The system that built luxury is breaking down. What comes next?

For decades, the biannual fashion calendar did something remarkable: it told the world what to want and when to want it. Twice a year, in the same cities, editors and buyers organized their attention around the runway, and conglomerates organized their finances around it accordingly. Retail networks, licensing structures, and brand hierarchies were all calibrated to this rhythm. The groups that could afford the biggest shows, the most coveted creative directors, and the widest retail footprints pulled further ahead. Fashion became the engine, the distribution mechanism, and the cultural currency of luxury, all at once. That system no longer works the way it once did. And the scramble to find growth beyond the runway — in hospitality, beauty, and other categories — is the most revealing story in luxury right now. When the calendar became a cage The problem with building a financial empire around fashion’s desire cycle is that the cycle is not yours to control. The aspirational buyer who had stretched to participate in luxury pulled back when economic conditions shifted. The creative director cycle accelerated to a pace where coherent brand identity became difficult to maintain. Social media collapsed the distance between runway and retail, removing the anticipation that had always been central to how fashion generated desire. And algorithmic culture changed who sits in the front row: the presence of tech billionaires at recent shows is not incidental — it reflects where cultural authority has migrated. The conglomerates that had scaled their operations to meet the peaks of the cycle found themselves holding infrastructure built for a world that had moved on. Too many stores. Too much product pushed through outlets because the full-price model could not absorb the volume. Luxury had not failed, but the industry had built itself so completely around fashion that it had lost the capacity to imagine itself otherwise. The ‘ReconKering’ plan Kering is the clearest example of what happens when that dependency reaches its limit. Between 2022 and 2025, group revenue fell from €20.35 billion ($23 billion) to €14.67 billion ($16.9 billion) — a drop of roughly €5.7 billion ($6.5 billion). Its recurring operating margin contracted from 27.5% to 11.1%. Gucci, which had represented more than 40% of group sales, lost desirability through years of inconsistent creative direction. The consumer base was weighted too heavily toward aspirational buyers, and the retail network had expanded beyond what the market could sustain. The group responded with two moves. First, Kering sold its beauty division — including House of Creed and beauty licenses for Gucci, Bottega Veneta, and Balenciaga — to L'Oréal in a deal worth €4 billion ($4.6 billion), raising cash and narrowing the group’s focus. Then, in September 2025, it appointed Luca de Meo, whose career was built at Renault, as CEO. In November 2025, de Meo circulated an internal memo dubbed “ReconKering,” setting an 18-month timeline to return all brands to growth, reduce the group’s reliance on Gucci, and shrink a retail network that had already closed 55 stores in the preceding year. His stated ambition: to make Kering “the undisputed challenger in luxury” within five to ten years. The appointment itself is worth pausing on. De Meo came from outside the industry entirely. So did Leena Nair, appointed to lead Chanel in 2022 after a career at Unilever. Two very different houses, two very different briefs. But they had the same instinct at the same moment: to look outside fashion for the people who will define what comes next. LVMH and the logic of hospitality LVMH’s move into Orient Express is not a story about hotels. It is a story about time. In June 2024, LVMH took a 50% stake in Accor’s Orient Express brand, covering future hotels, revived luxury train operations, and a sailing yacht project, with an option to acquire full control by 2027. The first Orient Express hotels opened in Rome and Venice in 2025; a sailing ship launched in 2026. The deal extends an existing hospitality portfolio that includes the Belmond collection, acquired for $2.6 billion in 2018, and the Cheval Blanc hotel brand. The logic is straightforward. Fashion sells a moment — a season, a drop, a show. Hospitality sells time. The guest who spends three nights somewhere does not consume a brand the way a client buys a bag. They inhabit it, and the relationship is deeper and harder to replicate. Research from Bain & Company describes a structural shift in how luxury consumers allocate spending, with experiential categories like hospitality, fine dining, and wellness among the fastest-growing in the sector. The risk is real, however. The qualities that made Aman Group a benchmark in ultra-luxury hospitality — radical scarcity, total environment, a refusal of scale — are precisely what conglomerate ownership tends to erode. The question the industry has not yet answered is whether luxury hospitality