- LVMH U.S. CEO Anish Melwani expressed relief over the decline of the ‘quiet luxury’ trend, arguing that while understated elegance has long existed within LVMH brands, the trend limited consumer expression and choice in the luxury space. As the industry shifts, European luxury brands now face a new challenge in the form of potential U.S. tariffs under President Trump’s proposed plan, which may lead to price hikes that consumers are expected to absorb.
The CEO heading up operations for designer empire LVMH in the U.S. said he’s glad to see the back of the ‘quiet luxury’ trend.
Driven by social media engagement, the ‘quiet luxury’ craze referred to a lifestyle and aesthetic focused on high-quality, timeless pieces largely free of branding.
Anish Melwani, the chairman and CEO of LVMH U.S., said understated brands have always existed within the LVMH portfolio, and even labels associated with status dressing go through cycles of dropping their monogram.
Melwani argued that the beauty of the luxury sector is that it offers an aspirational goal to any consumer, and that the ‘quiet luxury’ trend threatened to hamstring choice.
“I’ve always argued that luxury is connected to the underlying human emotion of accomplishment,” Melwani told the Milken Institute’s global conference on Tuesday.
Speaking on the panel moderated by Fortune’s Diane Brady, Melwani continued: “When you really get it right you provide a product that a consumer when they purchase it, they feel accomplished. That can manifest in different ways, but it’s fundamentally a feeling of accomplishment and it’s an inspiration.”
Customers of LVMH have many brands to choose from for that sense of accomplishment.
The stable of brands under the Paris-based LVMH umbrella includes Maisons such as Louis Vuitton, Dior, Fendi, Loewe and Givenchy, as well as jewelry and watch designers such as Tiffany & Co, Bvlgari and Tag Heuer.
The group is headed by tycoon Bernard Arnault, who is worth more than $147 billion according to Forbes.
“One of the geniuses of Mr Arnault is recognizing that consumers at this level are not monolithic in what makes them feel accomplished,” Melwani added. “Hopefully we’re past the term quiet luxury—that was getting pretty annoying—especially because it’s not new.
“If you ask Loro Piana, they would say, ‘We’ve been doing quiet luxury for 50 years.’ If you actually look at Fendi, Fendi’s had its periods where it’s been heavily logoed and monogrammed, and there’s been periods where less than 2% of the product line had any logo on it at all.”
The next headache for fashion: Trump tariffs
The idea of ‘quiet luxury’ began circulating most notably online, courtesy of the TV show ‘Succession‘.
In one scene, a character attached to a wealthy family is appalled by a guest’s “ludicrously capacious bag”.
The bag in question features a well-known print from a designer brand, and is also large enough to fit items such as a lunchbox or “subway shoes” inside—neither of which would be needed by an extremely well-off individual.
The scene exemplifies how an item proudly worn by one individual may be viewed as gauche by another.
“It’s impossible for any one brand to truly give that feeling of accomplishment to everyone,” chimed Melwani.
“By having a portfolio, and more importantly having Maisons be independent and autonomous, allows each Maison to use its own heritage to create that feeling of desirability, to create that feeling of accomplishment in the audience they’re speaking to and allow people to find what is it that’s going to make them have that feeling.”
But having successfully navigated consumer trends like ‘quiet luxury’ and subdued shoppers in major geographies like China, the luxury sector, most notably high fashion out of Europe, faces a new challenge.
This is, of course, President Trump’s tariff plan which includes a 20% hike on the EU following the conclusion of his 90-day pause.
Some 70% of the global luxury goods market is based out of Europe, and while this presents an outsized problem for the sector as a whole, it also gives the companies greater power.
“We would expect most European luxury companies to pass on the tariffs in the form of price increases to end consumers, who tend to be less sensitive to pricing and accustomed to regional price differentials,” UBS equity analyst Zuzanna Pusz wrote in a note earlier this year.
This story was originally featured on Fortune.com
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