InvestSF / Keller Williams International Real Estate

May 23, 2016

Inside the Luxury Menswear Boom

May 23, 2016

Inside the Luxury Menswear Boom

The recent conclusion of men’s fashion week in New York wrapped up a season of runway shows in London, Paris, and Milan showcasing the latest trends in the world of menswear.  While these shows have been prominent for decades, the New York men’s show only recently left its post as the little sibling of New York women’s Fashion Week to join the international menswear season.

The move was only the latest signal of luxury menswear’s growing popularity. According to Bain, luxury menswear sales have grown nearly twice as fast as luxury womenswear sales over the past five years. Several market research firms project sales of over US$110 billion by 2020 — a 7.5% compound annual growth rate from 2015.

Many brands not historically known for their menswear lines are making new investments. Large houses such as Prada, Gucci and Dolce & Gabbana have all responded to the trend by opening men’s focused stores over the past few years, while Stella McCartney announced this month that her first menswear collection will debut in June for the spring/summer 2017 season. Oscar de la Renta CEO Alex Bolen has teased the possibility of launching a menswear line. In addition, traditional men’s brands such as Dunhill are seeing renewed investment and bringing in new creative directors to cast a fresh vision.

Several trends have been driving this growth.

As high-end apparel has continued to become more casual, it has attracted more affluent and UHNW shoppers for whom suit and tie is not a preferred option. Many modern HNW men of all ages are infamous for their casual dress sensibilities. The T-shirts and hoodies of wealthy tech founders have replaced the pinstripe suits of a prior generation of bankers, driving a relaxation of workplace dress habits; the effect has been felt across industries.

This is a street that runs both ways, however. Casualization has actually invited more HNW men into the luxury clothing world, while also elevating their street wear and athletic wear into serious fashion statements. Brands from Alexander McQueen to Brunello Cucinelli have introduced greater variety and more expensive casual and athletic wear, bringing fashion and luxury more deeply into areas that had previously been dominated by mass labels.

While casualization has drawn more men into the orbit of fashion, there has also been a notable, if somewhat smaller, movement back toward formal dressing for office work, though in a newer and more stylish key. This move, inspired by prominent television shows such as Mad Men and capitalized on by designers like Thom Browne, has led a new generation of millennial luxury buyers to consider dressing up for work.

For many luxury consumers, menswear has also become a forum for lifestyle expression. Social media based communities have grown in popularity, and many successful menswear bloggers and Instagrammers have cultivated dedicated followings. As with other luxury goods, these platforms have also proven to be fruitful ways for brands to engage consumers. Traditional media outlets have not been far behind. In a significant nod to these trends, the New York Times launched a men’s style section in April 2015 — the first new print section at the paper in 10 years. “The men’s market is very hot right now,” Brendan Monaghan, NYT’s vice-president of luxury advertising, told New York Magazine. In 2014, “we saw a 30 percent increase in men’s related ads in the newspaper, T, and digital combined. The demand for this is huge.”

Chinese men are also driving the luxury retail market, even in the midst of an anti-corruption crackdown by the Chinese government. According to a 2014 Euromonitor report, the Chinese menswear market grew 7% YOY to reach US$83.5 billion, and this growth has driven sales for many luxury houses.

How can luxury brands continue to take advantage of this trend?

One key will be keeping marketing and investment calibrated to the real pace of growth in the market. While menswear will continue to grow, it will likely do so at a slower pace over the next five years as the market matures and reaches saturation. There has been a lot of cheerleading for luxury menswear in the past few years, but understanding the difference between the hype and the reality will drive successful decision-making. Smart brands will not allow their optimism to lead into over- expansion.

As with all market trends, improved growth has brought increased competition for consumers. Brands that forge a personal connection through unique and personally catered transactions that reframe the traditional shopping experience will continue to capture a larger share of the market. Many of the most successful brands and retailers have done just that, recreating shopping environments to include bars and clubs, and targeting technological development that improves convenience while creating additional points of connection to the brand. John Varvatos, for example, has recently begun producing shoppable videos. Others have introduced in-store bars, or tech-enhanced mirrors that can suggest clothing matches.

While menswear as a serious pursuit is likely here to stay, winning will require staying true to the same core principles that guide luxury brands, while envisioning and executing the technological strategies to stay ahead of a rapidly changing luxury marketplace.