The luxury sector's Gen Z problem
STORY: Gen Z was expected to account for a fifth of spending on luxury goods globally by 2025
But inflation is hitting discretionary incomes of young consumers hard, especially in North America and Europe
Brands such as Burberry have noted lower sales in sneakers and slides, which are thought to be entry-level luxury products
Executives are troubled in particular by a hit to young Chinese shoppers
That market has younger high-end consumers than the global average and is a driver of growth in the sector
Source: Chinese government
But recent data shows the unemployment rate for those aged 16 to 24 is nearing 20%
Source: Oliver Wyman study
Some luxury brands are significantly lowering their sales expectations for China
Some brands are focusing on established customers and embracing the metaverse
Still, some firms like LVMH and Kering are proving resilient due to spending by their wealthiest clients