No way forward. After a decade of uninterrupted growth, the luxury fashion sector has hit a wall. Global sector revenue was estimated at €364 billion in 2024, compared to €369 billion in 2023, showing the limits of a business model based on constant price increases.

In the face of this slowdown, luxury labels need to rethink their strategies to maintain their appeal, and their margins too, according to a study by Lectra based on figures from its Retviews data analysis solution.

Market in midst of strategic redefinition

Price increases, often hard to justify, in luxury products, have been stemmed by economic stagnation and dwindling consumer purchasing power. This paradigm change is forcing luxury labels to reconsider their strategies. “The current luxury market slowdown is a turning point for labels. They must now rethink their strategies, which had until now been price-centred,” said Antonella Capelli, president EMEA at Lectra.

The Lectra study revealed two diametrically opposed strategies. Some labels are concentrating on the ultra-luxury segment, targeting a highly specific clientèle that is less susceptible to economic fluctuations. Others, like Louis Vuitton, Miu Miu and Prada, are trying to appeal to a new clientèle by tweaking the prices of their entry-level products.

Leather goods a desirability linchpin that needs to be optimised

In this uncertain environment, leather goods, and especially handbags, are still a mainstay in the market positioning of luxury labels. These iconic items continue to attract an extensive clientèle. Retviews figures show that China is the country where these products are selling at the highest prices, generating margins of several hundred euros per item for labels like Gucci and Prada.

Luxury labels are adjusting their assortment strategies in order to protect their high-end image and their profitability. One of their tactics, identified by Lectra, is withdrawing from the market models that are similar but less expensive, to prompt consumers to opt for their higher-priced counterparts. Luxury leather goods are therefore becoming even more expensive. A second approach observed by Lectra is product range streamlining: Bottega Veneta’s Jodie handbag went from five to three sizes in 2024. By the same token, Bottega Veneta has stopped selling its smallest model, the Candy Jodie, aligning with the current trend away from mini handbags in favour of larger models.

Handbag charms emerging as new consumer bait

As the handbag market is rebalancing, a new accessories trend is emerging: handbag charms. These very small leather goods are playing a key role, becoming a new gateway into the world of luxury goods for budget-conscious consumers.

This new direction has been adopted both by affordable premium brands like Coach or COS and by more upmarket labels, which are developing their collections with a price positioning reflecting their status. Retviews confirmed this phenomenon by observing a whopping 51% growth between 2024 and 2025 in the presence of handbag charms and keyrings in luxury labels’ assortment, a growth rate at odds with the decrease observed in other accessories categories.