Insight Flash: How Shifts in Luxury Demand Create Winners in Fashion
Updated: January 28, 2025
2024 brought a lot of uncertainty to the consumer landscape, leading to shifts in spending behavior that impacted many different consumer-focused industries. The luxury sector certainly felt these shifts in a big way. While there were some bright spots among luxury players, particularly in jewelry, Consumer Edge U.S. Transaction data showed that the majority of brands saw a meaningful decline in sales as shoppers prioritized savings amid macroeconomic stresses. Many consumers chose to shift their budgets to resale brands such as Depop and Grailed, and newer, trendy luxury-brand alternatives like Quince and Alo Yoga. With the luxury industry still facing significant headwinds, we explore which companies might be set to benefit if consumers continue to pull back and allocate spending elsewhere.
We analyzed spending behavior of consumers that significantly reduced single brand luxury purchases between 2023 and 2024 (specifically, 3 or more purchases in 2023 and 1 or 0 purchases in 2024). Those consumers contributing meaningful spend growth at resale players like Clothes Mentor, Savers, and Style Encore, jewelry brands such as Brilliant Earth and Reeds, and more affordable options in athletic apparel (Fabletics) and formalwear (Charles Tyrwhitt). For each of these brands, CE transaction data reflected overall spend growth between 2023 and 2024, but the growth was much more pronounced for this specific cohort of consumers, indicating that the pullback in luxury is directly benefiting each of these. Other notable mentions include Baggu, Marine Layer, and Boot Barn, all of which could continue to ride the wave of shifting consumer share of wallet.
Originally published January 13, 2025
The apparel, accessories, and footwear sector faced a challenging year in 2024, with overall spending declining by 3% as most sub-industries experienced declines. A notable exception was Consignment and Thrift, which thrived as budget-conscious and eco-minded consumers embraced second-hand shopping. Meanwhile, Fast Fashion and Footwear/Athletic Apparel underperformed, with sales declines among incumbents like Zara, H&M, and Foot Locker overshadowing gains from new market entrants.
The Luxury sector also struggled, with all three subsectors posting year-over-year declines. Single-brand luxury houses, including Gucci and Louis Vuitton, were hit hardest, while high-end jewelry brands such as Van Cleef & Arpels and Cartier fared better, with low single-digit declines.
Despite these challenges, some brands excelled in 2024. Resale platforms like Depop capitalized on sector-wide growth trends, while brands like Alo Yoga (athletic apparel) and Quince (DTC fashion) prospered against the odds. Foreign-owned retailers like Primark, JD Sports, and Uniqlo also gained traction, highlighting consumer preferences for affordability, sustainability, and quality.
Encouragingly, growth rates in some struggling subsectors accelerated in Q4, suggesting a brighter outlook for 2025. Fast Fashion posted a sequential 5% improvement in year-over-year growth, entering positive territory, while Single-brand Luxury narrowed its losses by 4 points, though it remained down high-single-digits.
Middle-income consumers ($60K–$150K) reduced spending the most, while both high-income ($150K+) and low-income (<$60K) segments held up better. Additionally, brick-and-mortar retail outperformed e-commerce in Q3 and Q4, indicating that in-person shopping remains a valued experience for many consumers.
Apparel Industry Faces Challenges in 2024, with Resale Rising and Luxury Under Pressure
In 2024, overall spending in the Apparel, Accessories, and Footwear industry declined by 3% as budget-conscious consumers scaled back on discretionary purchases. Among sub-industries, Consignment and Thrift stood out as the top performer (+1%), driven by brands like Depop, Vinted, and Goodwill, which appealed to shoppers prioritizing affordability and sustainability. Family Apparel showed resilience (-1%), with strong growth from newcomers such as Quince, Sezane, and Primark, alongside steady performances from established names like Gap/Old Navy, American Eagle, and Abercrombie & Fitch.
In the Fast Fashion segment, spending declined by 1% despite robust growth from Shein and Uniqlo, as stalwarts like Zara and H&M faced increasing competition. Meanwhile, Footwear and Athletic Apparel spending dropped 6%, with underperformance by Adidas, Under Armour, Nike, and Foot Locker overshadowing gains from trendy newcomers like Alo Yoga, Vuori, On Running, and Hoka.
The Luxury sector faced notable challenges, with single-brand houses such as Gucci, Louis Vuitton, and Michael Kors underperforming. Multi-brand luxury retailers experienced the steepest declines, although luxury jewelry fared relatively well, bolstered by a strong Black Friday/Cyber Monday period.
Resale, Fast Fashion, and Intimate Apparel/Accessories Show Momentum Heading Into 2025
The resale market closed the year on a strong note, with Q4 growth accelerating to its highest level of the year at +4%. Platforms such as Grailed and Depop, alongside traditional thrift store Goodwill, drove gains, while Poshmark struggled amid increased competition from more specialized, tech-forward platforms and recent fee structure changes.
