The luxury sector in 2025 is going through a phase of profound repositioning, influenced by generational changes, structural problems and economic and geopolitical instability. Today Gen Z and Millennials seek authenticity, quality and sustainability which have become the main purchase drivers, going beyond the simple status symbol.
Rather than iconic products, young consumers are looking for personalized experiences and emotional connections with brands. Luxury companies are reacting by moving towards a more inclusive model, where personal expression and social sharing play a central role.
Chiara Robba explains it, head of LDI Equity of Generali Asset Management underlining that
“this change in consumers is taking place in a context of slowdown in global demand: in 2025 a market contraction of between 2% and 5% is expected according to Bain, due to the crisis of the wholesale distribution model, the instability of supply chains (quality of suppliers which often does not exceed ESG criteria) and pressure on distribution channels, both physical and digital. Furthermore, the growing economic uncertainty and geopolitical tensions (such as US tariffs and wars in Ukraine and the Middle East) are eroding the “feel good factor” fundamental to spending on discretionary goods”.
Spotlight on the luxury sector
As if changes in consumption habits and geopolitical uncertainties were not enough, many of the large luxury “Maisons” are about to face the crucial phase of generational transition, which involves both the family dynasties at the helm of large groups and the managerial and creative structures of the brands. This process is delicate and strategic, because it directly affects the continuity, identity and competitiveness of companies.
Many luxury groups, especially in France and Italy, are still family-run. The generational transition is not just a question of succession, but of transfer of vision, values and leadership. For example, the LVMH Group began a gradual succession process with the entry of Bernard Arnault’s children into key roles: Delphine Arnault became CEO of Dior Couture, while Antoine and the other children took on strategic roles in the holding.
In Italy, the Ferragamo family is now already in its fourth generation in the company with around 50 grandchildren linked in various capacities to the company. After the death of the founder Salvatore Ferragamo in 1960, the leadership passed first to his wife Wanda Ferragamo, who managed the company for over 50 years, then to his six children who later played a key role in the transformation of the brand into a global group.
The GAM view
To avoid conflicts and ensure an orderly transition, the family signed an agreement that establishes, among other things, the requirements for joining the company. The Group has been listed on the stock exchange since 2011 and has always chosen to preserve the independence of the brand by avoiding sales to external groups such as the French conglomerates LVMH and Kering.
In Italy again, the Prada Group has begun to plan the future with a progressive rotation, while maintaining a strong presence of the founding family. These changes are not definitive, but represent strategic steps to guarantee continuity and stability for investors, avoiding sudden shocks.
The post Armani
The recent death of Giorgio Armani showed us how in the absence of direct heirs, the great designer thought about his succession and the continuity of his company which has a turnover of approximately €2.3 billion, an EBITDA of €398m with an EBIT margin of approximately 17% and assets estimated between €11-13 billion.
The Giorgio Armani Foundation is now the linchpin of the succession: it receives 9.9% of the shares in full ownership and 90% in bare ownership. The usufruct on the latter is assigned to Pantaleo Dell’Orco (companion and right-hand man), his nephews Silvana Armani and Andrea Camerana, and his sister Rosanna.
The will requires that, within 18 months of the opening of the succession, the Foundation transfers 15% of the company to a large luxury group (priority LVMH, EssilorLuxottica or L’Oréal).
Between the third and fifth year, a further 30% (up to a maximum of 54.9%) must be sold to the same buyer. In total, within 5 years, up to 70% of the company could change hands.
If the sale does not materialize, a stock market listing (“IPO”) would be expected between the fifth and eighth year of succession. In any case, the Foundation must maintain at least 30.1% of the capital, to guarantee continuity and control. The will explicitly excludes the entry of investment or financial funds, favoring only industrial operators in the sector, with a view to business continuity and further growth opportunities.
According to press rumors, L’Oreal would evaluate the acquisition of Armani’s Beauty business, with which it has a licensing agreement until 2050. The deal would make sense, given that the brand is one of the most important within L’Oreal’s portfolio and would possibly allow it to expand into other product categories.
EssilorLuxottica for its part has not yet expressed its opinion, but it also has a licensing agreement for glasses which was renewed in 2022 for 15 years.
Finally, as regards the LVMH Group, honored to have been mentioned in the will, it could help the brand strengthen its global presence thanks to the financial and strategic support of a Group that had a turnover of €84.6 billion in 2024. The Armani Group would represent approximately 3% of sales and less than 1% of profits initially.
Meanwhile, Kering, which had an agreement with the Mayhoola investment fund, supported by Quatar, has postponed the purchase of the remaining 70% of Valentino to 2028 and 2029, as the group itself is undergoing reorganization after the arrival of the new CEO Luca de Meo.
Prada acquires Versace
The acquisition of Versace announced by Prada in April this year for €1.25 billion (a multiple of 1.7x EV/Sales) should also be finalized in the second half of 2025. The Group, led by CEO Andrea Guerra, said that it does not want to revolutionize the brand famous for the Medusa logo, but that it only wants to make some changes in order to have sustainable growth in turnover in the long term.
In the 90s, Italian fashion experienced a golden age thanks to a generation of iconic designers such as Armani, Versace and Valentino. It is to be hoped that the generational and corporate changes we are experiencing in Italian luxury can help the sector return to growth and sustain the high multiples at which it is trading.
