Street spirit

Streetwear has exploded onto the fashion scene and sent rifts throughout the entire fashion industry, ultimately defining modern fashion trends.

Streetwear items include t-shirts, hoodies, and trainers and its consumers are most often 25 and younger, and although most are not on high incomes, they will happily spend $100-300 on a single product.

Streetwear and luxury fashion once remained in separate lanes. However, streetwear increased its popularity by redefining exclusivity, beyond price. Customers have to find out where and when to make purchases through "drops", where brands announce a product release at a specific date and time, whether online or in-store. The scarcity and limited production coupled with the rarity of “drop” occurrences successfully create high demand. A second-hand market, which sees millions in value traded annually, acts as a metric for a brand's success and popularity.

The big players
The giants in this sector, such as Off-White, have enjoyed huge success, ultimately surpassing Gucci as the world's hottest label based off an index of sales and consumer sentiment. Other luxury brands, such as Balenciaga, have also incorporated elements of streetwear into their product ranges, with the inclusion of more casual and streetwear styles. Luxury giants have also collaborated with Nike, Adidas, and The North Face, successfully generating more hype amongst young consumers who have a keen interest in sportswear and casualwear.

The luxury apparel market grew by 24.2% in 2021, an indication of luxury brands success in attracting Gen Z and millennial consumers, as the streetwear industry continues to do.

Hyperphysical spaces
As over half of young consumers go to physical stores for an experience, luxury fashion brands had to evolve their retail spaces to generate further engagement. Hyperphysical spaces are defined as retail spaces that are enriching and evoke emotion, providing visitors with a more personal and memorable experience.

Jacquemus created a pop-up at Selfridges in London, Le Blue, based on a bathroom design to showcase their exclusive products from look books. Previous iterations by the brand in Paris and Milan went viral on social media.

Balenciaga created a pop-up for their Le Cagole-it handbag in London and Bangkok, where the retail spaces were covered with shaggy pink faux fur. Bottega Veneta staged a maze installation pop-up without any merchandise in Seoul, instead focusing on visitor engagement and experience, emphasising that sales can no longer be used as a single metric for success. Additionally, creating positive experiences or memorable experiences is likely to drive transactions, whether immediately, in the future, in-store or online.

The influence
Luxury fashion is not the only industry that has clocked onto this paradigm shift. Mass-market, high-street brands, including Gap, Adidas, New Balance, Reebok, and J.Crew have all brought in creative directors that had once ran prestigious luxury streetwear giants, such as Yeezy and Fear of God.

Hiring such creative leaders, who were on the forefront of design for streetwear, will redefine mass market classics. With such developments, streetwear will become more affordable and accessible. Luxury brands, both traditional and streetwear, must learn to adapt to accommodate for younger consumer groups, who are sure to have their attention shifted to these redefined mass market brands.

The opportunity
Streetwear is a popular draw for more than just Gen Z consumers, and they can add freshness and a contemporary feel to an asset.  

Gate Zero, a pop-up concept that trialled in Zurich Airport (seen above), brought products from over 15 luxury fashion brands in 2021. Highsnobiety, a streetwear publisher and the creator of Gate Zero, has since teamed up with Gebr Heinemann in a 50-50 joint venture to expand the Gate Zero concept to other airports. After the success of the Zurich Airport pop-up, Gate Zero was able to open in a permanent space in Kastrup International Airport in Copenhagen in May 2022.

Asset managers and investors can use this as an example of the renewed energy that can be brought in with implementing elements of streetwear, just as the mass market fashion brands are looking to do in tandem.

Alexander Foy