The luxury sector entered 2025 on shaky ground, weighed down by rising prices and a slowdown in China. According to Claudia d’Arpizio, senior partner at Bain & Company, the industry recorded a 5% drop in first-quarter performance—a clear sign of lost momentum. She shared her insights during the Milano Unica textile fair, painting a sobering picture of an industry facing mounting global headwinds.
Claudia d’Arpizio — Bain & Company.
“Regionally, we’re seeing momentum build in the Middle East—particularly in Dubai—while Japan has come to a standstill,” d’Arpizio noted. “But China remains the most pressing concern. The government continues to discourage overt displays of wealth, and with the economy slowing, luxury spending has become increasingly taboo. We’re calling this cultural shift ‘luxury shame.’ That pullback has created a vacuum that India and Southeast Asia are starting to fill, though those markets are more fragmented and harder to scale. In the U.S., conditions remain weak overall, despite some modest signs of recovery in May.”
The luxury customer landscape is undergoing a sharp transformation, as rising global prices continue to reshape demand. “In 2024, sales volumes for high-end goods dropped by 20% to 25%,” said d’Arpizio. “In response, brands raised their prices—triggering lower production levels and tighter distribution strategies.” The result: the luxury sector lost nearly 15 million customers, out of a global base of around 400 million. “Brand performance now varies significantly,” she added. “Consumers no longer view luxury as a single, homogenous category. They’re choosing more carefully, prioritizing value and purpose over name alone.”
Rebuilding consumer trust has become one of the industry’s most urgent challenges. “There’s a widening gap between retail prices and perceived value,” d’Arpizio warned. “Prices keep climbing, yet we’re seeing little in the way of true creative innovation. Luxury once stood for aspiration and forward-thinking design—now, for many, it feels out of reach and out of touch. This is more than a pricing issue; it’s a cultural and strategic misstep that brands must confront head-on.”
Behind the scenes, pressure is mounting across the supply chain. As brands scale back production and input costs continue to rise, suppliers are being squeezed. “The situation is worsening,” d’Arpizio said. “And with China ramping up pride in its domestic manufacturing, we’re losing some of our competitive advantage.”
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