Editor’s Note
This analysis highlights a pivotal shift in the luxury sector, as economic pressures are projected to shrink the global consumer base by 70 million “aspirational” buyers by 2025. The article examines the implications for major European luxury houses navigating this new reality.
The luxury market in Europe and its publicly traded companies—LVMH, Kering, Hermès, Richemont, Ferrari, and Porsche—are undergoing profound changes. After years of double-digit growth driven by post-pandemic spending, the global consumer base for luxury goods will shrink from 400 million in 2022 to 330 million in 2025. This represents a loss of 70 million “aspirational” buyers, who are moving away from this segment due to increased economic uncertainty and rising global inflation.
This trend has puzzled investors. Ultimately, what will happen to the value of major luxury groups if consumers do not follow? The consequence was a significant drop in stock prices and in fortunes like that of Bernard Arnault, owner of the LVMH conglomerate.
Market volatility, geopolitical tensions, and fragile confidence have had a full impact. Consumption slowed last year, leaving the luxury sector with virtually no growth, according to Bain & Company and the Altagamma Global Luxury Market Monitor. By age group, Baby Boomers (10% of the total) and Generation X (25%) remain almost unchanged. In contrast, Millennials—who represent the largest market share—began to reduce their consumption of traditional brands. Meanwhile, spending by Generation Z (19%) remains concentrated in a handful of culturally significant brands.
For 2026, projections are different. Most analysts anticipate a better year, though without major leaps: consulting firms estimate a recovery of between 3% and 5%. Profitability, which has been falling since its peak in 2022, will remain under pressure. Margins continue to be affected by the advance of global inflation, tariffs imposed by US President Donald Trump, and promotions.
In other words, this is an adjustment far from being a collapse or a trend reversal.
The long-term projection for personal luxury goods remains an annual expansion of between 4% and 6% until 2035. According to specialists, this year’s growth will be driven by those brands that bet on product innovation, and not by pricing strategies, to recapture the aspirational consumer.
Demand for personal luxury goods will be sustained by a combination of mature and emerging markets, and not by a single dominant economy, as was the case with China in the recent past.
Projections from Bain and Altagamma anticipate a recovery driven by the reactivation of China and the Asia-Pacific region, which could grow 5%, the good pace of the United States (also with an estimated 5%), and firm demand in Europe, where an increase of 4% is expected.
However, behind these numbers there are important differences. It is worth analyzing each segment, as “durable” luxury—high-value, long-life goods such as watches, fine jewelry, and high-end accessories—and “light” luxury—such as textiles, clothing, and bedding—show very different behaviors.
In 2025, jewelry was the best-performing category of personal luxury items: it grew between 4% and 6%, driven by investment purchases, even while other categories stagnated.
It is considered structurally attractive because it combines emotional purchase, brand legacy, and value reserve characteristics. These are key factors in contexts of financial fluctuations and tension in the real estate market, especially in China. Among the publicly traded groups with strong exposure to the jewelry business, Richemont—with the best combination in the sector—stands out, along with LVMH (through Bulgari and its watch and jewelry division) and, to a lesser extent, Swatch Group, with high-end brands in its portfolio.
Although China continued to show overall weakness—with a 5% drop in 2025—jewelry held up better than other categories. The number of Chinese with ultra-high net worth grew 30% that year, supporting high-value purchases, despite the contraction in more massive aspirational demand.
Western luxury brands point out that their clientele differs from local gold buyers. In fact, surveys continue to place Western maisons at the top of the preference ranking among Chinese millionaires. However, competition is intensifying in the more massive gold segment.
Leather goods and footwear recorded a contraction last year, with declines of between 5% and 7%. In an intermediate zone, clothing and watches fluctuated between a 1% drop and a 1% increase. This behavior reinforces the idea that ultra-high-quality products remain resilient, while “light,” aspirational, and logo-centric luxury—which saw strong price increases—faces increasing resistance from the middle class.