What happened to luxury?

0:02A cynic knows the price of everything and the value of nothing. Oscar Wilde said this, and he may be talking about luxury industry today because something's off. The industry spent years, at least recent years, rising prices. For a while, it worked really well. Higher price, higher the draw, at least among aspirational consumers. But then they stopped buying it, literally and figuratively. The whole model crumbled like the house of cards. What replaced it is actually more interesting. Most coveted things aren't the most expensive. They're the most obscure ones. A run so limited that no one knows about it.

0:46An AI ad that pissed off almost everybody. Or, as Matthew Blasey said, craft as technology. When the currency changes, so does the trade. In this episode, we're asking, where is the value in the industry known for taste, craft, and story once it got addicted to growth at scale and high price. Welcome to season two of Hitmakers, the show that tracks how culture moves margins, multiples, and market cap.

1:24Hi, Lee. Hey, Anna. How you doing? What's new? What's good? I just got back from a big event to doing a panel, which was always kind of fun being a little provocative on stage. So I'm kind of hyped up to be like super provocative today. But I don't believe you as provocative. No, I'm not. I'm not. That's more for other people. You're the peacemaker, the rational one. Everyone gets it. I like to be like intellectually provocative. No, but it's good. You put everyone on the higher value. It's a compliment. Like trying to get people to see things differently. It's easy to be provocative. You know, like those people who are like on LinkedIn just asking questions.

1:59They're like, fuck, go away, you know? Oh, yeah. No, no, no. That's not provocative. That's just, I don't know what that is. That's lazy provocations. It's just sad, like, how tropey LinkedIn posts have gotten. This changes the game. Microsoft is dead. Every law firm out there has just lost its business. Like, it's just, I have this, like, little kind of desire to write a little article about catastrophe literacy, you know? Like, there's just, the content out there is just so incentivized to be catastrophic promoting that, like, that's the way everybody writes. And so if you don't have catastrophe literacy, you read it as literal, right?

2:45And so it went very clearly, like if you start to have this catastrophe literacy thing, you can see what people are doing to get pop in the algorithm. And you can then write it off and completely ignore it. But for someone who doesn't, they can just too much of it. I know, but that's like the rest of social media is exactly the same. It just came to LinkedIn because, you know, like LinkedIn was like the least popular social network ever until maybe last year or two years ago. And then like here comes everybody to LinkedIn. and then you knew that it's growing because everyone started using those hashtags in their posts.

3:18And it was like, oh, no. LinkedIn used to be such a quiet place, a nice place. No, you know, and then it's always the same form, but you know why? AI writes it. And people think that no one can get the hang of it. And it's kind of, it's obvious, bro. Well, actually, that's the whole topic for today is how to write a LinkedIn post. We're going to go real deep on it. Yes, guys, this is one of one of LinkedIn. Like, I think we're going to get a lot of audience. Whoever didn't sign off now is going to stay for market moves. All right. So Calvin Klein sees a surge in demand following the TV premiere of Love Story.

3:59Calvin Klein experienced that sharp spike in sales that can only come when you are part of a big television phenomenon. It happened in the month following the debut of Ryan Murphy's new series. searches for vintage Calvin Klein and Carolyn Bessette style rose more than 240%, with total brand search up 347 % on the day of the premiere compared to a year earlier. Items referenced in the show, including the tortoiseshell headbands and minimalist slip dresses, are selling out across retail and Calvin Klein's own essentials line. Coinciding with the premiere, Calvin Klein launched its Valentine's 2026 Our Calvins campaign featuring influencer couples.

4:40In the first two weeks of February, the brand reported a 22 % increase in underwear sales. Also getting a bump from the show is CEO Bigelow Apothecaries. Let's see. The company reported a 300 % increase in sales of the French-made Charles Waba headband, famously worn by Miss Bissette Kennedy. The accessory, priced around$30, has become a high-volume seller since the show's release. While vintage Calvin Klein pieces remain out of reach for many fans, the headband has emerged as an accessible purchase tied directly to the show's aesthetic, driving the six-figure sales for the New York retailer. At Prada's Milan show on Thursday, the show did not begin until one final guest was seated.

