Utilising the “lipstick effect”, can the power of perfumes and the blissful beauty industry overcome a slump in fashion sales?March 2024 sees the fashion industry enter a new precarious state. With a slew of longstanding creative directors stepping down, an impending economic downturn and sales slumps forcing brands to diversify, it appears as though the battle for profits comes down to the beauty industry.
If one recalls, it was Tom Ford that revolutionised the Gucci brand during his tenure from 1994 to 2004 with fragrances playing a key part of Gucci’s expansion strategy. Gucci Envy, Gucci Rush and Gucci Pour Homme contributed to the brand’s success in the perfume market but it was also his salacious campaigns that caused a controversy.
LUXUO previously discussed how luxury brands were leveraging on the growth of Southeast Asian countriesAs of 2023, LVMH’s Perfumes & Cosmetic sector is valued at USD 8,948 million with fragrance extensions of fashion houses including Stella by Stella McCartney, Parfums Christian Dior, Givenchy Parfums, Loewe Perfumes, Kenzo Parfums and most recently Celine Beauté. Large conglomerates understand the value of the beauty and fragrance industry.
Luxury Powerhouses: Kering Buys 30 Percent of Valentino, LVMH Pays US $166 Million To Sponsor The Paris 2024 Summer OlympicsOnce again LVMH finds itself squaring up against Kering as Celine Beauté was announced earlier this month as the extension to the French luxury label under the helm of creative director Hedi Slimane.
So why are fashion houses venturing into the beauty industry? First off, beauty allows for brand extension. By venturing into beauty and perfumes, fashion houses can extend their brand and offer a more comprehensive lifestyle experience to their customers. Beauty and fragrances allow fashion houses to reach a broader audience and engage with consumers who may not purchase their clothing or accessories. This is how the aforementioned “lipstick effect” strategy by LVMH comes into play.
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