The luxury sector recovery is pushing major brands to refocus on quality, exclusivity and client experience after a sharp slowdown hit sales and profits, industry analysts said.
LVMH and Kering saw profits fall last year, while Burberry posted a loss for its 2024-2025 financial year. Analysts linked the shift to weaker Chinese demand, higher prices and concerns over quality.
Eric Briones, cofounder of the Paris School of Luxury, said post-pandemic “binge buying” put pressure on the luxury industry’s artisanal model.
Italian police have also investigated major luxury brands over alleged outsourcing to poorly paid Chinese workers and poor labour conditions.
Briones said some labels raised prices by up to 50 percent after the pandemic without matching quality improvements. In some cases, he said, quality declined.
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Bain & Company said the luxury market lost 20 million clients between 2024 and 2025. The consultancy said the sector had already lost 50 million clients over the previous two years.
Luxury groups are now trimming portfolios. LVMH recently sold its US label Marc Jacobs and its DFS duty-free operations in China, while Kering sold its beauty division to L’Oréal for €4 billion.
Kering Chief Executive Luca de Meo said last month that the group must improve quality and restore Gucci’s appeal. “Our priority is to make Gucci unmissable again,” he said.
Analysts said brands are also shifting toward luxury experiences, hospitality and wellness as customers demand more than expensive products.
