Global luxury stabilizes amid compounding disruptions as brands race to amplify meaning and rebuild relevance

• Global luxury spending reached €1,443 billion in 2025. Luxury experiences continue to outpace tangible goods, but personal luxury goods spending is stabilizing in 2026, with the market (at €358 billion last year, down 2% at current rates but up 1% at constant exchange rates vs. 2024) expected to grow by 2% to 4% for the full year, to €365 to €373 billion under our base case scenario
  
  
• Growth in personal luxury goods is diverging sharply by region: the Americas are surging, led by US-native brands and strong traction among younger consumers, while Europe and the Middle East remain a drag on overall performance
  
  
• Polarization of performance persists, but performance gaps between brands are lower than last year. Roughly 60% of luxury players are performing above their last year comparable results – signs that the market is progressively finding its footing after a turbulent period
  
  
• The consumer is changing as fast as the market: half of luxury shoppers now consult the secondhand market before buying new, and half already use AI in their purchase journey – with nearly all planning to continue doing so
  
  
• Sports sponsorship has quietly become a cornerstone of luxury brand-building, with over 80% of luxury market value now represented by brands that actively sponsored sports in the past 12 months.

MILAN, June 25, 2026 /PRNewswire/ -- The global luxury sector enters the second half of 2026 confronting a compounding polycrisis of economic volatility, geopolitical turbulence, and deep cultural shifts, even as underlying fundamentals point to a gradual stabilization, Bain & Company, in partnership with Altagamma, the Italian luxury goods manufacturers' industry association, reports today.

Worldwide luxury spending reached €1,443 billion in 2025 and is on a trajectory of gradual stabilization in 2026, according to the spring update of the Bain-Altagamma Luxury Goods Worldwide Market Study. The study maps a market shaped by four interconnected forces: amplifying experiences over ownership, rebalancing growth engines across geographies, evolving consumer meanings of luxury, and rapidly shuffling go-to-customer funnels disrupted by artificial intelligence.

Global luxury spending in 2026 is expected to reach €1,440 to €1,470B in Bain's base scenario for the market, a growth rate of between zero and 2% at constant rates.

"The luxury market is stabilizing, but this is not a return to the old rhythm, it is the emergence of a new one," said Claudia D'Arpizio, Bain & Company senior partner and global leader of the firm's Fashion & Luxury practice, lead author of the study. "Consumers are not stepping back from luxury. They are stepping forward into a new relationship with it – one defined by meaning, not just by product. The brands that will win are those that can continuously reinvent their relevance and resonate with both consumers and AI-led ecosystems".

Macro turbulence sets the backdrop

The first half of 2026 has been shaped by a series of macro-economic shocks. The outbreak of Middle East conflict pushed oil prices up. US inflation climbed to its highest since April 2023 – while consumer confidence hit an all-time low. The ECB raised interest rates in June for the first time since 2023, and global GDP growth this year is now forecast to come weaker than in 2025. Luxury share prices fell ~8% in January, and international tourism in Europe down 20% year-on-year in February before partially rebounding.

Experiences lead, tangible goods recalibrate

Consumer sentiment towards experiences is outgrowing tangible goods by 1.5x so far in 2026, reflecting a structural and cultural shift from ownership to lived moments. Within the experiences space, most categories are holding up well. Luxury hospitality, private jets, yachts, and cruises are all resilient, driven by premiumization, strong backlogs, and new customer acquisition. Fine dining and gourmet food benefit from a "less but better" mindset. Fine arts are returning to growth as investors rebalance. The weaker spots are experience-adjacent goods. Luxury cars remain a drag amid the EV transition. Fine wines and spirits face softer consumption as drinkers trade down in frequency or switch to alcohol-free. Design and furniture are slowing as post-pandemic backlogs clear and real estate stays constrained.

Personal luxury goods: gradual recovery with scenario uncertainty

The personal luxury goods market dipped slightly to €358 billion in 2025 (from €364 billion in 2024, down 2% at current rates, though up 1% at constant exchange rates) but is expected to bounce back in 2026, growing 2% to 4% to reach €365 to €373 billion. Bain assigns this most realistic case a 70% probability, underpinned by assumptions of continued Middle East stabilization, resilient local spending, and a gradual recovery in Chinese demand. A more optimistic 4% to 6% growth outcome (~20% probability) would require geopolitical tensions to ease further, a boost from renewed momentum of the US market, and China accelerating its recovery. The downside scenario of flat to 2% growth (~10% probability) would reflect renewed Middle East escalation, softer tourism, or weakness in the Americas.

After a soft Q1 2026 (between -5% and -3% at current exchange rates vs the prior year), conditions are expected to slightly improve in Q2 as macro and geopolitical headwinds begin to lift. Around 60% of luxury players are already outperforming their Q1 2025 results, and the wide performance gap that defined 2025 is beginning to close, as last year's winners cool and former laggards recover.

