It may be Men’s Fashion Week in Paris right now, but for the rest of the retail world, it feels a lot more like luxury retail season.
This, following three separate high-end retail earnings reports this week, which not only shattered estimates but also shed new light on the mindset and habits of consumption of the well-off during what was supposed to be a time of great uncertainty.
Exclusive designer brands have not only been able to navigate the holiday headwinds that have plagued the entire retail industry, but have done so with confidence on price and on the back – or wallets – young consumers who wanted to trade and splurge on something special, after almost two years of holding and saving.
“Full-price sales continued to grow at a double-digit percentage from two years ago, accelerating from the previous quarter and reflecting higher quality business,” said Burberry Group President Gerry Murphy, about the UK-based company. company quarterly results for the 13 weeks ending December 25. “Our focus outerwear and leather goods categories performed well as we continued to attract new, younger consumers to the brand,” he added, despite continued challenges in the external environment. .
Interestingly, Burberry’s “premium business” saw full-price sales rise 26% in the quarter from comparable 2019 levels, while total same-store sales fell 3% due to what the iconic plaid retailer said was its planned release of markdowns across its stores and website.
The fact is, luxury sales rose at a time when the latest measure of US consumer shopping activity for December recorded a surprise drop of 1.9% last week for the most important of the year.
A Moment of Luxury
To drive demand and engagement, Burberry, for example, cited a mix of innovations that helped it attract early buyers and drive double-digit full-price sales growth across all product categories. , including a renewed focus on “distinctive and meaningful storytelling and experiences”. campaign, a first-ever advertising campaign dedicated to outerwear and a new store concept as well as a mix of digital and omnichannel innovations.
“We’re seeing strong and growing engagement with customers around the world shopping online through the improvements we’ve made to the online shopping journey, including greater personalization,” Burberry said. These efforts, he said, have led to strong customer adoption of omnichannel solutions, as well as an increase in in-store appointment bookings, a move that he says is spreading to more. of stores and countries.
Prada also noted its adaptive response to changing consumption and the economy, saying the significant increase in its pre-tax profit was supported by a higher contribution from its retail channel as well as sales. at full price. At the same time, Prada said the “wholesale channel streamlining” will continue.
“2021 was a year full of challenges but we proved that we were ready and quickly responded to the needs of an extremely dynamic market, implementing actions that allowed us to effectively understand changes in consumer behavior” , said Patrizio Bertelli, CEO of the Prada Group, in a press release. declaration.
The “Maisons” portfolio within the Richemont Group also saw outsized demand and performance, with retail (+45%) leading at channel level, while jewelery (+38%) and fashion (+37%) show the strongest performance in terms of activity. performance.
“On a two-year basis, sales exceeded pre-Covid levels across all regions, channels and lines of business,” Richemont said in its business update, adding that its direct-to-consumer sales are up. were further strengthened and now accounted for 78% of group revenue.
Richemont’s online retailers, including Yoox, Net a Porter, the Outnet and Watchfinder, also benefited from the luxury boom and saw sales rise 19% from a year ago.