【France】Luxury Slowdown: What Levers for a Rebound in 2025?

The luxury world is now navigating troubled waters. After several years of strong growth, 2024 ended with a notable slowdown for the sector—a first since the pandemic. Analysis.
For the first time in over a decade, global sales of luxury goods declined by 2% in 2024, according to the annual study by Bain & Company. This figure, though seemingly modest, marks a turning point for a sector accustomed to spectacular performance. Forecasts for the coming years confirm this trend: according to McKinsey, the sector’s annual growth is expected to fluctuate between 1% and 3% until 2027, while the more optimistic Bain & Company envisages a rebound reaching 4%.
This growth deceleration is already translating into marked declines for market leaders: LVMH (-3%) and Kering (-15%) recorded significant sales drops, illustrating the new vulnerabilities of a sector long considered impervious to economic crises.
The slowdown is all the more concerning for the French economy. Luxury represents nearly 3% of France’s GDP and generates one million direct and indirect jobs. These jobs, spread across fashion, wines and spirits, and watchmaking-jewelry, make luxury a true economic engine.

Between 2020 and 2023, however, luxury soared above global markets, reaching unprecedented levels of profitability. Sales of personal luxury goods, such as leather goods, watches, and jewelry, recorded an average annual growth of 5%, peaking at +9% in 2022. This period of “euphoria,” fueled more by sharp price increases than by higher volumes, allowed major houses to triple their profits in just four years.
However, this dynamic revealed its limits in 2024. Sales declines strongly impacted historical pillars like LVMH, where flagship divisions were affected: -5% in fashion and leather goods, and -8% for wines and spirits, notably cognac (-11%) destined for China. Conversely, some segments, like perfumes (+5%) and selective retailing (+6%), proved more resilient. Kering, for its part, did not escape the crisis: an 11% drop in revenue in the first half, and a 16% decline in the third quarter.
This downturn stems from several structural and cyclical factors. First, consumers adopted more cautious purchasing behaviors in the face of hyperinflation that has hit the sector in recent years. According to Bain & Company, approximately 50 million customers have left the luxury market over the past two years, redirecting their spending towards products deemed more essential.
Furthermore, price increases by major houses, which have climbed by an average of 33% since 2019, helped maintain comfortable margins but ultimately dampened demand. McKinsey highlights that this strategy, although profitable in the short term, has

Some houses, however, manage to stand out. Hermès, thanks to limited production and a controlled scarcity strategy, continues to post double-digit growth (+11%). The performance of Loro Piana, a house within the LVMH group, was praised by Jean-Jacques Guiony, LVMH’s CFO, in his results analysis, with its “quiet luxury” positioning. Loro Piana thus succeeds in attracting a clientele seeking exclusivity, discretion, and quality.

If the sector’s slowdown in 2024 revealed the structural fragilities of the global market, it also highlighted an unavoidable truth: the future of luxury remains closely tied to the evolution of Chinese demand. For over a decade, China has represented a growing share of the global luxury clientele, with Chinese consumers accounting for up to 35% of global purchases, according to Bain & Company.
Between 2019 and 2023, China recorded spectacular growth in luxury goods consumption, reaching an average positive growth of 18% per year. This market, which doubled in size in just four years, solidified the position of Chinese consumers as indispensable pillars of the industry worldwide. During this period, spending on luxury goods by Chinese consumers fueled a significant portion of the performance of major French houses, propelling LVMH, Kering, and other major players to new heights.

However, economic and geopolitical turbulence in recent years has slowed this momentum. Since 2023, the growth of the Chinese market (in the French luxury sector) has encountered several obstacles, both structural and cyclical. Among them, the government’s campaign for “common prosperity” has curbed ostentatious displays of wealth. This initiative has encouraged more discreet consumption, amplifying a phenomenon of “luxury shaming” where consumers hesitate to display purchases perceived as extravagant.
Simultaneously, the priorities of Chinese consumers have evolved: health, travel, and other emotionally enriching experiences have taken precedence over purchases of traditional luxury goods. These changes in consumption habits, combined with a less favorable overall economic climate, have led to a stagnation in the growth of the Chinese market, which had been the sector’s main engine for years.