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Excessive heat, ever fiercer storms, and a reliance on fossil fuels are becoming an existential crisis for the yearly festival in the Nevada desert.

IT WAS DESPERATION that led Michelle into a BDSM tent at Burning Man. Not a desperate need for a spanking. Far from being a masochist, Michelle just wanted relief from the heat, and the BDSM tent had air-conditioning.

Burning Man 2022 was hot. The infamous bacchanal held in the dusty, dry lake bed of Nevada’s Black Rock Desert started at a high of 98 degrees Fahrenheit on Monday, August 29. By the weekend it had gotten up to 103, a record-setting temperature for a place already inhospitable to life.

That this featureless, skin-cracking-dry expanse of white dust isn’t easy living has always been the point of hosting Burning Man there. But last year’s conditions led to a general sense of burnout and malaise, and many of the 80,000 attendees asked the existential question of whether it was still worth it to throw a party in a desert on a warming planet.

Tickets usually sell out within seconds of going on sale, and when the tickets to the 2023 event become available on April 12, that probably won’t change. Instead, the event might slowly decay after hitting a cultural high point right before the pandemic.

Reno, Nevada, is the closest big city, and it is the fastest warming city in the United States. Nevada currently averages 20 days a year with “dangerous” heat. By 2050, that’s projected to be 30 days. That doesn’t mean every year from here on out will have triple-digit days, but it does mean they’re increasingly likely.

Michelle, 35, is an outdoorsy person who likes to camp out and hike. She lives in Vancouver, British Columbia, and counts plenty of “Burners” among her friends and former roommates. “Self-sufficiency being one of the core principles, I was thinking this would be a really fun adventure for me,” she says, alluding to Burning Man’s foundational 10 Principles that festival devotees adhere to. (Michelle asked me not to use her last name because she worries that publicly identifying as a Burner would adversely affect her professional life.)

Two friends got her a last-minute ticket and set her up with a 175-person sustainability-focused camp. There would be fresh vegan meals, talks about sustainable living, and a bio-toilet, and the camp would provide composting for other camps. She packed a duffle bag with lightweight clothes, a big hat, electrolytes, sunscreen, plenty of water, two battery-powered fans, and a two-person tent. But those supplies were no match for the dust and the heat.

By 8:30 on the first morning, her tent was an oven. She scrambled for a place to hide from the heat. The few misting cool-down stations listed in the official schedule were all packed with people seeking respite. Meanwhile, dust storms swept over the playa, limiting visibility to a few feet and coating everyone with alkaline dust.

“I really felt like I was gonna die,” Michelle says. She knew her two friends had air-conditioning in their shelter, but they were a 45-minute bike ride away. She finally found their yurt and crawled inside. When they showed up an hour later, Michelle was having a breakdown. “This is too much. I think I need to go home,” she sobbed. She ended up staying, however, and at the end of the week she endured the nauseating task of cleaning rotten food out of her camp’s freezers and throwing it away—the camp’s old generators had broken down.

It’s Hard to Be Green in the Dust

Full disclosure, I spent Burning Man 2022 in a gas-guzzling, air-conditioned RV. It was my sixth year at the Burn, and I was having a crisis of conscience over my participation, which was exacerbated by sitting in a 12-hour traffic jam to get out that was so big you could see it from space.

When we made it out of this pathetic Mad Max scenario and arrived in nearby Lake Tahoe, we went hiking under a sky rendered apocalyptic orange by nearby wildfires. It all seemed completely wrong, and way too expensive; each year cost me $5,000, not including fashion. Frankly, being a Burner no longer felt like a good thing.

“You're not the only one who said this to me,” says David Shearer, a clean-tech scientist and cofounder of Black Rocks Labs, which works in concert with the Burning Man Organization—the festival’s governing body, often called “the Org”—on renewable energy solutions. He points to some of the Org’s efforts to decarbonize the event, including deploying mobile solar generators for art projects on the playa, implementing a LEED-type rating system for camps, and testing out renewable diesel and hybrid battery-diesel generators.

But the big barrier to running Burning Man on renewables is air-conditioning, which draws an exceptional amount of power. (Even Shearer’s camp partially ran on gasoline generators.)

