So here’s the thing about the fashion world right now – everyone’s freaking out about whether luxury fashion is having its final moment. I mean, when you read about LVMH losing the title and the millionaires dropping a hair below the billionaire slack from the sale of their handbags, then you get to feel that we are watching the slow killing of an industry.
However, we are not sure yet that we want to plan the funeral of Chanel and write the obituaries of Gucci just yet, and look at what is really going on behind the sparkly storefronts windows.
The Great Luxury Slowdown of 2026
Picture this: You’re Bernard Arnault, sitting in your probably-gold-plated office, watching your empire’s numbers drop faster than a poorly made knockoff bag. That’s basically what’s happening right now in the luxury fashion world.
The global luxury market is expected to expand by 2-4% per year between 2025 and 2027, which seemed a decent number until you realize this is a a huge comedown from post-pandemic boom years. What we’re talking about here are companies that were in there high double-digit growth and then having to celebrate for single digits like they just got their license.
LVMH said it suffered a worse-than-expected fall in first-quarter sales as the industry’s downbeat trend shows little signs of reversing. Sales declined 5 percent on a comparable basis in the fashion and leather goods business. When even the world’s largest luxury conglomerate starts breaking a sweat, you can be pretty sure something is afoot.
Why Everyone’s Suddenly Over Luxury?
The relationship between consumers and luxury fashion has gotten complicated – like that situationship you had in college that nobody could define.
China Changed the Game
Do you recall the bloated luxury industry, fought over by minions of Chinese consumers who were largely left to hold the industry up with their purchasing power? Well, twist in the plot: The Chinese consumer was at one point in time THE diamond of the luxury brands clientele. However, high-end and luxury brands such as LVMH and Kering have lost their attraction with rich people in the nation.
The pandemic gave Chinese shoppers a couple of very harsh lessons about priorities. They no longer spend a fortune on the new It-bag; they are being more down to earth concerning their purchases. The hot new Louis Vuitton purse or the blinged-out Versace dress lost some of its luster- they were now interested in being more sensible and to spend long-term focused.
The Aspirational Customer Is Gone
This is the interesting part. The individuals, who would boss around and save months to be able to afford that one designer item? They have literally become extinct. The average Consideration level of a set of eight major luxury brands (Burberry, Dior, Gucci, Jimmy Choo, Louboutin, Louis Vuitton, Prada and Versace) declined between January 1 and April 16 by nearly 3 percentage points to 7.6. That is a reduction of almost 25 percent.
It is as though the middle classes saw the prices of luxury, chuckled and threw money elsewhere. But who is to blame them? When a single simple handbag is more than what some people pay in rent, priorities begin to adjust very fast.
The Brands That Are Struggling vs. Thriving
Not all luxury fashion brands are sinking in the same boat. Some are basically the Titanic right now, while others are cruising along like nothing happened.
The Strugglers
LVMH recorded falling profits of 15% in the first half of 2025, its organic growth declined by 3%, all but one of its divisions achieved flat or negative results. Then there is Gucci-owned luxury group Kering, whose Q2 revenue is dropping 18 % this year and Gucci sales are descending 25%.
What Gucci is going through is the identity crisis. Brand became fully into hype culture and high maximalism, what happens when the hype goes down? Gucci, which is currently experiencing a massive drop in the sales and its consumers losing interest in the company, it is struggling to find relevance again.
The Winners
Meanwhile, there are those brands who are involving an entirely different game. Setting the bar to a tumultuous market, analysts anticipate a 12 percent growth in the leather goods department in Q2 2025 at the French luxury Maison Hermes.
What is Hermes also doing differently? They have learnt how to be ungetable. It is not a Birkin bag that you can walk in and pick up and buy. There is an earning, waiting, proving you are acceptable level to the Birkin bag. Since it is an instant world, though things are not scarce, scarcity is the new luxury.
The Real Problem: Luxury Lost Its Exclusivity
Here’s the tea: luxury fashion became too accessible for its own good. With the pandemic boom, brands were greedy. They produced more, opened additional stores, and increased the prices and did not contribute to the actual quality or the feeling of exclusivity.
Excessive growth in the industry within the past five years has resulted in the over-exposure of the industry and the dulling of the exclusiveness, creativity of craftsmanship that the sector seems to offer. When you are able to see the same designer bag on all the influencers Instagram, it ceases to be special anymore.
All brands did was turn the heritage into a hype and are reaping the results. The loss of the soul in favor of larger numbers is not simply what is denting these groups today, it is what has made the last trappings the effects of tariffs, inflation and geopolitical uncertainty.
What Luxury Fashion Needs to Do to Survive
If luxury fashion wants to avoid becoming a cautionary tale, brands need to get back to basics – and I mean really back to basics.
Rediscover Craftsmanship
Majority claim it is because of the quality: 61% consider that luxury items are just manufactured in a better way. People desire to believe that they are purchasing something really special, rather than to spend money on the stamp with a logo printed on the mass product.
Stop Chasing Trends
It is not the brands that mimic everything TikTok to be the victors at this point. About 25 percent of the trend is quiet luxury, which has put an emphasis on understated beauty, excellent workmanship, and designs that outlast time taken at the expense of explicit branding or other shiny logos”.
Create Real Experiences
clients have been showing increased interest in the luxury experience, rather than on luxury precedices. This inevitably creates new trade-offs that clients will deliberate on, implying that personal-luxury-goods players have to exert even more than ever before to beat higher-than-ever client expectations in order to win spend against luxury travel and wellness experiences.
So, Is Luxury Fashion Actually Dying?
Short answer: No, but it’s definitely having a midlife crisis.
Luxury fashion isn’t dying – it is having to progress. The brands which have treated the luxury as the fast fashion but at a premium price are struggling. The ones which actually kept their exclusivity and were providing quality are doing great.
The luxury business is in a very delicate position. As long as executives are capable of leading with purpose, vision, creativity and a renewed focus on excellence, with a long-term investment and multi-year programs, their concerns, they can rest assured with the success and prosperity of their brands.
This slowdown might actually be the best thing that could happen to luxury fashion. It is making brands recall what once made them unique in the first place; a superior product, actual exclusivity and that unquantifiable emotion that comes with holding something that in itself is extra-ordinary.
The future of brands should be those that can create a sense of specialness among the customer and not trendy. Genuine luxury resides in a microcosm in which everything is available: lack of abundance, artisanship, authenticity. Maybe this isn’t the death of luxury fashion – maybe it’s just growing up.
Mandy is a Dutch digital dash(aka nerd) running many platforms, including this one. She is a Dutch entrepreneur and writer but is also active in English. Branding and creating is what she does best. Next to that she works parttime as a social health worker/health care worker, guiding people to live their fullest and helping people with their problems. The combination is good for her and gives her the feeling she is giving back to society. After having a rough start back in 2015 she is back here again and want to travel more and meet need people (soulmates). She likes working and being busy is a blessing. Next to that she is spiritual and believes in karma. .