As the pandemic begins to fade, luxury brands are trying to get back on the horse after COVID-19 caused sales to plummet. But rising prices and the growth of eCommerce, which experts say luxury fashion was slow to adopt, potentially leave the door open for newcomers.
For example, Mehdi Raad, founder and CEO of men’s fashion brand Maceoo, sees an opportunity to bring his nascent clothing lines to more consumers through a growing number of brick-and-mortar locations.
“The quality that we use, it’s the same quality of brands like LV (Louis Vuitton) or Christian Dior or many other brands, but it’s not really expensive compared to what the other brands sell,” Raad said. “It’s the same factory, the same quality, the same value.”
The goal, he said, is to be “the Apple of the fashion world,” applying the principles of a tech company to clothing. “We don’t want to just sell a garment, we want to sell a solution — for your posture, for the way you carry yourself and your confidence.”
Maceoo uses an algorithm based on a sample of 30 million people to determine the sizing of its clothes, adjusting the dimensions every year to come up with the best fit. “They’re minimal /changes, but we keep adjusting,” Raad said. “A lot of people have sleeve length problems, but we don’t have that problem.”
According to research by Bain & Co., the luxury industry shrank by approximately 20 percent in 2020 amid the COVID-19 pandemic, with personal luxury goods falling by 23 percent, the first time that market has contracted since 2009. A May report from Bain said sales of luxury merchandise could return to pre-pandemic levels later this year, an improvement over its previous forecast that luxury goods would not rebound until 2023.
To be sure, those projections may be slightly outdated, as the pandemic remains a fluctuating situation amid concerns about the Delta variant. PYMNTS surveys over the past several months have found that consumers have been pushing back their expectations for when life will return to whatever “normal” means now, with the anticipated “end” of the pandemic now stretching into the early months of 2022.
Raad said it’s been a struggle to get the Maceoo brand off the ground given the competitiveness of the fashion industry, and even now, with Louis Vuitton, Gucci and other luxury titans raising prices, “it’s not an easy road. … We’re trying to make an impact.”
The Physical Experience
Even as many luxury retailers move online — online retail sales are expected to account for 25 percent of total luxury purchases by 2025 — Raad said he’s focused on expanding Maceoo’s physical presence in places where “people go to be emotional and happy. … We want to catch people when they’re happy and make an impact on their life.”
Maceoo initially began as a wholesale brand sold by merchants around the world, such as Nordstrom, but Raad eventually realized he wanted to make the retailer “part of the American culture” — which meant opening brick-and-mortar locations. Maceoo recently opened a new location at the Aria Resort & Casino in Las Vegas and plans to open at least six new locations in Dallas, Atlanta and other metro areas in the coming year. The brand also has a presence in Miami; Tampa, Florida; and a flagship location in San Diego.
“I get to make our store based on an experience,” Raad said. “I just don’t want to be a store where I’m selling clothes, so everything that I loved when I was a kid, I brought into a store.” Each store is different based on the location, but some popular features include an ice cream shop, a barber, a custom fragrance bar and customized made-to-measure suits.
Experiential retail has been on the rise across the sector as brands and merchants find themselves looking for ways to bring consumers in-store. In June, French luxury goods giant LVMH opened a refurbished department store in Paris with over 215,000 square feet of retail space, 161,000 square feet of office space, a hotel, 12 restaurants and several other amenities. Lego also recently opened a new flagship store in New York City with “retailtainment” elements that the company intends to export to 100 other stores in the coming year.