The estimated reading time for this post is 363 seconds
I started thinking about the latest developments in luxe streetwear after leafing through the FT to see the following advert marking the proposed purchase of Stone Island by Moncler. (Stone Island had already sold its parent brand CP Company and intellectual property back in 2015 to Hong Kong manufacturer Tristate Holdings Limited).
It follows hot on the heels of Supreme being purchased by VF Corporation.
From the luxury market point of view their customer base over the past 30 years has done three things:
- The customers have become younger. Luxury shopping is no longer dominated by dowager heiresses in Europe and the New World. Now the man purchasers of luxury are much younger and are second generation money. They’ve had money in their families for somewhere between 20 and 50 years. They are the scions of political leaders or business leaders. Money has allowed them access to the world’s best education institutions. They might have had etiquette classes, but they’re no more than two generations away from having known deprivation.
- The customers are in a different place. Globalisation massively changed their customer base. First it was the Japanese middle classes who picked up a taste for luxury brands whilst travelling abroad. As the Asian tigers took off, you started to see luxury purchases being made in Singapore, Hong Kong, Korea and China. When the Soviet Union fell luxury consumption also sprang up in the East as some people had money to burn. Much of the luxury retail in traditional shopping areas like London and Paris are derived from tourists rather than local purchasers. A change in the luxury tax regime in China has seen more domestic luxury consumption. China is now looking to build Hainan into a domestic luxury shopping and holiday resort.
- Luxury serves a different purpose. Luxury has traditionally reflected status. Goods of a superior nature that the ‘wrong sort’ of people would never be able to afford. Luxury then became a symbol that you’d made it. In Asian markets, particularly China, luxury became a tool. People gifted luxury products to make relationships work better. It also signified that you are the kind of successful business person that partners could trust. You started to see factory managers with Gucci man bags and premium golfwear to signal their success. Then when the scions of these business people and figures in authority were adults, luxury has become about premium self expression. It has been mixed up with streetwear in a manner reminiscent of the Buffalo Collective.
So from the perspective of the luxury industry, they are feeling a massive amount of disruption going on. And that’s even before you get into digital transformation.
It is this transformation of customer segments, geographies and use cases which is forcing the luxury industry to ‘go casual’ fit in a luxe streetwear space.
The perspective from the streetwear side of the table is more exemplified by my favourite Thai English phrase: same-same, but different. Their market hasn’t been disrupted in the same way as luxury. It has got a lot bigger.
The internet has meant that streetwear culture has become global and trends catch on much faster. It has become more popular around the world and there are thriving secondary markets like StockX and GOAT.
Streetwear has pushed into luxury pricing models led by Japanese brands; who brought a higher attention to detail to the market. It has continued the trend of innovation that companies like Stone Island started. This is best exemplified now by the likes of German label ACRONYM.
From a design perspective right back to the origins of what we know as streetwear by the likes Shawn Stüssy or Harlem’s Dapper Dan co-opted luxury product language. In Dapper Dan’s case using fake fabrics and labels to make clothing. His customer base of African Americans from poor neighbourhoods whether early hip hop stars or criminals didn’t see the items that they wanted in boutiques. And even if they did, many of them didn’t feel welcome in the uptown boutiques.
From Stüssy’s point of view it was the pop art ethos and DIY fanzine culture that infused his work. The reversed double S in a circle is an obvious reference to Chanel’s design language.
Over the space of a decade Supreme went from being sued for aping Louis Vuitton’s design language to collaborating with them. Dapper Dan has recently been collaborating with Gucci.
Does luxe streetwear lack ambition?
Highsnobriety asked the question five years ago and concluded that no streetwear company had shown the serious ambition to become an umbrella brand the size of LVMH or Kering. Skiwear, skate wear and snow sports equipment are sectors that are a tenth of the size of streetwear. Yet they have seen consolidation into larger holding groups. These groups provided the financial cushion for these companies through the 2008 financial crisis.
The closest that luxe streetwear has got to the holding group is likely to be New Guards Group. New Guards Group describes itself as a contemporary luxury fashion holding group. It owns Off-White, Opening Ceremony and Palm Angels. This in turn was bought out by luxury e-tailer Farfetch. Farfetch in turn has Richemont and Alibaba as minority shareholders.
Surfwear is also described as having a generational strain. Dads keep wearing the gear. Kids no longer want to wear it. Given the commonality with the streetwear lifestyle. You could see similar things happening at even the largest of streetwear brands eventually. Some of the people wearing Supreme in the mid 1990s are still wearing it. The original international Stüssy Tribe are still going strong, repping streetwear in their 50s and 60s.
Luxe streetwear brand A Bathing Ape has definitely seen better days, by the time Nigo sold the business to Hong Kong I.T. Group. The transitory nature of streetwear brands is littered with names that were formerly prominent like XLarge (that came back) or 90s icon Massimo.
Stone Island and luxe streetwear
Moncler get a technically proficient firm in Stone Island. It was built on a foundation of experimenting with materials. It is the only company able to garment dye polyester fabric for lightweight applications like summer jackets.
The brand is widely respected and has collaborated with other innovators like Nike. It has been worn by Drake regularly that opened the brand up to hip hop fans. This has helped the brand widen its association beyond football hooligans and scally culture.
More luxury related content here.
Moncler to buy Stone Island in deal that values rival at €1.15bn | Financial Times
VF snaps up streetwear line Supreme in $2bn deal | Financial Times
Luxury brands set sights on Chinese tourists in Hainan as extended duty-free quotas and pandemic-free shopping attract travellers | South China Morning Post
Dapper Dan’s collaboration with Gucci – focused on ‘hip hop style ready to wear and accessories featuring the GG logo
Everything we know about the Supreme x Louis Vuitton collection | High Snobriety
The umbrella brand: is streetwear ready for corporate takeover? | Highsnobriety
Billabong’s demise is emblematic of a wider crisis in the surfwear industry | Guardian
Silk or Synthetic | Financial Times