Sales of personal luxury goods are projected to decline by 2% to 5% in 2025, according to a new study by Bain & Co., following a drop to \u20ac364 billion ($419 billion) in 2024. Despite geopolitical tensions, tariff threats, and slowing economies, Bain partner Claudia D\u2019Arpizio emphasized that the market remains resilient. \u201cIt is slowing down but not collapsing,\u201d she said at the report\u2019s release Thursday.<\/p>\n\n\n\n
Luxury brands are not just contending with macroeconomic headwinds. The sector is facing what Bain calls a \u201ccreativity crisis,\u201d paired with aggressive pricing strategies that are alienating consumers. Recent revelations of sweatshop labor in Italian subcontractors have further tarnished brand perception, compounding the pressure on legacy houses.<\/p>\n\n\n\n
The study shows significant sales declines in key markets. In the U.S., economic volatility and tariff risks have dampened consumer confidence. Meanwhile, China has recorded six consecutive quarters of contraction due to persistently low sentiment. Europe remains stagnant, while some regions \u2014 including Southeast Asia, Latin America and the Middle East \u2014 are experiencing growth.<\/p>\n\n\n\n
This regional divide is also visible in corporate performance. Prada reported a 13% increase in Q1 revenue to \u20ac1.34 billion, while Gucci saw revenue plunge 24% to \u20ac1.6 billion. In response, Gucci\u2019s parent company Kering appointed former Renault CEO Luca De Meo to lead a strategic turnaround. His arrival was welcomed by markets, pushing Kering shares up 12%.<\/p>\n\n\n\n
To cushion the impact of potential U.S. tariffs, luxury companies are adjusting logistics \u2014 such as shipping directly from factories and cutting down in-store inventory. With multiple brands undergoing creative shifts, Bain warns that \u201cstuffing the channels doesn\u2019t make sense\u201d in a market where consumers are increasingly selective.<\/p>\n\n\n\n
D\u2019Arpizio noted that while war and instability will likely persist, some clarity around tariffs could ease pressure. Importantly, luxury sales are more closely correlated with stock market trends than geopolitical developments.<\/p>\n\n\n\n
Despite short-term declines, the luxury sector has proven its capacity for recovery. From 2019 to 2024, the industry posted a 28% growth, far surpassing pre-pandemic levels, according to Altagamma President Matteo Lunelli. Previous crises \u2014 including the 2008 recession and the 2020 pandemic \u2014 saw sharp rebounds fueled by pent-up demand and emerging markets.<\/p>\n","protected":false},"excerpt":{"rendered":"
Tariffs, wars and creative fatigue weigh on global sales Sales of personal luxury goods are projected to decline by 2% to 5% in 2025, according to a new study by Bain & Co., following a drop to \u20ac364 billion ($419 billion) in 2024. Despite geopolitical tensions, tariff threats, and slowing economies, Bain partner Claudia D\u2019Arpizio […]<\/p>\n","protected":false},"author":10772,"featured_media":12132,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[1798,1794,1802,1799,1796,1800,1793,1795,1531,1797,1791,1803,1801,1792,1078],"class_list":{"0":"post-12131","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-lifestyle","8":"tag-bain-co","9":"tag-china-market","10":"tag-creative-fatigue","11":"tag-digital-luxury-strategy","12":"tag-geopolitical-risk-retail","13":"tag-global-economic-slowdown","14":"tag-global-sales-slowdown","15":"tag-gucci-revenue","16":"tag-kering","17":"tag-luxury-consumer-trends","18":"tag-luxury-goods","19":"tag-luxury-market-rebound","20":"tag-luxury-sector-outlook","21":"tag-prada","22":"tag-u-s-tariffs"},"_links":{"self":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/12131","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/users\/10772"}],"replies":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12131"}],"version-history":[{"count":1,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/12131\/revisions"}],"predecessor-version":[{"id":12133,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/posts\/12131\/revisions\/12133"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=\/wp\/v2\/media\/12132"}],"wp:attachment":[{"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12131"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12131"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thetimesfinancial.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12131"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}