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For the first time since the 2009 financial crisis, the luxury goods market is losing its shine. A whopping 50 million shoppers have stopped splurging on designer bags, watches, and other high-end items, according to Bain & Company’s latest report. The reason? Sky-high prices that just don’t match the experience, quality, or exclusivity people expect when buying luxury.
Over the past few years, many brands hiked prices without offering anything new in return. This “broken promise,” as analysts call it, has left shoppers unimpressed. Major players like Louis Vuitton, Dior, Gucci, and Burberry missed their revenue targets this year, as customers started looking elsewhere or simply cutting back.
Michael Kors, founder of his namesake brand, put it bluntly: “The luxury consumer wants something rare and unique, but too many brands are failing to deliver that.”
One standout is Hermès, whose iconic Birkin bag—with its legendary waitlists and exclusivity—has kept the brand thriving while others struggle. “When something feels truly rare, it holds its value,” explained a retail expert.
China, once the powerhouse of luxury growth, is also pulling back. Inflation and low consumer confidence have hit spending hard, with brands like Gucci-owner Kering reporting double-digit drops in sales. Globally, many “aspirational” shoppers are rethinking their priorities, focusing on investments or spending in other areas like travel or dining instead of luxury goods.
The entire sector is expected to shrink by 2% this year, but there’s hope for a rebound by late 2025, especially in places like Japan, where favorable exchange rates are encouraging spending.
Experts agree on one thing: luxury brands need to rethink their approach. “It’s about making people feel inspired again,” one analyst said. “Surprise them, delight them, and show them why luxury is worth it.”
For shoppers who’ve been priced out or left disappointed, it’s clear that exclusivity, quality, and authenticity still matter—and the brands that get it right may be the ones to thrive in the future.
Source: Fortune