At least one camp in 2022 did manage to power its whole setup—including AC for 48 people—on solar power. Solarpunks constructed a 48-kilowatt microgrid, the largest on the playa, using consumer-grade equipment. It never had an outage. They didn’t allow anyone to bring an RV. Instead, they did a bulk buy of Shiftpods, silver dome-shaped tents that were invented by a Burner for camping in harsh conditions. Set up of the solar microgrid took several back-breaking days in the heat. Equipment costs totaled $200,000.

“It was hard, not gonna lie. But it worked in the end,” says Corey Johnson, Solarpunks cofounder and CEO of the Los Angeles-based events company Production Club. Solarpunks financed the microgrid with a mix of donations and a loan from Production Club and has been deploying it pro bono to events and art installations around Los Angeles.

According to Black Rock Labs, about 78 percent of playa generators—all but the largest ones—could be replaced by solar microgrids, whose price will hopefully come down to more affordable levels.

Black Rock Labs helped provide a 30-kilowatt mobile solar solution called Dragon Wings to the famous Foam Home camp, colloquially known as the Dr. Bronner’s camp, where Burners line up to take a communal soapy shower. The turnkey, double-stacked shipping container has solar panel “wings” that unfold in five minutes, providing shade beneath a 40-foot wingspan. Black Rock Labs also did an energy assessment of Foam Home’s needs so the camp could run no more diesel generators than were necessary. This cut their power draw by half. Shearer says he’s hoping to make his camp energy calculator public before the 2023 Burn in August.

The festival’s ephemeral nature makes it particularly resistant to greening. Black Rock City—the name given to the community that forms on the playa once a year—is what you would get if Davos and a refugee camp had a baby. Thousands of famous high-net-worth people fly in, some into Burning Man’s ad hoc private airport, to party and network and talk about ideas. The city’s infrastructure is temporary and remarkably shoddy, and every single item and person has to be shipped in.

“It's meant to be built and destroyed,” says Matteo Cantiello, an astrophysicist who in 2022 partially powered the camp he founded with solar. “It doesn't scale out in society. It's more like research and development for society and for technological solutions.”

Ninety-one percent of Black Rock City’s emissions are from travel by plane, RV, and cars to the desolate spot three hours outside of Reno. That also includes miles logged by heavy trucks and machinery that bring all the infrastructure needed to build a temporary city in the desert. Electric trucks are coming, but likely not in time to meet Burning Man’s stated goal of being carbon negative by 2030. And on which grid would they charge back up after the three-hour drive?

Bougie Burners

All this raises questions about how an event founded on the idea of “radical inclusivity” (principle numero uno) can still live up to that ideal when it increasingly requires access to AC. RV rentals have already doubled in price for next year, and try bringing a Shiftpod and swamp cooler on the Burner Bus from Reno. Throughout my conversations, I was whiplashed between optimism—mostly from the people with money who come in RVs—and dejection from my broke-ass creative friends who aren’t going this year after such a brutal 2022.

“I wish that there was an easier, better way to be net-zero at Burning Man,” says Joel Wish, a climate tech investor and entrepreneur. Wish’s camp ran on diesel generators, and he does not feel bad about it. “At the end of the day, it's such a small drop in the bucket compared to the emissions that are coming from people's normal daily life.”

An individual Burner’s footprint is about two-thirds of a ton for the week, twice that of an average American. But Burners aren’t average, and they’re becoming less average every year. The median personal income of attendees went from $51,100 in 2013 to $71,500 in 2019.

Burners are famously good at leaving little to no trash on the playa (principle number eight: “Leave no trace”), but that’s cracking under the stress too. This year, the team that sweeps the playa to ensure it’s truly clean before inspection by the Bureau of Land Management was shocked by the amount of trash it found, attributing the mess partly to punishing winds and dust storms, but also excessive heat and fatigue. It’s telling that the thing they found the most of was tent stakes. Tent campers were just done.

You might be wondering why we should care about an 80,000-person totally optional festival and its first-world problems, when the ancestral homes of millions of people are fast becoming unlivable due to climate change. People without access to air-conditioning die every year in Pakistan, but there was only one death at Burning Man in 2022—a middle-aged man had a heart attack. But if a collection of some of the most capitalized, connected, and tech-forward people on the planet can’t figure this out, what hope is there for the rest of us?

