Luxury fashion may be switching gender and age roles. In much of the world now, the most attractive demographic for such companies as Burberry and Coach isn’t middle-aged women with sky-high credit limits; it’s twentysomething men with smartphones and self-esteem issues.
At least that’s the theory put forth recently by a three researchers at HSBC. The future of retail is in young, urban males—or as HSBC dubs them, “Yummies” (a handy verbal shortcut if one can say it without gagging).
“The metro-sexual, that cliché from 20 years ago, is now becoming a commercial reality,” the HSBC team writes.
Young dandies want to flash blue-chip brands as soon as they can afford them, while older consumers closer to the top of the socioeconomic pyramid don’t have as much to prove. The silver-backed master of the universe is secure in his Speedo swimsuit and skin-tight driving gloves; he doesn’t need a camouflage backpack from Prada ($980) to make his mark on the world.
But hasn’t it always been thus? Apparently not. HSBC notes that a lot of men are marrying later in life these days, freeing up income in their twenties that would otherwise have gone to supporting a family. The college fund can go to Coach totes, and the diaper budget is diverted to baby-soft driving moccasins.
In trying to impress, HSBC says many young men are also looking past cars for the first time. After all, anyone with a few hundred dollars a month to spare can lease a Lexus, but a traveling martini satchel from Tumi takes $5,000.
Not only are these gents making generous incomes, but thanks to increasingly global marketing and media, they don’t have to be anywhere near the epicenters of luxury to know what’s on-trend. These days, a brand with a solid smartphone store can capture opulent returns around the world. Burberry, for example, is now streaming its runway shows online and working on a plan called “Customer 360″ to track an individual’s buying habits worldwide.
The report points to a handful of luxury companies making significant investments in luring male shoppers. Michael Kors, for example, is hoping to grow its annual menswear revenue to $1 billion, which would amount to almost a sevenfold increase. Coach, meanwhile, is close to that goal, having expanded its sales to men from $100 million in 2010 to about $700 million today.
The story is similar at Burberry, a company that simply licensed its menswear to third parties until three years ago. “We see significant growth opportunity in men’s, especially in these high-growth underdeveloped markets,” Chief Executive Officer Angela Ahrendts told analysts in November.
The sole exception to the trend is the market in China, where HSBC says women will fuel the future of luxury fashion. Up until the mid-1990s, almost all of the plush purchases in that country were made by men—often as gifts for other men. Half of senior managers in China are now female, and women account for about half of luxury spending. Chinese retailers are playing catch-up on that front.