The Global Luxury Market Enters a Phase of Strategic Moderation

MILAN / GENEVA – November 2025.

After a decade of uninterrupted growth, the global luxury industry is entering a new cycle defined by prudence, redefined value, and long-term sustainability. According to McKinsey & Company’s State of Luxury 2025 report, annual growth for the sector is expected to slow to between 1% and 3% through 2027, signaling the end of the post-pandemic boom and the beginning of a more selective, value-driven era.

Meanwhile, Bain & Company forecasts a possible 2% to 5% decline in personal luxury goods spending in 2025, driven by macroeconomic headwinds such as inflation, China’s cooling demand, and rising geopolitical tension.

A New Logic of Value

Industry analysts emphasize that this is not a downturn but a structural maturity phase for luxury. The categories expected to lead growth — leather goods, jewelry, and watchmaking — will continue expanding at a steady pace of 4% to 6% annually, driven by demand for craftsmanship, durability, and heritage.

Fashion and high-end footwear, however, face growing pressure from consumers who demand coherence, purpose, and tangible quality rather than logos or fleeting collaborations.

The most resilient markets remain the United States (4–6%), China (3–5%), and Europe (2–4%), while the Middle East and Southeast Asia emerge as new centers of gravity for investment — regions where cultural sophistication meets purchasing power.

From Growth to Meaning: Reinventing Luxury

The new luxury economy is forcing brands to rethink what “value” truly means. Personalization, digital-physical integration, aesthetic consistency, and social responsibility have become the core pillars of customer loyalty.

As analysts at CXG highlight, “the brands that will thrive are not those that sell more, but those that mean more.” The shift calls for a transition from numerical expansion — more stores, more product lines — to qualitative consolidation: creating memorable experiences, responsible production, and tightly curated brand communities.

A Sector Evolving, Not Slowing

Luxury is not retreating; it is evolving. The age of strategic discipline replaces automatic growth, where every choice — from store location to creative narrative — aligns with a long-term vision.

For the maisons that embrace this transition, the reward is clear: lasting profitability and cultural relevance. In times of moderation, excellence once again becomes the most powerful engine of luxury.