Luxury Market 2025: A return to common sense and a focus on quality
After a period of rapid growth and excess, the luxury industry, according to a recent study by Luxurynsight and LY Trends (Heuritech), is returning to a more rational approach. The global slowdown of the sector observed in the first half of 2025 has been driven by economic uncertainty, shifts among creative directors, and fast-paced technological development. The personal luxury goods market contracted by 1% in 2024, reaching €364 billion, due to a weakening global economy, new U.S. tariffs, and more restrained consumer demand.
Strategic Reorientation: Quality, Localization, and Experiences
Luxury brands are prioritizing quality over quantity and favoring local, deeply developed activations over large-scale global media operations. In 2025, the number of activations decreased by 2%, but their quality increased: events are becoming more immersive and focused on creating a unique client experience.
Special attention is being paid to retail — the number of activations in this segment has grown by 48%. Stores now function as cultural spaces, such as the multisensory “The Louis” in Shanghai and Dior Gold House in Bangkok. In China, the trend is shifting toward rare, large-scale flagships targeted at Very Important Clients (VIC), who are expected to be the main drivers of growth through 2027.
Localization and Cultural Resonance
To stay relevant, brands are increasingly turning to local initiatives. A vivid example is the «The World Music Day» (“Fête de la Musique”), which has become a platform for engaging with a young, digitally oriented audience. Participation in Milan Design Week and the launch of home collections illustrate how brands are expanding from fashion into lifestyle.
Luxury prices are stabilizing: the average price increase for leather goods and handbags was just 1.2% in the first half of 2025, indicating a normalization after the post-COVID surge. The exception is Japan, where growth reached 1.9% due to the weak yen. At the same time, the integration of fashion and fine jewelry is strengthening, and brands are focusing on exclusive products for premium clients.
Cosmetics and Technology: Generative AI and Personalization
The only segment experiencing growth is perfumery and cosmetics. Here, brands are actively adopting technology: generative AI, 3D, and big data enable hyper-personalized offerings. Major partnerships such as L'Oréal with NVIDIA and Estée Lauder with Google Cloud highlight a strategic focus on innovation. These technologies not only meet customer expectations but also increase marketing ROI by 10–30% and revenue by 5–15%.
Microtrends and the New Face of “Quiet Luxury”
In fashion and leather goods, microtrends centered on comfort and understated elegance dominate. Key directions include “Golfcore Chic,” “Horse Girl Reclaiming,” and “Summer at Lord’s,” all reflecting a desire for versatility and authenticity. The demand for “soft luxury” and “quiet luxury” is rising: quality is valued over flashy logos.
Jewelry Sector: Record-High Gold and a Focus on Top Clients
The watches and jewelry segment has faced new tariffs (up to 39% on Swiss imports to the U.S.) and record-high gold prices, resulting in uneven price increases (from 2.5% to 6.9%). However, high jewelry remains in demand among the wealthiest clients: 0.1% of consumers account for 23% of all luxury sales. In response, brands are launching exclusive products and investing in flagship boutiques.
Conclusion: The luxury industry is undergoing a profound transformation, prioritizing quality, local experiences, and technological innovation. At the center of this shift are authenticity, personalization, and the creation of emotional connections with clients. The sector is transitioning from an era of excess to an era of conscious, intelligent luxury.
Pay attention to these trends when visiting the upcoming «INTERFABRIC» exhibition to acquire relevant materials for future collections aligned with the latest consumer preferences.
What you will find at the «INTERFABRIC» General Industry Exhibition in Moscow:
- fabric exhibition,
- home textiles exhibition,
- technical textiles exhibition,
- sewing equipment exhibition,
- nonwoven materials exhibition,
- fashion exhibition,
- textile industry exhibition.
This is not just an exhibition. This is the industrial brain and heart of the future of fashion!