What European Luxury Can Learn From American Fashion

Late last year, Coach chief executive Todd Kahn was shopping for a hostess gift at a European luxury brand’s store in Naples, Fla. After purchasing a few hundred dollars worth of soaps and other elevated essentials, he asked the sales associate for a ribbon to tie around the bag.

To his astonishment, the request was denied — ribbons, they said, were only available to customers who had bought a certain tier of product.

“If that happened in any Coach store, I would go crazy,” said Kahn. “That elitism is the antithesis of American fashion.”

For a long time, though, that exclusivity was an asset. Between their heritage, their headquarters in Paris and Milan, and the runway shows, European luxury labels have long enjoyed a certain prestige that their American counterparts have never quite been able to capture.

But lately, momentum has shifted. European luxury brands are criticised for being overexposed, lacking innovative product and out of touch with their core customer, accusations lobbed at brands like Coach and Ralph Lauren not so long ago. In his annual remarks to shareholders last month, LVMH chief executive Bernard Arnault predicted the sector’s troubles are not yet over; the company’s fashion and leather goods division reported a 3 percent decline in fourth-quarter revenue, as did rival Kering.

Meanwhile, large American fashion brands are having a moment. Ralph Lauren and Coach have both posted 19 consecutive quarters of sales growth; at $7.1 billion last year, the former’s revenue is now higher than Gucci’s. Tory Burch has won commercial and critical praise for her much-discussed “Toryssiance.” A cohort of New York-based labels, The Row and Khaite chief among them, are achieving international success at a luxury price point.

The effect isn’t universal — Calvin Kleine reintroduced its elevated Collection line but has yet to see a significant sales bump and Michael Kors is struggling to pull out of a steep slide.

And the biggest American brands are still making the bulk of their sales at well below luxury prices. What they’ve perfected, however, is the ability to elevate their brand and product while being more thoughtful about where they are sold, who they’re selling to, and most of all, how to raise prices without sacrificing growth. Those lessons are particularly relevant in the American market, which will play a key role in European luxury’s recovery.

The Business of Fashion spoke to top executives from standout American brands about why they’re seeing success right now, and what strategies European labels could borrow as they plot their own resurgence.

“In the US, there’s always been a sense of pragmatism,” said Pierre-Yves Roussel, chief executive of Tory Burch, who was the chief executive of LVMH’s fashion group prior to joining the brand. “Stay close to the customer and offer a product that has a great intrinsic value.”

The American Advantage

In today’s environment, where shoppers are more cautious, the qualities that have previously been regarded as weaknesses for American fashion are proving to be an asset.

Historically, American brands have been labeled as “too commercial.” There was good reason for that reputation: When a rising star began to take off, they would expand rapidly, landing licensing deals and wholesale partnerships, sometimes amassing billions of dollars in annual sales but quickly becoming overexposed.

For some, the past decade has been about recovering from those mistakes. Ralph Lauren, Tory Burch and Coach have pulled back from outlet malls, discounting and wholesale, focusing on convincing customers to pay full price in their own stores; 85 percent of Tory Burch’s sales are now direct.

Where the commercial mindset remains is in the products themselves. The goal, executives at multiple American brands said, is to create a strong product that fills customers’ wardrobe needs or makes sense for their lives. Even special pieces are undeniably wearable.

At Khaite, chief executive Brigitte Kleine said, “there’s the runway, but there’s also so many wearable pieces for how women go through her life.” Even on the catwalk, there’s both: At the brand’s Spring 2026 show, the opening look featured jeans and a black blazer, while at the end, there was a two-piece handknit set.

American brands have better maintained the careful balance between fantasy and function. Last season in Milan and Paris, several critics felt that there wasn’t enough of the latter, particularly for female shoppers. Meanwhile, the influence of sportswear, long the foundation of American fashion, looms larger than ever, according to Roussel.

Creative Continuity and Consistency

While European brands are usually rooted in craft (like Hermès or Louis Vuitton’s history with leather goods) or fashion (think Dior and Chanel), in the US, it’s more about lifestyle, according to Roussel.