In August 2021, Nikki Caravelli, a climate adaptation planner from Sacramento, coauthored a memo with the Org that predicted the difficulties Burners faced last year, including heat, wind, dust, and a torn-up playa surface from the unsanctioned Renegade Burn that revelers held on the site in 2021.

I ask if she expected her predictions to come true so quickly. “I'm not surprised,” she says. Caravelli didn’t go to Burning Man in 2022, because she and her partner didn’t have enough time or money to get themselves a shelter with AC. The pair had a rough 2019 Burn, wandering in the heat until a friend allowed them to crash in their air-conditioned horse trailer.

Caravelli says she respects the efforts Burning Man has made to address its emissions. But on the adaptation side—addressing health dangers that arrive with an overheated Black Rock Desert, especially for the elderly, pregnant women, low-income folks, or others vulnerable to extreme heat—very little has been done beyond inviting Caravelli into the discussion.

“This could prove to be an issue if it's not really addressed intentionally,” she says.

I did talk to several Burners who insisted that it’s still possible to attend and enjoy Burning Man in a tent, though when things get hairy, they just crash in a friend’s RV. One Burner who always goes in a tent, Shreenath Regunathan, sent me a voice note saying, “This is probably a fncked up thing to say, but a lot of people over-exaggerate how insanely crazy it is and how difficult it is.” I pointed out that, as someone who grew up in a blazing-hot part of India, he’s probably more adapted to Burning Man’s climate than, say, someone who lives in Vancouver. (Regunathan also doesn’t turn on the AC in his New York apartment.) He then backtracked: “Did not mean to diminish someone else’s experience!”

Officially, there are no VIP sections at Burning Man. The Org has also been clamping down on so-called plug n’ play camps, where the ultra wealthy show up to a completed camp with luxury amenities. But in practice, high-end camps create AC domes for their campers, and they do not advertise it.

Connor Magill, a 33-year-old video editor based in Brooklyn, thought about bringing a swamp cooler for his tent at his first Burn, but he was already over budget after buying his basic survival gear. He tried staying awake for 36 hours, then crashing for 12 at night. On the third round, he realized he wouldn’t make it to sunset. A friend staying in a posh 300-person camp with a private air-conditioned nap dome let him sleep there. “This is for us,” the friend told Magill. “But you're here a lot. And we like you.” (Magill is making sure he has his own AC next year.)

At the beginning of this year, I emailed a proposal to Burning Man’s Placement team (essentially, zoning and urban planning) advocating for sectors of the city where camps agree not to have amplified sound during the day and to provide public, well-shaded areas that are listed on the official schedule for anyone to crash in. Caravelli calls these “resilience centers.”

“As you probably know, there is not truly a quiet place in Black Rock City, so even zoning would have its limitations,” a Placement representative chipperly wrote back. They directed me to look at the sound zoning policy “if you make it to BRC again.” In other words, no.

Benevolent Burn-archy

When you’re at the end of a 10-hour acid trip (not saying I have been myself), that point where time loses all meaning as you gaze at the sci-fi horizon, it really does feel like you’re totally cut off from the troubles and complexities of the real world. Many people do leave Burning Man thinking it proves out their libertarian fantasies of what life would look like with no rules and no government: fncking awesome.

But Burning Man does in fact have a government; the Org delineates its borders, provides infrastructure, and sets rules. It’s more of a monarchy than a democratically elected body. In 2012, Burning Man received 501(c)(3) status and longtime board member Marian Goodell became its first CEO, taking over from the idolized founder Larry Harvey, who passed away in 2018.

In multiple conversations—some off the record for fear of reprisals from the Org—people advocating for change expressed frustration with the lack of communication and opaque decision-making process of Burning Man’s governing body.

Henk Rogers, founder of the Tetris Company and the startup Blue Planet Energy, brings renewable power to the playa for art projects. Previously, one of his Cubes—an 8-foot container with a solar array and batteries—powered all the lights and sound for the largest art installation that year, an intricate old-timey village called the Folly.

