Future+ Fridays | Issue35

1. Luxury sector slump: Kering and LVMH hit hard, while Hermès stays resilient

What's happening: Kering Group and LVMH, two of the largest luxury conglomerates have reported double digit decline in recent earnings reports, citing unfavourable market conditions and dwindling demand in Asia. However, Hermès stands out as a rare exception with continued growth, largely due to its unique brand strategy.

TLDR:

• Kering Group reported a 16% revenue drop in Q3, bringing earnings down to €3.8 billion, with total revenue for the first nine months falling 12% to €12.8 billion due to weakened demand across its luxury brands.

• Sales from Kering’s directly operated retail network declined by 17% on a comparable basis, mainly due to lower store traffic in Asia-Pacific and Japan, while North America and Western Europe saw slowdowns across several brand houses.

• Gucci took the hardest hit among Kering brands, with a 26% revenue decline driven by challenging market conditions in Asia-Pacific, which has traditionally been a major growth region for the brand.

• Saint Laurent recorded a 13% revenue decline, but Bottega Veneta defied the trend with a 4% revenue increase, thanks to demand from North America and Western Europe.

• Kering’s other brands, including Alexander McQueen and Balenciaga, saw a collective 15% revenue drop, while the Kering Eyewear and corporate segment performed well, with a 32% revenue increase.

• LVMH, on its end, reported a 3% decline in revenue year-over-year, with sales in Asia (excluding Japan) falling 16% this quarter, and minor changes in the U.S. and Europe. Leading the shares to drop by 7%.

• Hermès stood out as an exception, reporting constant revenue growth due to a focus on brand exclusivity, scarcity, and timeless brand identity, with only its watch segment seeing slower sales; Hermès attributes its success to avoiding seasonal trends and partnerships, in contrast to other brands.

Why it matters: The downturn in Asia and North America signals changing luxury consumption patterns, especially in major hubs like China, where demand from high-net-worth individuals has become crucial for those groups. Kering and LVMH’s challenges reflect broader sector struggles, such as navigating high inflation and reduced discretionary spending. Hermès’ unique, slow-growth approach bucks this trend, spotlighting a business model that prioritises scarcity and long-term brand equity over rapid expansion or trend-driven collaborations. As the landscape shifts, companies like Kering may need to rethink strategies, while Hermès’ resilience could serve as a model for navigating economic shifts in the luxury world.

2. Chanel takes on The Boat Race, while Roitfeld merges Fashion and Sport in a new magazine

What’s happening: The collaborations across fashion and sport keep moving, signalling a strong trend that is here to stay. Chanel has signed on as the title sponsor and official timekeeping partner for The Boat Race between Oxford and Cambridge, marking its first major sponsorship in the fields of sports. Starting in 2025, the iconic event will be renamed the "J12 Boat Race." Separately, Carine Roitfeld, alongside her son Vladimir, will be launching a bi-annual magazine next year dedicated to the intersection of fashion and sports, the first one to be guest-edited by former NBA player Dwyane Wade.

TLDR:

• The Boat Race, an almost 200-year-old British tradition is an important event in the UK sports calendar, it is broadcast on the BBC and attracts over 250,000+ viewers.

• Chanel will become The Boat Race’s title sponsor and timekeeper, rebranding it as the “J12 Boat Race” in 2025.

• Even though the Maison was always big on sports from the beginning, this marks Chanel’s first major sponsorship since its establishment in 1910.

• Carine Roitfeld and Vladimir Restoin Roitfeld will launch a new sports and fashion magazine in 2025.

• Dwyane Wade will serve as the inaugural guest editor for the magazine, which will feature athlete interviews, style influences, and e-commerce.

• The magazine aims to build a community interested in the cross-section of sports and fashion. Readers can expect capsule collections, exclusive merchandise drops, and brand collaborations, making it a one-stop hub for curated sports-fashion goods and content.

Why it matters: Chanel’s entry into sports sponsorship marks a strategic shift, blending its luxury identity with an active lifestyle ethos. By supporting The Boat Race, Chanel enhances the sport's prestige and aligns itself with an aspirational, style-conscious audience. Similarly, Carine Roitfeld’s upcoming magazine taps into the rising demand for fashion that embraces both elegance and functionality. Together, these ventures signal a growing trend where luxury brands merge with sports, creating crossover appeal for a younger, dynamic demographic and for brands, providing new experiences to their clients.

3. Fabricant’s new intelligent tools transform fashion design from Sketch to Digital Reality

What's happening: Fashion-tech company The Fabricant is launching an intelligent design tool that turns fashion sketches into highly realistic digital garments, allowing designers to skip physical materials and gain more creative freedom.

