The Luxury Reset: How Procurement Funds Transformation Without Compromising Brand

The luxury sector is shifting into a new reality. After more than a decade of strong growth, top brands are seeing revenues flatten and EBIT margins fall from 21% in 2019 to 18% in 2024. Early indicators suggest this trend is persisting into 2025, with only a few houses posting modest growth — creating sustained margin pressure and slower cash generation across the sector. Aspirational consumers are pulling back, global demand is normalizing, and inflationary pressure continues to squeeze profitability.

Leaders now face a familiar tension: transformation is essential, but it cannot come at the expense of brand integrity. This is why procurement — especially in indirect spend — is emerging as a strategic enabler.

Unlike COGS, which evolves with collections, indirect costs tend to grow year after year, often without coordinated oversight. In many maisons, 30–40% of this spend has no clear ownership, despite representing up to half of total third-party spend.

Bringing structure and transparency to these categories enables rapid, low-disruption impact — typically 8–10% savings per category within six to twelve months. And because these actions do not touch ateliers, product design, or client experience, they offer a rare opportunity: funding transformation without compromising what makes the brand timeless.

As one luxury executive put it:

“Reducing third-party spend was the only way to finance our modernization without touching the atelier or boutiques.”

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Key Insights from the Luxury Reset White Paper

Luxury’s shift from expansion to efficiency is forcing leaders to rethink how transformation is funded
Indirect spend has become the sector’s most immediate and least disruptive source of financial headroom
Many maisons lack visibility and control over 30–40% of indirect spend — a structural barrier to transformation
A four-phase procurement approach enables fast impact while safeguarding brand identity
Case studies show measurable outcomes, including:
- 30% reduction in media-agency fees
- 26% savings through sustainable packaging redesign
- 10% optimization in IT licensing
Procurement is becoming a strategic co-pilot for CEOs and CFOs, enabling reinvestment in creativity, client experience, and sustainability

What Sets Leading Luxury Organizations Apart

The white paper introduces a clear, four-phase approach that helps luxury brands improve cost performance.

Leading maisons succeed by:

1. Creating Transparency

Harmonizing fragmented spend data to build a single source of truth.
2. Identifying Opportunities

Prioritizing categories by impact while safeguarding brand integrity.
3. Implementing with Speed & Sensitivity

Activating commercial, technical, and demand levers without disrupting creative processes.
4. Securing Long-Term Impact

Embedding governance, roles, and operating models that sustain results.

This approach enables procurement to deliver fast, low-disruption impact while fully respecting brand DNA.

What this means for luxury leadership

Luxury’s next decade will be shaped by leaders who pair creative excellence with operational intelligence. Those who treat procurement as a strategic partner, rather than a cost lever, will unlock the reinvestment capacity needed to accelerate transformation.

The white paper offers a practical playbook for CEOs and CFOs on how early procurement involvement can drive long-term value creation.

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Download “The Luxury Reset” to discover how leading maisons are using procurement to fund transformation with precision — without compromising brand identity.

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