Luxury megabrands are feeling the heat in 2025. The shine that once defined them is fading as consumers rethink how they spend and what they value. Reports from leading analysts show a sharp slowdown in sales and a crisis of relevance. The sector is still powerful, but cracks are widening.
There was a time when luxury used to mean untouchable prices and endless demand. Now, buyers are pushing back. The personal luxury goods market shrank by 2% in 2024, the first real decline in fifteen years outside of the pandemic years. Bain & Company reports 50 million consumers have stepped away from buying luxury goods since 2022, burned out by constant price hikes and thin innovation.
Luxury Sales are Slipping
Big names like LVMH, Kering, and Chanel are struggling to hold momentum. Prices climbed steadily from 2019 to 2023, but most of that growth came from price tags, not actual sales. People are finally saying no. Gucci’s attempt to play it safe with classic looks fell flat, and Dior’s double-digit drop shows the problem is real.
There is a gap between what brands charge and what buyers feel they get. Shoppers want creativity and quality that matches the cost. Instead, they see recycled designs and endless logos. That mismatch is pushing them to rethink what luxury means.
LVMH / IG / Affluent buyers are spending on trips, fine dining, and wellness instead of so-called big-name brands. Luxury experiences are thriving while products gather dust on shelves.
The energy and emotion that once came from owning a label now comes from moments that feel alive.
Quiet luxury brands are seizing this shift. Hermès, Loro Piana, and Brunello Cucinelli are winning by focusing on craftsmanship and rare detail. They speak softly but carry a real sense of value, while logo-heavy megabrands struggle to stand out.
Gen Z Wants More Than Old Stories
The turning point is that Gen Z is not impressed by a name alone. They look for sustainability, digital access, and real transparency. Many luxury megabrands are far behind on these fronts. Young buyers want brands that feel authentic, not trapped in decades-old playbooks.
This generation also questions the true cost of luxury. If a brand talks about craft but delivers mass-produced goods, they call it out. Their spending power is rising, and their skepticism is loud.
China and the U.S. Are Cooling Off
China was once the growth engine for luxury, but that engine is stalling. Economic uncertainty and strong domestic brands are slowing the rush for imported status symbols. Shoppers in China are looking for something new, not just a logo.
Kering / IG / Even in the U.S., high earners are pulling back. Many say they no longer feel a connection to the brands they once trusted.
Luxury without emotion is just expensive, and people are noticing.
Rapid creative director changes are hurting consistency. Gucci and Dior have both cycled through leadership, leaving their design languages scattered. Without a clear vision, the magic fades.
Social media, once a growth engine, has stripped away mystery. Overexposure has made luxury feel common, and critics are louder than ever. Complaints about quality and greenwashing trends make once-mighty brands look out of touch.
Experiential luxury is the next frontier. Blending physical and digital experiences, from AR try-ons to exclusive NFT memberships, can spark excitement again. Buyers want more than a logo. They want a story and a feeling.
The future belongs to brands that make luxury mean something deeper. In 2025, the old model is cracking. The ones who thrive will make luxury feel alive, personal, and worth every cent.