5:25It wasn't Rihanna or Zendaya, It was Meta CEO Mark Zuckerberg and Priscilla Chan. Zuckerberg was escorted in moments before the lights dimmed, accompanied by Anna Wintour and Eva Chan, Instagram's director of fashion partnerships. The seating choreography underscores a growing alignment between luxury fashion and platform power, as tech executives increasingly occupy front row seat real estate traditionally reserved for cultural icons. Meanwhile, Pokemon celebrates 30 years. What began in 1996 as a modest Game Boy release has become the highest grossing media franchise in history. The Pokemon company has sold nearly 500 million video games and more than 75 billion trading cards, with its anime broadcast in roughly 190 countries.

6:12Total lifetime revenue now stands at approximately$150 billion, surpassing Star Wars and Marvel. The monetization engine remains active. Pokemon Go still reports around 30 million monthly active users nearly a decade after launch, and competitive tournaments draw global audiences. And the collectible market continues to escalate. On February 16th, a rare Pikachu card sold for$16 million, setting a new record. Nearly 30 years on, Pokemon is no longer a game franchise. It's a fully diversified IP ecosystem operating across software, physical collectibles, media, and live competition with durable recurring demand.

6:52And side note, personal side note, very relevant right now. They also have a traveling Pokemon fossil exhibit that is going to be held at the Chicago Field Museum. And my son loves Pokemon, and I was going to take him there, and today was the day to buy the tickets. and my wife signed on at the exact same time to buy the tickets. And she immediately found herself in a queue of 23 ,000 people to get tickets to the Field Museum to see Pokemon characters represented as fossils. I love that. Needless to say. I don't love that there is that you guys didn't get tickets, but I love that there is 23 ,000 people full of Pokemon.

7:34You know what I mean? Needless to say, I did not get a ticket, but all the bots got tickets. So I will end up having to pay a 3 ,000 % markup in the after sale market for these tickets if I want to do that. That is Pokemon. Are you going to pay? Probably not. I mean, unless I get lucky. But it's just so absurd. Anyway, it was just very relevant to this market thing. Like literally two hours ago, I was expressing my dismay because I've been looking forward to taking my son to this for like three months. And the only people going to this now are bots. That's luxury. That's luxury. I know. I know.

8:11They saved 20 Moore Street, which is where Love Story characters lived. The headband and Pokemon. What's those? Anyway, moving on from my personal... I'm going to take a step. Just asking questions here. Okay. This will be our most in-demand episode. Okay, let's move on to Bloomingdale's. The chain posted five straight quarters of sales gains, including a 9 % rise in its most recent quarter ending November 1st. It's scheduled to report the next set of results this month in March, and analysts expect the streak to continue, not least because of chief rival Saks Global, which includes Saks Fifth Avenue, Neiman Marcus, and Bergdorf Goodman, who filed for bankruptcy in January.

8:52A strategy Bloomingdale's executives launched years ago is now paying off. Their plan is to elevate the retailer and make it more relevant, but also keep its sweet spot as more affordable alternative to true luxury chains. Puma reported a recorded annual loss on Thursday and warned that its major new Chinese investor could weigh on the German sportswear company's business in the short term. The group posted a net loss of 645 million euros for 2025 and a sharp decline from a 281.6 million euros net profit a year earlier. The reversal followed a 13 % sales slide, costs linked to selling excessive inventory, and 191 million euros in one-off charges, largely related to plans to cut about one in five jobs this year.

9:41Anta Sports' recent acquisition of a 29 % stake in Puma may have a negative impact on its business in Greater China in 2026, says chief executive author Hold. He cautioned that the wholesale and franchise partners could become unsettled by uncertainty over Puma's future distribution model, giving Anta's stronger focus on direct-to-consumer sales. Meanwhile, also in China, China's grappling with a shrinking population and historically low birth rate. People are finding romance with chatbots instead. The Communist Party wants young women to prioritize getting married and having children. Instead, many of them are finding romance with AI.

10:19is complicating the government's efforts to reverse the country's shrinking population and a birth rate hovering at the lowest level in over 75 years. Meanwhile, there's a set jetting phenomenon in play where travelers journey to the filming locations of popular shows and films. And this is at an all-time high. We are more driven than ever by the desire to immerse ourselves in on-screen narratives. Locations tied to shows see spikes of 60%, 95%, even 3 ,000 % in search interest. When people travel to a filming location, the emotional connection is pre-built. Rather than generic sightseeing, they are following a narrative, recreating scenes, hunting for specific spots, piecing together a geography they already know from their favorite show or movie.

