Keep Your Eyes Open: We’re About to See a Surge In Luxury Spending

Capri Holdings Ltd— the parent company behind Micheal Kors, Versace, and Jimmy Choo— just released a luxury spending forecast. And by the brand’s estimation, it looks like we’re on the upswing.

While worldwide lockdowns and restrictions undeniably impacted the luxury fashion scene, it appears that luxury shoppers may be more willing to spend than they were before.

Capri Holdings’ CEO spoke to the increased revenue currently coming in: "As the world reopens, we are pleased to be seeing better than expected performance from all three of our iconic fashion luxury houses.” And the brand isn’t the only one experiencing this.

“Bigger rivals LVMH, Hermes and Gucci-owner Kering were able to report sales above their pre-pandemic levels,” CNBC reports.

One major factor: The shift to online luxury retail. Before the pandemic, it was less common to see luxury designers selling online. The reason behind this was the fear of counterfeit products, as well as the often exorbitant taxation that comes with international shipping. While these reservations have made luxury brands hesitant to process online sales in the past, COVID-19 left little choice.

The difference can be seen today between which brands adapted to the digital world and those that didn’t. But while Capri, LVMH, Hermes and Kering were able to benefit from the shift, “smaller labels like Ferragamo and Tod’s still have to catch up.”

What does all of this mean for shoppers, though?

Judging by the higher-than-expected sales, it’s fair to say that luxury audiences are ready to spend. Surprisingly, luxury didn’t grind to a halt during the pandemic, and easing restrictions world-wide is only bolstering the industry. In Australia, we may still be battling a new wave of the pandemic, but in places where restrictions have eased significantly, luxury shopping has made a comeback.

And it makes sense when you think about it.

We’ve spent a lot of time, cooped up at home with nowhere to go—and no one to dress for. Rather than going out and spending money on experiences for the past year or so, many consumers have been patiently waiting, saving money for future travel, dining, and purchases.

In the luxury world, this looks like “consumers with record savings” who “are splurging on handbags and shoes.” (Reuters) Only time will tell how long this upwards trend will last, but for now, luxury brands can rest easy knowing that they still have a place in consumer’s lives.

To quote Yves Saint Laurent: “Fashions fade, style is eternal.” Safe to say, no industry understands this better than luxury fashion.

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