IBA European Fashion and Luxury Law Conference – Barcelona, 3–4 May 2023
Madalina Hagima Hristescu
Hristescu & Partners, Bucharest
Summary
The IBA European Fashion and Luxury Law Conference is a prestigious event which was originally launched in Milan six years ago and has since expanded considerably, taking place in some of the most exclusive and fashionable cities in Europe. This year, the conference was held under the warm Barcelona sun, attracting professionals from various legal and luxury sectors, and, most importantly, exposed the participants to a large range of direct clients.
What other topics could be more attractive than high-end luxury companies’ trends and future development? An industry that proves to be growing at a constant and consistent pace, despite any economic vicissitudes, with significant profits increasing year-after-year from 1996 until today.
The conference was masterfully led and organised by: ERF Co-Chair Christine Blaise-Engel, Fidal, Paris; ERF Senior Vice Chair Panagiotis Drakopoulos, Drakopoulos, Athens; and ERF Vice-Chair, Western Regional Forum Isabel Gandoy Fernandez, Cuatrecasas, Barcelona. The officers all showed an absolute commitment to realising a successful outcome, reflecting not just the industry growth, but also the overall strong link between legal services and various cross-industry business interactions.
The event commenced with an enthralling presentation delivered by Mathilde Haemmerle, a Partner at Bain & Company, Paris. With an in-depth analysis of the market overview, the audience was held captive in anticipation of what was to follow, foreshadowing the tone of the day’s discussions.
First of all, the global luxury market has completely recovered from the Covid-19 crisis and is a market worth billions of dollars that spans everything from make-up, to cars, to hospitality, gourmet experiences, to fine art, cruises and yachts. Certainly, 2022 was a year of recovery, from every perspective, across all luxury industries, with 22 per cent year-on-year growth.
Instead of prioritising profitability alone, most service providers decided to shift their focus towards accommodating a climate of growth, which also came in the context of a global hyperinflation period. This translated into a longer-term investment, which is shown through the lower profits registered in 2022 compared to the initial forecasts. However, this phenomenon is extended and can be observed on most industry players, which shows a greater focus on growth, as well as a maturity of the overall luxury-providing industries.
2023 is expected to drive different profits, with pessimists estimating three per cent and optimists evaluating a staggering eight per cent market growth over the 2022 statistics.
As often is the case with the luxury industry, we’re in the middle of a shift in 2023, driven by the following fundamental trends:
- Regarding growth of the customer base, both the generational shift and the activist mindset have become a core of the luxury positioning, on top of which regional dynamics are also shifting.
- Concerning products and experiences, the return of experiences has shaped the market offers considerably, especially as category dynamics are going through changes of their own. Exclusive high-end brands like Chanel and Hermes are now considering setting up private shops for private selling experiences.
- Focusing on ‘next gen’ is a matter of fusion between digital and offline, with an increasing number of interconnected touchpoints facilitated by the increase in digital services, as well as the rise of Web3.
- Sustainability has become a cornerstone of its own during the past few years, demanding not just legal pressure concerning regulation and urgency for results, but also increased awareness, which in turn dictates trends and priorities looking forward. The dangers of fast fashion and its consequences have urged consumers to be much more attentive and driven them to be more selective with their purchases in general, which elevated the baseline for the adoption of luxury goods.
- The value chain has also become interconnected with the infusion of tech solutions, which act like an extra layer of intelligence on top of the existing processes. While there are still barriers for adoption across industry in terms of integration, the pathway to maturity most of the service providers have embarked on is their digital transformation. One of the largest such barriers is the perceived idea that the limited use cases make the transition still unnecessary to a deeper level, which also comes on top of the existing talent shortage.
One of the main factors driving constant growth is the expansion of the customer base towards traditionally overlooked demographic segments, whose inclusion in the luxury world has become a priority since their overall rate of higher social integration impacts their input in the economy overall, and it’s expected to reach as many as 500 million people by 2030, as opposed to only 330 million in 2014.
The rise of Gen Z and Gen Alpha also impacts demand in a significant manner, with both generations maturing much faster in their adoption of luxury goods and services.
Meanwhile, ‘Very Important Clients’ are a priority of their own, with dedicated services throughout the entire sales funnel, from offers, to distribution, and even generating specific customer experiences to appeal to their needs in a more particular manner.
Another increasing demographic is China, which will once again become the main personal luxury goods market by 2030, as facilitated by the staggering economic growth and infusion of investment in the megacities.
Additionally, it is expected that a similar phenomenon will occur in other regions of the world, through which certain demographics will also register spectacular growth. This means that the overall mapping of geographical demand is yet to be completed in the following years.
One key result in terms of category dynamics is that every single category has registered its own form of growth since 2019.
A very special aspect of the conference was the very interesting and inspiring mix of speakers on the panels, chosen from the heart of the luxury industry and covering roles ranging from investment bankers to influencers, from fashion academics to brand owners with solid histories, from legal department executives to executive managers of some of the most influential international brands.
Although an essentially and fundamentally European conference, given the greatness and influence of the Middle East fashion markets, the creation of a panel dedicated to ‘Experience in New Luxury: Europe meets Middle East’, in which legal and non-legal aspects of the interaction and consolidation between the two, was a must and the highlight of the event as a whole.
In a society deeply focused, among other things, on regulation and progress in the environmental, social and governance (ESG) field, the panel dedicated to this new trend discussed the critical role of the in-house lawyers in the creation and successful implementation of efficient strategies able to navigate the risks and capitalise on the opportunities related to the ESG landscape.
Digitalisation, including discussions about non-fungible tokens (NFTs) and metaverse, intellectual property (IP) rights and all related new legal challenges, played an important role in the overall conference structure, as big brands have no choice now but to embrace the new reality in a very creative but legally compliant way. If there are currently only a few of them registering significant profits from launches on Web3, future estimations show significant increase.
In today’s fast-evolving world, change itself is, paradoxically, subject to change, and this is highly reflected in the role that influencers play in the marketing and communication journey. We learned from well-known talent management experts and brand strategists not only what the new trends and latest adjustments are, but also how much pressure these roles face.
Initially addressed as a question mark as to whether lawyers play a major role in this fascinating world, the conclusion left no doubts about the weight their opinions carry. The verdict was an unequivocal and resounding ‘yes’.
A lot of topics were discussed, a lot of concepts and ideas were challenged but there was still not enough time to fully cover the massive potential this industry has. This is a conference that is here to stay and grow. Thanks are extended to its leader and supporting sponsors: Centro de Estudios Garrigues Business & Law School; Sader-Fashion Law Arabia; and Gianni & Origoni.