The Behemoths of Luxury: A Discussion
Like most of my discussion posts, this article starts from reading an article on The Business of Fashion, this time concerning the future of LVMH and Kering and their great battle over the fashion landscape.
The article is entitled ‘Winners Take All’, and talks about how LVMH and Kering will (undoubtedly) extend their supremacy post pandemic.
Completely transparently, I kind of love it, and have a healthy appreciation for these titans of industry. This is in large part because I’ve been thinking about the opportunities that will be afforded to brands after the COVID experience, and despite our industry being one of the hardest hit, I believe fashion to be actually in an incredibly lucky position.
Going forward, the fashion industry is uniquely equipped to pivot in a way other industries are not, and this is in large part because of these masters. The deep industry consolidation and wealth will allow the larger groups to survive. Fashion will go through a period of great short term pain, a decimation of the weaker players, and likely increased long term success. As Scott Galloway so aptly remarked, the larger elephants will survive, and when the rains return there will be more foliage on which to feast.
I suppose this could be a negative, but fashion is in large part an innovative and forward moving industry precisely because it is so consolidated. It would be difficult to find one person who has worked at one of the LVMH or Kering brands who doesn’t understand and appreciate the benefits of scale and capitalisation in fashion and retail. Further, from a personal standpoint, the LVMH brands in particular are some of my favourites to watch. I could go on for hours about the remake of LV and their creative marketing campaigns (for some fun, check out their recent rainbow of hope initiative). These groups are not stale old dinosaurs that inhibit industry progress, but are highly nimble and creative in a way that smaller brands cannot be, and this is precisely because of their size and market share.
Fashion is one of the rare industries that can pivot, and pivot fast, from this crisis. Smaller brands and stores will go, but it is likely that these were weak to begin with. Even as someone who runs a small brand, I understand the opportunity afforded to me by these behemoths. They have created a system of consumer demand, and pave the way for the smaller creative shops. I don’t personally feel that it’s prohibitive to be in F&L as a small brand. Not every brand can be a multimillion dollar operation attached to a large conglomerate, and I do believe there is creative space for everyone to exist. As we feed from the demand created by the top, the larger houses benefit from watching the creativity in both design and marketing from smaller enterprises. The bigger the pie and the more value built into brands more generally, the better this ecosystem works.
As mentioned, this has been a painful clearing of the decks for many, and maybe the winners will take all. However, these larger plays are the ones who will survive, adapt, and change the industry for the better moving forward. They not only will continue to dominate the landscape, but will go forward to shape it for the rest of us, and I am interested to see how the larger conglomerates and independent brands (Chanel, Prada, Moncler, etc), lead the way forward to a (hopefully) bright new future in fashion.
