Chanel, Armani, Tiffany’s: What’s killing ‘big logo’ luxury brands?

Every Saturday for the past eight years, husband-and-wife duo Lamme and Jennie Sathalet have set up their second-hand designer clothing stall at Sydney’s Glebe Markets.

Three years ago, they began adding handbags to the mix. “We started with just one rack,” Lamme said.

Now, third-party authenticated handbags have a prized place in the centre of their busy stall, where they can sell more than 20 vintage Coach or Louis Vuitton bags from $200 to upwards of $1000 on a single weekend.

Jennie and Lamme Sathelet, owners of 21s Vintage, a second-hand clothing and bag stall in Glebe Markets.Credit: Dean Sewell

“It’s getting more and more popular,” Lamme said. Some teenage girls come with their parents, who buy them their first designer bag. “If they have three kids, they buy for three.”

The Sathalets’ busy stall is a stark departure from what’s happening at the big end of town. Some traditional “big logo” luxury brands are battling declining profits and popularity among Australian shoppers who are making fewer in-store purchases and favouring more affordable options at resellers.

Fashion houses Chanel, Tiffany & Co and Giorgio Armani recorded declines among their Australian sales and profits in 2024, while Hermes and Prada have found ways to sharpen their competitive edge, according to recent financial reports filed to the corporate regulator.

The global luxury market is slowing down, and Australia is no exception.Credit: Various

Australia is no exception to global trends affecting a fall in the luxury market as it experiences its toughest slowdown since the global financial crisis, says the director of RetailOasis consultancy Trent Rigby.

Growth in the global luxury market in the years ahead is expected to slow to 1-3 per cent, from 5 per cent between 2019 and 2023, when luxury giants’ profits tripled, a 2025 McKinsey report has found.

Gennaro Autore, founder of global luxury retail advisory Graaf Group.Credit: Oscar Colman

“While the ultrarich – think the [top] 1 per cent – remain largely insulated, those middle-income aspirational shoppers, once the engine of growth to the luxury category, are tightening their wallets,” Rigby said. “Mainstream luxury heritage brands are suffering from creative stagnation.”

The rise of “quiet luxury” has also shifted spending away from ostentatious labels and towards more subtle displays of wealth as customers become more careful about where and how they splash their cash.

“It’s not like you need a big logo or brand,” said luxury retail adviser and Graaf Group founder Gennaro Autore.

“A lot of people are moving from that direction to quiet luxury, simple things where quality and style overtake the approach of wanting to appear. This is happening in Europe, it’s happening worldwide.”

Chanel’s Australian sales fell 16 per cent to $499.7 million and its profits slumped 87 per cent to $6.7 million in the 2024 calendar year, financial reports filed to ASIC show.

The iconic French luxury fashion house, founded in 1910, has underperformed competitors since aggressive price rises in recent years backfired amid perceptions of declining quality, Rigby said.

“We recognise that the luxury sector is experiencing fluctuations,” a Chanel spokesperson said, “and the macroeconomic and geopolitical volatility is unquestionably challenging for business.

A model walks the runway during the Chanel Haute Couture Spring/Summer 2024 show as part of Paris Fashion Week on January 23, 2024 in Paris, France.Credit: Getty Images

“Our philosophy has always been to act and grow with a long-term view, and we will continue to invest significantly in the future.”

New York-headquartered jewellery giant Tiffany & Co’s revenue in Australia fell 6.2 per cent, with profits nearly halving to $3.6 million.

“Tiffany has generally struggled to attract younger customers, who are increasingly opting for less expensive brands or alternative jewellery styles,” Rigby said. “Tiffany went really hard after younger customers a few years ago, but it really backfired as people said it was trying too hard.”

Chanel, Tiffany & Co and Italian fashion house Giorgio Armani – which is now unprofitable in Australia, having swung to a $33,600 loss after profits of $682,000 a year earlier – have been slow to bring their digital channels up to speed and are struggling to connect with younger consumers as a result, the retail consultant said.

Sales for the Paris-headquartered Hermes grew 21 per cent, but this did not translate into higher profits. Prada, which also owns the brand Miu Miu, drove a 6.9 per cent lift in sales and a 22.2 per cent rise in profits to $3.7 million.

The stronger performances from Hermes and Prada have arisen for different reasons; Prada’s numbers have been driven by Miu Miu, which Rigby described as a “real leader in the luxury space” for its appeal to Gen Z.

Gigi Hadid in Miu Miu at the Met Gala this year.Credit: Getty Images

“While Miu Miu’s product may not play into the exclusivity of wealthier clientele, they cater to younger consumers through experimentation, stylistic innovation and boldness – some of their runway looks and shows are pretty provocative,” Rigby said. “It focuses less on past icons; rather, they innovate for the future.”

Meanwhile, Hermes – maker of the elusive Birkin bag, which costs from $13,000 into the millions, with hopeful buyers required to establish a “purchase history” before they are considered – has turned exclusivity into a “whole other level”.

“It’s positioned itself extremely well to that higher-end customer,” Rigby said.

Scarcity of supply has helped drive some of the luxury market’s highest resale values and the retention of highprofit margins, which Rigby estimates for Hermes is double that of Prada’s.

The Himalaya Niloticus crocodile diamond Birkin 30, with 18k white gold and diamond hardware, fetched a record price at a Sotheby’s auction: 352,800 euros ($631,540) in Paris.Credit: Christie’s

“For most luxury brands, the customer is trained and aspires to buying one item. The trend with Hermes is [that] you aspire to buy the whole wardrobe.”

Evolution of luxury

Consumers are embracing a broader definition of luxury, outside the traditional categories of jewellery, watches and bags. They now consider premium beauty, which has helped local retailers such as Mecca; homewares and furniture; fragrances; and travel accessories, with luggage brands such as July experiencing significant growth.

Gen Z consumers are also entering the luxury category in ways that deviate from their older counterparts, with a particular preference for thrifting from secondhand sellers and online marketplaces. The pre-owned luxury market has boomed as it combines the demand for vintage and collectors’ items with the growing preference for more sustainable ways of consumption.

Treetacha Treepechsamakoon, who has collected nearly a dozen high-end handbags, prefers buying vintage items from resellers than newly released stock. “The new ones, I’m not impressed [by] because I feel like they have, lately, bad quality,” she said.

Treetacha Treepechsamakoon visits Glebe Markets twice a month to check out what vintage designer gems she can find.Credit: Dean Sewell

“[Customers] want to find the best value ... You don’t have to care about the [brand] name sometimes, maybe it can be hidden somewhere, but you can feel the quality.”

Vestiaire Collective, Vinted and Resellify are three online platforms with higher turnover thanks to the demand for pre-loved goods, said Graaf Group’s Autore. Companies such as Cettire have also undercut luxury giants through relationships with European distributors and retailers looking to offload excess stock that Cettire then sells directly to customers.

“There’s a bit of bitterness in terms of finding an item that [customers] have purchased the day before, offered on one of these platforms at as much as half of that price that they paid,” Autore said.

Younger consumers’ enthusiasm for dupes are also challenging luxury’s claim on exclusivity, Rigby said.

“From our research, they prefer edgier, social-media native labels over traditional heritage icons,” he said.

“They’re really embracing ‘lipstick moment’ splurges at the moment. It’s currently all about small luxuries, even outside of the beauty category; look at Labubus, Yo-Chi, concerts, et cetera.”

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