TLDR:

• The tool automates repetitive tasks that usually consume a designer’s time, letting them concentrate more on the creative aspects of their work.

• Designers can upload sketches, which the tool then converts into highly realistic digital garments and generates sewing patterns directly from images—no need for physical samples. By cutting out physical prototyping, the tool accelerates the design-to-production cycle, reducing time to market, being more sustainable and enhancing overall efficiency.

• The tool creates interactive 3D models that can be showcased in virtual showrooms, enabling consumers to explore virtual try-ons and immersive AR experiences.

• Since it reduces the use of physical materials and optimises resources, the tool offers designers a more sustainable way to bring collections to life, supporting eco-conscious practices.

• Fabricant is offering early access and the option to schedule a demo on their website, allowing designers to experience how the tool can transform their design process.

• Other exciting start-up are offering exciting AI tool to make the production and design process faster, such as Imki who provide AI’s for brands making the process smoother and seamless.

Why it matters: Fabricant’s new tool is a game-changer in fashion design, merging human creativity with AI to streamline workflows and reduce resource waste. By enabling realistic digital prototyping and virtual try-ons, it redefines how collections are conceptualised and brought to market while providing a sustainable, cost-effective solution that could revolutionise designer-client interactions and consumer shopping experiences.

4.  Moncler and LuLu Li Turn AI fashion into reality

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What's happening: Moncler hosted the ‘City of Genius’ (refer to last week's newsletter here) during Shanghai Fashion Week, spotlighting 10 unique collaborations. This included a standout collection from award-winning Chinese designer LuLu Li, who unveiled her AI-inspired fashion line in partnership with Moncler on October 24.

TLDR:

• Designer and artist LuLu Li, founder of the Didelidi studio, presented her AI-inspired collection developed in collaboration with Moncler.

• Li’s designs bring exaggerated, surreal aesthetics to life, rooted in digital fashion concepts created using AI software including Runway and Midjourney.

• The real-world collection, based on Li’s virtual designs, includes three down jackets, a vest, and urban-inspired layers.

• The collection was revealed in Shanghai during the ‘City of Genius’ and will be available globally starting October 28.

• Since 2020, Li has been experimenting with generative AI and in 2023, she started working closely with Moncler’s team as the brand reached out to her on Instagram. First sceptical about the collaboration due to a lack of knowledge in Fashion, she went ahead with the brand’s support.

Why it matters: This collaboration marks an important intersection of AI, digital artistry, and high fashion, showcasing how virtual designs can evolve into wearable garments. Li’s journey from digital-only designs to a physical fashion line demonstrates AI’s potential as a creative tool in fashion—helping designers imagine, iterate, and produce styles that push the boundaries of traditional garment construction. Moreover, it shows the power of AI, allowing individuals to transcend industry boundaries and expand their skill sets, pushing creativity to new levels. Moncler’s support has allowed Li’s signature surreal aesthetics to reach a global audience, redefining both digital and physical fashion experiences.

5. Future Stores: a high-tech retail revolution arrives in London

What's happening: An immersive retail experience called Future Stores will open on Oxford Street, London next week. The concept aims to shake up traditional retail by combining advanced technology with interactive, sensory-driven shopping.

TLDR:

• The new shop that benefited a £20 million investment, called ‘Future Stores’, aims to redefine retail on Oxford Street with a tech-integrated, experiential approach.

• The first brand taking place in the space will be Intel, debuting its new AI-powered PCs in the space, offering in-store gaming and hands-on tech trials.

• High-definition micro-LED displays, dynamic billboards, and advanced payment systems will bring a futuristic vibe and convenience for any brands who want to activate and use the space. The display will help brand captivate audiences while driving impactful marketing campaigns to generate sales.

• The store doubles as a testing ground for consumer data and insights on shopping patterns and engagement.

• The space aims to partner with both large and small brands and companies from fashion and beauty but also tech firms, food and drink giants. It will also allow emerging brands to leverage the space as an entry point to the high street, taking advantage of customisable installations and prominent displays.

• The team behind the concept is already working on expansion plans, with additional London sites and a Paris store under consideration.

Why it matters: As retail faces growing competition from online shopping, the Future Stores concept brings a novel answer to a longstanding challenge: how to keep consumers engaged in physical spaces. With cutting-edge tech and immersive design, the store promises a shopping experience that combines entertainment and interactivity, bridging the gap between digital and physical. The concept also provides a launchpad for emerging brands, making high-street presence financially accessible and flexible without being tied into year-long leases. This new retail model could set a precedent for engaging and data-driven store design.