Here’s a bold statement: the once-unshakable throne of European luxury is wobbling, and American fashion is stepping in to show it a thing or two. But here’s where it gets controversial: Could the very elitism that defined European luxury now be its downfall? Let’s dive in.
Late last year, Todd Kahn, CEO of Coach, found himself in a European luxury brand’s store in Naples, Florida, searching for a hostess gift. After spending a few hundred dollars on soaps and other high-end essentials, he asked for a ribbon to tie around the bag. To his shock, the request was denied—ribbons, he was told, were reserved for customers who had purchased a certain tier of product. Kahn’s reaction? “If that happened in any Coach store, I would go crazy. That elitism is the antithesis of American fashion.”
For decades, European luxury brands have reigned supreme, their heritage, Parisian and Milanese headquarters, and runway shows exuding an untouchable prestige. But lately, the tide has turned. European giants are facing criticism for overexposure, lack of innovation, and disconnect from their core customers—accusations once hurled at American brands like Coach and Ralph Lauren. LVMH’s Bernard Arnault recently warned shareholders that the sector’s troubles are far from over, with both LVMH and Kering reporting a 3% decline in fourth-quarter revenue.
Meanwhile, American fashion is having a moment. Ralph Lauren and Coach have posted 19 consecutive quarters of sales growth, with Ralph Lauren’s revenue surpassing Gucci’s at $7.1 billion last year. Tory Burch has earned both commercial and critical acclaim for her much-discussed “Toryssiance,” while New York-based labels like The Row and Khaite are achieving international success at luxury price points. And this is the part most people miss: It’s not just about sales—it’s about how American brands are redefining luxury itself.
Of course, it’s not all rosy. Calvin Klein’s reintroduction of its elevated Collection line hasn’t seen a significant sales bump, and Michael Kors is struggling to reverse a steep decline. Plus, the biggest American brands still make the bulk of their sales at well below luxury prices. What they’ve mastered, however, is the art of elevating their brand and product while being intentional about where and to whom they sell. Most importantly, they’ve figured out how to raise prices without sacrificing growth—lessons European luxury brands would do well to heed.
The Business of Fashion spoke with top executives from standout American brands to uncover the secrets behind their success and what European labels can learn from them.
“In the US, there’s always been a sense of pragmatism,” said Pierre-Yves Roussel, CEO of Tory Burch and former head of LVMH’s fashion group. “Stay close to the customer and offer a product that has great intrinsic value.”
The American Advantage
In today’s cautious shopping environment, qualities once seen as weaknesses for American fashion—like its commercial mindset—are now its greatest strengths. Historically, American brands were labeled “too commercial,” expanding rapidly through licensing deals and wholesale partnerships, often at the cost of overexposure. Over the past decade, brands like Ralph Lauren, Tory Burch, and Coach have corrected course, pulling back from outlet malls and discounting to focus on full-price sales in their own stores. Tory Burch, for instance, now sees 85% of its sales come directly from its own channels.
But the commercial mindset lives on in the products themselves. The goal, executives say, is to create strong, wearable pieces that fit seamlessly into customers’ lives. Even high-fashion brands like Khaite strike a balance between runway glamour and everyday practicality. “There’s the runway, but there are also so many wearable pieces for how women go through her life,” said Khaite CEO Brigitte Kleine. This balance between fantasy and function is something European brands have struggled with, particularly in recent seasons.
Creative Continuity and Consistency
While European brands are often rooted in craft or fashion, American brands are more about lifestyle—a lifestyle often deeply tied to their founders. Think Ralph Lauren’s Western-inspired designs, rooted in his Colorado ranch, or Khaite’s downtown cool, reflected in its brutalist store design and 90s rock soundtracks. This authenticity creates a natural alliance with culture, whether it’s Ralph Lauren dressing Team USA for the Olympics or Coach partnering with the WNBA and Gen Z-favorite series like “The Summer I Turned Pretty.”
Creative continuity also plays a key role. European maisons often see frequent changes in creative directors, with some tenures lasting just a season or two. In contrast, American brands like Tory Burch, Ralph Lauren, and Khaite are led by their founders, while others, like Coach’s Stuart Vevers, have held their roles for over a decade. “When so many things are changing, what a brand stands for gets a bit lost,” Roussel noted. Longer tenures allow creative visions to develop, resonate, and evolve over time.
Knowing Your Customer
American brands excel at understanding their customers. Coach, for example, has created Gen Z-friendly apparel to position itself as younger customers’ first luxury purchase. Khaite appeals to a cross-generational downtown sensibility, while Ralph Lauren interprets classic Americana in endless ways. Keeping production close helps too—Tory Burch’s homewares, for instance, are produced in-house to maintain quality and consistency. “If you’re trying to appeal to everyone, you’re really appealing to no one,” Kahn said. “You become very vanilla.”
Getting Their Money’s Worth
As fashion conglomerates chase growth, the pressure to scale has intensified. But in the process, European luxury brands have hiked prices far beyond inflation, alienating customers. American brands, meanwhile, focus on providing value. Even at the high end, they offer entry-level pieces like Khaite’s $320 T-shirts alongside $9,000 leather jackets. “We’re very focused on making sure we don’t alienate our client,” Kleine said.
But luxury isn’t just about the product—it’s about the experience. Scarcity can generate hype, but it can’t come at the expense of customer connection. “Exclusivity stems from exclusion, which is arcane and a barrier,” said Coach’s Vevers. “Desirability is more relevant than exclusivity.”
The Bigger Question
American fashion’s historic lack of prestige compared to Europe has forced it to innovate and connect with customers in ways European brands haven’t had to—until now. As fashion’s dynamics shift, American designers are reclaiming their power. “American fashion has always been looked down on as too commercial. But isn’t that the point?” said CFDA CEO Steven Kolb. “Americans have gotten more confident in what we do.”
So, here’s the question for you: Is European luxury’s elitism its greatest strength or its Achilles’ heel? And can American fashion’s pragmatism truly redefine luxury for the modern consumer? Let’s debate in the comments.
