Luxury fashion leaders gathered in Milan and Paris this week to showcase their latest collections, but behind the glittering runway shows a sobering reality is emerging. The ongoing conflict in the Middle East is driving inflation that squeezes even affluent shoppers, leaving executives concerned about growth prospects for the sector.
Market pressure mounts
Shares of Kering, the parent company of Gucci, have erased the gains recorded since CEO Luca de Meo took the helm a year ago. LVMH, the world’s largest luxury conglomerate, is down 37% since the start of 2026. Analysts attribute the slide to reduced discretionary spending as middle‑class consumers cut back on high‑end handbags and apparel.
Industry leaders call for stability
“I believe this year and next year will likely be a holding period while the market stabilises and becomes more predictable again,” said Diego della Valle, chairman of Tod’s, speaking to reporters in Milan. He highlighted the need for brands to balance investment in innovation with the reality of a tighter consumer budget.
Runway costs under scrutiny
Fashion houses continue to pour money into runway productions that can cost up to €10 million ($11.5 million) per show. While these spectacles aim to generate buzz and justify premium pricing, executives acknowledge the risk of diminishing returns. “Brands face a choice: either invest in innovation, customer experience and cultural relevance to justify their price positioning, or revise their pricing and accept lower margins,” noted Federico Bazzani, a partner at Deloitte Advisory.
Shifts in consumer priorities
Renzo Rosso, chairman of Diesel owner OTB, warned that shoppers are increasingly prioritising wellness, health, longevity, and experiences such as hotels and restaurants over luxury goods. This shift adds pressure on brands to diversify offerings and enhance the value proposition for the wealthiest clientele.
Upcoming shows and brand strategies
Prada will open Milan Fashion Week with a revamped flagship store featuring private spaces for top spenders. In Paris, LVMH’s flagship houses Dior and Louis Vuitton are set to headline the upcoming Fashion Week, while Chanel, praised for creative director Matthieu Blazy’s new designs, will present its spring/summer 2027 collection on October 5.
Despite the challenges, industry insiders remain hopeful that strategic investments in store experiences, exclusive services and culturally resonant designs will help the sector navigate the current headwinds and emerge stronger once market conditions stabilise.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
