Jewellery, Outerwear, and Strategic Moves Drive Growth as Lunar New Year Approaches and LVMH Prepares to Announce Earnings
Burberry kicked off the year with some promising results, offering a glimmer of hope for the luxury sector amid lingering challenges. On Friday, the British house reported better-than-expected sales, driven by strong performance in its US business and outerwear category.
CEO Joshua Schulman, who took the helm in July, is already putting his stamp on the brand through a series of strategic changes under the “Burberry Forward” initiative. “Since launching Burberry Forward in November, we have moved at pace to advance our strategy to reignite brand desire, improve our performance, and drive long-term value creation,” Schulman stated, emphasizing that the transformation is still in its early stages. Analysts have responded positively to the moves, noting the potential for a more focused and revitalized brand.
The drivers behind Burberry’s recent success include its decision to lean into outerwear, one of the brand’s signature categories, and a less severe slowdown in China. However, it’s worth noting that holiday price cuts also played a role in boosting sales. Executives remain cautious, acknowledging that the challenges facing the luxury sector remain far from resolved.
Richemont followed suit with similarly surprising results earlier this month, reporting a 10 percent rise in fourth-quarter sales. The jewelry giant saw strong demand in the US and Europe, helping to offset smaller-than-expected declines in China. Though Richemont’s success is buoyed by its strength in jewelry, other luxury players, like LVMH, which rely heavily on handbags, continue to face steeper challenges in convincing consumers to spend on high-ticket items.
All eyes will now turn to LVMH as the sector bellwether prepares to release its earnings report on Jan. 28. With a packed Lunar New Year calendar in China and Paris Couture Week kicking off on Jan. 27, the coming weeks will set the tone for how the luxury sector enters 2025. And with rumors of further designer reshuffles, including speculation that Jonathan Anderson could take the reins at Dior, the luxury market promises no shortage of intrigue.
That said, the coming weeks offer reasons for optimism. Couture Week kicks off in Paris on Jan. 27, setting the stage for standout collections, while Lunar New Year celebrations begin on Jan. 29, bolstered by China’s decision to add an extra public holiday to boost spending. And with rumors swirling about Jonathan Anderson potentially taking the creative reins at Dior, the year ahead promises no shortage of excitement.
While challenges persist, the luxury sector continues to prove its resilience and capacity for reinvention. The question now is how the leading houses will seize the moment to navigate what lies ahead.
Warm Regards,
Kenneth Richard
Chief Impressionist
The Impression
