MILAN — Visibility may be poor, but one thing is almost certain: the $230 billion fashion and luxury goods industry is set to shrink this year, according to Altagamma.
The association, which represents luxury firms in Italy, said Monday that it expects sector earnings before interest, taxes, depreciation and amortization to fall 21 percent in 2009 due to a “significant” drop in demand, particularly in the first half of the year.
“The luxury bubble has burst,” said Armando Branchini, Altagamma general secretary and deputy chairman of Milan-based consultancy Intercorporate.
By region, Altagamma forecast full-year sales will contract 14.8 percent in the Americas, 11.7 percent in Japan, 8.8 percent in Europe, 2.3 percent in Asia and 2.1 percent in the rest of the world.
By category, the association predicted sales of tableware will decrease 15.4 percent; jewelry and watches, 12.3 percent; apparel, 8.7 percent; shoes and leather accessories, 6.2 percent, and perfume and cosmetics, 4.8 percent.
“The market that used to exist doesn’t anymore,” said Francesco Minoli, chief executive officer of Italian jeweler Pomellato.
Paola Durante, Merrill Lynch investment banking director and head of corporate broking in Italy, said a recovery would likely come sometime in 2010.
“Perhaps we won’t see a return to the levels of 2006 or 2007, but [the situation] will resolve itself,” Durante said, citing a need for luxury companies to focus on creativity.
However, Deutsche Bank analyst Francesca Di Pasquantonio cautioned the environment would likely deteriorate further before improving.
“From a financial market point of view, things may have bottomed out, but in economic terms, there are further falls to come,” Di Pasquantonio said.
Bain & Co. partner Claudia D’Arpizio, who heads up the consultancy’s international fashion and luxury goods practice, said consumers were buying less and-or at lower price points, citing the positive performance of secondary lines. She also specified the crisis was accelerating existing trends rather than creating new ones.
Valentino chief executive officer Stefano Sassi said the downturn was leading consumers to take a “punitive” or “moral” approach to buying, meaning that price had to be relative to quality more than ever.
Experts added the crisis was necessitating firms to be more efficient, which should put them in a stronger position when the industry recovers.
“I am confident that we will come out of this more strongly,” Altagamma president Leonardo Ferragamo said.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)