When the Org asked Rogers to power the lights on the Man—the 75-foot-tall wooden icon that’s torched at the event’s climax—he suggested they swap its neon tubes for more efficient LEDs. The Org refused on artistic grounds, so Rogers sent two Cubes ahead to cover the Man’s power needs. When he arrived, the Cubes were nowhere to be found, and a huge solar array that the Org called the Unicorn—and that generated twice as much power as the Man needed—was being set up in its place. (In a statement sent after publication, Burning Man said they paid for the Cubes, but that their late arrival meant the team didn't have time to test them. The Cubes were instead placed in a camp that was piloting renewable solutions.) Rogers was confused—and pissed.

“I'll help them as far as I can help them,” Rogers says. “But they have to listen. The Org has to lead by example.”

Several people told me they like that the Org has been incentivizing neighboring camps to link up and share resources, to reduce the cost and number of generators on the Playa. But they would like to see it do more, such as giving out points to camps that are powered by renewables or creating a fast lane for electric vehicles to skip the famously long entry and exodus lines.

The camp I’m usually with is working on bringing a hydrogen fuel cell generator, perhaps from United Rentals, which just made it available. It’s silent and can be run on green hydrogen made from water. The problem is where to safely store all that hydrogen—or renewable diesel if they went in that direction—in the camp. The Org would have to provide one or both of these fuels at the official filling station to make it happen. The Org did not answer my question about whether it is planning on doing so.

“I don't have much patience for people who don't see the emerging solution set,” Shearer says. “The real question is, can we do it fast enough with these tipping points around the planet?”

Despite all the green technology being discussed, Burning Man will get dirtier before it gets cleaner—and will miss its own goal of being net negative on emissions by 2030—unless the Org makes big changes.

The Org prohibited any employees or contractors from talking to me and sent over a statement that answered only a few of my questions. “Burning Man Project does not believe it is our responsibility to decide for the individual which tools and positions they should put into practice to manage their impact on the planet,” a spokesperson wrote.

Caravelli would like to see Burning Man conduct a science-backed risk assessment on the viability of hosting the Burn in Black Rock Desert, just so it can get a solid idea of what’s in store and make decisions appropriately. (Burning Man did not answer my question of whether it was planning to do so.)

So there’s that one final climate concept we haven’t yet discussed: managed retreat. Abandon Black Rock City in favor of a location that isn’t being hammered so hard by the climate crisis.

“I really, really hope that we can find a solution to this problem,” says Cantiello, the astrophysicist. “I think there's a specific magic about that desert, but if it turns out that that's not the place to go anymore, so be it, you know? Don't force it.”

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«Do ré mi...» Comment ces onomatopées sont-elles devenues des notes? Le Figaro revient sur la génèse de ces petits mots de la musique.

     «Do ré mi fa sol la si do.» C’est encore plus frappant par écrit: ces drôles de petits mots ne semblent vouloir rien dire. Ces onomatopées, que l’on s’amuse à chantonner enfant, désignent les sept notes dont est composée la musique depuis le Moyen Age. Elles paraissent si naturelles aujourd’hui qu’on oublie par exemple que dans le monde anglo-saxon, les notes sont nommées avec les lettres de l’alphabet (la=A, si=B…). Mais d’où viennent les noms des notes de musique?

     Jusqu’au début du XIe siècle, il n’existait pas de système de notation stable. Depuis l’Antiquité, on utilisait des signes ou des lettres, que l’on organisait arbitrairement à partir de la première note de la mélodie. C’est autour de l’an 1000 que paraît le Dialogus de musica, qui fixe un premier système de signes: sept lettres de l‘alphabet latin, de A à G, pour couvrir la gamme qui va de notre «la» à notre «sol». C’est de cette manière qu’on nomme les notes encore aujourd’hui, dans les pays anglophones et germanophones. Fa-Si-liter l’apprentissage

     Mais comment en est-on arrivé à des syllabes sans lien apparent avec les lettres de l’alphabet? C’est le moine bénédictin italien Guido d’Arezzo, qui, au XIe siècle, en est à l’origine. En cherchant à faciliter l’apprentissage du chant pour les jeunes moines qu’il formait, il invente la «solmisation», ancêtre du solfège moderne. Pour fixer le nom des notes, il prend la première syllabe des 6 premiers vers de l’hymne à Saint-Jean-Baptiste:

 «Ut queant laxis / Resonare fibris / Mira gestorum / Famuli tuorum / Solve polluti / Labii reatum / Sancte Johannes.»