11:08We're also seeing a correction of the famed first brand. Rare Beauty, founded by Selena Gomez, is now a verified$1.3 billion empire, and Road, founded by Haley Bieber, hit a$1 billion valuation in just three years. Their secret is investing in proprietary formulas over hype drop marketing. Conversely, Prime, founded by Logan Paul, has faced a brutal 40 % to 70 % sales decline late last year and already this year. The market is signaling that hype has a half-life. If the product doesn't stand alone without the face, the valuation collapses. And finally, about one of my favorite shows on television, Industry.

11:47The season four finale aired earlier this week on March 1st with a viewership up 30 % over season three and a show now averaging 1.7 million viewers per episode. What started as a niche finance drama has compounded audiences year after year, climbing from early six-figure live numbers in season one to sustained seven-figure scale. Importantly, it's doing it efficiently. Production costs run$3 to$5 million per episode, which is a fraction of the$20 million-plus budgets attached to tentpole fantasy franchises like Game of Thrones. On a cost-per-viewer basis, industry sits as among HBO's most capital-efficient scripted properties.

12:27The audience profile also adds leverage. HBO reported that some of the highest retention rates are among succession viewers with strong concentration among high-income demographics. The show's evolution from trading jargon to power dynamics and status culture expanded addressable demand without inflating cost structure. If Games of Thrones is a blue chip stock that everyone owns, industry is a high-growth tech startup that just IPO'd. It's not the biggest company in the world yet, but its growth per share of cultural attention is the highest in the market. And that's it. Nice. You did it. Yay, I did good.

13:06Speaking of, this is why luxury doesn't work anymore, Lee. Yeah, speaking of things that don't work. Which is, what happened with luxury and its identity? I mean, Brunello works, Prada works, DeRoe still works. But the list is short. Hermes works. But what happened? Because, you know, like Coco Chanel, she was like one innovative motherfucker. She was innovative. She went and she, you know that she dated the Duke of Westminster. And she went, she was like, she was a firecracker. She went like horse riding and hunting and everything that women didn't do back in the day. you know or whatever they did they did in skirts and she did it in pants and she took twid and she combined it with silk and jersey and she created the signature material and pattern that we know chanel today but it's not like she she sat down and was like oh i need to invent brand codes she was like i'm gonna create this brand that's gonna liberate women because you know You know what, guys?

14:17I'm not going to get married. I'm not going to do traditional things. I'm going to create something new in this world. And Saint Laurent did the same thing. And Dior did the same thing. And Balenciaga all did the same things. And Louis Vuitton did the same thing. Part of the reason why I love this topic is because it just seems so absent in so much of luxury today. Part of the whole thing with luxury watches, for example, with Rolex, the whole value of those is made off of complications and the stories about how those were created through the technical, mechanical architectures and stuff. Like, it's just really cool to kind of like learn where all of these come from.

14:58And I think, you know, a lot of luxury watches still kind of stay at the forefront of that innovation, trying to create new complications or add complications to stuff. But you're right in the luxury fashion space. It seems that it prioritizes image over innovation or at least innovation and image, I should say, versus innovation and material cut utility and so on. And then there was like back then there was no scale. They were like, you had to come to the salons of those people and you had to be like somebody in order to do that. And when I say, and obviously, like now we live in much more meritocratic egalitarian society.

15:35So there are plus and minuses to everything. But they work there and it was the work of human hands. So craft was technology, is technology. And that is very obvious with Bottega, where Matthew Blasi was, where he said that. But it was obvious across the board in all those brands. And what is before Arnaud came in and ruined everything, it was literally, they were tiny, nearly bankrupt brands because, you know, like they were inherited by their, like they didn't have kids or, you know, like they were whoever inherited and didn't grow them. And luxury never was meant to grow. The whole point of luxury is non-rivalrous.

16:19good if you have it I don't have it if I have it you don't have it so competing on higher prices and growth that high differentiation high volume thing was never the plan yeah well it was just a matter of when was this whole thing gonna collapse yeah and so you think it's all collapsing right now because there's no real product innovation going on it's not just innovation I think it's the compounding of factors is accessibility is a big thing. If everyone has it, there is no signal. If there is no signal, there is no status. The signal doesn't signal anything if everyone has the same thing. So that's number one.

