Preview | The American Luxury Renaissance - A Different Path to Success

American luxury brands are surging while European counterparts struggle, revealing a new competitive dynamic in the luxury landscape. Tapestry (Coach) and Ralph Lauren have delivered exceptional stock returns (+55% and +29% respectively in 2025) and strong sales growth (+13% and +11%), while European brands averaged -3% decline. This divergence highlights a three-tier luxury hierarchy: ultra-luxury focused brands (Hermès, Brunello Cucinelli) succeeding at the top, accessible luxury done right (American brands) winning in the middle market, and confused European brands struggling between strategies. American brands succeeded by maintaining disciplined pricing ($200-$500 sweet spot vs. European brands going 10x higher), targeting young consumers abandoned by price-aggressive Europeans, and investing heavily in brand building (up to 10% of sales on advertising). They're capturing customers who were "priced out" of European luxury, with significant growth in China (+30% for Ralph Lauren, +22% for Coach) as consumers "trade down" to affordable luxury. European brands face a strategic dilemma: double down on ultra-luxury exclusivity or compete for accessible luxury they inadvertently abandoned. The success demonstrates that strategic clarity and consistent execution matter more than geographic origin - whether choosing ultra-luxury or accessible luxury, confusion in the middle satisfies no one.

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