SurveysJun 26, 2025
After Recovering in May, Consumer Confidence Dips in June SurveysJul 09, 2025
Jewelry Stays Strong as Luxury Market Slows, Bain & Co. Says
Turbulence will be the new baseline for luxury as it faces its biggest potential setbacks in 15 years, a recent report said.
An 18-karat white gold multi-strand necklace from Mikimoto’s “The Bows” high jewelry collection featuring Akoya cultured pearls and tanzanite, with a removable brooch. Jewelry sales have remained strong, even as the luxury market faces a slowdown, according to a recent report by Bain & Company.
New York—The global luxury sector is facing a downturn as it battles economic turbulence and market disruptions, Bain & Company said in its latest report on the luxury market, released last month in collaboration with Altagamma.
The sector is up against its “biggest potential setbacks for at least 15 years,” said the report, citing economic issues as well as societal and cultural shifts.
It is facing its first slowdown since the financial crisis of 2008/2009, excluding the COVID-19 pandemic.
According to the report, the personal luxury goods segment posted a post-pandemic rebound of €369 billion ($435 billion) in 2023 while sales were down 1 percent (flat when adjusted for currency fluctuations) to €364 billion ($429 billion) last year.
For some luxury brands, the slowdown has continued into the first quarter of this year, with jewelry the shining exception.
Luxury conglomerate LVMH, which owns Louis Vuitton and Tiffany & Co., among others, reported that Q1 revenue was down 2 percent, though sales were up in its jewelry and watch division.
Similarly, Kering saw sales sink in Q1 amid Gucci’s ongoing struggles while sales for its jewelry brands, which include Pomellato and Boucheron, grew.
“Worldwide luxury spending, historically sensitive to uncertainty, is coming under intensified pressure as luxury consumers’ confidence is eroded by current economic upheavals, geopolitical and trade tensions, currency fluctuations, and financial market volatility,” said Bain.
However, armed with strong fundamentals and a resilient spirit, the luxury market’s long-term prospects remain bright, it said.
Here are five key takeaways from the report.
Demand for luxury goods has softened in the United States and China.
There is a growing polarization in the luxury market, said the report, noting varying performances in different parts of the world.
In the U.S. and in mainland China, the two most important luxury markets, the report noted a period of softened demand due to “economic turbulence.”
In the U.S., tariffs have led to volatility, which is affecting the market and consumers’ willingness to spend.
In China, the middle-class consumers are in “wait-and-see” mode, said Bain.
“Despite this, the report points to glimmers of hope for the medium-to-longer term, with American consumers signaling appetite for accessible luxury while high-spending customers remain resilient,” it said.
In China, there’s a small but growing consumer interest in “new” local luxury brands.
As for other markets, Europe and Japan have been hurt by weakening tourism but local demand has somewhat offset the decline.
Notably, European consumers have continued to show an interest in jewelry and ready-to-wear clothing, especially in destination locations and for value-driven formats.
The luxury market remains strong in the Middle East, Latin America, and parts of Southeast Asia.
Related stories will be right here …
The sector is up against its “biggest potential setbacks for at least 15 years,” said the report, citing economic issues as well as societal and cultural shifts.
It is facing its first slowdown since the financial crisis of 2008/2009, excluding the COVID-19 pandemic.
According to the report, the personal luxury goods segment posted a post-pandemic rebound of €369 billion ($435 billion) in 2023 while sales were down 1 percent (flat when adjusted for currency fluctuations) to €364 billion ($429 billion) last year.
For some luxury brands, the slowdown has continued into the first quarter of this year, with jewelry the shining exception.
Luxury conglomerate LVMH, which owns Louis Vuitton and Tiffany & Co., among others, reported that Q1 revenue was down 2 percent, though sales were up in its jewelry and watch division.
Similarly, Kering saw sales sink in Q1 amid Gucci’s ongoing struggles while sales for its jewelry brands, which include Pomellato and Boucheron, grew.
“Worldwide luxury spending, historically sensitive to uncertainty, is coming under intensified pressure as luxury consumers’ confidence is eroded by current economic upheavals, geopolitical and trade tensions, currency fluctuations, and financial market volatility,” said Bain.
However, armed with strong fundamentals and a resilient spirit, the luxury market’s long-term prospects remain bright, it said.
Here are five key takeaways from the report.
Demand for luxury goods has softened in the United States and China.
There is a growing polarization in the luxury market, said the report, noting varying performances in different parts of the world.
In the U.S. and in mainland China, the two most important luxury markets, the report noted a period of softened demand due to “economic turbulence.”
In the U.S., tariffs have led to volatility, which is affecting the market and consumers’ willingness to spend.
In China, the middle-class consumers are in “wait-and-see” mode, said Bain.
“Despite this, the report points to glimmers of hope for the medium-to-longer term, with American consumers signaling appetite for accessible luxury while high-spending customers remain resilient,” it said.
In China, there’s a small but growing consumer interest in “new” local luxury brands.
As for other markets, Europe and Japan have been hurt by weakening tourism but local demand has somewhat offset the decline.
