2025: The Abyss of Luxury Fashion Between Finance, Creativity, and New Global Routes
The fashion world continues to suffer a deep and prolonged luxury crisis, with no signs of easing. Negative signals are mounting daily, painting a bleak picture of an industry struggling to regain both economic and creative stability
2025 promises to be an especially challenging year, often dubbed by experts as “the black year of fashion and design,” due to the multiple obstacles luxury houses and brands face.
This crisis is not confined to a single region or fashion segment; it involves the entire ecosystem—from major luxury groups to small artisan workshops—threatening the traditional Italian and international supply chain. The combination of geopolitical tensions, shifting consumer behaviors, and rising global competition creates a complex and volatile environment, casting doubt on the sector’s very future.
Global Crisis and Outlook for 2025
After 2024, marked by a slowdown in the Chinese market initially blamed as the main cause for the fashion sector’s stumble, the situation quickly deteriorated.
Despite initial optimism from the US market’s strong performance, political tensions linked to Donald Trump’s election and ensuing trade wars with tariffs hit luxury and design brands hard. These factors worsened the crisis, creating unstable conditions unfavorable to investments.
Today, fashion stands at a crossroads: finance and creativity—two fundamental pillars of the industry—seem to be running on parallel tracks destined not to meet without a radical change in direction.
In this context, upcoming fashion weeks carry critical importance, but signals are mixed, with rapid turnover among creative directors and uncertainty reflected both on runways and in financial results.
Anticipated Debuts and Creative Director Turnover
The creative sector is at the heart of a real earthquake, with numerous debuts and leadership changes radically transforming international fashion.
The phenomenon of turnover in key positions has become constant—almost a reaction to financial pressures that govern brands more than creative freedom. This has resulted in a landscape where artistic director appointments are driven more by economic logic than by long-term stylistic vision.
In the coming months, the fashion calendar will see a wave of debuts, with notable names preparing to take the stage.
- Milan Fashion Week September 2025: Bottega Veneta – Louise Trotter; Gucci – Demna; Versace – Dario Vitale; Jean Paul Gaultier – Duran; Loewe – Jack McCollough and Lazaro Hernandez; Jil Sander – Simone Bellotti
- June 2025, Paris Fashion Week: Dior – Jonathan Anderson
- July 2025, Paris Fashion Week: Maison Margiela – Glenn Martens; Celine – Michael Rider
- September-October 2025, Paris Fashion Week: Chanel – Matthieu Blazy; Mugler – Miguel Castro Freitas
Negative Quarterly Results and Employment Crisis
The economic aspect confirms the crisis’s severity, with increasingly disappointing quarterly results. Losses go beyond financial statements, dramatically affecting the social and employment fabric of the sector. Artisans—key figures in Italian and international fashion tradition—are among the first to feel the impact.
Many companies have already announced layoffs and factory closures, risking the loss of historic skills that are difficult to recover. Job cuts and employment precariousness threaten not only families but the entire production system. Government interventions and solidarity contracts offer only temporary relief, emphasizing the urgent need to rethink the production model and industrial policies that protect human capital.
Bally Closes Historic Tuscan Factory
One of the most striking recent news is the closure of Bally’s historic factory in Lastra a Signa, near Florence. After months of unsuccessful union negotiations, 28 workers were laid off following the company’s decision to shut down the production site. Once the beating heart of Tuscan luxury manufacturing, this plant had already seen a drastic reduction from 55 to 28 employees.
Leadership changes—with new CEO Ennio Fontana replacing Simone Bellotti (now at Jil Sander)—failed to reverse the trend.
Bally’s closure is an open wound for the Italian luxury supply chain, highlighting that even prestigious brands are not immune to production and employment crises.
Burberry Lays Off 1,700 Employees: Crisis in British Luxury
The crisis spares no major player, as seen with Burberry in London. The British brand announced 1,700 layoffs, a drastic measure reflecting financial and strategic difficulties. This reduction accompanies the cancellation of men’s shows scheduled for June 2025, signaling a cutback in promotional and creative activities.
Burberry reported a 17% revenue decline, with forecasted losses up to €90 million over the next two years. New CEO Joshua Schulman faces a tough restructuring that could redefine the brand’s future amid a highly competitive global luxury market.
Kering and Gucci: A Difficult Break to Overcome
Gucci, Kering’s flagship brand, is navigating a turbulent phase marked by sharp sales declines and a traumatic creative leadership change. The departure of Alessandro Michele—beloved innovator—left a void hard to fill.
Successor Sabato de Sarno failed to reverse the downward trend; Demna’s arrival created new divisions among fans and insiders. This shift led to a 25% sales drop, raising questions about Kering’s strategic choices and its ability to sustain one of its most valuable assets.
The situation highlights the fragile balance between creativity and financial management in this demanding industry.
