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Luxury market faces more complex turbulence – Bain & Company lowers 2025 forecast

Posted On May 15, 2025 CPP-LUXURY 0

Global consultancy Bain & Company has significantly lowered its forecast for the luxury goods sector, now expecting sales to decline between 2% and 5% in 2025. The firm had previously projected a modest gain of up to 4%. The downward revision highlights growing challenges for the luxury industry following a 1% drop in global sales in 2024.

In its highly anticipated spring report, Bain noted that the global luxury market is now navigating “more complex turbulence across multiple axes.” The consultancy pointed to mounting economic pressures and growing consumer fatigue over rising prices during the first quarter of the year. It also observed that many shoppers appear to be waiting for more original and creative offerings from luxury brands.

Major fashion houses such as Gucci, Chanel and Dior have all appointed new creative leads in recent months as the sector faces its most significant downturn in years. A combination of China’s real estate crisis and weakened consumer spending in the United States has created a ripple effect across the industry.

The updated forecast arrives as the luxury market confronts renewed economic instability and intensifying global trade tensions. While 75% of luxury consumers surveyed by Bain said tariffs were unlikely to impact their future purchases, nearly half of those who had already reduced their spending attributed their decision to rising prices.

Analysts point out that many luxury brands seized the post-pandemic recovery to implement their steepest price increases in recent years, which may now be contributing to consumer pushback. At the beginning of the year, industry leaders remained hopeful for a rebound in the U.S. following encouraging signs during the holiday season. However, early indicators of softening demand began to surface by mid-February, dampening optimism for a swift recovery.