17:01And that means that the strategy needs to be different. The luxury strategy hasn't been fashion strategy. And for whatever reason, luxury brands adopted fashion strategy with this constant novelty. The whole idea is high differentiation, high durability. So how is high durability achieved? Is investing in quality and product design. Investing in merchandising, which is having very considered product pyramid, product portfolio. So this is the biggest challenge, actually. Everyone wears your brand or has your brand, but not a lot of people have the same thing. And that is the main problem, because right now, if you have a Gucci store at every corner and you sell the same things, people are going to get bored.

17:51And you have to produce new things to create artificial novelty. But if you do things like Hermès does and you create such a clear pyramid where the top is Kelly doll or Hermès or Kelly or made by measure or maybe really rare Birkins in very rare materials or customized ones, then that's 101. And then on the next level, you have limited editions, you have capsules. And then on the next level, you have haute couture. And then on the next level, what Dolce & Gabbana has, alta moda,$100 ,000. And then, you know, like you kind of create that very clear segmentation. Brunello does the same thing. Prada does the same thing.

18:40And there is a separation in one when Prada does. They have novelty in ready-to-wear, but they have heroes in leather goods. That's all merchandising. So how do you create that illusion that something is always happening without actually something's always happening? And then instead of marketing, you have that world building that Brunello does, that Prada does, that Hermes does. Hermes never has any lack of interest. But when you look at their advertising, it's always like follow the thin line. And you're like, what the hell does this mean? or like the line of the horizon and you're like or they hire artists to really riff on the idea of the horizon and you're like oh my god this is like I'm listening to a fairy tale and no matter how old I am you know like it works although I don't have anything except a knockoff from a rock that I gave my mom like a scarf I fall for it.

19:47Yeah. No, I mean, I think the hard part on a lot of this is it's basically just digital content. Like, I mean, the internet is a giant copying machine. And so it's just the images of these things get copied and copied. Even if you're a one of one of one, like the image gets copied and copied and copied. And so like even, you know, I'm sure there's like a brain scan connection to this where like neurologically the same parts of your brain light up. if you see a picture of something versus if you see it in real life. So just seeing these one-of-ones promoted everywhere because people are so fascinated by them is a real issue when they really have to cultivate scarcity.

20:28And I think it just kind of goes to that whole kind of identity challenge of luxury. When it's everywhere, for good reasons, you still want access to the brand. You don't want to be totally closed off and stuff, but kind of managing that access and the proliferation of it in the digital ecosystem is a really difficult thing to handle. Because particularly with algorithms, if you show any interest in luxury goods at all, it just needs you the same content over and over again. And so in a way, the algorithm is working against the luxury strategy. Oh, absolutely. But I think what Hermes does really well, they do these cartoons on Instagram that are like silly and fun and like super cute and they have artists and you're like ah this is so cute you know and you engage at that level and then you have like there is no shortage of airport stores that Hermes has and they're like beautiful and you can recognize Hermes windows their visual merchandising is incredible because there is like always some wind blowing and there you know things are moving and they're captivating.

21:36They're unbelievably playful and really well-made. But you can't buy anything there except scarves and keychains. So that's that, you know? And then you can't even buy Birkin in any of their stores. You need to earn a Birkin. Birkin is earned. That is a completely different level of access. So yeah, sure, of course you can access Hermes' world. I mean, we live in, you know, 21st century. democracy you know like great come in but don't come in you know so that's that's that interplay between oh scarcity and accessibility that they're like playing so well same goes with Prada I mean they have like oh yeah sure you can go to their museum you can go to Prada Marfa which by the way it was not even theirs they kind of accepted it but beyond that can you afford that stuff Maybe.

22:32Are you ever going to be invited to their events? Not really. Are you going to do the yachting club? Like, well, no, unless you have a yacht, you know? So these are kind of like, it's like a game with different levels. And that really depends not even about money you need to be invited. It's not about how much money you have. You need to be invited. Well, it's very much that idea of like it being a status market and being recognized within it and sort of invited into that kind of inner court and stuff because you have the right codes and cues that you're playing and you're playing in the right spaces and build the right cultural capital to get access to those spaces.

23:15And it's, you know, I think it'd be interesting to talk about price here because on one hand you can say price from like literally the price of the products, but it's also like the price that it takes to build that cultural capital to get that invite that you were talking about can really be prohibitive for a lot of people. It's also social status because you say you have cultural currency, social status, and commercial value. Commercial value is how much you spend. But social status is who you know. What's your network? Are you recommended? Are you seen with the right people? And that is what's the most important thing.