Three speeds across geographies

The regional picture is one of sharp divergence, with the Americas surging while Europe and the Middle East drag on overall growth.

In the US, luxury spending is on the rise across apparel, hard luxury, and to a lesser extent beauty. American-native luxury brands grew by roughly 10% to 15% year-on-year in Q1 compared to the same period last year, without accounting for dollar swings. Younger shoppers are leading the charge – consumers under 35 are spending at a clip about four percentage points faster than their older counterparts. Perhaps more striking, upper middle-class households are now growing their luxury spending at roughly twice the rate of wealthier cohorts, suggesting that the market is succeeding in broadening its base.

China activity is coming back, but carefully. Online luxury sales jumped 25% to 35% in Q1 vs a year earlier. Notably, shoppers are gravitating toward ready-to-wear at twice the rate of leather goods, with consumers stepping back from status purchases in favor of choices leaning more into belonging and self-expression. Japan, meanwhile, is contending with a slowdown in tourist traffic, particularly from China.

Europe is the market's weak link for now. International tourist spending dropped around 20% in February, with Middle Eastern visitors especially affected by regional conflict. The Gulf luxury consumer base shrank by between 15% and 25% in early 2026. That said, the picture has started to show some sign of improvement in Q2: tax refund data from May shows accelerating spending by American, Chinese, and Middle Eastern visitors compared to April – a tentative signal that both Europe and the Gulf may be turning a corner as the second quarter unfolds.

Category performance shaped by evolving consumer priorities. Channels and funnels in flux

Across categories, Bain's analysis shows that jewelry is leading, with apparel, eyewear, and fragrances also holding up well. Cosmetics are lagging, and leather goods and footwear are still under pressure, yet on improving trajectory. In watches, connoisseurship is overtaking hype, with collectors increasingly rewarding craftsmanship and rarity – a dynamic that is also fueling momentum in the resale market. Beyond watches, resale market continues to thrive Vintage bag online searches have more than doubled year-over-year, and roughly half of all luxury shoppers now check the secondhand market before buying anything new. The channel landscape is stalling in aggregate, but a number of internal shifts are underway. Mono-brand retail remains experience-led but faces volume pressure. Travel retail is recovering unevenly, with activity in the Gulf states particularly volatile. Multi-brand retailers are caught between brand pullback and continued consumer interest. Direct online is stabilizing as brands tighten control over direct-to-consumer distribution.

AI is profoundly reshaping the luxury consumer journey

Consumers increasingly discover, compare, and validate their purchases of luxury brands through AI and the technology rapidly redefines luxury relevance, Bain reports. Its analysis finds that approximately half of luxury consumers already use AI in their buyer journey while nearly all plan to continue this pattern. About one in four luxury consumers use it for brand and product discovery, while two out of three of them leverage it for product comparison. Bain cautions that brands that are not building AI-native relevance risk being left behind as consumers increasingly discover products and services, and validate purchase decisions, through AI-mediated channels.

Sports are emerging as a powerful new arena for luxury brand-building

Over 80% of luxury market value is now represented by brands that have sponsored a sport experience in the past 12 months; yet, the focus is still mostly on building cultural credibility and saliency at scale, rather than on driving growth in sales.

Amplifying experiences: new formats redefine the luxury frontier

Experiential luxury is shifting toward emotion- and purpose-led moments. Immersive bookings across dining, leisure, and entertainment are up 30% compared with last year, driven by bespoke, slow-travel formats rooted in local culture. Travel beyond traditional hotspots has grown by 20% vs last year, reflecting an "Elsewhereism" trend, while multi-generational travel is rising: ~50% of Gen-Z say their brand preferences have been shaped by their parents.

"The appetite for luxury remains strong. The tolerance for disappointing experiences or products does not," said Federica Levato, Bain & Company senior partner, leader of the firm's EMEA Fashion & Luxury practice and co-author of the study. "Over 70% of customers who have left luxury intend to return – but not necessarily to the same brands. The question is whether brands are building the meaning and AI-native relevance to be surfaced and chosen when that moment arrives."

Winning through meaning amplification

Bain's analysis concludes that the meaning of luxury to consumers is evolving from being about social validation towards an individual focus on "self-actualization" – a shift from a desire to be admired towards a goal of personal fulfilment. This new era for the sector means that luxury will no longer define what its consumers own but rather how they live, the report suggests. It sees luxury evolving from elitism through aspiration and self-expression to an era characterized by "living well". Against this unfolding backdrop, Bain identifies three imperatives for brands: delivering wonder through immersive experiences in longevity escapes and untamed sanctuaries; building cultural relevance for diverse communities; offering clients a platform to co-author through AI-enabled creativity and personalization.

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