This week, a look at the latest luxury earnings reports, which celebrated U.S. sales, and the potential impact of AI agents on luxury e-commerce.
According to this week’s earnings reports by leading luxury groups, growing sales in America are making up for declines in China, equating to overall growth — if only in the low single digits — and appeasing (some) investors.
On Monday, Ermenegildo Zegna reported that the Americas accounted for 27% of its 2024 revenue, boosted by accelerated sales in the fourth quarter, particularly of the Zegna brand. The group’s overall sales for the year increased 2.2%, with sales in the Americas increasing 15.4% and in Greater China declining 14.5%.
LVMH, meanwhile, eked out 1% organic revenue growth for the year. The U.S. contributed 2% of that growth, while Asia, excluding Japan, saw an 11% year-over-year sales decline.
LVMH chairman and CEO Bernard Arnault said that, moving forward, he expects the U.S., not China, to drive the normalization of luxury consumption.
“What I expect is to see a gradual recovery,” he said on the investors’ call. “We’re going to get back to a normal situation after two years, [but] it’s not going to happen overnight. In the U.S., it’s going to be a boom, but it’s going to take more time for China to recover fully.”
Also, on the call, Arnault spoke about the challenges of manufacturing in LVMH’s home base of France, compared to the U.S.
According to Bain & Company’s China Luxury Report, released this week, China’s luxury market is expected to stay flat in 2025. The market saw an 18-20% year-over-year decline in 2024, dipping to 2020 levels, owed to low consumer confidence and increased overseas spending.
And, as reported earlier this month by Glossy, McKinsey remains bullish on the U.S. luxury market, even considering the market’s looming tariffs.
“The U.S. is probably the only market that can help compensate for the decline in China,” Gemma D’Auria, the global leader of apparel, fashion and luxury at McKinsey, said.
Why AI could render Farfetch and Net-a-Porter obsolete
According to Justin Banon, founder of decentralized AI commerce companies Boson Protocol and Fermion Protocol, DeepSeek’s breakthrough in creating advanced AI for just $5.57 million, versus Meta’s $500 million, signals a fundamental shift in how luxury consumers will discover and purchase high-end goods. This “Sputnik moment” of AI will lead to the sunset of the website era and, consequently, the transformation of luxury retail.
More specifically, according to Banon, AI agents will replace websites and apps as the primary interface for luxury shopping and revolutionize the authentication and trading of luxury goods, among other impacts. Below, a breakdown of his predictions.
“Agents promise to upend how consumers discover and purchase luxury goods by bypassing traditional platforms and connecting directly with brands and sellers. More fundamentally, they will replace websites and apps as the primary interface between consumers and brands. Imagine asking your AI agent to ‘Find me a black Chanel evening bag similar to the one Emma Stone wore at the Golden Globes but within my budget.’ The agent would instantly search across authorized retailers, resale platforms and brand inventories, negotiating prices and verifying authenticity. No more toggling between browser tabs or juggling multiple shopping apps — the entire luxury shopping experience becomes conversational and effortless. The implications for luxury are profound. Today’s dominant platforms like Farfetch and Net-a-Porter risk being rendered obsolete as AI agents cut through their walled gardens, comparing prices and authenticating goods across the entire digital landscape. The ‘platform era,’ where centralized marketplaces controlled discovery and transactions, may be coming to an end.
However, for AI agents to function effectively in luxury commerce, they need infrastructure they can trust. Agents cannot verify physical products or resolve disputes on their own. This is where decentralized commerce protocols become critical, providing the ‘trust layer’ that allows AI agents to confidently execute real-world transactions. Through decentralized protocols, luxury goods can be ‘hard tokenized,’ meaning ownership rights are cryptographically secured and transfers are automated through smart contracts. When a customer’s AI agent purchases a Birkin bag, for example, the protocol ensures they will either receive the authentic item or get their money back, without relying on any centralized intermediary.
This technological convergence enables entirely new models of luxury consumption. Consider fractional ownership — AI agents could help clients build portfolios of shares in ultra-luxury items, from rare watches to couture pieces. Or authentication — agents could instantly verify the provenance of vintage pieces by checking their digital credentials on decentralized networks. The broader impact may be making luxury more accessible while paradoxically increasing its exclusivity. AI agents can help aspirational consumers discover entry-level luxury through recommender systems and fractional ownership. Meanwhile, ultra-high-net-worth individuals gain new ways to acquire and trade rare pieces through trusted protocols.
For luxury brands, this shift requires fundamentally rethinking how they engage with customers. Rather than investing in website redesigns and mobile apps, brands will need to make their inventory, content and authentication data accessible to AI agents through decentralized protocols. The focus shifts from creating beautiful interfaces to developing rich, machine-readable datasets that agents can interpret and act upon. The platform era is ending. Brands that recognize this shift early will be best positioned to thrive in luxury’s next chapter.”
Stat of the week
$628: The average price of the top 10 hottest fashion products in the fourth quarter of 2024, according to the Lyst Index, marking a decrease of 27% year-over-year. The list largely includes non-luxury items — with the exception of a Miu Miu fleece — including a Coach bag charm and a sweater by H&M Group’s Cos. The Lyst Index takes into account the shopping behavior of Lyst’s 200 million annual shoppers, as well as social media activity linked to fashion brands and products.
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