can survive absorption into a portfolio logic built around efficiency, margin targets, and brand extension. Orient Express has a storied name. Whether LVMH’s operational hand strengthens or dilutes what that name means in practice remains to be seen. The beauty question Beauty was supposed to be the protected vertical. The “lipstick effect” — the idea that consumers would trade down on clothes but not on small pleasures — was almost an industry law. Having a beauty division was a buffer. Building an entire business around beauty seemed like resilience by design. The category has proved its value. Victoria Beckham’s fashion label spent over a decade absorbing losses after its 2008 launch. By 2024, following an expansion into beauty, the group reported revenues of £112.7 million ($150 million), marking its fourth consecutive year of double-digit growth. If fashion gave the brand its identity, beauty gave it a business model. But the lipstick effect was always a cycle, and cycles end. Within beauty, fragrance is the category making the strongest case for itself right now. According to VML Intelligence’s The Future 100: 2025 report, 70% of Gen Z consumers say the fragrance they wear reflects their identity. On TikTok, the hashtag #PerfumeTok has accumulated 6.4 billion views, with users documenting personal scent combinations that mass production cannot replicate. A survey by Piper Sandler also finds that fragrance spending among teen boys rose 26% in 2024. Circana data further points to a GLP-1 effect: fragrance was among the beauty categories recording the strongest sales gains in the first half of 2025, driven in part by consumers using weight-loss medications. This group is spending more freely across beauty as confidence and self-image improve. Fragrance is growing precisely because it asks nothing of the calendar. It does not need a season. Even so, the broader beauty category is under pressure. Estée Lauder’s difficulties, including channel dependency, the collapse of travel retail, and the slowdown in prestige skincare, mirror what happened in fashion: margins compressed by infrastructure built for a cycle that turned. The proposed merger with Puig, which would have created a combined beauty group with revenues exceeding €17 billion, collapsed in May 2026 over pricing disagreements. Speaking at a Deutsche Bank conference in Paris, Estée Lauder president and CEO Stéphane de La Faverie confirmed the deal had fallen apart: “If we cannot reach the growth and the profitability at the right price point, then that is not an option.” Meanwhile, the company is cutting between 9,000 and 10,000 jobs under its “Beauty Reimagined” restructuring, targeting $1 billion to $1.2 billion in annual gross savings. The failed merger raises a question the industry has not fully answered: whether consolidation at this scale protects desire or simply manages it. What comes after the calendar? The luxury industry is not in a crisis of categories. Moving from fashion into beauty, or from beauty into hospitality, does not resolve the underlying question of where desire comes from and how to sustain it. It relocates the question. What the fashion calendar provided was not just a rhythm but a shared logic — a reason, accepted across the industry, for why people should want things and when. The conglomerates that built around that logic became extraordinarily powerful. They also became extraordinarily dependent on it. The moves into hospitality represent the most coherent attempt yet to find a replacement. Time, immersion, and memory are harder to commoditize than a seasonal collection. But the same organizational forces that strained fashion businesses — the pressure for scale, margin discipline, and portfolio returns — will follow these assets into their new categories. Whether the groups acquiring them have the organizational capacity to protect what made those assets valuable is the challenge. The brands that define the next chapter will not necessarily be the ones with the most assets or the widest portfolios. They will be the ones that can answer a harder question: not which category to move into next, but what kind of desire they are actually capable of building. That question has no boardroom answer. It has to be worked out in the product, the property, and the experience itself. Carlota Rodben is a luxury innovation specialist and author of “Beyond Luxury: The Promise of Emotion.” She previously led innovation at Chanel and now advises luxury brands on strategy and transformation. Carolina Soares is the Head of Content and Business Intelligence at Beyond Luxury Group. A former Googler with 11 years of experience in insights and trend analysis, she later transitioned into consulting for leading brands.

The system that built luxury is breaking down. What comes next?

How Bottega Veneta weaved China’s forever it bag

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The system that built luxury is breaking down. What comes next?

How Bottega Veneta weaved China’s forever it bag