The Business of Luxury: Why Some Fashion Brands Thrive and Others Fade

Luxury is more than just a price tag—it’s an identity, a perception, a carefully crafted dream. The world’s most iconic fashion houses don’t just sell clothing; they sell status, heritage, craftsmanship, and culture. But while some brands remain timeless, others disappear into obscurity.

Why do some luxury brands stand the test of time while others fade into irrelevance? What separates the Chanel and Hermès of the world from brands that once held prestige but have now lost their luster? The answer lies in business strategy, cultural relevance, and an evolving understanding of what luxury means today.

At Orm Muse Collective, we’re not just looking at fashion as art—we’re examining it as a business. Let’s break down the factors that determine whether a luxury brand thrives or fades.

Heritage vs. Hype: The Luxury Balancing Act

The most successful luxury brands understand that heritage is power, but reinvention is necessary. They honor their legacy while evolving with the times.

Brands That Get It Right:

Hermès: Never chases trends, remains rooted in craftsmanship, and controls supply to maintain exclusivity.
Chanel: Balances its classic codes (tweed, pearls, the quilted bag) with modern innovation, never compromising on brand DNA.
Dior: Consistently reinvents its signature looks (the Bar Jacket, the Saddle Bag) while embracing new creative directors who add fresh perspective.

Where Some Brands Go Wrong:

Some chase trends too aggressively, losing their brand identity (see: once-iconic brands struggling to find relevance).
Others become too reliant on celebrity culture, forgetting that true luxury is about craftsmanship and not just social media buzz.

Takeaway: The key is in evolution without losing the core essence—luxury is about lasting impact, not fleeting hype.

The Power of Scarcity & Exclusivity

Luxury is built on desire, not accessibility. The moment a brand overproduces, discounts heavily, or floods the market with logo-heavy designs, it risks diluting its exclusivity.

Winning Strategies:

Hermès: Keeps the Birkin and Kelly bags ultra-exclusive, creating a perception of unattainability.
Rolex: Controls distribution so tightly that buyers must wait years for certain models.
Bottega Veneta: Removed its social media presence for a while, making the brand feel more elusive and high-status.

Where Brands Lose Their Edge:

Over-licensing their name (think of brands that slap their logo on everything).
Excessive discounting, which signals to customers that the product isn’t worth its original price.
Too many collaborations—if done carelessly, it can feel more like a cash grab than an artistic choice.

Takeaway: The strongest luxury brands understand that exclusivity drives demand. When something is scarce, it becomes more desirable.

The Role of Creative Directors: Visionaries or Mistakes?

A creative director can make or break a luxury house. The best ones bring a clear artistic vision while respecting the brand’s history.

When It Works:

Alessandro Michele (Gucci, 2015-2022) – Transformed Gucci into a cultural phenomenon by embracing maximalism, gender-fluidity, and nostalgia.
Pharrell Williams (Louis Vuitton, 2023-Present) – A bold move that blended music, culture, and streetwear appeal with a high-fashion touch.
Daniel Lee (Bottega Veneta, 2018-2021) – Resurrected the brand with a fresh take on luxury minimalism, making Bottega one of the most desired labels again.

When It Goes Wrong:

Appointing a designer who doesn’t understand the brand’s core identity.
Relying on shock factor or gimmicks instead of creating timeless pieces (trends fade, craftsmanship lasts).

Takeaway: Creative direction must elevate, not alienate the brand’s core identity. When done right, it breathes new life into legacy.

The New Definition of Luxury: Experience Over Product

Modern luxury isn’t just about owning a product—it’s about being part of a world. The most successful brands today understand that their audience wants an immersive experience.

Brands Leading This Shift:

Chanel – Owns exclusive private clubs and experience-driven pop-ups for VIP clients.
Louis Vuitton – Expands beyond fashion, creating hotels, cafes, and immersive exhibitions.
Jacquemus – Turns runway shows into cinematic, destination-driven events (think lavender fields and salt flats).

Where Some Brands Struggle:

Focusing too much on mass production instead of unique experiences.
Neglecting the next generation of luxury consumers—Millennials and Gen Z crave exclusivity but not in the traditional way.

Takeaway: The new luxury is about storytelling, community, and experience—not just an expensive price tag.

The Future of Luxury: What’s Next?

As we move forward, luxury will continue evolving, but a few core principles will always remain:

🔮 Sustainability & Ethical Craftsmanship – Luxury consumers now expect transparency. Brands that prioritize quality over quantity will thrive.

🔮 Cultural Relevance & Authenticity – The strongest brands will be the ones that understand heritage while embracing the future.

🔮 The Shift Toward Quiet Luxury – Excessive logos are fading, and understated, quality-driven luxury is taking over.

💡 Final Thought: The brands that thrive in the luxury space aren’t just selling products—they’re selling dreams, legacy, and exclusivity. And those who fail to evolve? They fade into the past.

At Orm Muse Collective, we believe luxury is an art form and a business, and understanding its evolution is key to shaping the future of fashion.

📢 What do you think? Which brands are getting it right? Who’s losing their edge? Drop your thoughts below!

Until next time,

Nina Orm

Founder & Creative Director, Orm Muse Collective