- Traditionally, high-end fashion houses and luxury brands conceptualized new trends and styles, which were then copied by mainstream and mass-market retailers. However, in the past few years, luxury brands have increasingly been taking style inspiration from streetwear and skateboard trends and incorporating more sporty and casual urban aesthetics into their designs.
- Luxury brands are adapting to changing times and striving to attract and connect with a younger and more diverse customer base, grooming the next generation of loyal luxury customers.
- Multiple luxury fashion houses and brands such as Louis Vuitton have been partnering with streetwear brands and introducing sneaker- and streetwear-inspired products.
Introduction: Luxury Meets Streetwear
In this brief report, we discuss the evolving relationship and collaboration between the distinct worlds of luxury goods and urban streetwear. Traditionally, high-end fashion houses and luxury brands conceptualized new trends and styles, which were then copied by mainstream and mass-market retailers. However, in the past few years, luxury brands have increasingly been taking style inspiration from streetwear and skateboard trends, incorporating more sporty and casual urban aesthetics into their designs.
Luxury brands are adapting to changing times and striving to attract and connect with a younger and more diverse customer base, grooming the next generation of loyal luxury customers:
- Luxury goods labels are blending streetwear styles into their collections and increasingly featuring merchandise such as beanies, T-shirts, logo hoodies, track pants, fanny packs and sneakers.
- Luxury brands and retailers are establishing exclusive design and marketing collaborations with streetwear labels, hip-hop and rap recording artists and entertainers, and fashion and social media influencers.
- Several luxury goods labels have profited from hip-hop and streetwear-inspired collections over the past few seasons. Multiple luxury fashion houses, as well as the Louis Vuitton and Givenchy brands, have been partnering with streetwear brands and introducing sneaker- and streetwear-inspired products.
Luxury Growth Fueled by Millennial Spending
The personal luxury goods market increased by 5% year over year to reach a record high of €262 billion (US$304 billion) in 2017, according to Bain & Company. The majority of the market growth was driven by millennials and Gen Zers:
- Approximately 85% of market growth in 2017 was driven by millennials and Gen Zers, according to Bain.
- Reflecting the growth in casual high-end apparel, the global luxury T-shirt market alone is worth €2.5 billion (US$2.9 billion) and the rubber slide shoe market is worth half a billion euros, according to Federica Levato, a Bain partner quoted by the Associated Press.
- Numerous luxury goods brands, such as Gucci and Fendi, are prioritizing the millennial market.
Bain forecasts that personal luxury goods sales will grow by 4%–5% annually for the next few years.
Numerous high-end omnichannel and online pure play retailers, including Selfridges, Barneys, MyTheresa.com and Stylebop.com, have been carrying streetwear-inspired designs and styles:
- Iconic London luxury department store Selfridges partnered with hip-hop artist A$AP Rocky on a 10-day pop-up shop in the department store in September 2017. The shop featured merchandise designed by the hip-hop artist, including T-shirts and sweatshirts, and was a huge success, according to Selfridges’ management. A$AP Rocky is also a face of Dior Homme, the LVMH-owned Christian Dior brand.
- In October 2017, Barneys New York staged a two-day event in partnership with streetwear lifestyle website Highsnobiety that featured exclusive designer merchandise.
- Also in October 2017, Stylebop.com and Moncler partnered on a streetwear collaboration that sold out instantly.
Multiple luxury fashion houses, as well as the Louis Vuitton and Givenchy brands, have been partnering with streetwear brands and introducing sneaker- and streetwear-inspired products:
- Louis Vuitton partnered with the Supreme skateboard brand on a design collaboration that apparently generated €100 million (US$117 million) in sales. The collection, which was sold in pop-up stores in major cities worldwide in June 2017, included T-shirts, hoodies and bags emblazoned with Supreme’s white logo on bright red Louis Vuitton patterns. The event caused a buying frenzy, as the products were considered collector’s items that could be resold instantly for four or five times the original price. Following the collaboration, Supreme was acquired by prominent private equity firm The Carlyle Group at a valuation of US$1 billion.
- There has been a proliferation of high-end sneakers and running shoes designed by luxury goods brands such as Balenciaga, Gucci, Coach, Prada and Fendi. The latest luxury shoe craze is the sock sneaker, and labels such as Balenciaga, Marni, DKNY, Fendi and Rick Owens have all offered sock sneaker designs. These shoes have a minimal, stretchy knit upper attached to a sole, with no laces. The design was partially pioneered by sports apparel companies Adidas and Nike. According to fashion research firm Edited, since the first quarter of 2017, the number of sock-like sneakers offered by luxury brands has increased by 220%. The average price of last quarter’s new sock sneaker arrivals was US$410.
- Goyard, a French luxury goods maker famous for its monogrammed luggage, has become a favorite brand among a group of high-profile rap recording artists such as A$AP Rocky, Travis Scott, Big Sean and Kanye West.
- French luxury goods house Chanel will launch an Adidas Hu NMD shoe exclusively designed and customized by pop music artist Pharrell Williams. Williams was also featured in an advertising campaign for Chanel’s Gabrielle bag.
Even the fashion media and publishing world is moving toward the luxury-meets-streetwear trend. For example, Vogue, the high-end fashion bible, and Vice Media are collaborating on an editorial project that will run for 100 days and feature a new website across the two brands’ various platforms. A team of Vogue and Vice editors will produce content for the project, which is scheduled to launch in early 2018.
- The historically conservative luxury goods industry is striving to attract a more diverse and younger client base.
- Brands and retailers are partnering with streetwear labels in order to become or remain relevant among millennials and Gen Zers.
- We believe that luxury goods companies will increasingly need to innovate and keep up with millennial and Gen Z trends in order to capture and grow sales among the younger generations.