Luxury Stumbles in 2024 but Can Still Return to Solid Growth

The 23rd edition of the Bain & Company Luxury Study, released in collaboration with Italian luxury goods body Fondazione Altagamma, suggests that the global personal luxury goods market is likely to dip by 2% to €363 billion in 2024.

The forecast reflects continued strength in Japan, solidity in southern Europe, and a progressively improving trajectory in the US, but also a rapid slowdown in China and challenging conditions in South Korea. Globally, the strongest category growth was found in beauty and eyewear. Jewelry was the most resilient core luxury category. Shoes and watches struggled.

The tighter conditions are polarizing the market. We estimate that only about a third of luxury brands will emerge from 2024 with positive growth, down from two-thirds a year earlier—many brands are set to suffer a drop in their revenue. In this context, pressure on profitability is mounting, setting the scene for an increased focus on performance improvement and technology in 2025.

Longer-term market growth should be solid thanks to anticipated increases in wealth and the luxury consumer base. Unlocking that growth will require clarity in strategy and execution. Brands should rediscover their purpose and embrace the foundational pillars of the industry: desirability fueled by craftsmanship, creativity, and distinctive brand values; meaningful, personalized, and culturally resonant customer connections and experiences; and tech-enabled flawless execution.