Another factor that is impacting the market is rising prices. According to HSBC, luxury goods are now 54% more expensive than in 2019. A Dior Lady bag, which cost 3,200 euros in 2016, now exceeds 5,900 euros. The price increases, which seemed justified by growing demand, are now disappointing many consumers. Andrea Guerra, CEO of Prada, called these increases a “clear mistake,” signaling a reversal of the trend.
some analysts are confident that luxury is not going away, but will undergo a transformation. In fact, global wealth continues to increase, and according to UBS, there will be 86 million millionaires worldwide by 2027, up from 60 million today. The billionaire class continues to grow, with 2,781 billionaires in 2024, according to Forbes. This segment of wealthier consumers tends to be less affected by economic fluctuations, continuing to spend on luxury goods.
Brands that cater to an exclusive industry email list clientele, such as Brunello Cucinelli, which sells $6,000 cashmere sweaters, or Hermès, with its high-end handbags, continue to do well. Brunello Cucinelli’s sales, for example, increased 12% in 2024. Demand for these high-end products does not appear to be in decline. On the contrary, brands that have sought to “democratize” luxury are looking for new ways to rekindle consumer interest. Miu Miu, part of the Prada group, doubled its sales in 2024 thanks to innovative products and provocative advertising campaigns. Other brands such as Bottega Veneta, Chanel and Givenchy are trying to adapt to the change by hiring new creative directors, but these changes may take years to fully manifest themselves.