The luxury industry is currently facing one of its most significant market slowdowns in recent years. Understanding why this slowdown is happening and strategically adapting to it isn't just essential—it's critical for long-term survival, profitability, and investor appeal.
In Episode 7 of the Money & Mimosas Podcast, we explore what's causing the current luxury slowdown, draw clear parallels with the 2008 financial crisis, and reveal actionable strategies for luxury founders to position their brands confidently in today's market.
What’s Causing the Current Luxury Slowdown?
The global luxury market experienced significant growth from 2019 to 2023, which was primarily fueled by aggressive price increases rather than genuine consumer demand. Brands mistakenly believed that price-driven growth reflected true market strength, but in reality, consumers were becoming increasingly fatigued with inflated prices that didn't match actual product value.
Several critical factors have contributed:
Geopolitical Instability: Ongoing global conflicts, trade tensions, and uncertainty—particularly in critical markets like the U.S. and China—have significantly weakened consumer confidence and decreased luxury spending.
Consumer Shift Towards Sustainability and Transparency: Luxury consumers now prioritize ethical sourcing, sustainability, and transparency. Brands unable or unwilling to adapt authentically to these expectations are rapidly losing relevance and customer loyalty.
Supply Chain Disruptions: Inflation-driven production delays and mismanaged inventory levels have caused brands to struggle significantly. Many brands have excess inventory or critical shortages, impacting profitability and consumer experience.
Who’s Thriving and Who’s Struggling?
Brands Thriving Despite the Slowdown:
Hermès continues to thrive due to a strict adherence to limited production, tightly controlled distribution, and commitment to heritage-driven exclusivity.
Patagonia has effectively leveraged its sustainability credentials which deeply resonates with the increasing consumer demand for ethical luxury.
The Row capitalized on the "quiet luxury" movement, appealing directly to consumers seeking discreet, understated yet high-quality luxury goods.
Brands Struggling During the Slowdown:
Logo-Dependent Brands: Companies heavily reliant on conspicuous branding and visibility are losing market share as consumers increasingly opt for subtle luxury and value-driven purchases.
Brands with Aggressive Expansion Strategies: Luxury brands that expanded too quickly without strategic demand alignment now face significant excess inventory and financial strain.
Discount-Dependent Brands: Brands consistently resorting to heavy discounts have diminished their perceived exclusivity and now struggle to restore premium pricing and brand equity.
The Illusion of Market Strength: Hollow vs. Embodied Luxury
From 2019 to 2023, many luxury brands artificially inflated their prices, creating the illusion of robust market growth. However, beneath the surface was weak demand, consumer fatigue, and a lack of genuine connection to brand ethos or cultural identity. This created what we call "Hollow Luxury"— luxury that appears valuable but lacks substance and authenticity.
According to our Power Glam Philosophy, embodied luxury feels luxurious at every level, deeply rooted in authentic cultural identity, true craftsmanship, and intrinsic value. This philosophy starkly contrasts hollow luxury brands that rely on external validation, fleeting trends, and superficial aesthetics.
As we’ll discuss further in Episode 8, the future of luxury depends on your ability to move from hollow to embodied luxury—building a genuine, culturally authentic, and financially resilient brand.
Lessons from 2008 to Apply Now:
The parallels between today's market slowdown and the 2008 crisis are clear. Here's what luxury founders should apply from past experiences to navigate current market uncertainty:
1. Financial Flexibility:
Build adaptable financial forecasts to pivot swiftly as market conditions change.
Implement our 3/2/1 Financial Foundation Formula:
3 financial priorities (profitability, cash flow management, and strategic investment)
2 high-margin, heritage-aligned revenue streams
1 weekly money date to review financials
2. Prioritize Profitability and Exclusivity:
Avoid chasing every trend or market expansion. Instead, focus your investments on high-margin core products that protect your brand’s integrity, exclusivity, and investor appeal.
3. Cultural Authenticity:
Leverage authentic cultural narratives, especially those emerging from African and Caribbean luxury markets.
Position your heritage and cultural identity as a powerful competitive advantage, not a niche afterthought.
Why Investors Value Your Adaptability & Strategic Clarity
Investors prioritize brands that demonstrate clear financial strategy, strong alignment with market demands, and genuine exclusivity and profitability. By refining your business strategy, you position your brand as an attractive investment opportunity, ready for sustainable, long-term growth.
Ready to dive deeper? Explore our 1-hour masterclasses.
Explore Our Masterclasses:
✨ Passion Purpose Profit – Align creativity with financial clarity.
✨ Raising Capital – Learn how to refine your financials for economic resiliency.
✨ Scaling Sustainably & Internationally – Expand with intention, not compromise.
Listen to the Full Episode Now:
🎙 Episode 7: The Current Luxury Slowdown—What's Happening and How to Adapt
About Money & Mimosas: Since 2014, Money & Mimosas has helped founders secure over $180 million in capital. Our proven frameworks empower luxury businesses to align their purpose with profitability, attract values-aligned investors, and scale elegantly—without compromising their brand's soul.