Fashion in America

«The Fashion and luxury world in the US has already recovered and got back to its pre-Covid-19 levels, and we expect the American luxury market to reach 70 billion euros by 2022». Guia Ricci and Lucia Casagranda, partner and consultant respectively for Bcg - Boston consulting group, told MFF about the moment the fashion world is going through in the US market in the current economic context. The American Gdp has, in fact, decreased for two consecutives quarters in the first half-year. This trend is commonly known as recession. For this reason, investors are wondering whether the US economy is actually receding. «With constant employment rate increase, an unemployment rate at historic lows and solid consumption growth, it does not seem like a recession that most people would remember,» Diana Wagner, Manager of Stock Portfolio for Capital group, explained.

What is the conclusion then? The truth is that everything depends on the interlocutor, that is, the social class of the target consumer, and obviously the sector too. «With food, energy and housing prices increasing more rapidly than wages, the average American consumer would probably say yes,» Wagner stated. Americans bear the weight of an inflation over 9%, an increase of energy costs and a drop in real estate sales. And everyone is affected by these data. The job market is the only department that does not register a recession at this moment. «However, these numbers reflect an imbalance between demand and offer in an economy that has not yet fully recovered from the Covid-19 pandemic».

Among the various segments, however, fashion seems to be on the upswing. «The fashion & luxury sector in the Us is going through a momentum. As the focus on Chinese consumers wanes and a potential recession is also being discussed in Europe, the Us is proving to be a thriving market, with more and more luxury brands betting on it, for example by opening new high-profile stores and organizing high-end events,» the Bcg experts clarified, adding that, in general, the performance of luxury brands in the Us market during both Covid-19 and the recent period of uncertainty has shown great resilience.

Consumer spending has been strong and growing in several regions, confirmed by the opening of new stores in cities such as Detroit by iconic brands, and the participation of European brands in New York fashion week. Ricci and Casagranda estimate that the Us will be less impacted by a potential recession than European countries, considering a strong dollar and greater physical distance from the area of the Russian-Ukrainian conflict, as well as the macroeconomic consequences this entails. The US economy has performed very well, even in times of inflation, continuing to create jobs, despite the Federal reserve's measures to raise interest rates.

In addition, the US has shown a resilient market even during the pandemic, both in general and within the fashion & luxury sector, recovering faster than expected for both the US market and Europe and established Asian markets such as Japan. «A major driver of growth is the casualization of style, whereby consumers have increasingly invested in sneakers and casual ready-to-wear garments, as well as other luxury categories such as handbags, watches and jewelry,» the experts stated. «According to our latest estimates, the Us luxury market will grow again and at a faster pace than most luxury markets over the next four years, including Europe and Japan,» they concluded, looking ahead. (All rights reserved)