.
An exception is Hermès. The company
has raised the cost of its Birkin 30 bag in Togo leather just 15 percent from
2019 to 2024, taking it from $10,900 to $12,500. That said, many claim you may
have to spend a great amount on other Hermès items to “earn” the privilege of
buying one.
Like my sad Kiki Boots, much of
old-school luxury — the kind that was so glamorous, lush and exquisite that
everyone understood it, many craved it and few could have it — is beyond
repair. Once-revered establishments that prided themselves on craftsmanship,
service and cultivating a discerning and loyal customer base have become mass-marketing
machines that are about as elegant and exclusive as the Times Square M&M’s
store.
Today, instant gratification, profit
and appearances are more desirable than substance, depth or intrinsic worth.
And while the decline of “luxury” might not seem like the end of the world
(especially with so many apocalypse-adjacent events unfolding), its fall
represents a deeper decay that’s gnawing at so much of our existence — from
education, media and literature to interpersonal relationships and quality of
life.
But back to shopping. Now is the
perfect time to seek skilled, independent craftspeople and designers who remain
uncompromised by the luxury conglomerates’ production quotas and politics.
If something is obviously awful and
obscenely expensive, don’t buy it. Don’t tout it on Instagram. Tell the manager
you know it was “mid.” I certainly won’t be dipping my toes into any Marc
Jacobs platforms again. One bruised tailbone was terrible enough. I’ll happily
tell you all about it.
Katharine K. Zarrella is a longtime fashion
editor, critic and lecturer." [1]
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