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Insider Ties: Starting a Lux Brand Now Will Be Rough

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New signs of a slowdown in high-end spending are emerging as two luxury leaders — Hermes and Richemont — forecast slower sales or smaller profits.

Source: Luxury stocks slump amid growing signs of spending slowdown

Tod’s SpA is adjusting after a huge slow down: http://footwearnews.com/2016/business/earnings/tods-first-half-new-strategy-shoes-257107/ It’s not just Tod’s. Tod’s has even gone the route of adding Tattoo artists to their bags… which was done to death with a thousand brands in the last ten years. Does anyone still own an Ed Hardy item?

Across the board luxury brands have been able to stay current due to the appeal of high fashion in Asian markets. In the American market the shift to athletic casual fashion is so evident that NY Fashion Week was dominated by large and small brands introducing their lines of warm up inspired fashion.

In other words if your goal is to launch with a product that will be considered high end, you probably need to delve deeper into your research and work out the details. If Hermes and LVMH shares are declining an approach to footwear and luxury garments should be handled in a very limited fashion. Consider this, the luxury footwear is being completely disrupted by its own relevance being attached to high profile entertainers.

French Fashion company Dior aligned itself with Rihanna. This brand sponsorship has been literally undercut due to Rihanna;s extremely successful releases with Puma.

The obvious alignment of Kanye as the Louis Vuitton Don is no longer relevant as Kanye and YZY is literally becoming a luxury brand of its own with adidas. (While insiders feel that Yeezy is a joke).

The point is lux brands and high end items are losing considerable shares of the market to a new generation of people who would rather spend 600 dollars on a the new iPhone than on Gucci, LV or Prada. Those same people will spend 400 on a pair of Lux Air Jordans now because those shoes are now seen as a luxury item. Any company looking to gain access to the luxury market should realize that now might not be the time and the time may never come now that a 4K tv is the same price as a Hermes belt buckle.