Key Facts
• Luxury brands are launching compact, affordable accessories to counter declining demand.
• Bain & Company reports up to 25% of brands are expanding product lines to attract customers.
• Spanish brand Loewe, known for €5,200 leather bags, now sells €280 fabric pouches.
• Average luxury product prices rose up to 12% annually from 2022 to mid-2024.
• Global luxury goods market lost approximately 50 million customers between 2023-2024.
• Market size in 2025 is projected to shrink by 2-5% year-on-year, per Bain.
• The 2025 downturn could be the worst since the 2009 financial crisis, excluding the pandemic.
• Chinese market growth, a key driver in 2009, is no longer a factor.
• French group Kering appointed Luca de Meo, ex-Renault CEO, to lead restructuring.
• Bain expert Claudia D’Arpizio calls this leadership change a positive move for the industry.
Summary
Luxury brands are adapting to economic challenges by introducing affordable, compact accessories to attract customers amid rising prices and declining demand. Bain & Company highlights that up to 25% of brands are expanding product lines, with examples like Loewe offering €280 fabric pouches instead of their usual high-priced leather bags. The global luxury market, which saw a 12% annual price increase from 2022 to mid-2024, lost 50 million customers between 2023-2024. Projections for 2025 indicate a 2-5% market contraction, marking the worst downturn since 2009, excluding the pandemic. The Chinese market, once a growth driver, is no longer contributing significantly. In response, companies like Kering are restructuring, appointing leaders like Luca de Meo to navigate these challenges. Experts view such changes as a positive step for the traditionally insular luxury industry.