Fast fashion rebounded in Q4 after a softer Q3, although growth for H&M and Zara weakened under pressure from Shein. While Shein’s explosive growth has decelerated, the brand continues to capture market share, now exceeding the combined spend of H&M and Zara.
Intimate apparel and accessories enjoyed consistent growth throughout the year, improving from -6% in Q1 to +1% in Q4. Newer brands like Honeylove and Skims led the charge, while Victoria’s Secret finished the year on a positive note after a slow start.
Luxury sub-industries saw modest improvements from Q3 to Q4 but remained significantly down year-over-year, with consumers cutting back on spending at brands like Gucci and Louis Vuitton and platforms such as Farfetch and Net-a-Porter. However, the jewelry sector stood out, managing to re-accelerate to flat YoY growth, bolstered by strong performance from high-end brands like Van Cleef & Arpels and Cartier.
Quince, Depop, and Alo Shine; Footwear, UK Merchants, and Niche Brands Lead Top 20
In 2024, direct-to-consumer apparel brand Quince claimed the top spot in the Apparel, Accessories, and Footwear industry. Founded in 2018 in the US, Quince has captivated shoppers with its focus on high-quality, sustainably sourced items at accessible price points, achieving remarkable growth over the past three years. While still relatively small—about one-fourth the size of Abercrombie or American Eagle—its rapid ascent positions it as a potential challenger to larger incumbents.
Depop, a peer-to-peer resale platform, ranked second, driven by consumer demand for budget-friendly and sustainable alternatives to fast fashion. Depop’s trend-driven approach, powered by AI recommendations, influencer collaborations, and social media integration, has resonated particularly with Gen Z shoppers, who are flexing their growing purchasing power.
Alo Yoga secured third place, with growth accelerating from 2023. Its innovative influencer-led marketing strategy, community-focused branding, and premium, versatile products have helped Alo gain a loyal following while taking market share from established players like Lululemon and Athleta. Notably, Alo’s DTC growth outpaced fellow upstart Vuori in 2024, solidifying its position as a rising star.
UK-native brands JD Sports and Primark continued to grow their US presence, establishing significant footholds in the competitive American retail market. Primark attracts consumers with its affordability and diverse offerings, while JD Sports has expanded rapidly through new store openings and conversions of Finish Line stores (acquired in 2018) to the JD banner.
Footwear brand HOKA also made the top 20, thriving in the post-pandemic running boom with its focus on comfort, performance, and innovative designs, carving out a niche in the crowded athletic footwear market.
Other notable top-20 performers include shapewear maker Honeylove, French fashion house Sézane, luxury discounter Jomashop, and Japanese clothing brand Uniqlo.
Luxury Weak in 2024, But Jewelry Brands Offer Hope
Among the 25 largest luxury brands in our data, jewelry dominated year-over-year growth in 2024. High-end jeweler Van Cleef & Arpels led the charge, buoyed by celebrity endorsements and strong social media engagement with Millennial and Gen Z consumers. David Yurman and Cartier also performed exceptionally well, solidifying jewelry’s position as a growth leader.
Single-banner luxury brands experienced mixed results. While ultra-high-end brands like Hermès maintained their strong standing, low- to mid-tier luxury names such as Ralph Lauren, Hugo Boss, and Coach performed better in rankings, reflecting a shift among cash-strapped consumers reevaluating their willingness to invest in expensive items. Conversely, more exclusive brands struggled, with Gucci notably falling lower in the rankings. The brand’s flashy logos and trendy collaborations appear misaligned with shifting consumer preferences for “quiet luxury,” compounded by market saturation after its prior surge in popularity.
Multi-brand luxury platforms, including Net-a-Porter, Farfetch, and SSENSE, also ranked lower. These platforms face mounting competition from emerging players and single-brand retailers refining their direct-to-consumer (DTC) strategies.
While spending on apparel, accessories, and footwear was down across all income groups this year, middle-income earners ($60,000 – $150,000 per year) appear to have cut back the most, while spend among both the lowest- and highest-income shoppers saw less pronounced YoY declines.
A similar pattern was also evident in spend on Footwear and Athletic Apparel, with the $40,000-60,000 and $150,000+ cohorts again holding up better than middle-income earners, though the lowest-income consumers ($40,000 per year and below) pulled back more sharply in this sub-industry than any other group.
Brick-and-mortar spend appears to be enjoying a resurgence in recent months, with in-person sales of apparel and footwear growing faster than online spend YoY in both Q3 and Q4 of this year. While e-commerce growth has generally outpaced that of brick-and-mortar shops over the past decade, online penetration may be approaching saturation levels, with many consumers still preferring the hands-on experience of trying on clothes in-store (particularly as some online-first clothing retailers have begun charging customers fees for returns).
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