The global market for luxury goods is expected to weaken in 2025. The reasons for this are geopolitical tensions and economic uncertainties that, according to a recent study by Bain & Company, could be among the strongest challenges of the past 15 years in cooperation with the Altagamma Foundation.
The study warns: “Luxury sales are sensitive to uncertainties and are under growing pressure. The trust of consumers: on the inside is affected by economic upheavals, geopolitical and trade policy tensions, currency fluctuations and the volatility of the financial markets.”
The two most important sales markets of China and the USA are particularly affected. In the United States, customs dynamics primarily ensure that the reservation of buying, while in China, a waiting attitude of the middle class dampens consumption.
Return to the normality after the boom
“We are currently experiencing an unusual phase of economic and geopolitical turbulence,” explains Joëlle de Montgolfier, head of the luxury area at Bain, to the AFP news agency. After a strong increase in expenses for luxury goods in the period after pandemic, a return to normality can now be observed. At the same time, she emphasizes: “The global demand for luxury remains – we do not experience any market slump.”
For 2025, the study predicts a decline in sales of personal luxury goods – such as fashion, leather goods, jewelry and watches – by two to five percent. This group of goods accounts for around a quarter of the entire luxury market. In 2024 the market had achieved sales of 1.478 billion euros.
“The last quarter of 2024 was still stable, but the 2025 annual start was weaker,” continued de Montgolfier. The current development is part of market normalization.
Three scenarios for 2025
In addition to the basic scenario, Bain expects two alternative courses. In an optimistic scenario, sales could stabilize and fluctuate between minus two and plus two percent. In the pessimistic case, demand could collapse even more, with declines between five and nine percent.
In addition, de Montgolfier expresses doubts about the current radiance of many luxury brands: “There is uncertainty about what added value luxury offers today and whether he can convince his customers: inside.” This uncertainty can also be felt within the industry, for example by numerous changes in the creative management positions of large houses.
In the past few months there have been significant changes in personnel: Matthieu Blazy took over creative cable roles at Gucci at Gucci at Chanel, Jonathan Anderson. “The industry is aware that renewal, new ideas and innovation are necessary,” says de Montgolfier. “But it is still unclear how strong this renewal will actually be.”
Long -term perspective remains positive
The Bain/Altagamma study remains optimistic in the long term. Over the next five years, over 300 million new consumers could enter the market – especially from generations Z and Alpha. Together with an increase in global income and the progressive generation change in the assets, potential customers for luxury goods should continue to grow.
This article was used with digital tools translated.
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