Can luxury make money while degrowing?

Luxury is no longer sustainable. And it is not just an environmental sustainability issue: the severe sales crisis is proof of how the economic model applied to the supply chain at this moment is causing more harm than good. As in all profit-driven industries, fashion and luxury also base their modus operandi on the micro and macroeconomic concept of economies of scale: the more production increases, the lower the costs and the higher the profits. This could work—if everything that is produced were sold—but we know that is not the case. Not only are major luxury groups sitting on billions worth of unsold merchandise, the storage and disposal of which come at astronomical costs, but the offloading of this inventory through off-price channels has become an accounting line for many brands. This mass of unsold goods exacerbates the issue of sales now reaching historic lows, especially as the Chinese spending power that once drove up sales volumes has now slowed. Many unsold products are then pushed into gray markets (as we saw last year with the proliferation of sample sales), but over the past year, even these have been suffocated by excessively high prices—while all others are simply destined for landfills. The issue is that by following the philosophy of economies of scale and, to put it simply, mass production, most luxury brands continue to produce an excessive amount of merchandise, chasing the capitalist ghost of infinite growth, which must materialize every quarter. But the real problem is this: how can the industry continue to grow, producing more and more, while expecting theoretically ever-higher margins in an economy with ultimately finite resources? According to various theories proposed in recent years—but which nss magazine is now trying to shape into a concrete framework for the general public—fashion should slow down its race for growth. Beyond being an outdated economic model, this race also represents a deeply ingrained mindset among top managers. And now that the sales crisis has exposed the fragility of an already bloated system, it may be time to look at the system from the bottom up.

It is now evident that there is a total discrepancy between declared objectives and production realities, reflecting a systemic inability to implement radical changes. A striking example is James Reeves' comment in response to Kohei Saito’s argument on the need for systemic change to effectively address climate change and global inequalities: «It will be quite a shocking idea for many business people». This statement aligns with PwC’s 2024 survey, which found that nearly half of CEOs worldwide believe they will need to reinvent their businesses to remain competitive over the next decade. However, this need for reinvention still appears confined within traditional business logics, focusing more on modifying existing business models rather than implementing a true structural shift in the system. This is precisely where degrowth could offer a tangible alternative: not merely a reduction in costs or a marginal adjustment, but a complete redefinition of priorities and strategies, placing sustainability and long-term economic resilience at the center. This was the main reason why 2024 was an extremely chaotic year for the luxury industry: the continuous turnover of creative directors was merely a symptom of a much deeper and more structural issue. Over the past 12 months, the vast majority of major groups have altered and overturned their investment strategies. Take Tapestry, for example, which not only abandoned its acquisition of Capri Holdings in recent months but, according to Vogue Business, has recently decided to sell Stuart Weitzman for $105 million. Similarly, at the beginning of 2025, Kering opted to sell all of its outlet stores to reduce debt—an investment that, however, as reported by Business of Fashion, was among the group’s most lucrative divisions. 

Currently, most initiatives in the fashion industry are limited to a form of “circularity” that, at best, can only be considered tangentially related to degrowth. As highlighted in the Circularity Gap Report, efforts are primarily focused on improving efficiency in the early stages of the supply chain and developing models that keep products in circulation—through repair, rental, resale, and reuse. However, these attempts, still in their infancy, fail to truly challenge the dominant take-make-waste linear production system. Angela Baidoo, writing for The Impression, points out that even a diluted version of degrowth struggles to scale—further proof of how the harsh reality of capitalist markets stifles any serious challenge to the existing production paradigm. If truly implemented, degrowth would mean producing less, but with higher quality standards, raising the bar for working conditions and care at every stage of the supply chain. As Olya Kuryshchuk, founder and editor-in-chief of 1 Granary, states, «It means taking care of workers and the planet, not producing without first considering the human and environmental costs.» An approach that, while seemingly simple, clashes with an industry where growth has been synonymous with success for decades. But, as Kuryshchuk also observes, for independent brands, there is no strong correlation between expansion and success. The new generation of creators must urgently question what it means to have a sustainable fashion business today, challenging outdated structures and seeking creative models that integrate environmental and social impact into their production processes. A critical analysis is also needed regarding who and what is chosen to grow. In an industry where expansion is seen as the sole measure of success, it is essential to redefine the parameters of success, questioning the benefits of unlimited growth.

So far, all businesses that have adopted the concept of degrowth in their economic model have relied more on sustainable ideals than on the theory’s anti-capitalist dialectic. In 2022, Vogue Business wrote about the first brand founded on degrowth principles, Early Majority, which focused on outerwear and debuted with a collection of seven "subversive" pieces designed to be worn across four seasons, depending on how the different components of the garments were combined. In essence, buy less but buy better. However, as evidenced by both its official Instagram page and the brand’s absence from the web, Early Majority did not survive beyond two years—although last August, it announced that «this is only a goodbye, not a farewell». This is precisely why the degrowth model remains a great unknown. Between the lack of empirical evidence and the stigma many brands hold against discussing and adopting such a model—as highlighted by Aerielle Rojas in her panel on the implementation of degrowth in fashion at the Global Fashion Conference and in the Textile Exchange report—there is no certainty that applying this economic approach would actually benefit all stakeholders involved. Moreover, ultra-luxury brands (such as Hermès and Chanel), while adopting rhetoric somewhat aligned with degrowth, have also increased their prices, fundamentally contradicting the anti-capitalist concept at the core of the theory. At the same time, it is now undeniable that the business model of the entire luxury industry is no longer adequate: as time goes on, the industry as a whole is edging closer to a state of unprecedented precariousness.