The global luxury fashion industry, once booming after the pandemic, is now facing a sharp slowdown. Giants like LVMH (Louis Vuitton, Dior, Tiffany, Bulgari) and Kering (Gucci, Saint Laurent, Bottega Veneta) have reported falling revenues. LVMH’s half-year results showed a 4% revenue drop and 15% fall in profits, with fashion and leather goods hit the hardest.

Experts point to multiple causes: relentless price hikes, quality concerns, and luxury’s over-exposure in discount outlets, making it less “exclusive.” Geopolitical tensions and US tariffs (15% on EU goods, 39% on Swiss watches) add to the pressure, especially in the American market.

China, once the engine of luxury growth, is also cooling. While wealthy buyers still shop, aspirational middle-class customers are cutting back due to economic uncertainty. Around 75% of Chinese luxury shopping now happens domestically, but overall demand is weaker.

Some brands like Hermès and Rolex remain resilient, but analysts warn this could be the industry’s worst slump since the 2008 financial crisis. Bain & Company predicts a 2–5% decline in sales in 2025, though the long-term outlook is positive, thanks to rising incomes and wealth transfers. To survive, brands must rethink exclusivity, deepen customer loyalty, and connect emotionally with younger consumers.