With global luxury growth poised to slow down by 1-3%. Let's dive into why it happened and what comes next.
Global luxury growth is expected to slow to just 1-3% from 2024-2027.
Luxury giants like LVMH and Kering are struggling. Once fueled by China and Europe, the industry now faces weak demand, economic pressures, and changing consumer habits. Meanwhile, new markets and trends are reshaping the landscape.
A Shift in Global Markets
China and Europe, once luxury powerhouses, are losing influence. Instead, regions like the Middle East and India are expected to drive future growth. Brands must rethink their expansion strategies to stay ahead.
Consumers are Spending Differently
Luxury spending is shifting from apparel and watches to high-end travel and wellness experiences. The desire for exclusivity remains, but how it’s expressed is evolving.
The Industry’s Own Misstep
Luxury brands chased demand by overproducing and raising prices. This diluted exclusivity and alienated even top spenders. Growth was driven by price hikes—not innovation—weakening long-term desirability.
The Rise of Boutique Brands
Shoppers are turning to smaller, niche luxury brands. Miu Miu, Prada’s sub-label, saw 105% growth, while industry giant LVMH struggled. Exclusivity and fresh creativity are winning.
The Quiet Luxury Effect
Consumers are gravitating toward understated, high-quality craftsmanship over flashy logos. Boutique luxury brands are well-positioned to thrive in this new era of “quiet luxury.”
Accessories & Resale Are Growing
Luxury buyers are accessorizing more, with belts, jewelry, and sunglasses gaining traction. The pre-owned luxury market is also expanding, offering consumers new ways to engage with high-end brands.
Industry Challenges Ahead
Executives remain cautious. Tariffs, economic instability, and China’s slow recovery make 2025 a challenging year. Brands must redefine their value proposition to stay relevant.
The Future of Luxury
To survive, luxury brands must reset and refocus on exclusivity, creativity, and desirability. The next era of luxury will be defined by craftsmanship, experience, and strategic storytelling.