The luxury sector's Gen Z problem

STORY: Gen Z was expected to account for a fifth of spending on luxury goods globally by 2025

But inflation is hitting discretionary incomes of young consumers hard, especially in North America and Europe

Brands such as Burberry have noted lower sales in sneakers and slides, which are thought to be entry-level luxury products

Executives are troubled in particular by a hit to young Chinese shoppers

That market has younger high-end consumers than the global average and is a driver of growth in the sector

Source: Chinese government

But recent data shows the unemployment rate for those aged 16 to 24 is nearing 20%

Source: Oliver Wyman study

Some luxury brands are significantly lowering their sales expectations for China

Some brands are focusing on established customers and embracing the metaverse

Still, some firms like LVMH and Kering are proving resilient due to spending by their wealthiest clients