     Ce système permettait d’apprendre aisément les intervalles («distance» sonore entre deux notes) et notamment de situer dans une gamme la place du demi-ton. Il était ainsi possible de se repérer sur sa main gauche, en associant à chaque phalange une note d’une gamme. Avant lui, l’apprentissage passait surtout par la mémorisation des mélodies et prenait une dizaine d’années.

     Le «si», septième note dela gamme, n’est pas introduite par d’Arezzo, car elle permettait de former un «triton», intervalle dont il se méfiait et qui fut surnommé «le diable dans la musique» pour sa grande dissonance. Son ajout, au XVIe siècle, est attribué à Anselme de Flandres, à partir du «s» et du «j», transformé en «i», du dernier vers de l’hymne à Saint-Jean-Baptiste. L’Ut est remplacé par le «do» que l’on connaît au XVIIIe siècle, car plus facile à chanter. Qu’en est-il ailleurs?

     Ce système de notation est toutefois très européen. Si les pays anglophones et germanophones utilisent des lettres de l’alphabet latin, les autres langues ont leurs manières propres de désigner les notes de musique. Par exemple, au Japon, les sept notes sont associées aux sept premiers caractères de l’iroha, chant bouddhiste aussi utilisé comme méthode de classement et initiation à la calligraphie. Cela donne, phonétiquement: «i» (la), «ro» (si), «ha» (do), «ni» (ré), «ho» (mi), «he» (fa), «to» (sol). En chinois, depuis le début du XXe siècle, les notes sont associées à des numéros, le 1 étant notre «do».

Cette notation s’inspire du système de notation français Galin-Paris-Chevé, quasiment inconnu en France, qui visait à simplifier la lecture de la musique.

Chinese electric vehicle upstart Xpeng is acquiring the smart EV assets of ride hailing giant Didi for $744 million, marking another significant alliance that the Tesla challenger has struck in recent months.

In an announcement on Monday, Didi said the duo is forming a strategic partnership to “promote the global application of smart electric vehicles and technologies.”

Notably, the Didi assets will become a new sub-brand called “Mona” under Xpeng, which is scheduled to launch in 2024. The partnership also extends to areas including marketing, financial insurance services, charging and international expansion.

The news followed on the heels of Volkswagen’s $700 million investment in Xpeng which would see the production of two new models under the Volkswagen brand utilizing XPeng’s key ADAS technologies.

Xpeng’s mass market ambitions

Despite spending heavily on R&D, Xpeng’s EV adoption remains quite limited, making up just 2.1% of China’s new energy vehicle market (including hybrids) in 2022. A partnership with Didi could potentially help it tap hundreds of millions of users in China.

For the 12 months ended Q1 2023, Didi recorded 587 million active users. Imagine that these passengers, when picking their ride on the Didi platform, see Xpeng’s Mona model s displayed as a preferred option in the future. Furthermore, Didi’s footprint reaches beyond China with its acquisition of the Brazilian rideshare company 99 back in 2018, which has given it a boost in Latin America.

Indeed, Xpeng acknowledged in its filing with Hong Kong’s securities authority that the partnership “will increase the Company [Xpeng]’s brand exposure and customer reach through the Seller [Didi]’s platform, which will in turn result in more business leads and unfold business opportunities for the Company in new international markets.”

Didi’s carmaking dream

Like Uber, Didi has over the years formed partnerships with major auto OEMs. That included one with Volvo, where it agreed to supply autonomous driving technology to power robotaxi fleets supplied by the manufacturer. Shedding its smart car business means Didi has given up part of its carmaking dream.

The rideshare titan has been slowly climbing out from under the dark cloud following a series of regulatory crackdown. At this stage, where its priority is probably to strengthen its dominance in China’s ride-sharing market, selling the money-hemorrhaging, assets-heavy EV business to an industry partner doesn’t seem like a bad idea.

The remaining question is whether Didi and Xpeng will join forces in the autonomous vehicle realm. Xpeng itself has a large AV team, having been the most aggressive EV player in China in terms of software development investment. And there’s no sign of slowdown in part of the business despite the recent loss of its AV head. The seas of driving data gleaned by Didi’s platform no doubt could be an invaluable asset for Xpeng in training its autonomous driving algorithms.