Notably, European consumers have continued to show an interest in jewelry and ready-to-wear clothing, especially in destination locations and for value-driven formats.
The luxury market remains strong in the Middle East, Latin America, and parts of Southeast Asia.
While spending habits vary by generation, brand engagement is down across the board.
The growing polarization noted above also applies to different generations of consumers.
Gen Z consumers are “split between a perceived need for self-expression and a desire for conformity.”
“These young consumers are seeking creativity, excitement, and emotional re-engagement,” the report said.
Financial pressures have made millennials more cautious, but they are responding to “fresh brand engagement,” said the report.
Older consumers, meanwhile, value meaningful experiences over goods.
Across all demographics, however, brand engagement has declined since 2022, the report said.
Brand-related searches are down for more than 40 percent of the brands, said Bain, while social media follower growth sank 90 percent.
Engagement rates are down by 40 percent, which the report attributes to “price fatigue and stagnant creativity.”
“In turn, brands have begun to pursue efforts to nurture consumers’ desire through new, experiential formats, category diversification, ‘beyond product’ experiences, and increasingly through a new wave of creative change,” said the report.
Claudia D’Arpizio, a partner at Bain & Co., encouraged brands to focus on their strengths and to prioritize quality, creativity, and authenticity.
“Deepening consumer relationships is essential, shifting away from push marketing toward seamless, customer-centric experiences across every touchpoint,” she said.
Jewelry is performing well while the watch category faces headwinds.
The divergence continues across product categories.
Jewelry remains strong, as it did last year, alongside apparel and eyewear, with “uber-luxury” items and those in the aspirational segment posting positive performances.
Watches, leather goods, and footwear are facing headwinds, “unless backed by true innovation,” according to the report.
“Even if the price points continue growing by 2 to 3 percent on average, brands are subtly reinforcing entry-price strategies to broaden their appeal without eroding brand equity, with winning cases underpinned by [a] combination of true newness and a unique brand point of view,” it said.
“Traditional brands, stuck in diluted identities and lookalike aesthetics targeting the same consumer pools, are losing ground to more agile, culturally rooted luxury rivals.” — Bain & Co.
As competition heats up, offering a strong value proposition is key.
New and evolving brands are giving traditional luxury brands a run for their money, combining authenticity with a modern strategy.
“Traditional brands, stuck in diluted identities and lookalike aesthetics targeting the same consumer pools, are losing ground to more agile, culturally rooted luxury rivals,” said the report.
New Western brands are offering strong value propositions and more accessible pricing, said Bain.
As for retail, multi-brand channels are facing added pressure, even though consumer interest is still there.
“More than 70 percent of luxury brands are pulling back volume from these retail platforms amid their financial struggles,” the report said.
“To remain vital, multi-brand players must evolve–deepening customer engagement, supporting emerging brands, and delivering standout service across the journey.”
Brands can also stand out by offering a solid value proposition.
Luxury brands are up against weakening consumer sentiment and a “growing disillusionment” with their offerings, particularly among Gen Z.
“This trend is calling into question the luxury sector’s long-standing price-to-value equilibrium as a growing group of younger consumers reassess their relationship with luxury,” said the report.
Bain said it’s urging the industry to respond to the current challenges by refocusing on the fundamentals, “grounding value propositions in clear and differentiated brand identities, anchored in strong product quality and thoughtful price architectures.”
“At the heart of this shift lies a more fundamental question: Who are we as a brand, and what do we stand for?”
— Federica Levato, Bain & Co.
The future of luxury remains hopeful.
The current luxury market is facing short-term volatility, but all hope is not lost.
The industry’s long-term fundamentals and prospects remain strong, the report said.
Over the next five years, more than 300 million new consumers are expected to enter the luxury market, with more than half of these shoppers falling into the Gen Z or Gen Alpha (2010-today) demographic.
The number of potential luxury buyers is set to expand further as global incomes rise and generational wealth is transferred. There is expected to be a 20 percent increase in the number of high-net-worth consumers.
That doesn’t mean the industry doesn’t have work to do.
“Brands will need to rethink how they engage younger consumers, avoid over-reliance on top spenders, and build emotional connections that go beyond transactional loyalty,” said the report.
Bain & Co. partner Federica Levato said, “At the heart of this shift lies a more fundamental question: Who are we as a brand, and what do we stand for?
“Answering this with clarity and conviction will be critical for any brand aiming not just to endure, but to lead in this new era of transformation.”
Editors' Picks
Sponsored by
More on Surveys
The Latest
SourcingAug 19, 2025
Dubai’s Jemora Group Buys Diamond Miner LucapaThe investment company, founded by Dev Shetty, has acquired the struggling miner and its assets, including the Lulo mine in Angola.
ColumnistsAug 19, 2025
Peter Smith: The Arrival Fallacy and Jewelry RetailSmith shares wisdom he gleaned from a podcast he was listening to one morning while being walked by his dog, a Malshi named Sophie.
CrimeAug 19, 2025
Customs Seizes 7,300 Pairs of Fake ‘Alhambra’ EarringsThe counterfeit Van Cleef & Arpels jewels would have been worth more than $30 million if genuine.
