In a year that will see only one third of luxury brands reach positive revenue growth, jewelry was the most resilient segment, according to Bain & Co.
Overall, the personal luxury-goods market is forecast to fall 2% to EUR 363 billion ($383.48 billion) in 2024, the first slowdown since the recession of 2008, excluding during Covid-19. Meanwhile, total global luxury spending will remain flat at around EUR 1.5 trillion ($1.58 trillion), Bain reported last week in its Bain & Company Luxury Study, released in collaboration with Italian luxury-goods company Altagamma. The decrease is the result of declining interest in luxury by younger consumers, which has led to its customer base shrinking by about 50 million over the last two years.
“Jewelry is holding strong, especially favored by the high-jewelry segment and by a remarkably positive performance within the US market,” Bain explained. “Watches, leather goods and shoes have seen a slowdown as consumers downtrade and are increasingly selective about purchases.”
However, the secondhand market is gaining traction as consumers seek “value” purchases, primarily when it comes to jewelry, heritage apparel and leather pieces, Bain noted.
Sales of luxury goods in Japan and Southern Europe have remained solid, while the US is seeing continued improvement. China has experienced a rapid slowdown, while conditions in South Korea are challenging, Bain said.
The luxury market is expected to see a slight improvement in 2025. After that, Bain expects growth to pick up due to anticipated increases in wealth and a growing luxury consumer base, and by 2030, the market will likely begin a long-term positive trajectory.
“To secure future growth, brands will need to rethink their luxury equations, reestablishing creativity and blending old and new playbooks,” said Federica Levato, a partner at Bain and leader of its Europe, the Middle East and Africa (EMEA) fashion and luxury practice. “This includes rediscovering their essence and embracing the foundational pillars of the industry: desirability fueled by craftsmanship, creativity, and distinctive brand values; meaningful, personalized, and culturally resonant customer connections and experiences; and tech-enabled flawless execution.”
Image: Young shoppers buying jewelry. (Shutterstock)
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