Luxury closes out August amid restructuring, new alliances and an increasingly intense battle to reignite desire

Dolce & Gabbana, Gucci and OVO show that the luxury business is entering a period of profound restructuring

The news shaping this August 28, 2026 reveals a luxury industry that looks very different from the one that existed during the years of almost automatic post-pandemic growth. Capital matters as much as creativity once again, major brands are reviewing their internal structures, intellectual property is increasingly being separated from commercial operations, and maisons are searching for new ways to generate desire without relying exclusively on price increases. One of the most relevant cases is Dolce & Gabbana, which has reached an agreement with its banks to gain additional time to reorganise its financial structure. Creditors have suspended certain covenant-related requirements until March 2028, while the Italian group has committed to pursuing extraordinary financing operations and restoring its net financial debt-to-EBITDA ratio to no more than three times. The latest accounts reflect the pressure on the business: net revenue declined by 2%, the fashion division contracted, the financial year ended with losses once again, and debt increased. The case demonstrates that even one of the world’s most recognisable luxury brands needs to combine creativity, financial discipline, cost control and intelligent monetisation of its assets to compete in the new cycle.

At the same time, OVO, the brand co-founded by Drake, has just completed a transaction that could anticipate how many culturally driven brands will grow over the coming years. Authentic Brands Group has acquired a majority stake in the intellectual property of October’s Very Own, while Vince Holding has acquired its operating business and also retains a 5% stake in the intellectual property. Drake maintains an ownership interest and creative involvement. Vince will use its infrastructure to accelerate OVO’s stores, e-commerce and wholesale distribution, while also transforming itself into a multi-brand platform. The structure is particularly interesting: the brand, its symbols and its intellectual property can be managed as an independent asset while another specialised organisation commercially operates retail, merchandising, e-commerce and distribution. The founder continues to provide cultural legitimacy and creativity, but expansion no longer depends exclusively on a corporate structure built around him. For the luxury and premium industries, this model could be replicated across brands created around artists, athletes, designers and major digital communities.

Gucci wants to reignite desire by changing more than its collections

The most closely watched transformation in international fashion continues to unfold inside Gucci. Demna is not approaching his arrival simply as the replacement of one creative director with another. He is also changing the way products are created. Among his first moves has been the establishment of an in-house atelier that allows prototypes to be developed and modified more quickly, alongside a new approach to proportions, sizing and the creation of an immediately recognisable Gucci silhouette. Early launches have reportedly increased store traffic, although it is still too soon to determine whether that interest will translate into a sustained recovery in sales. The importance of the experiment lies precisely here: Gucci needs to demonstrate that a megabrand can regain cultural relevance after years in which price, distribution and awareness were no longer enough to sustain growth.

Demna’s objective appears to be building a brand capable of provoking a powerful emotional response once again. In contemporary luxury, indifference can be more dangerous than controversy. When virtually every major company has spectacular boutiques, international ambassadors, multimillion-dollar campaigns and enormous digital budgets, the true scarcity is once again the ability to generate desire. Gucci is therefore becoming one of the industry’s most important laboratories: if it succeeds in restoring growth through product, identity and a faster creative architecture, it could provide a reference point for many other maisons currently attempting to rebuild relevance without resorting to further price increases.

Guerlain shows that heritage can also be used to attract new consumers

In beauty, Guerlain is pursuing almost the opposite strategy to creative disruption: looking into its own archives to find growth. The maison is reviving L’Heure Bleue, originally created by Jacques Guerlain in 1912, through a new interpretation that represents its first major women’s fragrance launch since Mon Guerlain in 2017. The decision is particularly interesting because the company is not eliminating the historic fragrance: it is retaining L’Heure Bleue 1912 while creating a contemporary proposition capable of introducing that universe to another generation of consumers. The new launch is also being introduced through specific retail activations, including one at Isetan Shinjuku.