23:53Like what instead of class before, now you have that. That's why you have Mark Zuckerberg in the front row. And that's why the show is waiting for him to show up. That was unbelievable 10 years ago. I know, but that's why I think that was such an interesting market update event. Because like arguably he has more capital market power and commercial market power than cultural market power. Not anymore. You think he has cultural market power? Well, dude is like everyone was waiting for him for the show to start. I mean, only Ana Ventura came after him and they came together. No, but that's a bit of my point is because cultural markets are very like power oriented in terms of like who are the people dictating the terms of everything.

24:44It makes sense in today's kind of day and age that they that the gatekeepers of cultural markets would look to the most successful people coming out of the capital and commercial markets and want association with that. No, but you see, he didn't become rich overnight. He's been rich for a while and it didn't matter because he looked like he went to Aventura Mall and bought like went to Paxson. you know what i mean and like no no no no it's like that's the that's the whole thing because i think that now that you have jeff bezos and lauren sanchez like sponsoring mad ball like they're they now have like in a very weird unnatural way gained that cultural power which is not the power of cool but it's the power of mainstream that they you know and because before Or he did have money, but no one would care that he showed up because he was Mark Zuckerberg.

25:49And now because he is Mark Zuckerberg, now, like, what does that mean? Is, like, meta getting into fashion? And what does that, like, does it mean that technology and fashion are, is there innovation that's coming? And what does it, in what sense does it mean? What does it mean? No, that's, I think those are all really good points. But is it also because maybe some of the measures of power have evolved in response to the way culture has evolved over the last 10 years? Because your point, I totally get your point. He was a billionaire before. He's a billionaire now. So he didn't change. Something else changed around it.

26:23I think that it's that proximity of fashion and technology and asking, hey, what is the plan here? Is he going to invest in fashion? And if so, are we going to see some fashion innovation here? Maybe we see innovation like from 100 years ago or something like that. You know, maybe something new happens here. Maybe he does, you know, how Robert Barron's were investing in art or something like these ones. They never invested into anything, but maybe that changes. So I think maybe that is kind of like, oh, is this a sign that there is intersection between business and art? because there was no, otherwise he would just be Mark Zuckerberg who has a lot of money showing up at the fashion show.

27:08Right, right. And that's not notable in itself because any rich person, like Elon Musk can show up and he's the richest or Jeff Bezos can show up and they did show up. Yeah, yeah, yeah. And they do that, they did that with Brunello Cuccinelli. He would fly them to Solomeo and serve them Nona's pasta and so on because they are great customers, but there is no meaning there. They just spend a lot of money with him. So talk a little bit about how price, in terms of the actual goods offered by these houses, has contributed to the decline in the luxury category. Well, I mean, let's both unpack that because I want to see how that goes beyond fashion.

27:52And, like, it's the blend. And when you go to a blend and say that price is not indicator of the actual production cost or the actual functionality, it never was the idea. It's always indicator of the cultural and social value of something, the status signaling power. And that was used for social to demonstrate social proximity and social distance. I belong with this class and I'm different from that class. And that's the price you pay of belonging and of differentiation. And that was the luxury price. You were paying to signal your social, cultural, environmental status. That is the value that you're paying for.

28:38You're not paying economic value of a pair of shoes, which were, yes, handcrafted, made in France, made in Italy. And then that was the original logic. But then when you grow by scaling and when you grow by increasing prices so that you grow through increasing margin, which means you decrease cost of production by moving production facilities where it's cheaper to produce, you have higher margin. And when you sell more of the same, as we talked about, you make more money. Both of those things, accessibility and higher price without accompanying social and cultural value, create a discrepancy in what you're buying because you're not buying status anymore.

29:32Status that's accessible is not status. And then status that is not accompanied with the high quality rarity is again not status. So, like, let's take, like, LVMH, for example, because we've talked a few times. That's a dangerous one. Let's talk about Gucci, because we've talked about that a few times. In terms of their downslide in performance and stuff, I mean, you know, so far we've talked about innovation. We've talked about identity. We've talked about price, particularly around Veblen goods and cultural capital building. You know, looking at Gucci, what do you see as the, what would you diagnose has happened there?