Amid sluggish growth, inflation, and geopolitical uncertainty in 2025, luxury demand has softened. This report analyses how leading luxury groups are building resilience by strengthening regional strategies, investing in experiential retail, diversifying portfolios, and targeting growth in emerging markets. These strategic shifts are enabling brands to adapt to market pressures and capture new opportunities in a rapidly evolving competitive landscape.
Key findings
Macroeconomic and geopolitical headwinds are reshaping competition
2025 was defined by slow global growth, persistent inflation, rising capital costs, and geopolitical uncertainty. Added pressures from new tariffs and climate challenges are forcing brands to rethink their strategies. While some heritage brands remain resilient, overall demand is softening amid weak consumer confidence – particularly among the aspirational middle class. To stay relevant brands must pivot towards local sourcing, strengthen regional positioning, and deliver experiential offerings that go beyond traditional retail.
Portfolio diversification and vertical integration drive resilience
Leading luxury players are leaning on diversified portfolios, spanning fashion, beauty, jewellery, hospitality and even real estate to offset volatility. Kering’s eyewear has helped balance segment declines, while LVMH’s multi-pillar model has delivered resilience. Vertical integration and portfolio breadth are now key advantages, enabling brands to absorb category or regional downturns.
Emerging markets offer strategic growth opportunities
While developed markets face stagnation and increased vulnerability to tariffs and economic shifts, emerging markets – especially in Asia, Latin America and the Middle East – are fuelling demand. Rapid wealth expansion and a growing middle class in these regions present opportunities for brands to localise offerings and tap new consumer segments.
Experiential and lifestyle-centric luxury is redefining value
Luxury is shifting from a product-focused model to one centred on experience, lifestyle, and emotional connection. Flagship stores are evolving into immersive destinations, while brands invest in wellness, hospitality, and cultural touchpoints. The rise of the experience economy makes storytelling, personalisation, and memorable moments critical to winning loyalty, especially for younger and high-net-worth consumers.
Purpose, sustainability, and technology are non-negotiable differentiators
Consumers are looking for more conscious, value-driven luxury, favouring quality, durability, sustainability, and emotional connection over pure brand prestige. Brands are responding with resale and repair programmes, sustainability initiatives, and tech-driven personalisation. The future will belong to those that blend heritage with innovation, cultural relevance, and sustainability.
This report comes in PPT.
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Key findings
Companies at a glance
Brands to move from a transactional model to experience and emotional engagement
Agility in response to macroeconomic pressures across the competitive landscape
Diversification and cross-category portfolios cushion the blow of a slow luxury market
Competition heats up as mergers, acquisitions and divestments rewrite the playbook
Emerging vs developed
Portfolio balance and vertical integration are key differentiators for luxury players
LVMH continues to lead personal luxury retail, despite slower performance in China
US trade war and political uncertainty pose key risks for key luxury players
Cautious optimism for China as business and luxury consumer confidence stay muted
Competitive luxury landscape will be shaped more by purpose rather than price tag
Key players continue to bet heavily on experiential retail to showcase exclusivity
Luxury hotel brands thrive by blending immersive experiences, wellness and technology
Luxury leaders pioneering experiences through technology and wellness
Competitive pressures mount as value-driven choices redefine the battle for loyalty
Meaning of value becomes more nuanced and complex for today's luxury consumer
Luxury value creation in an era shaped by experience, sustainability and culture
Consumers prioritise health and wellness amidst turmoil and uncertainty
Luxury integrates home and lifestyle elements to enhance the brand experience
Global wealth surge in 60+ demographic underscores new values in the lifestyle sector
Lifestyle-driven ecosystems and differentiation fuel luxury’s next growth engine
Key emerging markets will offer luxury players opportunities to diversify beyond China
Confidence lifts as the luxury sector’s 2-year downturn may be nearing an end
LVMH continues focus on lifestyle and the experience economy amid consumer trends
Definitions (1/2)
Definitions (2/2)
Luxury Goods
This is an aggregation of: Personal Luxury, Fine Wines/Champagne and Spirits, Luxury Cars and Experiential Luxury.
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