MILAN — Kering’s acquisition of a 30 percent stake in Valentino in July took the industry by surprise at a time when Italian entrepreneurs have begun to cozy up to one another like never before. This is aimed on the one hand at protecting the country’s unique manufacturing pipeline and on the other at trying to bulk up in the face of the ever-growing power of Europe’s luxury conglomerates.

In the case of the latter, the race is uphill for Italy’s fashion groups and the common view is that it is clearly too late to compete with the might of LVMH Moët Hennessy Louis Vuitton, Kering or Compagnie Financière Richemont, which also in July snapped up Italy’s Gianvito Rossi. However, in the former case, there are several successful — and unexpected — ventures.

The consensus is that this is only the beginning, since small and medium-size companies make up the majority of Italy’s 62,000 fashion firms, according to Confindustria Moda. They form the backbone of Made in Italy production, and a supply chain that works with the best luxury brands in the world. Entrepreneurs have realized it has become essential for the future of the industry to protect this pipeline and this is expected to involve more consolidation, more M&A activity, more nuanced partnerships and more efforts to map out common goals.

In 2021, in what was surely considered a major partnership, the Ermenegildo Zegna Group and Prada Group joined forces to acquire a majority stake in Filati Biagioli Modesto SpA, which specializes in the production of cashmere and other precious yarns. In June, the companies teamed again, buying a 15 percent stake each in knitwear and fine yarns specialist Luigi Fedeli e Figlio Srl. Both Zegna and Prada have over the years invested in building their pipelines and supply chains, as well as their own manufacturing plants in Italy.

In May, in the first such deal for Chanel and Brunello Cucinelli, the companies partnered on an acquisition of a 24.5 percent stake each in Italian cashmere manufacturer Cariaggi Lanificio SpA. This was a development in a deal that was signed last year by Cariaggi and Cucinelli, the latter’s first such merger and acquisition. At that time, Cucinelli revealed he was buying a 43 percent stake in Cariaggi, his longtime cashmere supplier. While Chanel over the years has been buying stakes in 40 suppliers, of which 15 are based in Italy, this is the first time it partnered with another established fashion brand.

While some fashion groups have been taking shape in Italy — such as Renzo Rosso’s OTB, through the acquisition of Marni, Maison Margiela and Jil Sander, for example, or the Moncler Group, with the addition of Stone Island in 2020, and Calzedonia Group taking control of the Antonio Marras brand last year — Gruppo Florence and MinervaHub are among the examples of new platforms to supply high-quality Made in Italy products to major luxury fashion brands. These platforms aim to leverage competitive prices, guarantee prompt and flexible deliveries and solutions, while safeguarding the technical and cultural know-how of small and medium-size family-owned Italian companies.

Gruppo Florence has grown over the past three years to control around 24 companies, from knitwear and informal outerwear manufacturers to footwear specialists, reaching sales of 600 million euros — and there are no signs it plans to stop here. The founding families of these companies have agreed to reinvest minority stakes in the holding.

In April, investment holding San Quirico SpA acquired a 75 percent stake in MinervaHub, emerging as a leading aggregator of small and medium-size makers of components for luxury brands, from chains and metal details to galvanic treatments and hand embroideries.

The remaining 25 percent stake remains in the hands of one of the sellers, Xenon Private Equity, with other coinvestors that include president Matteo Marzotto.

MinervaHub reports sales of more than 170 million euros, has a portfolio of more than 1,000 clients, of which are 20 among the main luxury brands, and 700-plus employees. In July it took control of 100 percent of New and Best H.F. Srl, known for its expertise in high-end leather goods, shoes, ready-to-wear and accessories, and surface finishings.

Likewise, more consolidation is expected in the country’s textile industry as entrepreneurs in the segment face market volatility, inflation’s impact on consumer confidence and mixed business in China and the U.S. Over the past few years, growing textile demand during the post-pandemic rebound and supply hiccups have hit the market, fueling competition and boosting prices for raw materials.

