Editor’s Note
The luxury sector faces a pivotal year in 2026, tasked with rebuilding consumer trust after a recent contraction. This analysis explores the signals behind the cautiously optimistic forecast for renewed growth.
If in 2025, the global luxury industry contracted by 2% to 358 billion euros, and despite the loss of nearly 20 million consumers that same year, the latest Bain-Altagamma report remains optimistic with an expected growth of 3% to 5% in 2026. What are the signals that allow for this forecast? Analysis.
**5%** – Estimated rate of erosion in the luxury market in 2025
**€108 Billion** – Sales amount in the personal luxury goods market in Europe in 2025
**1.2%** – European GDP growth forecast for 2026, according to Mastercard Economics Institute
In 2025, the luxury industry lost nearly 20 million consumers, reducing the global active clientele to 330 million, according to the latest Bain-Altagamma report, compared to 400 million three years earlier. In 2026, will this erosion (estimated at 5% in 2025) continue?
The highly tense geopolitical context at the beginning of 2026, notably with the interventionist policy displayed by the Trump administration in Latin America, and particularly in Venezuela, does not currently allow for feeding this optimism. Latin America is indeed one of the regions of the globe that maintains its level of spending on luxury goods, especially Mexico, driven by the dynamism of trade with the United States and the phenomenon of nearshoring, leading to an improvement in living standards, particularly in Monterrey where Tesla announced opening a gigafactory with a $6 billion investment. American interventionist policy could momentarily destabilize the area and freeze the opening of new luxury boutiques there.
Another crucial geopolitical point is Chinese intentions towards Taiwan, which could also be encouraged by this assumed global interventionist phenomenon and reinforce the caution of Chinese customers regarding spending in 2026. According to Bain, mainland China experienced a significant slowdown in 2025, although less pronounced than in 2024. The luxury market declined by approximately 6% to 8% at current exchange rates compared to 2024 and represented 42.96 billion euros (12% of 358 billion euros) in sales in 2025. However, Chinese consumption of luxury goods is also shifting to domestic brands, like jeweler Laopu Gold Co, which are increasingly favored by customers, encouraged by a heightened sense of national pride, but also attracted by their better value for money and superior cultural identity. According to the Wealth Briefing report, 56% of mainland Chinese consumers planned to buy more Chinese brands in 2025.
However, the Chinese government continues its support for domestic consumption and intensifies its investments in R&D to promote technological autonomy. On this point, Chinese dynamism in artificial intelligence, aerospace, renewable energies, and quantum technologies has been welcomed by an increase in international investments and a rise in the value of listed Chinese companies, according to an article in the Global Times.
The driving markets for luxury in 2025 remained Europe and the Americas. The European continent remains in first place with a total of 108 billion euros in sales in 2025, down 1% to 3% at real exchange rates, followed by the Americas with 101 billion euros, stable or slightly up between 0 and 3% at real exchange rates. On this continent, it is interesting to note that, according to data from Pyxis by Bain & Company, the number of American luxury customers decreased, the frequency of purchases remained stable, and the average order value increased. Another notable point: accessible luxury brands prospered, a general trend observed worldwide. Another determining factor: the weakness of the dollar, which made the purchase of certain luxury products on the domestic market more attractive for American consumers. Here too, the renewed pride in buying national played a role. For example, Ralph Lauren reported revenue growth of +8% in 2025, with total revenues reaching approximately $7.1 billion for the full year, exceeding its initial forecasts of 6–7% growth. As for Coach, the main brand of the Tapestry group, it was the main growth driver, with sales up approximately +10% in 2025. Tapestry communicated record results for fiscal year 2025, with total revenue close to $7 billion, up approximately +5% compared to 2024.