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Inside The luxury Reset As Emerging Markets Reach €45 billion

Global luxury is pivoting from a decade of hyper‑growth to a tighter, more value‑driven cycle where profitability, product quality, and client relationships matter more than chasing every possible shopper.

Published: Dec 24, 2025 3:39 AM

By Jeanel Alvarado

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Inside The luxury Reset As Emerging Markets Reach €45 billion

Global luxury is pivoting from a decade of hyper‑growth to a tighter, more value‑driven cycle where profitability, product quality, and client relationships matter more than chasing every possible shopper. For brands, the Bain & Company “new longevity” playbook is about serving fewer, more committed customers better—while expanding into new regions, categories, and experiences without losing their core identity.

Market and margin reality check Overall luxury spending in 2025 stayed roughly flat at about €1.44 trillion, only 1% to 3% below 2024 at current exchange rates and still 12% to 14% above 2019 levels.

Personal luxury goods are forecast to reach around €358 billion, a mild 2% erosion versus 2024 that looks more like normalization than collapse.

Behind the topline, profit pressure is real: operating margins have slipped to about 15% to 16%, down from a record 21% in 2022, wiping out roughly 20% of the industry profit pool over the past two years.

Discounts now represent 35% to 40% of industry revenues, and stock levels are 3 to 4 percentage points higher than in 2019, forcing brands into a constant tug‑of‑war between clearing inventory and protecting image…

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Inside The luxury Reset As Emerging Markets Reach €45 billion

Global luxury is pivoting from a decade of hyper‑growth to a tighter, more value‑driven cycle where profitability, product quality, and client relationships matter more than chasing every possible shopper.

Unlock the rest of this story

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