Luxury Industry 2014 Outlook – Fashion

After a tumultuos 2013 with many ups and downs, the luxury fashion sector braces in 2014 for yet another year of stagnation with minimal growth rates expected even for power-players such as Louis Vuitton,Chanel, Hermes, Armani, Ferragamo, Burberry, Zegna and Gucci. Prada, Valentino, Loro Piana and Bottega Veneta will continue to lead in terms of business performance in 2014, being among the few luxury fashion brands likely to register double digit growth.

Most of them are likely to pursue the already restrained retail development strategy in 2014 too, focusing rather on refurbishing or enlarging existing flagship locations. China, India and Russia will continue to see minimal activity with in terms of new store openings, with the U.S., Canada, Brazil, Middle East (GCC) and select Asia-Pacific countries (Malaysia and Indonesia) likely to see most number of new store openings in 2014.

In 2014, the luxury fashion sector is likely to register a shift in the retail expansion business model, most new store openings likely to be conducted in franchising. Mid-sized luxury fashion & accessories companies such as Jimmy Choo, Christian Louboutin, Roberto Cavalli, Belstaff, Moncler, Brioni, Mulberry are expected to open between 15 and 20 new stores in 2014. Prada, Fendi and Valentino will lead in 2014 in terms of number and size of directly operated new store openings.

Niche luxury fashion and accessories brands to watch in 2014 both in terms of exceptional business performance: Loewe, BerlutiCourreges, Charlotte Olympia , Roger VivierAzzedine Alaia and Givenchy.

Men’s only stores by generalist fashion houses, a major trend in luxury retail development in 2013 will remain in 2014, however, with a much slower pace in terms of new openings. Tod’s is likely to pursue the global expansion of its Milanese ”Sartorial” retail concept inaugurated in 2013, both as a stand alone and a section/floor of an existing store. Bottega Veneta and Dior are expected to open new men’s stores in 2014.

Overall, the biggest (come-back) trend for 2014 will be the growth of affordable-luxury fashion and accessories brands, with double-digit performance expected in 2014 too, led by Michael Kors, Calvin Klein, Longchamp, Karl Lagerfeld and Hackett. For U.S. giant Coach, 2014 is not likely to bring the much sought after stabilization, as the company is yet to identify its ideal diversification model in its pursuit of recognition as a lifestyle brand.

After a major development push for iconic British menswear brands Gieves&Hawkes and Kent&Curwen, Hong Kong based group Fung Group will speed up retail expansion of two other of its brands, Cerruti and Sonia Rykiel, with several new store openings expected in 2014 worldwide.

2014 will also accentuate the already ailing performance for several fashion houses, despite rumours of much needed cash injections by outside investors: Versace, Gianfranco Ferre and Pal Zileri. Despite its vehement denial, Richemont Group (world’s second largest luxury group) is likely to pursue the sale of several of its worst performing apparel & accessories brands, especially Alfred Dunhill and Lancel. As for its other brands, Chloe, Shanghai Tang and Azzedine Alaia, Richemont will most likely seeks to implement further development plans.

Oliver Petcu

Belstaff House flagship store London, on New Bond Street