(Noam Galai/Getty Images) |
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Happy Met Gala Day! Did you know it can cost six figures for VIPs to attend the high-profile event? Think: custom couture, glam teams, and a little propranolol to keep from sweating on the carpet. (Not to mention the cost of the ticket itself — after all it is a benefit!)
In today’s special Business of Fashion edition: retailers are deep in their tariff era. From shrinking margins to luxury slowdowns, we’re breaking down how some of the biggest names in the game are feeling the squeeze.
Before we dig in, let’s talk about last week in the markets. Confirmation that China is open to trade talks with the US along with better-than-expected US job growth in April fueled another day of gains for stocks, with the S&P 500 up 1.5%, the Nasdaq 100 gaining 1.6%, and the Russell 2000 booking a 2.3% advance. The S&P 500 has now reclaimed all of its losses since the April 2 reciprocal tariffs announcement.
❓ Haute or not? Test your knowledge with our Snacks Seven Quiz. Here’s the first Q: |
- Which retailer cited a “lack of seasonal purchasing” due to “mild weather” for why it lost market share in the UK?
Check your answer.
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After nearly tripling its economic profit from 2019 to 2024, the global luxury market hit a snag last year, shedding nearly 50 million shoppers. In China, once the industry’s shining star, luxury sales dropped 18% to 20% as shoppers shifted their focus abroad and consumer confidence took a hit. Meanwhile, in the West, many aspirational buyers are keeping a tighter grip on their wallets as savings run dry and worries about inflation and tariff-induced price hikes grow. Now, some of luxury’s biggest players are starting to feel the pinch:
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LVMH, owner of over 75 brands including Louis Vuitton, Dior, and Tiffany, posted revenues of $23 billion for the first quarter of the year, a 2% drop year over year, as demand cooled in the US and Japan for its fashion and leather — not to mention the drink that makes up the “M” in its name.
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Kering has had an even rougher ride and reported dismal Q1 sales. Gucci, Kering’s top brand, saw revenue plunge 25%, with steep drops in the US and Asia as the brand struggled to connect with high-end buyers. In a bid to revive Gucci’s buzz, it tapped a controversial new artistic director, which didn’t go great for the stock.
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Hermès stayed in its own stratosphere, posting record Q4 revenue of $4.15 billion. The premium luxury giant now plans to hike US prices to fully offset President Trump’s tariffs, as demand for its iconic $15,000 Birkin bags and $1,000 belts continues to outstrip supply, despite copycats trying to muscle into its leather domain.
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Luxury is in reboot mode. With shoppers more selective as tariffs loom, legacy houses are betting on creative overhauls to keep their brands rare and relevant. The pressure is on: creative director tenures are now shorter than ever, sometimes lasting just a season. While unlikely to upend the entire industry, the narrative is clearly shifting. Analysts now expect the global luxury market to shrink by 2% this year, a sharp U-turn from the 5% growth previously forecast.
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Invest in the Pre-IPO Market Amid Public Market Uncertainty |
Kevin O’Leary is StartEngine’s Strategic Advisor and Spokesman.4 |
Tariffs, emptier ports, market volatility. Amidst public market uncertainty, private markets are expected to continue growing, and are projected to hit $18T+ by 2027.1 And yet, the big players have been the ones reaping the rewards of these opportunities, leaving out everyday investors like you.
Enter StartEngine, the platform connecting accredited individuals with top pre-IPO companies like OpenAI, Perplexity, and Databricks. While uncertainty reigns, StartEngine just posted recent financials. |
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