Luxury lost 70 million customers — and is only now starting to win them back

The global personal luxury goods market showed signs of recovery in the second quarter, despite the war in the Middle East. US demand came in stronger than expected.

In an update to its outlook, the base case now points to a 2% to 4% rise in personal luxury sales this year, against a previously forecast 3% to 5% published in November, before the outbreak of the US-Israeli war on Iran.

Context matters: the market, valued at €358 billion ($406 billion) in 2025, has contracted for two straight years. It shrank 2% at current exchange rates in 2025, though it edged up 1% in constant currencies. Looking wider, experiences continue to outpace tangible goods.

“We see growing uncertainty and turmoil at the macroeconomic and socio-political levels, but the market is there,” says Bain partner Federica Levato.

The geography has shifted. Growth in the US, led by native brands and younger consumers, is partly offsetting a slowdown in the Middle East and Europe. China is recovering slowly, with growth led more by ready-to-wear than leather goods. “America is growing more than expected and China is recovering faster than expected,” Levato says. Europe was hit by depressed tourist flows, though signs of stabilisation emerged in May.

But the most uncomfortable number in the report is about people. Since 2022 the industry has lost around 70 million consumers, as brands raised prices and focused ever more heavily on top-spending clients. “The industry should refuel the growth of the consumer base rather than focus only on the top 1%,” Levato says.

Two things are reshaping shopper behaviour right now. First, artificial intelligence: about half of luxury consumers already use it when buying, for discovery and comparison. Second, resale: half of luxury shoppers now check the second-hand market before buying new.