The fashion business is no joke. It's much more than selling a pretty outfit or an expensive handbag; it also involves staying up to date with the latest trends, following customer demand, analyzing market costs, being an innovator, and most importantly, finding ways to make a brand stand out from the rest.
It's no secret that the luxury market is experiencing a tough time, prompting many leading luxury fashion houses to do everything they can to bring their businesses back to life, hoping to exit this devastating slump successfully.
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Fashion is like survival of the fittest, many brands have tried to enter the luxury fashion world over the years, but only the strongest few make it past the trial period.
Gucci got its start by selling leather luggage, Hermés sold horse harnesses and saddles, and Fendi specialized in small leather goods.
Followed by multiple rejections, failed attempts, and tons of money lost to unsuccessful ideas, these brands had to endure it all to ultimately earn their spot in the highly coveted luxury market. However, one thing they all have in common is that they aren't afraid to take risks.
Prada makes space fashionable and NASA approves
Some companies focus their turnaround plans on changing their marketing strategies, others opt for a complete rebranding, and some choose to do partnerships and collaborations.
Although these strategies could each potentially revive a company, sometimes making the most unexpected turn can be the best way to propel it to a higher level.
The Prada Group is a leading Italian luxury group that owns some of the world's most prestigious brands, including Prada, Miu Miu, Church's Car Shoe, Marchesi 1824, and Luna Rossa.
This group is already known mainly for its high status in fashion here on Earth. However, with its latest partnership, it will expand its horizons and enter an unusual business it has never ventured into before.
Prada (PRDSF) announced it had teamed up with aerospace leader Axiom Space to create a spacesuit for astronauts to wear during the Artemis III lunar mission in 2026. This historical moment will mark humans' first return to the moon since 1972.
NASA is also stepping out of its comfort zone as this is the first-ever nontraditional partnership in its history.
“Our elite teams have redefined spacesuit development, establishing new pathways to innovative solutions and applying a state-of-the-art design approach for the AxEMU,” said Matt Ondler, Axiom Space President in Axiom's press release. “We have broken the mold. The Axiom Space-Prada partnership has set a new foundational model for cross-industry collaboration, further expanding what’s possible in commercial space.”
The Axiom Extravehicular Mobility unit spacesuit, also known as AxEMU, was unveiled on Wednesday during the International Astronautical Congress. The spacesuit is a one-size-fits-all masterpiece made from a white material that reflects heat and protects astronauts from extremely high temperatures and lunar dust; it also has an HD camera, 4G/LTE communications, and in-suit nutrition.
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Diesel partners with Rihanna's brand Savage x Fenty to make Gen Z shoppers happy
Diesel's partnership is not as outlandish as Prada's, but it's definitely a first for the brand.
Diesel is an Italian premium apparel company that markets itself as an alternative to luxury, which is why the brand has grown to be so popular among the Gen Z community despite its inception in 1978.
Diesel is owned by the international fashion and luxury group Only The Brave, commonly known as OTB. This group also owns other renowned brands, including Jil Sander, Maison Margiela, Marni, and Viktor&Rolf.
On Oct. 8, Diesel announced it joined forces with Rihanna's Savage x Fenty to create a lingerie and apparel capsule consisting of 34 unisex pieces. The best part is that they retail for far more affordable prices than Diesel is used to, ranging from $30 to $90.
This collaboration was created to target the Gen Z community, which comprises most of Diesel and Savage x Fenty's current target audience.
Although the brand has partnered with other renowned celebrities before, including Kylie Jenner, Beyoncé, and Nicki Minaj, to name a few, this will be the first time the brand has collaborated with another fashion brand.
The line is available for purchase now at all Diesel and Savage x Fenty physical stores and online shopping platforms, as well as through Nordstrom's website.
According to OTB's yearly earnings report for 2023, revenues increased by 10.2% for the group, with Diesel reporting overall growth of 13.1% and a sales increase of 13% compared to the previous year.
However, Diesel hasn't always been profitable. In March 2019, Diesel USA filed for Chapter 11 bankruptcy after reporting spiraling sales.
The company devised a strategy to get the brand back on track: closing underperforming stores, focusing on high-end denim, and targeting a wealthier clientele. Since then, Diesel has continued to be profitable by evolving with the trends.
Brunello Cucinelli defies the luxury slump — here's how
Multiple high-end fashion companies have suffered the worst of the luxury slump, reporting disappointing earnings that have forced them to slash outlooks and devise new strategies to return to positive numbers.
This luxury downturn has been attributed to the shaky state of the global economy, especially with Chinese consumers. These consumers have been luxury's top clients for years but are now responsible for much of the industry's pullback.
According to Brunello Cucinelli's earnings report for the first nine months of 2024, revenues were up by 12.4%, with an increase in the Americas by 17.6%, compared to the same time last year.
The Americas are a strong market for Brunello Cucinelli since the region saw the highest growth.
But one number caught analysts' eye: Brunello Cucinelli single-handedly defied the luxury slump and China's economic slowdown, which most luxury groups and fashion houses have struggled with for the last few months.
Unlike its strongest rivals, who have been reporting multiple losses, Brunello Cucinelli (BCUCF) saw an astonishing 12.2% increase in the Asia market and an 8% incline in Europe, making Asia the company's second most profitable region after the Americas.
Brunello Cucinelli forecasts growth of around 10% for 2024, which seems on track to achieve based on its past earnings and current performance. For 2025 and 2026, the company is also estimated to grow by approximately 10% and double the profits made in 2023 by 2030.
Unfortunately, other luxury groups' prospects are less bright. LVMH (LVMHF) reported declining revenues by 1% in its last reported earnings compared to the year prior, and Kering's (PPRUF) fell 11%.
Brunello Cucinelli's strategy, which continues to work flawlessly, focuses on targeting the higher-end consumer who's not as shy to spend a pretty penny and has more limited exposure to China than its rival companies.
Mulberry's majority owner refuses to let the brand go
Mulberry shareholders have found themselves in a tug-of-war over the luxury company as the strongest one refuses to let it go, but the weaker link persists in overtaking it.
Mulberry is a British luxury brand known for its leather goods, particularly women's bags, and It's also the largest manufacturer of this specialty in the UK.
Roger Saul founded the brand in 1971, but it's currently owned by majority shareholder Challice Limited, which owns 56.4%, and Frasers Group (SDIPF) , which owns 37%.
On Oct.13, it was announced that Challice Limited had rejected an acquisition offer from Frasers Group.
Although the company is reporting declining revenues by 4% in 2024 compared to the previous year, this is the second time that Frasers Group has made a bid for the Mulberry brand.
On Sept. 30, Frasers Group offered £83 million, or approximately $108.3 million, to acquire the entire brand, but Mulberry's board rejected the offer.
The board justified this rejection by stating that with Andrea Baldo's recent appointment as CEO and its new subscription for 10 million new ordinary shares, Mulberry has a strong potential to execute a turnaround; therefore, the offer doesn't properly match the company's projected value.
Additionally, Challice Limited had no interest in selling its shares, and Frasers Group couldn't proceed with its offer without the majority owner's shares.
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But Frasers Group quickly snapped back and argued that if the company continues to run the business the way it has, Mulberry will not survive for long, as it currently has no turnaround plan for immediate action.
Frasers Group refused to give up its fight and made another offer on Oct. 11, but this time to buy all of Challice Limited's shares for $14.4 million.
On Oct. 14, the Mulberry board responded that it was working with advisors to analyze the company's current and future financial state and would announce its findings when ready.
Frasers Group was given until Oct. 28 to make an offer with the intention to acquire Mulberry or announce that it would not be making an offer to buy the company at all.
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