Luxury In The Dump

Luxury Sales Slide

Remember when luxury meant hand-stitched perfection and service so fawning it bordered on performance art? Those days are looking as antique as a monogram trunk. “Customers don’t recognize themselves anymore in the luxury price-value equation,” says consultant Claudia Levato. Translation: people are paying Hermès-prices for fast-fashion headaches. “In the past, you bought exquisite high-quality products at a premium price with excellent customer experience and that was luxury. Now, some of these pieces are broken.” Ouch.

And the cracks aren’t just metaphorical. The market is increasingly polarized, with top spenders ballooning their share while everyone else backs away. Even the ultra-high-net-worth crowd is yawning as those once coveted VIP events have turned into cookie-cutter cocktail hours, heavy on the logo walls and light on actual excitement. Levato warns that the elite now feel “undervalued,” and if brands don’t wake up, that collective eyeroll could become a long-term habit. Levato said that 6 months ago… and now, the eyerolls have turned into “talk to the hand”.

If this sounds familiar, it should. Back in 2009, brands realized that the middle class kept the lights on. They hustled out more accessible collections and saved the industry. Today? The opposite. Instead of courting aspirational shoppers, many houses are walling themselves off like a Riviera mega-villa. Basically, there is no ladder to climb and no customers to replace the ones heading for the exit.

The numbers read like a crime-scene report. LVMH, the world’s reigning luxury octopus with Louis Vuitton, Loewe, Fendi and Givenchy under its tentacles, posted a 22 percent profit drop in the first half of 2025. Gucci fared worse, with a 25 percent quarterly sales plunge. The latest McKinsey report is equally unsparing: five years of hyper-expansion have left the sector overexposed and creatively anemic, “weakening the industry’s promise of exclusivity, creativity and craftsmanship.” In other words, when everyone has a logo bag, nobody wants one and especially after a concurrent 15% price hikes.

Well, its not all bad news, because in this dumpster fire of a slowdown, not everyone is getting charred. A few houses are still lighting up the room instead of disappearing in the smoke.

• Hermès: The clear standout. It reported €8.0 billion in revenue for H1 2025, up 7% year-over-year (8% at constant exchange rates), with Leather Goods & Saddlery leading at 12% growth. Their Q2 sales jumped 9%, and they continue to benefit from artisanal production, tight control over supply, and that rarest of commodities: genuine scarcity. However, Hermès’ CEO Axel Dumas made comments (during a Q2 2025 earnings call) that indicated concern over the resale market: “…people are buying Birkin’s to resell rather than use them”, which suggests that the premium and scarcity are being exploited in ways the brand feels are undermining value or perception. 

• Prada Group: Despite the luxury sector’s overall contraction, Prada held its ground. In 2024 the Group posted a 17% revenue increase with retail sales up 18%. Miu Miu nearly doubled, up 49% and the Prada brand itself held up respectably.

• Moncler/part of Richmont (per industry analyst forecasts) are expected to see gains YOY, even while many rivals sink. Interestingly, Johann Rupert, Chair of Richemont, explicitly said the company will “avoid sudden, rapid price increases” despite pressures from tariffs. He pointed out that being more restrained than competitors has helped Richemont avoid some of the consumer backlash seen elsewhere. He’s right.  

So yes, there are winners in this landscape, but they tend to share certain traits: rigid control over quality, craftsmanship, limited supply (or at least perceived limitation) and avoiding over-stretching their brand promise. So, if you’re a luxury brand, pick your lane. Be timeless. Be rare. Be worthy of the price. Because in 2025, “luxury” is no longer a guarantee, it’s something you must earn.