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Sustainability Remains a Priority in the Luxury Goods and Fashion Industry

Upscale shops at the Bellagio Casino and resort in Las Vegas. The luxury boutique style shops at the Bellagio include Gucci, Prada, Chanel and Louis Vuitton.At the end of 2022, Deloitte released its Global Powers of Luxury Goods 2022 report, opining that sustainability efforts in the luxury goods and fashion industry are impactful and here to stay. The report intimates that luxury players are rapidly adapting to global changes in sustainability, digitalization, and consumption patterns – and doing so while remaining successful if sales performance is any indicator. Per the Deloitte report, the overwhelming majority of luxury goods companies rebounded from the COVID-19 pandemic by the end of 2021. The top 100 companies generated composite sales of $305 billion, representing a 21.5 percent year-over-year increase.

Luxury giants are embracing the circular economy and putting sustainability principles at the forefront of their core strategies and Environmental, Social, and Governance (“ESG”) criteria. Per the Deloitte report, technology plays a large role in developing new, environmentally friendly materials and finding new ways to be more sustainable in the design, production, and distribution of products; to wit, being “sustainable by design.” This is taking an array of forms, including a focus on:

  1. fostering new business models that increase the duration of a product’s use (e.g., resale, rental, and secondhand);
  2. creating safe, renewable raw materials (e.g., biomaterials and biochemicals); and
  3. devising ways to extend the life of used products or turn them into new ones (e.g., repair or recycle).

The luxury goods and fashion industry has long been criticized for the environmental impact of its production processes and consumption practices – and skeptics remain. For example, a recent article in the Harvard Business Review opines that the fashion industry’s touting of sustainability credentials is unwarranted – stating, “the sad truth, however, is that all this experimentation and supposed ‘innovation’ in the fashion industry over the past 25 years have failed to lessen its planetary impact.” Nevertheless, it is undeniable that consumers are changing how they buy, use, and sell luxury goods and fashion. Today’s consumers, for example, are increasingly showing interest in the second-hand market – and the luxury industry is responding.

Luxury companies are discovering how the preowned category can help extend the lifetime of their products and increase the relevance of their brands among younger, more environmentally conscious consumers. Indeed, according to a recent CNBC article, purchases by these younger consumers are expected to grow three times faster than those made by older generations. According to a recent report from Bain & Co., Generation Y (also known as millennials) and Generation Z accounted for all of the luxury market’s growth last year. Their share of purchases is expected to grow even more dramatically over the next five years.

Many luxury goods companies have broken from tradition and invested in and joined forces with resale and rental platforms as alternative distribution channels. According to the Bain & Co. report, while the luxury industry has faced three years of turbulence and uncertainty, it shows more strength, resilience, and ability to innovate than ever before. Luxury players have invested in modernizing their operations, especially through more robust information technology infrastructure, to support the ongoing digitalization of the industry. They have also adopted new business models like resale and rental to try and dampen consumption of virgin resources and extend product lifecycles.

The sea changes at luxury goods and fashion companies tie well into the projection that the luxury market is changing shape, both with respect to younger generations becoming the biggest buyers of luxury and online becoming the leading channel for luxury purchases. So too, the efforts to adapt tie in with the luxury goods and fashion industry efforts to appeal to its younger, more environmentally conscious customer base by focusing on the development of viable biomaterials and finding new ways to be more sustainable in the design, production, and distribution of their goods. Per the Deloitte report, it seems the luxury goods and fashion industries are trying to step up and both reflect and lead culture by seizing the opportunity to use their creativity to not only talk the talk, but walk the walk toward authentic sustainability.

Please contact Warren Koshofer regarding your needs relating to the development or implementation of innovative sustainability solutions, ESG strategies, and other environmental matters.


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Warren A. Koshofer is a Principal in the firm’s Commercial Litigation practice group. Mr. Koshofer focuses his practice on contract matters, intra-company disputes, insurance coverage and defense, toxic tort defense, real estate disputes, and construction-related matters, as well as due diligence and indemnification relating to company mergers and acquisitions. He represents clients—including Fortune 100 companies, partnerships and high-profile individuals — at the state, federal, trial and appellate court levels. He also handles matters before administrative law courts, regulatory agencies, and alternative dispute resolution forums across the country. Mr. Koshofer’s clients expand across many industries, including insurance, manufacturing, financial and hospitality.