Editor’s Note
This article highlights the resilience of the global luxury market, which has maintained stability amid economic and geopolitical uncertainty. The insights are drawn from the latest “Global Luxury Market Report,” revealing a sector in significant transformation despite its substantial size.
Despite uncertain economic conditions, tense geopolitical situations, and rapidly changing consumer behavior, the global luxury industry has remained relatively stable this year. This is the conclusion revealed by the latest edition of the “Global Luxury Market Report.”
By 2025, total luxury spending will reach approximately €1.44 trillion, consistent with 2024, with fluctuations between +1% and -1% at constant exchange rates. However, behind this surface stability, a structural shift in consumer behavior is underway, increasingly favoring experiences and well-being over traditional personal assets.
The luxury personal goods sector—the core of the industry—is valued at approximately €358 billion in 2025 at current exchange rates, experiencing a slight contraction of 2%. The high-end client segment remains strong, while growth in the mid-to-low segments has slowed.
Categories include:
– **Jewelry**: A primary growth driver (+4%/+6%), supported by intrinsic appeal and customization.
– **Sunglasses and Eyewear**: Sustained growth (+2%/+4%), driven primarily by design and technology.
– **Beauty**: Stable, with strong dynamics in fragrances and a polarized high-end skincare segment.
– **Watchmaking**: Performing well in high price segments, with rising residual values for pre-owned watches.
– **Leather Goods**: Slower growth due to a lack of new “it-bags,” compensated by more playful offerings.
– **Footwear**: Under pressure from price sensitivity and competition from sportswear.
The accessible luxury market is thriving again as brands capture consumers at every stage of the purchasing process, with Gen Z favoring higher-value products at lower prices.
Rising operational costs and difficulty sustaining revenue growth have pushed margins back to levels seen over a decade ago. The EBIT margin for personal goods brands is expected to be around 15-16% in 2025, significantly below the peak of 23% reached in 2012.
Distribution dynamics confirm pressure on traditional models:
– Travel retail continues to perform excellently.
– The online channel remains stable.
– Single-brand store footprint has slightly decreased, with a reduction of 25,000 square meters in the past six months.
– US department stores are shrinking their network by 10%.
The trend is moving towards a more selective retail model: fewer, larger, more immersive stores offering personalized experiences.
2025 is a year of significant geographical divergence:
– **China**: Decline between -3% and -5%, with consumers favoring local brands and experiential offerings.
– **Japan**: Slowing growth after a stellar 2024.
– **Europe**: Slight decline (-1%/-3%) impacted by reduced tourism and a strong euro.
– **Americas**: Stable (0%–2%) due to US economic recovery and expansion in Mexico and Brazil.
– **Middle East**: The most dynamic region (+4%/+6%), driven by tourism and domestic demand.
Meanwhile, emerging areas with growing potential are surfacing: Southeast Asia, India, Latin America, and Africa, with a combined value already reaching €4-4.5 billion.
The luxury consumer base has shrunk from 400 million to 330 million in three years. There is a reduction in new customer acquisition (down 5% vs. 2024) and loyalty (the proportion of repeat customers dropped from 60% in 2022 to 40-45% in 2025). Consumers are buying less frequently, favoring more accessible price points and pre-owned goods. The only stable segment is the high spenders, now representing 46% to 47% of total market value.
Despite a phase of adjustment, Bain & Company forecasts an annual growth rate between 4% and 6% from now until 2035. This trajectory would see the luxury personal goods market valued between €525 billion and €625 billion, while the entire luxury ecosystem could reach between €2.2 trillion and €2.7 trillion.
The report emphasizes that the industry’s future depends on brands’ ability to balance creativity, discipline, ethics, and innovation. A new value formula based on entertainment, emotion, and ethics is fundamental to regaining trust, appeal, and cultural relevance.
The market continues to show resilience but is not immune to macroeconomic challenges and is striving for a delicate balance in the global economic landscape. To sustain growth, brands need quality-focused strategies underpinned by rigor, ethics, and innovation, focusing on a few high-impact locations, marking a shift towards a more experiential and selective model.
Amid high pricing structures and renewed consumer interest, brands face two key challenges: re-engaging aspirational audiences and legitimizing their expansion while maintaining brand consistency and authenticity. To ensure long-term resilience, companies must shift from scaling to precision, from adapting to trends to setting them. Brands that integrate ethics into their value proposition and build deep, sincere dialogues with consumers will secure a lasting competitive advantage.
