A special report published by The Economist detailed alleged discussions between fashion brands Prada and Versace about a potential merger. If accurate, this would be the latest in a long line of consolidations in the luxury industry over the past decade.
The report estimates that at least 33 notable acquisitions have been secured by three groups since 2000. Louis Vuitton Moët Hennessy, Kering, and Richemont accounted for 31 per cent of luxury goods sales in 2023, rising from 19 per cent in 2014.
“Many independent brands are now concluding that they cannot survive alone in an increasingly difficult market. A new wave of deals seems likely,” the report suggests.
“The luxury business is in the midst of a painful downturn. Weakening economic growth from America to China has led shoppers to spend less on designer frocks, bags and heels.”
The report added: “Such deals give luxury firms greater control over their supply chains at a time when these are under heightened scrutiny.”
The watch and jewellery industry has been subject to many notable mergers and acquisitions in recent years, including but not limited to LVMH and Tiffany & Co., Michael Hill International and Bevilles, and Rolex and Bucherer.
The report drew attention to a survey conducted by Vogue in January, which found that consumers are reducing discretionary spending on luxury items, including jewellery, because of a diminishing perception of value compared to cost.
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