Luxury spending set to resume growth after a rare downturn, studies show

The global luxury market is expected to grow at a rate of 4% to 7% through 2029, according to the 12th edition of the True Luxury Global Consumer Insight study, a recovery from an estimated 1% contraction recorded between 2024 and 2025. The report projects growth of 2% to 5% in the current fiscal year, an improvement that would mark the sector's return to expansion after a period in which stretched pricing, subdued Chinese demand and cautious aspirational shoppers weighed on results across the industry.

A parallel study from BCG and Altagamma reinforces the picture, finding that the luxury sector is growing again but with a materially different clientele than in the years before the downturn. The report points to new consumer segmentation, greater use of artificial intelligence in how brands reach and serve customers, and a renewed sensitivity to pricing after several years of aggressive increases across the sector. It also flags the growing influence of individual designers on brand fortunes, a dynamic that has played out publicly at several houses that have installed new creative leadership in the past two years.

The strategic read for brands and investors is that a return to growth does not mean a return to the conditions that drove the last cycle. Pricing power, which many houses leaned on heavily through the post-pandemic years, appears to have reached its limits with a broad swathe of aspirational customers, forcing brands to compete more on product newness, service and relevance to evolving client segments rather than list price alone. What to watch: whether the coming reporting season from major groups confirms this pattern, and which houses manage to grow volume rather than relying on price and mix effects alone.

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