Bain & Company revises sales forecast for the luxury goods industry downwards

Bain & Company revises sales forecast for the luxury goods industry downwards

The consulting firm Bain & Company forecast on Wednesday that sales of luxury goods will decline by two to five percent worldwide this year.

The previous growth forecast of zero to four percent has been significantly revised downwards. The situation in this sector is expected to deteriorate further after a one percent decline in 2024.

Ahead of its spring report, Bain & Company said the luxury market is experiencing "more complex turbulence on multiple axes," citing economic pressure and price fatigue in the first three months of the year. Customers are now waiting for new, more creative products from brands, the consulting firm emphasizes.

The new forecast comes as the luxury goods industry prepares for further economic turmoil as a result of global trade tensions.

The Swiss watch industry, for example, is currently faced with the uncertain prospect of a possible 31 percent tariff on all exports to the USA.

While the vast majority of luxury buyers surveyed by the consultancy (75%) said that tariffs were unlikely to cause them to buy fewer luxury goods in the future, about half of those who had already withdrawn in the past year said this was due to price increases in the sector.

According to analysts, many luxury brands took advantage of the surge in demand following the end of the pandemic to make their largest price increases in recent years.