Fashion shows by leading brands in Milan and Paris hide troubling issues for luxury executives. A slowdown in growth is worsened by the ongoing conflict in the Middle East, causing inflation to limit shopper budgets while interest in high-end products declines. Shares in Kering, the owner of Gucci, have fallen since CEO Luca de Meo’s appointment, and LVMH has dropped 37% in value since the beginning of 2026.
Luxury brands now face pressure to attract customers with fresh designs and justify the high costs of runway shows, which can reach €10 million. Research shows that middle-class consumers, once significant buyers of luxury items, are cutting back on spending, leading to more competition for affluent customers. According to Deloitte, brands are split, with less than half experiencing growth while others struggle.
Brands must choose whether to invest in innovation and customer experience or lower prices, which would reduce profit margins. Prada recently updated its flagship store in Milan targeting high spenders. However, rising prices have made even wealthy clients more cautious about value for money, complicating brand strategies.
Industry experts warn about changing consumer preferences, with a growing focus on wellness and experiences over luxury goods. Major fashion houses like Gucci and Armani will showcase new collections soon, while Chanel’s latest designs have been well received and will be presented later in October.
With information from Reuters