Brought to you by
Rallying Call for the Jewelry Industry on Tariffs and Other Key IssuesJewelers of America is leading the charge to protect the industry amidst rising economic threats.
MajorsAug 19, 2025
MJSA Apprenticeship Program Is Nationally RecognizedThe MJSA Mentor & Apprenticeship Program received the Registered Apprenticeship Program designation by the U.S. Department of Labor.
Weekly QuizAug 15, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
WatchesAug 19, 2025
Casio America Names New Timepiece Division ManagerCasio executive and watch enthusiast Masaki Obu is the new general manager of its U.S. timepiece division.
MajorsAug 18, 2025
Verragio’s Michael Barabash, a ‘Kind Soul,’ Dies at 58Barabash, Verragio’s client relations representative, was a vital member of the team and is remembered as being warm and full of life.
Brought to you by
Taking the Moment Head On: How Rio Grande Champions the Present & Future of Fine JewelryAs a leading global jewelry supplier, Rio Grande is rapidly expanding and developing new solutions to meet the needs of jewelers worldwide.
CollectionsAug 18, 2025
John Hardy’s New ‘Dot’ Collection Is on PointOriginally introduced in 1992, the “Dot” collection is back with a capsule featuring five archival designs and three new creations.
Events & AwardsAug 18, 2025
IJO Announces 2025 Vendor of the YearAllison-Kaufman has received the honor for the fourth year in a row.
FinancialsAug 15, 2025
In Q2 Results, Pandora Talks Tariffs, Q4 Plans The company had a solid second quarter, with sales of non-charm jewelry outpacing sales of pieces in its core collections.
EditorsAug 15, 2025
Piece of the Week: Etho Maria’s Showgirl-Approved Ruby Drop Earrings Taylor Swift dons the vibrant pair in new promotional imagery for her upcoming album, “The Life of a Showgirl,” set to release in October.
WatchesAug 15, 2025
Audemars Piguet Acquires Majority Stake in ManufacturerIts investment in micromechanics expert Inhotec will preserve skills essential to the watchmaking industry as a whole, said the company.
MajorsAug 15, 2025
Rio Grande Names New Marketing DirectorNicolette Bianchi joins the wholesale provider with more than 15 years of cross-industry experience in marketing and product development.
CollectionsAug 14, 2025
In Midst of ‘Sardine Girl Summer,’ Pippa Small Looks to ‘Flounder Fall’Her new “Ocean” collection was inspired by Myanmar’s traditional articulated fish jewelry, with depictions of flounder, catfish, and more.
MajorsAug 14, 2025
Casio America Names New CEOLongtime Casio executive Yusuke Suzuki is the new president and CEO of Casio’s U.S. subsidiary.
SourcingAug 14, 2025
West Coast Orgs to Host Trading Event, Mixer in LAThe full-day sourcing and networking event, slated for Aug. 18, will be followed by the fifth annual Mega Mixer Summer Soirée.
TrendsAug 13, 2025
Cristiano Ronaldo Proposes With Gigantic Oval-Cut DiamondModel Georgina Rodríguez received a rock of an engagement ring, with her diamond estimated to be 35 carats, experts say.
SourcingAug 13, 2025
ICA Names 2025 Board of DirectorsThe board elected 9 new directors at its recent ICA Congress in Brazil.
TrendsAug 13, 2025
Colorado Jeweler, Whiskey Maker Collab on Ring GiveawayThree winners will receive a custom ring from Honest Hands Ring Co. inlaid with a piece of history from Denver-based distillery Stranahan’s.
SourcingAug 13, 2025
Columbia Gem House Launches Winza Sapphires, RubiesThe new inventory, all untreated, features vibrant hues and unique bicolor combinations.
SourcingAug 12, 2025
Gemfields Sells Fabergé for $50MAcquired by a tech investor, the historic brand will continue to focus on jewelry, accessories, and timepieces.
Policies & IssuesAug 12, 2025
Higher Tariff on Chinese Imports Paused for 90 Days, Trump SaysPresident Donald Trump issued an executive order extending the pause on higher tariffs to November as negotiations with China continue.
CollectionsAug 12, 2025
Jacquie Aiche’s New Collection Harnesses the Energy of the ThunderbirdThe “Thunderbird Slab” collection features a thunderbird motif as a symbol of power, protection, and boundless possibility.
ColumnistsAug 12, 2025
Creative Connecting: How to Take a Better HeadshotColumnists Jen Cullen Williams and Duvall O’Steen share tips on how to elevate your professional image.
CrimeAug 11, 2025
Man Convicted of First-Degree Murder in Death of Colorado JewelerPeter Damian Arguello, a jeweler in the Denver suburb of Wheat Ridge, was found dead inside his store in November 2023.
IndependentsAug 11, 2025
Lisa Bridge to Depart Ben Bridge JewelerThe retailer, owned by Berkshire Hathaway, is becoming part of the Berkshire Hathaway Jewelry Group with Helzberg.
