Luxury Sector Faces First Contraction in Fifteen Years: The Great Diversion
Milaan, vrijdag, 20 juni 2025.
Bain & Company reveals a disturbing forecast for the luxury sector in 2025: an expected revenue decline of 2 to 5%. Global economic challenges, declining consumer confidence, and geopolitical tensions form the primary triggers for this unexpected downturn. Notably, this is the first significant decline outside the COVID period since 2008. While the impact appears substantial, experts point to the sector’s resilience and the necessity for brands to strategically reposition. The prediction is based on in-depth analysis of consumer trends in China, the United States, and Europe, indicating that the luxury market is at a critical transition moment with fundamental shifts in customer perception and spending patterns.
Economic Turbulence in the Luxury Sector
The luxury sector is facing an unexpected challenge in 2025, with a predicted revenue decline of 2 to 5 percent, according to the latest report from Bain & Company in collaboration with Altagamma [1][2]. This prognosis marks the first significant downturn outside the COVID period since the global financial crisis of 2008-2009 [3].
Global Market Challenges
The downturn is driven by complex economic factors, including declining consumer confidence and geopolitical tensions in key markets such as China, the United States, and Europe [4]. Bain & Company has outlined three potential scenarios for the luxury market, with the most likely option being a contraction of 2 to 5 percent [5].
Strategic Repositioning
Experts emphasise the necessity for luxury brands to strategically adapt. Federica Levato from Bain & Company states that ‘uncertainty is the new norm’ and brands must focus on core values such as quality, creativity, and authenticity [6].