Luxury Has Lost the Plot — and These Brands Are Picking Up the Slack

At a pop-up boutique in Aspen last winter, Kerry Pieri struck retail gold.

A suede trench from Parisian label Nour Hammour certainly looked and felt expensive, with buttery leather and an impeccable cut, she said. But the price tag brought a jolt of delight for the freelance fashion editor: where she’d been expecting to see $3,000 or more, the jacket cost just $1,200. It was an instant purchase.

A new, global class of designer-led labels including Nour Hammour, Toteme, Kallmeyer, TWP, Another Tomorrow, Christopher Esber, Róhe and many more are targeting a psychological sweet spot for shoppers like Pieri with a formula of accessible prices, high-quality fabrics and a focus on longevity that caters to a more sustainable philosophy of dressing.

“These brands are doing something amazing with design at strategic price points,” said Pieri, who was digital fashion director at Harper’s Bazaar for 11 years. “They’re also tapping into how women actually dress, with an understanding of how we are living our lives.”

There is a cultural shift where luxury itself is being redefined.

There are a lot of shoppers like Pieri. Brands that set their price point just below luxury — a category traditionally called “advanced contemporary” by department stores, though used less frequently by the labels themselves — are seeing surging sales, even as demand for luxury has decelerated in recent seasons. TWP, a label known for shirting and elevated separates, said its business is slated to grow 70 percent this year, while London-based Studio Nicholson, whose offering of tailored womenswear staples run between $300 to $1,000, has grown double-digits every year post-pandemic, according to chief executive Mark Suddards.

“Luxury consumers are definitely coming to our segment,” he said.

A middle class squeezed by inflation and out-of-reach prices, or simply underwhelmed runway collections from Paris and Milan only partly explain the trend. The rise of advanced contemporary also reflects a consumer rebellion against big luxury’s flood-the-zone approach of multiplying collections and endless newness. Brands like Studio Nicholson, Copenhagen-based By Malene Birger and new basics line All Three, for instance, are promising a more considered curation, what insiders call “wardrobing.” Whereas before, high-net-worth shoppers would purchase new designer collections every season, today people tend to buy fewer, more timeless items.

“There is a cultural shift where luxury itself is being redefined,” said Sherri McMullen, founder of the McMullen multibrand boutique in San Francisco. “Consumers don’t want to just wear a brand anymore … They want to feel some connection to what they’re putting on their body, and quite frankly, how they’re spending their money.”

Blurring the Lines of Luxury

The new class of contemporary brands are playing a similar role as predecessors like Theory or Vince, which filled in the gap between retailers like J.Crew and the likes of Dior and Chanel. A Toteme dress typically costs south of $900, compared to Loewe’s range between $1,200 to upwards of $6,000. TWP’s popular wool Didi trousers sell for just under $600, whereas Loro Piana’s version goes for $2,000 and above.

“Consumers are getting smarter about price. They know the value of things,” said Julie Gilhart, a brand consultant. “If you’re showing a blouse that’s $3,000, you have to validate and substantiate that price.”

Many of these brands say they use the same suppliers as LVMH, Hermès and Kering. Where there may be a difference in quality, it’s not always apparent to shoppers who see influencers pick apart luxury handbags on TikTok, and headlines linking Dior, Armani, Valentino and Loro Piana to sweatshops in recent scandals.

“I want to treat the person that I’m selling to as a reflection of myself, in a way where luxury is not speaking to that person anymore, it’s speaking above them,” said designer Tal Waksal, who launched her contemporary line All Three last year with a slim collection of tops, skirts and light dresses in luxe fabrics manufactured in Europe.

A New White Space

When TWP designer Trish Wescoat Pound worked at Theory in the 2000s, the space between mass and luxury was sparse, she recalled. “It was us, James Perse and Juicy Couture sweatsuits,” she said, “in what was known as ‘bridge’ in those days.”

In the ensuing decade, a new generation of American designers including Phillip Lim, Alexander Wang, Amy Smilovic of Tibi and A.L.C.’s Andrea Lieberman came on the scene, populating the category that became known as contemporary fashion.

“It was a huge shift and that business was on fire,” said Gilhart, who served as fashion director at Barneys at that time. “That was a big pivotal moment, where all of a sudden, people could buy designer products at a lower price than luxury.”

In the years following the pandemic, the contemporary space saw another resurgence, with a new cohort of labels such as Jenni Kayne, Loeffler Randall and Clare V.

Room at the Top

Today’s opportunity, however, lies at the very top end of the spectrum, where the lines between advanced contemporary and luxury are blurring.

For Pieri, the tipping point was the meteoric rise of Toteme, the Stockholm-based label founded by husband-and-wife duo Elin Kling and Karl Lindman in 2014.

“We saw Toteme create the same level of clout as a luxury brand,” she said, “and a girl buying Toteme is just as excited as she would be buying something more expensive.”

Toteme found itself at the forefront of the “quiet luxury” trend, marketing elevated but wearable and timeless staples with beautiful stores and a polished visual identity. It was The Row with Scandinavian flair, at a fraction of the price.

Today, many of Toteme’s peers at the top of the contemporary market follow a similar playbook: emphasising fabrications, eschewing trends in favour of hero pieces and taking aesthetic cues from traditional luxury.

The rat race of creating all these designer collections — that pace is not normal. You can’t create intimacy when something is rushed.

“It’s 100 percent about using the right photographers, the models that you’d see in luxury runways,” said Suddards of Studio Nicholson. “We invest heavily in our campaigns and spend a lot of money on making sure our assets look as good as what Jil Sander would put out.”

It’s not just luxury shoppers trading down to these brands. Consumers who always shopped contemporary labels are willing to pay more if they’re getting luxe materials and a refined lifestyle positioning, said Denise Magid, chief merchant at Bloomingdale’s. The Macy’s-owned department store chain has seen revenue growth driven in large part by the booming contemporary space.

“There’s much more stretch in the pricing architecture of contemporary,” said Magid. “You see it in denim, whereas before we’d sell jeans for $200, today we’re able to sell $600, $700 jeans.”

A Still Competitive Landscape

No trend lasts forever in fashion. Contemporary brands tend to rely more on wholesale, where many of the biggest retailers are struggling. Once-hot contemporary labels like Mara Hoffman and the Vampire’s Wife have closed.

Big luxury brands will inevitably course correct at some point, and make a play to win back the customers they’ve lost in recent years. Kering and other luxury giants have new leadership, and Gucci and Chanel are among the houses that will see debut collections from new designers this autumn.

Contemporary brands are betting they’ve built enough of an identity for themselves to survive into the next business cycle and beyond. Whereas the overwhelming majority of traditional luxury labels are creatively helmed by men, this new class of accessible players tend to be female-led. The focus on timeless pieces over trendiness could also work in their favour.

“I’m designing for the girl in the middle who has been unserved and unseen,” Waksal said. “The rat race of creating all these designer collections — that pace is not normal. You can’t create intimacy when something is rushed.”

It helps, too, that the old boundaries between luxury and contemporary are less relevant than even five or 10 years ago. Wescoat Pound recalled launching her namesake label in 2021 and encountering questions around how it would be classified: contemporary, designer or luxury?

She still doesn’t have an answer — and that’s just fine.

“Ultimately, it’s about approachability,” she said. “Both in terms of a design attitude around versatility, and also having an entry-level price point … it’s a kind of smarter luxury.”