The global luxury market, while currently experiencing a slowdown in the wake of post-pandemic fluctuations, is expected to regain momentum by 2025. This anticipation arises as inflation rates stabilize and aspirational consumers re-engage, with the market forecasted to grow by 27.8% between 2024 and 2028, reaching a total of $268.6 billion.
According to GlobalData’s latest report on the Global Luxury Apparel Market, capturing growth in 2024 remains challenging due to subdued consumer confidence. Nevertheless, luxury is anticipated to outperform the overall apparel market.
Major players in the global luxury fashion scene, such as Louis Vuitton Moet Hennessy (LVMH), witnessed a surge in demand post-pandemic. LVMH experienced a notable increase in sales during Q1 FY23, jumping by 16.8% to €21.0 billion ($22.5 billion) as consumers resumed spending.
This surge was attributed to strong demand from both local and international shoppers, particularly from China following the lifting of mandatory quarantines for travelers in December 2022.
However, this momentum tapered off towards the end of 2023 as the luxury market contended with inflationary pressures, leading to a decline in spending that persisted through 2024.
Analysts, such as Alice Price from GlobalData, view LVMH’s performance as indicative of trends within the luxury sector, with aspirational consumers scaling back spending due to ongoing economic challenges.
Looking ahead, GlobalData’s report suggests a rebound for the luxury market in 2025, outpacing growth in the total apparel market. This resurgence is expected as inflation rates stabilize, reigniting interest from aspirational consumers.
The report forecasts a 27.8% growth in the luxury market between 2024 and 2028, reaching $268.6 billion, accounting for 10.9% of total apparel spending. Additionally, the global luxury market is projected to grow at a compound annual growth rate (CAGR) of 5.9% between 2023 and 2028.
While macroeconomic challenges in Western Europe and North America may impact luxury demand in the short term, emerging markets in APAC and Eastern Europe are anticipated to drive growth. These markets are expected to see an increase in middle-class and urbanized populations, resulting in more luxury spending.
Furthermore, the report highlights the influence of Gen Z consumers, who are increasingly aspirational towards luxury brands through social media and influencer culture. Luxury brands are adapting their offerings to appeal to this demographic’s desire for exclusivity and social validation, which is expected to further drive growth in the luxury apparel market.
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