“Customers are starting to ask questions about the meaning of this industry,” worries the boss of Chanel watchmaking and jewelry, who fears a form of “luxury fatigue.”
The years 2025 and 2026 will be “complicated” for the luxury sector, believes the boss of Chanel’s watch and jewelry division in an interview with the Swiss daily Timewarning that the “trivialization” luxury contributes to the crisis the sector is currently going through. After three years of very strong growth, luxury is now shaken by a drop in demand in China, a key market where consumption is suffering from the slowdown in the economy, the real estate crisis and youth unemployment.
However, according to Frédéric Grangié, president of Chanel’s watchmaking and jewelry division, the current crisis in luxury can be explained by the geopolitical and economic context and by the significant presence of certain brands in China. But also by “a third factor that is much more worrying and which explains why this crisis will potentially last longer” which is a form of “luxury fatigue”he explains in the columns of the Swiss daily. “This feeling affects mature markets, where customers are starting to ask questions about the meaning of this industry”he observes. “The first two factors are cyclical” et “this will pass”according to him. But “this crisis will affect our activity more deeply” car “customers are tired of being bludgeoned by luxury”he judges.
For the third quarter, the world number one in the sector, the French giant LVMH reported a fall of 4.4% in its sales while those of competitor Kering (owner in particular of Gucci) fell by 15%. According to Frédéric Grangié, “the years 2025 and 2026 are going to be complicated” but the house founded in 1910 by Gabrielle Chanel – which is not listed on the stock exchange and discloses very few figures on its activity – can afford “to look at crises with a completely different prism”.
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First of all because the group had chosen to develop “in stages” in China, and today there is a presence “smaller” than its competitors with only «16 boutiques». But also because the company is “independent” et “family over several generations”which allows him to concentrate on developments at «long terme»he defends. According to him, episodes of crisis in the luxury sector risk becoming “more frequent”which requires placing emphasis on “long-term choices”.
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