The bad economy and a fundamental shift in the market for luxury goods are forcing an industry that reveres names like Chanel and Versace to embrace a different icon: Mother Nature.
Over the past year, many of the world’s best-known luxury labels have started to introduce ecofriendly products, snap up brands that tout their social responsibility and weave environmental themes into their advertising and marketing. In May, French luxury conglomerate LVMH Moët Hennessy Louis Vuitton took a stake in Edun, an organic-clothing company founded by the singer Bono and his wife.
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The global recession is adding challenges that defy simple solutions. Global sales of luxury goods are expected to fall 10% this year to €154 billion ($218 billion), the first decline in 15 years, according to Bain & Co. The industry isn’t expected to return to 2008 levels, €170 billion, until 2012, says Claudia D’Arpizio, a consultant at Bain’s Milan office. In response brands are slowing store expansion, lowering prices and trimming ad spending to cut costs.
Still, the economy may also accelerate the greening of luxury, industry executives say. A February survey by Cone found that 50% of Americans ages 18 to 24 said they have “higher expectations of companies to make and sell environmentally responsible products and services during the economic downturn,” compared with 35% of Americans overall.