Luxury Crisis: LVMH and Trump’s Tariff Challenge
LVMH, led by Bernard Arnault, faces a double challenge: US-imposed tariffs and a decline in stock value and Arnault’s personal fortune. The trade war initiated under Trump hit exports and investments, impacting group brands like Louis Vuitton, its flagship.
Arnault’s net worth dropped by $9 billion, and LVMH stock shows volatile trends reflecting global luxury market uncertainty. Despite this, LVMH remains a sector benchmark, though its vulnerability to external shocks is clear.
Prada Acquires Versace: Positive News for Italian Fashion
Amid global difficulties, Prada’s acquisition of Versace stands out as a rare positive for Italian fashion. This move strengthens Prada’s leadership in Made in Italy luxury—a sector long a national jewel. Donatella Versace and Miuccia Prada symbolize innovative spirit and artisanal tradition. Despite market uncertainties, Prada posted double-digit revenue growth (+13%) in Q1 2025, reaching €1.34 billion. This synergy could consolidate Italian luxury’s global presence, opening new development and innovation opportunities.
Scognamiglio and Chiara Ferragni: Return to Brand Control
Another key trend is founders reclaiming control of their brands. Francesco Scognamiglio repurchased 100% of his label, embarking on a new project blending fashion, art, and personal identity. Similarly, Chiara Ferragni holds 99% of her brand, maintaining control amid challenges faced by her company Fenice Srl. These returns to roots reflect strategic responses to crisis, emphasizing coherent, personal brand management in a complex, fast-changing market.
Aeffe Group: Moschino and Alberta Ferretti Struggle
Q1 2025 proved challenging for Aeffe Group, home to Moschino and Alberta Ferretti. Despite refreshed creative directions, financial results disappointed, with net losses rising from €5.6 million to €10.1 million. Retail revenue plunged, particularly in Italy (-24.7%), underscoring sector fragility even among established names. This shows that beyond creativity, commercial management and adaptability to new consumer trends are crucial for survival and growth globally.
Lanvin Group and Chinese Ownership Crisis
Lanvin Group, owner of heritage labels like Sergio Rossi, is facing a severe crisis that may lead to the full divestment of its portfolio. The historic Parisian maison—widely regarded as a symbol of elegance and tradition—is now in a precarious position due to ongoing financial and leadership instability under its Chinese ownership.
Following Bruno Sialelli’s departure, Peter Copping was brought in as interim creative director, but uncertainty still looms. This situation reflects a broader struggle for traditional luxury brands: maintaining identity and relevance amid a rapidly evolving, fragmented global market.
Luxury and Fast Fashion: Rising Prices and New Consumer Trends
Fashion consumption habits are profoundly changing. Luxury prices rise due to production costs, tariffs, and inflation, pushing many consumers toward mid-market, fast fashion, and especially second-hand. Brands like H&M’s COS and Zara lead sales charts by offering trendy, affordable products. Meanwhile, second-hand platforms like Vinted grow exponentially, confirming a radical shift toward sustainability and circularity in purchasing.
Quality Luxury Endures: Hermès, Zegna, and Cucinelli
Despite crisis and global turbulence, top-tier luxury players show resilience, reinforcing quality and craftsmanship’s value. Hermès closed Q1 2025 with 9% revenue growth, announcing a new leather goods factory in Colombelles, Normandy, creating 260 artisan jobs—an investment in tradition and talent.
Ermenegildo Zegna posted solid results with €458.8 million Q1 revenue, a slight 1% annual decline, but significant growth in Zegna, Tom Ford Fashion, and Thom Browne brands, boosted by direct-to-consumer channels growing 4-10% annually.
Brunello Cucinelli continues to impress, with 10% revenue growth in Q1 2025, aligning with analyst forecasts, confirming a steady, sustainable yearly trend.
These examples prove that in luxury’s elite, quality, identity, and authentic storytelling are keys to overcoming an increasingly complex market. True luxury is measured not just by price but by exclusive experiences and narratives.
Rethinking Fashion: Resilience and New Consumption Models
The current crisis demands deep reflection and radical change in fashion conception and production. The traditional overproduction model is unsustainable economically and environmentally. Strategies like upcycling, recycling, second-hand, and vintage are essential to reduce impact and enhance existing value.
As Italy’s third-largest manufacturing sector, fashion must refocus on people—protecting artisanal skills and promoting circular economy. This approach could be the key to a stronger, more sustainable rebirth, capable of facing future challenges with greater resilience.
Beyond the Luxury Crisis: An Industry to Rethink
No more trends, but new values.
The fashion crisis is not only economic but also ethical. Structural change is needed. The industry must rethink consumption itself, shifting to regenerative models: upcycling, second-hand, vintage, responsible production.
As Brunello Cucinelli said:
“I ask young people to be actors of a humanistic revolution toward a Tempus Novum.”
Fashion needs not just new collections but new meanings.
