LVMH and Louis Vuitton’s Strategies

LVMH (yeah, Louis Vuitton, Dior, Fendi, the whole gang) loves to flex their global reach, but €3.2 billion in unsold goods last year (Business of Fashion, March 2024) is a pretty big oops. CFO Jean-Jacques Guiony keeps insisting “brand equity” shields them from discounting, but the numbers say otherwise. Vuitton keeps monogram prices high in Europe, then quietly shuffles bags into weird “private sale” events elsewhere.

Kering? €1.5 billion in inventory, aggressive Gucci markdowns. Everyone’s watching to see if LVMH caves, but so far, they’re just slicing up markets—different products, different prices for Asia vs. the US. A Paris merchandiser told me stores are getting smaller deliveries to fake exclusivity. The big obsession now? Stopping grey market leaks. But with billions in leftovers, how do you even do that? No clue. Just more NDAs and crossed fingers.

Innovations and Future Trends in Luxury Fashion

Honestly, last week’s spreadsheet drama—columns everywhere, total mess—doesn’t compare to watching luxury brands hoard billions in unsold stock (LVMH: €3.2 billion by 2023, apparently). Product performance? Not what they hoped. Slapping a sale sticker isn’t fixing it. Suddenly everyone’s talking “smart inventory,” recycled fabrics, resale channels for old stock—half-hearted creativity trying to save margins. Will it work? I have my doubts.

Smart Inventory Management

You’d think luxury execs would’ve ditched the “just-in-case” warehouse hoarding ages ago, but nope—Kering’s sitting on a €1.5 billion mountain of stuff, and somehow everyone’s surprised when the numbers look terrible. Inventory bloat is like the industry’s dirty secret, but then, suddenly, everyone’s pretending they invented real-time supply chain software. Prada fiddled with scenario planning last quarter—did it work? Who knows. At this point, heuristic modeling and niche drops aren’t “innovation.” They’re survival.

Heard a guy at LVMH mutter something about “dynamic markdown loops” like it’s a normal thing people say. Is that even a real term? I guess it’s AI forecasting (crunching two years of stock data) mixed with panic and the embarrassment of unsold $4,000 handbags. Somewhere in Paris, there’s a spreadsheet with “unit views per drop” fighting “secondary market recovery.” Will we see automated recycling logistics next year? Doubtful, but I’ve been wrong before.

Shifts Toward Sustainability

Let’s not kid ourselves—nobody in the C-suite cared about upcycling until headlines started roasting them for unsold piles. I’ve literally seen a “recycled” silk shirt get a new button and a new price tag. But, apparently, the winds are shifting. Bain & Company (2024) says 53% of luxury shoppers want brand-certified resale. Not just recycled slogans or celebs with canvas totes. Actual resale.

Sustainability’s everywhere now—circular recycling partnerships, chain-of-custody audits, frantic attempts to call last season’s leftovers “collectible archives.” One creative director (no names, obviously) whined about upcycling because “fast fashion does it worse.” Still, upcycled cashmere and Frankenstein bags keep moving. The real problem? Retailers want everything fast, but real sustainability drags. Everyone’s looking for a magic fix, but nobody’s figured out how to cram it into a spreadsheet yet.

Effects on Consumers and the Wider Industry

Does anyone read the fine print on sale tags? Doubt it. Price drops at designer labels aren’t just about clearing racks. There’s real fallout—for loyal shoppers, for knockoff factories, for investors glued to their spreadsheets.

Changing Consumer Perceptions

So, last week, I’m in a boutique. Blazers that used to be $1,000 are suddenly $350. Sales associate leans in, says “core clients will be back next season anyway.” I’ve never seen so many regulars side-eyeing their phones, checking if they got ripped off. Who hasn’t felt burned by a markdown right after splurging?

Here’s the thing—designer price drops can nuke exclusivity. Deloitte (2024) says brand trust drops 12-15% during heavy discount cycles. Especially if you just paid full price for the same logo last quarter. Investors panic, too. One told me, “We dread luxury fire sales.” But nobody wants to admit fast fashion copies these markdowns in weeks, and suddenly everything feels cheap, right before the next earnings call.

Counterfeiters and Market Implications

Counterfeiters—no one knows where they hang out, but fakes show up the second a price drop hits. I asked an ex-LVMH supply chain guy (still salty): price swings, especially on hyped sneakers or logo bags, create instant chaos. Fakes pop up at the “new” price in hours, messing with bargain hunters and authenticators.

Market impact? Who can say. Fast fashion churns out lookalikes for pennies, calling it “trend responsiveness.” Some Italian investor at a trade show last winter grumbled that tanking prices “open the door for grey market chaos and embolden cheap replicators.” There’s basically no fix—someone buys a knockoff for 70% off, posts it, and legit buyers give up. Is this innovation? Or just the same screw-up, over and over.