That feels particularly resonant when it reflects a founder’s own life — Ralph Lauren’s Western flair inspired by his own ranch in Colorado, or Khaite’s downtown cool on display in the brutalist store design or the 1990s rock soundtrack designer Catherine Holstein curates for each show.

It also makes for a natural alliance across culture. Ralph Lauren, for instance, is synonymous with the Olympics, having dressed Team USA since 2008. Coach has wound itself into pop culture through team-ups with the WNBA and the Gen Z-favourite series “The Summer I Turned Pretty.”

Creative continuity plays another role. Recent years have seen European maisons devolve into a game of designer musical chairs, with creative directors hopping from house to house, many with relatively short tenures (in a few extreme cases, just a season or two). In the US, most creative directors are either their brand’s founder, like Tory Burch, Ralph Lauren or Khaite’s Holstein; others, like Coach’s Stuart Vevers, have been in their role for over a decade.

“When so many things are changing, designers and CEOs, every couple of years, and changing CEOs, what they stand for gets a bit lost,” Roussel said.

Those longer tenures allow more time for a creative vision to develop, resonate with shoppers, and progress as time goes on.

“You develop a fluency with your client, so you know how she’s evolving,” said Kleine. “As you get to know her more, it builds confidence, so you can design with more intentionality.”

That’s why American brands have zeroed in on knowing exactly who their customer is. For Coach, that meant creating more Gen Z-friendly apparel with the hope of being younger customers’ first luxury bag purchase. Sometimes it’s more about a specific aesthetic: Khaite has developed a cross-generational appeal by speaking to a downtown sensibility, while Ralph Lauren has found endless ways to interpret classic Americana. Keeping production close helps: Tory Burch’s few brand extensions, like homewares, are produced in-house for that reason.

“If you’re trying to appeal to everyone, you’re really appealing to no one,” said Kahn. “You become very vanilla.”

Getting Their Money’s Worth

As fashion’s conglomerates have catapulted their brands into multi-billion-dollar businesses, the pressure to grow has amplified, according to Roussel.

“They’ve been talking about numbers, size and scale in a way that I’ve never heard,” he said. Before, “growth was the consequence of doing what you feel was right.”

That attitude was the likely driving force behind European luxury’s price hikes, which have far outpaced inflation. But now that consumer sentiment has dwindled from the boom days of the immediate aftermath of the pandemic, providing a strong value proposition is paramount.

It starts with a financially attainable product. Even for those at the top of the pricing spectrum, it’s important to sell pieces that are accessible to an entry-level luxury shopper. Khaite, for instance, carries $9,000 leather jackets and $7,800 calf-hair pants, but also $320 T-shirts and $620 jeans. At Chanel and Dior, very few pieces cost under $1,000, and most are small accessories.

“We’re very focused on making sure that we don’t alienate our client,” said Kleine, adding that they simultaneously have invested in making sure its pricier products are worth the splurge — easier now that European manufacturing is more accessible to brands across the globe.

Tory Burch said variety in price points is more reflective of real-life shopping.

“I love to play with price points … for how women dress today, they don’t always want to wear something super expensive,” she said.

For his part, Arnault expressed his own intent for LVMH to be more focused, “instead of diversifying somewhat erratically,” adding that “we have already many product lines to develop to refine further.”

But luxury is also about the experience, from the marketing moments that build consumer intrigue and later, connection, to how they’re treated when shopping in store. A degree of scarcity is necessary to generate interest and hype — but it can’t come at the expense of alienating the customer.

“Exclusivity stems from exclusion, which is arcane and a barrier,” said Coach’s Vevers. “You scale a brand by opening up the conversation … desirability is more relevant than exclusivity.”

In that sense, even the American market’s historic lack of prestige in comparison to Europe has had upsides. For one, it made for an earlier realisation that you can’t rely on longevity and status alone. Fashion’s changing dynamics, too, have helped American designers reclaim a bit of power.

“American fashion has always been looked down on as too commercial. But isn’t that the point?” said CFDA chief executive Steven Kolb. “I wouldn’t say that’s gone away, but Americans have gotten more confident in what we do.”