This year the financial results from the world’s biggest luxury players have largely brought bad news, their shine dimmed by a sector-wide slowdown following a multiyear sales boom during COVID-19. For the first time since 2008, excluding the year of the pandemic, global sales of personal luxury goods are poised to fall by 2 per cent, to €363 billion (US$378.12 billion; S$512.
35 billion), according to Bain & Company. “As wealthy customers showed more resilience, brands focused their efforts on marketing activity and dedicated experiences for this [demographic],” observes Claudia D’Arpizio, a partner at Bain & Company, who leads its luxury goods vertical. “It created some growth at the top of the pyramid but there was a strong decline across the rest of the customer base, with 50mn pulling back.
” Geopolitical risks posed by elections (more than 60 countries headed to the polls in 2024) and conflicts also had an impact on consumer confidence. Online retailers shut up shop (Matchesfashion) or restructured under new owners (Farfetch and Coupang; Yoox Net-a-Porter and Mytheresa), while companies with lagging profits sought to consolidate (Saks Fifth Avenue’s owner HBC acquired Neiman Marcus in a US$2.65 billion deal; Tapestry and Capri’s merger fell apart after months battling antitrust regulators in court).
Looking to 2025, luxury analysts are hopeful that the sector will see slight improvements, even if sales growth remains low. Achim Berg, an independent luxur.
