The fork in fashion returns with a vengeance

As fashion month draws to a close, there’s no doubt that luxury is booming. In Milan, Bottega Veneta’s eclectic – and prolific – collection under the direction of Matthieu Blazy showed the power of merchandising. In Paris, Miu Miu once again went gold on social media with sequin-trimmed skinny pants and cardigans tucked under stockings.

The Prada Group, meanwhile, has had a triumph off the runway: it announced on Thursday that it had achieved record sales of 4.2 billion euros ($4.4 billion) in 2022. In February, LVMH posted double-digit growth last year, as did Kering, despite troubles at Gucci and Balenciaga.

These are good times also for brands at the opposite end of the price spectrum. Clothing chain Mango achieved record sales last year, the company said on Thursday, while Associated British Foods, owner of Primark, raised its forecast for 2023 after reporting higher-than-expected sales growth.

In the US, the giants beyond prices are also expecting a knockout year as shoppers begin to shift from post-pandemic frenzy to bargain hunting. According to, traffic at stores such as TJMaxx, Ross, Burlington Coat Factory and Marshalls surged in January. Capitalizing on this trend, Ross Stores announced this week that it will open 100 new locations in 2023.

Where does that leave the brands inside? Many are left stranded. Gap Inc., Nordstrom and Macy’s are among the companies currently expecting sales to decline in 2023.

In other words, a clear pattern has emerged – one that will define the fashion industry in the coming months. While the middle is hollowing out, the lower and upper ends of the fashion will develop.

This is nothing new – the polarization of fashion has been going on for almost two decades since fast fashion brands exploded into the market. The 2008 recession ushered in dramatic growth for players beyond price, including TJX, the owner of TJMaxx and Marshalls, as well as upscale brands tapping into the “quiet luxury” trend. It also set the stage for the demise of department stores, culminating in the bankruptcy of Sears and JCPenney.

Over the past few years, the midmarket has been able to recover somewhat. Department stores such as Nordstrom have introduced new store formats – such as the Nordstrom Local concept, which allows for online order pick-up – that better suit modern shopping habits. After the pandemic, brands started to open new stores again, averting the so-called retail apocalypse, during which thousands of brick-and-mortar stores were closed.

But if history is any indication, the picture could be bleaker for mid-tier retailers than currently anticipated. According to S&P Global Market Intelligence, already in the first two months of 2023, the number of bankruptcy filings among American corporations reached the highest level in any comparable period since 2011.

At the same time, the Great Recession spawned a new way of off-price consumption: flash sales. Even though sites like Gilt Groupe and Rue La La have declined in popularity, they are proof that times of economic uncertainty are ripe for a breakthrough.

Today, newcomers like Shein and Temu, for example, are gaining market share. Analysts say the rental and resale of luxury fashion is also set to increase as price-conscious shoppers start to cut prices.

With the post-pandemic surge in spending almost over, fashion is now entering a new era – defined by rising extremes, austerity for some, and hopefully fresh innovation.



Kendall Jenner on the Prada fall/winter 2023 runway.

Prada broke the sales peak of 2013. The Milan-based group, which also owns Miu Miu and Church’s, used the partnership between Miuccia Prada and Raf Simons to generate record sales. Annual revenue grew 21 percent to €4.2 billion ($4.4 billion) in 2022.

Adidas presents options for unsold Yeezy products. CEO Bjørn Gulden has suggested that the German sportswear giant might try to sell already produced collaboration sneakers, but it could still ruin the shoes. Adidas predicts an operating loss of €700m ($738m) in 2023 – its first negative income in 31 years – if it writes off unsold sneakers from former associate Ye.

Allbirds shares fall after shoe brand ‘deteriorates rapidly’. Allbirds Inc. sold investors a growth story when the sneaker brand went public less than 18 months ago. These sales gains disappeared in the fourth quarter, exhausting inventories.

Hugo Boss predicts a slowdown in sales in 2023. The German fashion house is facing tougher comparisons in 2023 after undergoing a wave of recent brand reorganization last year, with sales up 27 percent to 3.65 billion euros ($3.85 billion), as announced in January.

Report: Shein set to raise $2 billion, expects US IPO later this year. UAE sovereign wealth fund Mubadala is the lead investor in this round, as are existing investors private equity firm General Atlantic (GA) and venture capital group Sequoia Capital China, people familiar with the matter told Reuters.

The Gap sees weak annual sales as inflation-stricken consumers cut back on spending. Gap Inc on Thursday forecast full-year sales below Wall Street estimates, signaling a slowdown in demand as inflation-weary consumers cut discretionary spending.

Rolex and Patek investment beats S&P gains in five years. Prices for Rolex, Patek Philippe and Audemars Piguet watches have risen an average of 20 percent a year since mid-2018, outperforming the S&P 500, as prices for pre-owned luxury watches have increased, according to a new report.

Mango records record sales as rival Zara expands in US and India. Revenue for Mango, a rival to Inditex’s Spanish brand Zara, is up 20 percent year-on-year, with both in-store and online sales benefiting from post-pandemic consumer appetite for clothes, despite fierce competition in the apparel industry .

Superdry employs a cash saving change specialist. In a statement, Superdry, led by founder Julian Dunkerton, said Interpath would advise on the change and “ensure we have the right cost base and structure for future success”.

Report: Trussardi sought creditor protection for recovery. The latest crisis came after a failure to pay a distribution partner led to a halt to deliveries of Trussardi products, a source familiar with the matter told Reuters.

Aquazzura launches a line of handbags for a party in Paris. Bags have long been a major driver of luxury brand profitability, but this category can be extremely difficult to break. The brand has launched a selection of logoless shoulder bags and evening bags for handbags ranging in price from €1,000 to €2,000 ($1,060 to $2,121).


Stéphane Rinderknech

Stéphane Rinderknech appointed president and CEO of LVMH’s cosmetics division. Rinderknech joined the luxury goods conglomerate from L’Oréal USA, where he was chairman and CEO, in May 2022 as chairman and CEO of LVMH Hospitality Excellence.

Sephora opens its first UK store. The store, located in the Westfield shopping center in west London, is the first UK location for an LVMH-owned cosmetics company since withdrawing from the country nearly two decades ago. The retailer has been announcing its return for months and launched there digitally in October.

Perfume companies hit in Europe suspected of perfume supply cartel. Fragrance companies across Europe risk potentially heavy fines after prosecutors raided concerns including Givaudan SA and Symrise AG who colluded on prices for the supply of fragrances and ingredients.

Revlon faces cancer claims as bankruptcy nears completion. On Tuesday, a Revlon bankruptcy judge extended the deadline for customers with certain types of cancer to file claims against the company.


Lauren Santo Domingo

Tiffany & Co. appoints Lauren Santo Domingo as artistic director of Tiffany Home. The LVMH-owned New York jewelry house turned to Moda Operandi co-founder and Chief Marketing Officer

Craig Green awarded MBE for services to fashion. Green’s past accolades include British Menswear Designer at the 2016, 2017 and 2018 Fashion Awards, the 2016 BFC/GQ Designer Menswear Fund Award and Emerging Menswear Designer at the 2014 British Fashion Awards.


China’s does not provide quarterly revenue estimates. Revenue rose 7.1 percent to 295.4 billion yuan ($42.8 billion) in the three months ended December, missing analyst estimates of 296.17 billion yuan, according to Refinitiv data.

Zalando’s 2022 profits topped estimates in terms of profitability. The Berlin-based e-commerce platform reported an adjusted profit before interest and taxes of €184.6 million ($197 million) last year, it said in a Tuesday statement.

Compiled by Joan Kennedy.

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