The strategy summarises one of the greatest competitive assets of historic maisons. A young brand can buy visibility, hire celebrities or develop an excellent formulation, but it cannot manufacture two centuries of history. The challenge is preventing that heritage from becoming a museum. Its true value emerges when a company succeeds in transforming its archive into contemporary product. For LVMH, beauty is also an especially strategic category: it enables a much higher purchase frequency than fashion or leather goods and offers entry points into the universe of its maisons at very different price levels. The group is simultaneously strengthening the operating structure of its Beauty business, while Watches & Jewelry also continues to show strong momentum, with organic growth of 11% in the second quarter.

Vacheron Constantin takes rarity beyond watchmaking itself

High watchmaking is providing another important signal today. Vacheron Constantin has taken its Métiers d’Art collection into an even more artisanal territory through its One of Not Many Crafts Programme, inviting six independent creators from disciplines outside traditional watchmaking to reinterpret the animal kingdom on the dial. Gold embroidery, micro-origami, sculpted glass and other techniques are transferred onto a surface measuring barely 42 millimetres, resulting in six unique watches.

The strategy perfectly explains why the very top of the watch market continues to follow a different economic logic from conventional watchmaking. A mechanical watch no longer needs to justify its existence through accuracy: any smartphone can tell the time more precisely. Its value comes from what technology cannot easily turn into a commodity: artisanal knowledge, human time, difficulty, culture and rarity. By incorporating artisans from outside the traditional watchmaking world, Vacheron Constantin turns each piece into a meeting point between disciplines and makes it even harder to reproduce. In an industry where counterfeits are reaching increasingly sophisticated levels of precision, savoir-faire that is difficult to replicate also becomes an additional form of authenticity.

Luxury electric mobility receives another reminder: technology needs trust

Not all of today’s news comes from fashion, beauty or watchmaking. Lucid is recalling 27,185 units of its Air electric sedan in the United States because of an issue identified in an exterior lighting circuit that can overheat and increase the risk of fire, according to the U.S. road safety authority. The case is relevant to the entire premium automotive industry because it serves as a reminder that the race towards software, electrification and new technological architectures must coexist with a much more fundamental requirement: reliability.

For luxury brands, a technical problem also has a different dimension. The customer is not paying only for performance, but for peace of mind, service and confidence that the company will resolve any issue. As vehicles incorporate more software, batteries, sensors and electronics, after-sales service could become an even more important part of the premium experience. The next battle in luxury automotive will not be decided solely by range, power or acceleration, but also by which brand succeeds in making all the technological complexity beneath the product invisible to the customer.

The biggest story of the day is that luxury once again needs management, not just marketing

When Dolce & Gabbana, OVO, Gucci, Guerlain, Vacheron Constantin and Lucid are considered together, a conclusion emerges that is more important than any of the individual stories. The industry is entering a period in which brand remains fundamental, but can no longer compensate on its own for a weak financial structure, an undesirable product, inefficient operations or a poor customer experience.

Dolce & Gabbana needs to strengthen its financial architecture. OVO is separating intellectual property from operations in order to scale. Gucci is attempting to accelerate creativity and product development. Guerlain is transforming heritage into commercial innovation. Vacheron Constantin is elevating rarity through external savoir-faire. Lucid reminds the industry that even the most advanced technology requires flawless execution.

The luxury industry of the next decade will probably be far more difficult to manage than that of the previous one. Executives will need to understand creativity, finance, artificial intelligence, supply chain, intellectual property, retail, technology, culture, data and consumer behaviour simultaneously. Having a great brand and waiting for the market to grow around it will no longer be enough.

That may be precisely the most important story of August 28, 2026: after years dominated by expansion and price increases, luxury is entering the era of business excellence once again.

Prepare to lead the new luxury industry

The new cycle requires executives capable of combining creativity and desire with strategy, profitability, technology, artificial intelligence, operations and a deep understanding of the international consumer.

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