Chanel warns fashion, luxury industry of demanding year amid global economic slowdown

12/11/2023 3:07:24 AM

(MENAFN) Bruno Pavlovsky, Chanel's president of fashion, cautioned the fashion and luxury goods industry to brace itself for a demanding year amid the slowdown in global economic growth.

Speaking to a UK-based news agency during the company's Metiers d'Art show in Manchester this week, Pavlovsky highlighted the potential challenges looming for the industry.

Pavlovsky noted that the current economic conditions pose difficulties "everywhere, in every single country," and these challenges are expected to impact the luxury sector.

“Luxury is not protected from the economy. I don’t have a crystal ball, but the situation will be tougher than what we saw in 2023,” he cautioned.

Pavlovsky disclosed that the brand experienced a decline in store visits and purchases from first-time and occasional buyers throughout the year. He linked this trend to high inflation rates in both the United States and Europe, as well as record youth unemployment in China.

Earlier reports indicated that luxury sales in the United States saw only a marginal 2 percent increase in the third quarter after stagnating in the preceding quarter.

In Europe, the revenue growth of luxury brands decelerated to 7 percent, a notable decline from the 19 percent growth observed during April-June. In response to the downturn, Pavlovsky remarked that such fluctuations are "normal" as luxury goods cannot sustain permanent double-digit growth.

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