One example of consolidation in the textile industry came last December when Gruppo Piacenza SpA acquired patternmaking specialist Arte Tessile Snc, a little more than one month after taking over Lanificio Fratelli Cerruti. In 2020, Piacenza acquired Lanificio Piemontese, another Biella-based woolen mill, signaling its commitment to grow its manufacturing scope.

With post-pandemic euphoria waning, and currency headwinds looming, the high-flying luxury sector is coming back down to earth.

While increasing wealth and income polarization is supporting sustained luxury demand, “we anticipate moderating trends particularly amongst aspirational consumers who are more exposed to higher cost of living in Western markets,” observed Piral Dadhania, director of luxury goods and premium brands research at RBC Capital Markets.

What’s more, after witnessing consumers gorging on personal luxury goods in recent years, “we may see spend rotation back into experiential pursuits including travel, entertainment and dining, all of which have seen material price rises, lowering consumer purchasing power,” he added in an interview.

“After a very strong post-COVID-19 rebound, it’s likely time for growth to start to gradually normalize,” agreed Erwan Rambourg, global head of consumer and retail research at HSBC.

Rambourg said he expects luxury growth to be especially muted in the third quarter, and more robust in the fourth quarter “for mostly mechanical reasons.”

“Stores were mostly shut in mainland China the last six weeks of 2022 and the basis of comparison is getting easier in the U.S.,” he explained, noting that a strengthening euro could bring a “slight rebalancing between Americans’ purchases at home versus abroad.”

RBC tallies show luxury growth rates decelerating on a two-year stack: They were up 42 percent in first quarter, 35 percent in second quarter and estimated to come in at 28 percent in the third and 20 percent in the fourth.

“Even though absolute growth remains healthy, previous cycles in the decelerating growth phase are typically synonymous with more cautious investor sentiment (which we are incrementally seeing), potential multiple compression and negative earnings revisions,” Dadhania noted.

Analysts also expect luxury’s biggest players to continue to command the most attention, and gobble up more market share.

Challenges looming for all players include the online channel, now stalled; limited scope for price increases, with certain brands needing to “rebuild their access-price offering,” and menswear and sneakers, now taking a hit as they were “the biggest beneficiaries of easy, helicopter money in the U.S,” according to Rambourg, alluding to stimulus checks.

“We are back to ‘steady state,’ which means that fundamentals are becoming once again important as spend on luxury goods normalizes,” Bernstein analyst Luca Solca said in a recent report.

All eyes are on the U.S. and China, which have been the twin engines fueling rapid growth of personal luxury goods in recent years. Both nations face challenges.

According to Solca, the speed of America’s “normalization” and the speed of China’s economic recovery loom as the main influences on luxury’s prospects over the next six to 12 months.

Bernstein dialed down its U.S. growth forecast for fiscal 2023 to flat/low-single digits from mid-single digits, taking into account “very negative” indications from American department stores, and normalized spending after a two-and-a-half-year resurgence that made luxury goods a “momentum play” for investors.

“The crux of the luxury investment case is now whether we shall see ‘gentle’ growth normalization through a ‘soft landing,’ or whether we will see a dip and a spend ricochet after years of consumers splurging,” Solca argued. “The sector is no longer about chasing positive surprises.”

In his view, the luxury sector is returning to its cyclical ways, making “fundamentals” important once more.

“More and more, we will need to go back and analyze consumer confidence trends, global GDP growth prospects, gyrations in the stock market (for the USA) and the real estate market (for China) as valuable indicators of consumer willingness to spend money on discretionary products and services,” he explained.

That said, Solca cites currency headwinds (roughly 5 to 7 percent at the top line) as a “key factor” in the second half of 2023, “with hedging playing a key role in supporting profits.”

As for China, worrisome signs include anemic GDP growth, high youth unemployment, a propensity for saving among the middle class, and the real estate crisis, with Chinese property giant Evergrande recently filing for bankruptcy protection in the U.S.

But wth the Chinese government working to reignite growth and buttress consumer confidence, year-over-year growth should come in the 30 percent range in 2023, Solca predicts.

The rest of the world offers a mixed picture.

“There is evidence that some local clienteles such as Japanese and Continental Europeans, which had been very involved, are starting to land from a growth perspective,” Rambourg opined, characterizing American consumers as “somewhat muted still with a continued underperformance of access price points.”

