Luxury market to return to growth in 2026 - Bain & Co.

The luxury market, after two years of stagnation, may return to growth in 2026, predicted one of the world's largest consulting firms Bain & Co. In 2025, a noticeable recovery is not expected, but the improved performance of LVMH, Richemont and Burberry gives hope for next year. China remains the most vulnerable area: the situation there is gradually stabilizing, although the pace will be low.

The consulting firm Bain & Co. estimates that sales of jewelry, leather handbags, shoes and apparel will add 3-5% in 2026 (if calculated at fixed exchange rates), Bloomberg writes.

Claudia D'Arpizzo, managing partner of Bain, said that in 2025, according to current estimates, the market is unlikely to show significant growth. This, however, means an improvement in the forecast: back in the summer, the company's analysts assumed that the demand could shrink by 5%.

According to D'Arpizzo, brands were partly to blame for the downturn by raising prices too aggressively in an attempt to make Marks more exclusive. But now giants such as LVMH, Richemont and Burberry have started to improve, a sign that the industry may be ready to move to growth.

"Luxury houses are now in a reboot period: they are trying to add more creativity by inviting new designers," she explains . - At the same time, they are rethinking their pricing strategy and bringing more affordable entry-level models to the market.

China, one of the key markets for luxury, should show a slight acceleration already in the first quarter of next year - also thanks to a lower comparison base, says D'Arpizzo. But the overall backdrop remains difficult: the economic downturn, the crisis in the real estate market and high youth unemployment have noticeably reduced the consumption of expensive goods.

"We are seeing a cautious improvement in demand from affluent buyers, but the market is still challenging," notes d'Arpizzo. - Plus there is growing competition from local brands, which are increasingly displacing European houses."

According to Bain's estimates, expecting China to quickly return to double-digit or close to double-digit growth rates, as in the past two decades, is not a good idea.

D'Arpizzo expects leather goods to rebound more strongly in 2026 - after the jewelry category performed best in 2025.

"Jewelry houses have been very careful to raise prices, and customers perceive such pieces as a more reliable value than handbags," she explains .

An additional impetus for leather goods will be the release of new collections - against the background of changes of creative directors at Chanel, Gucci (owned by Kering) and Christian Dior Couture (owned by LVMH).

This article was AI-translated and verified by a human editor