Milan (AP) – Global sales of personal luxury goods are slowing down, but not collapsing, according to a advisory study by Bain & Co ..
Personal luxury goods sales, which were undermined to 364 billion euros (419 billion US dollars in 2024) This year by a further 2% to 5% slideThe study states, citing threats of US tariffs and geopolitical tensions, that trigger economic slowdowns.
“Nevertheless, to be positive in a difficult moment-with three wars, economies that slow down, inequality with a maximum-it is not a market in a collapse,” said Bain partner and co-author of the study Claudia d’Arpizio.
In addition to external headwind Ongoing creativity crisis And sharp price increases, said Bain. Buyers were also eliminated by recent studies in Italy, which showed that sweatshop conditions in subcontractors produce luxurious handbags.
The sales markets are heavily handled in the USA and China, as the study showed. In the United States, market volatility has discouraged consumers’ trust due to tariffs. China recorded six quarters of the contraction of the low consumer confidence.
The Middle East, Latin America and Southeast Asia are growing. Europe is mostly flat, the study showed.
This has created a sharp divergence between brands that are continued with strong creative and profit growth, such as the Prada group, which recorded a turn of 13% in the first quarter to 1.34 billion euros, and brands such as Gucci, whereby sales decreased by 24% to 1.6 billion euros in the same period.
Gucci owner Dry Last week Luca de Meo, the former CEO of Italian Automotive Executive, hired Renaultto assemble a turn. The decision occurs when three of his brands – Gucci, Balenciaga and Bottega Veneta – bring new creative directors to the market.
Kering’s share in the news about the appointment rose by 12%. D’Arpizio underlined his track record and returned to the French automobile manufacturer Renault in profitability and earlier roles as a marketing director Volkswagen and Fiat.
“All of these factors are well together in a market like luxury when they are in a phase in which growth is still the name of the game, but they also have to make the company more flend in terms of costs and turn some of the brands around,” she said.
Brands also make changes to minimize the effects of possible US tariffs. This includes shipping directly from production sites and not from warehouses and reducing stocks in shops.
With aesthetic changes in action, “filling the channels doesn’t make much sense,” said D’Arpizio.
Nevertheless, many of the headwinds that buffer the sector do not have the control of the companies.
“Many of these (negative) aspects will not change soon. What can change is more clarity in the tariffs, but I don’t think we will stop the wars or political instability in a few months,” she said, adding that the luxury consumer trust is closer to the stock market trends than the trends of the stock markets.
The President of the Italian Luxury Brand Association Altagamma Matteo Lunelli underlined the hat, which recorded a total growth of 28% from 2019 to 2024, which was far above the pandemic.
While luxury expenses for global turbulence are sensitive, it is historically quick to recover, driven by new markets and pent -up demand.
The financial crisis 2008-2009 fell over two years to turnover of luxury clothing, handbags and shoes from 161 billion euros to 147 billion euros. The market more than regained the loss in 2010, as it recovered by 14%with acceleration in the Chinese market. Similarly, sales after sales increased by 21% during pandemic, which rendered out -up spending sales to new records.