American consulting firm Berlardi Wong, which analyzes e-commerce sales for its mostly premium direct-to-consumer clients, forecasts single-digit growth in online apparel sales for the fourth quarter, encouraged by a 10 percent gain in July, which it attributes partly to the impact of the “Barbie” movie, plus sellout stadium tours by Taylor Swift and Beyoncé — dress-up occasions in what it dubs the “experience economy.”

HSBC’s take on Chinese clientele? “Despite unfavorable macroeconomic circumstances, they are likely to continue to rebound after a very rough 2022, but this will now likely be more visible outside the mainland in Hong Kong, Macau, South Korea and Japan while a rebound in Europe is taking a bit longer to materialize,” Rambourg said.

He blames the latter delay on airline capacity, cost of travel and accommodation weighing on top of passport and visa issues for various tourist cohorts. “The return of Chinese group tours could be a positive catalyst but here again it will rely on better airline capacity and costs of travel coming down, which is not a given,” he added.

“From a regional perspective, we anticipate a continuation of current trends which includes moderating to declining demand in the U.S., healthy European and Japan momentum (with moderating locals offset by tourism) and continued recovery in Greater China regional trends,” RBC’s Dadhania concurred.

Expect no change in the dynamism that luxury’s biggest players have been enjoying.

“Sad to say but I think the bigger brands now are unstoppable and as long as we remain in a recruitment market, they should continue to dominate,” HSBC’s Rambourg said, explaining that these players — Louis Vuitton, Chanel, Hermès, Dior and Cartier — have scale advantages for media spending, real estate locations, better management and other business fundamentals.

“Some can, of course, enter the club,” he allowed. “Prada and Tiffany have a clear shot at generating more than 6 billion euros in the not too distant future and others, like Moncler, can remain successful despite being much smaller by dominating a niche. But if you are a new entrant in leather goods, watches or jewelry, there are always exceptions but good luck.”

Bernstein favors sector leader LVMH Moët Hennessy Louis Vuitton, which has been boosting its marketing spend to “sustain demand and moderating price increases to avoid post-YOLO [you only live once] hangover.”

By contrast, Bernstein has dialed down forecasts for Kering due to material management changes and “potentially distracting” M&A, cut its price-earnings targets for Prada in the wake of aggressive price increases, and raised them for Hermès International, which raced past all competitors and posted the strongest set of first-half numbers, even logging 21 percent organic growth in America.

Oliver Chen, managing director and senior equity research analyst covering retail and luxury goods at TD Cowen, holds a more positive view on Kering, confident in the Gucci turnaround as the Italian brand charts a new fashion direction leveraging heritage and more timeless fashions.

“We believe Kering is pivoting and optimizing the brand portfolio with the same force and flexibility of a startup,” he wrote in a recent report, lauding the French group’s “modern approach to luxury.…[We] expect innovation of beauty, brand elevation and store experiences, particularly at Gucci and Bottega [Veneta].”

In an interview, Chen argued that the trend to “quiet luxury” should be a boon to the sector as a counterbalance to the logo trend, and entice consumers as they return increasingly to the office after an extended WFH period and consider tailored garments and more formal footwear.

On the economic front, the analyst expects slow to negative overall trends in the U.S. given weakness among aspirational consumers, high inventory levels, and worries over student-loan repayments. These challenges could be offset by some $800 billion in savings, low unemployment and wage growth outpacing inflation.

As for tactics within their control, Chen suggested that luxury brands leverage TikTok and other short-form video platforms to win further consumer attention, step up clienteling efforts and loyalty programs, improve inventory-management tech, and dial up their cultural relevance.

The analyst is also eyeing the burgeoning wellness trend, and how luxury players might address it.

“These themes around mental health and self care, they’ll be really important for the luxury customer, too,” he observed. “How does luxury think about health care and longevity?”

Nascent efforts include Dior’s recent collaboration with HydraFacial, and Gucci’s special-edition Oura ring, which analyzes sleep.

Cowen also pointed to viral interest in upscale California grocery chain Erewhon, famous for its organic products, nose-bleed prices and celebrity clientele.

“If you can afford to pay extra to be healthier, like that’s the ultimate luxury, right? I don’t think [luxury and wellness] are unrelated,” he surmised.