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Luxury brands have lost about 50 million customers in the past two years, while secondhand businesses and lower-price competitors are seeing upticks in their sales, The Wall Street Journal reports.
Demand for luxury goods is expected to be flat in 2024, according to consulting firm Bain, while luxury brands have lost more than 10% of their usual customers since 2022.
The constriction marks the first time in recent history that the sector’s shopper numbers have dropped. For the past three decades, the sector tripled thanks to strategies to attract middle-class customers.
Price increases for luxuries coupled with inflation pressures on other goods have reversed the long-term trend.
The cost of the average luxury product has risen sharply since the start of the pandemic, though there are big variations across brands. While some customers may have pulled back anyway as inflation ate into their disposable incomes, millions of other customers have been priced out.
“Finding regular size [handbags] at less than $3,000 from reputed brands has become virtually impossible,” says Luca Solca, luxury-goods analyst at Bernstein.
Expensive brands aren’t only selling to fewer people, they are selling far fewer products. The number of units sold by the luxury industry this year is expected to be 20% to 25% lower than in 2022, according to Bain.
