Luxury is having a reckoning, after a decade of hyper-growth, logo inflation, and growth-at-any-expense, fuelled by insane CACs, digital conversion wars, and relentless price hikes, the industry is finally exhaling.
The mood isn’t panic; it’s fatigue. The boom broke the sound barrier, and now comes the silence after the noise: a return to meaning, craftsmanship, authenticity and belonging.
LVMH’s +1% Q3 growth is a slight sign of relief. Hermès is still compounding (+8-9% H1, ~41% margins), proof that scarcity and craft never go out of style. Prada Group and MiuMiu continue to defy gravity, while Kering and Burberry remain in reset mode. Globally, analysts forecast 0-4% growth in 2025, one of the slowest years in a decade.
This isn’t all doom and gloom but a return to equilibrium. The aspirational middle, stretched by inflation and years of price increases, is pausing. Tourists are travelling again, but cross-border e-commerce and price harmonisation killed the “Paris bargain.” The pilgrimage to Avenue Montaigne doesn’t feel sacred anymore.
At the same time, people are becoming more conscious of what luxury truly means. They’re spending more on wellbeing, longevity, travel, health, experiences, and the ultimate luxury: time.
Across major markets, we’re seeing a redistribution of wealth, not in income but in intent: people investing in feeling better, creating memoeries and not owning more. That shift inevitably tempers demand for seasonal products.
Quiet replaces loud. Status whispers now. People buy heritage, quality, and identity (and resale value), not billboards. Value matters. Men in particular buy like investors, caring about resale and longevity.
E-commerce is no silver bullet. FARFETCH and YNAP’s decline show it clearly: people fall in love with brands, not platforms. Luxury built on aggregation, discounting, or convenience loses its soul.
Meanwhile, the Gulf is writing a different story.
The GCC luxury market grew +6% in 2024 to $12.8 billion, with fashion +11% and beauty +23% in early 2025. Dubai welcomed 9.9 million visitors in H1, while MalloftheEmirates’ AED 5 billion transformation and “The District” prove retail can still inspire awe.
Also Read: Dubai Holding unifies its malls and lifestyle destinations under one brand: 'Dubai Retail'
Wealth is moving east and the UAE will attract nearly 9,800 new millionaires in 2025, the world’s largest inflow, with billionaire wealth up 39% last year. These aren’t tourists; they’re residents. They’re building homes, collecting art, buying fine jewellery, and turning the region into luxury’s new heartbeat.
The age of expansion for expansion’s sake is over and the next era belongs to brands that slow down, tell better stories, and make people feel something again.
As consumers become more conscious of what truly matters, the brands that endure will be those that remind us why we fell in love with luxury in the first place.
Maria Gedeon - View Maria's services
Chief Marketing Officer | CMO | Consultant | Design | Growth | Transformation | Brand Builder | Board Member | MentorChief
