The 24th Altagamma Observatory says luxury industry revenue will remain stable in 2025 and recovery will begin in 2026

The outlook for the global market for luxury products and services was presented at the Altagamma Observatory 2025, the annual event organized by Altagamma, the association of Italy's leading luxury brands, held on November 20 in Milan. The global market for luxury products and services is expected to be worth approximately €1.44 trillion in 2025, on par with last year, despite economic and geopolitical uncertainty and different results between sectors. The shift towards experiential consumption will continue, while long-term forecasts remain generally positive.

The luxury personal items market will behave along the same lines, with a forecast of 358 billion euros by 2025 (2% less at the current exchange rate, but stable at the current exchange rate, like the market in general).

The luxury sector estimates for 2026 and the outlook for the current year emerged from the two studies presented at the event: Altagamma Consensus 2026, a study prepared with the help of 19 Italian and international financial analysts, presented by Stefania Lazzaroni, CEO of Altagamma; and Altagamma-Bain Worldwide Luxury Market Monitor 2025, curated by Claudia D'Arpizio and Federica Levato, senior partners at Bain & Company.

Both studies painted a picture of a resilient market, despite the significant structural transformations taking place, driven primarily by changes in the purchasing behavior of luxury consumers, who continue to prioritize experiences over products, and by the increasingly crucial relationship between price and value.

The panorama shows that there are regional differences: the Middle East is constantly expanding at a rate of 4% to 6% and the Americas are recovering (with a growth rate between 0% and 2%), thanks to domestic spending and the increase in the average purchase value. Europe is slowing (losing 3% to 1%), China remains weak (8% to 6%), while Japan plummets (also 8% to 6%) after an exceptional 2024.

There are performance differences between categories, influenced by the polarization between the high-end and more affordable market segments. In personal luxury, jewelry grows between 4% and 6%, and glasses between 2% and 4%, while leather goods and footwear lose between 7% and 5%. Car sales volumes are falling across all price ranges, with high-end sports cars faring better; the yacht building sector is growing vigorously, while furniture design remains stable; Premium wines and spirits are struggling, with the exception of premium champagne and Italian red wines.

The Altagamma Consensus study for 2026 has estimated a growth rate for the overall luxury sector of approximately 5%, in line with a longer-term growth forecast of between 4% and 6%. The sector's EBITDA is expected to increase by 5%, due to cost optimization measures and the resilience of the US, European and Middle Eastern markets. The renewed confidence of the Chinese consumer could be a positive development in this scenario. The impact of the exchange rate behavior of the dollar, currently weak in general, could penalize the exports of other countries.

However, the United States will remain a strong market anchor, regardless of the impact of tariffs. The Middle East is expected to be equally strong, benefiting from steady flows of tourism and real estate investment from around the world. The European market, with France and Germany in crisis, will remain resilient, while Asia and China will grow moderately. Physical retail will remain the preferred channel for luxury personal items in 2026 and will grow significantly, along with e-commerce, while the wholesale channel will further reduce its importance.

One exception is luxury outlet stores (both physical and online), which are expected to perform extremely well, taking advantage of unsold inventory from previous seasons. In terms of categories, 2025 has created room for moderate and widespread volume growth, which will consolidate in 2026. Jewelry is expected to perform very well, confirming the category's role as a safe haven asset.

Matteo Lunelli, president of Altagamma, stated that “the luxury market has remained stable in 2025 with a value of 1.44 trillion euros, despite going through a complex phase, marked by more selective consumption and the moderate push from China. Experiential consumption is growing, especially when linked to well-being and longevity, while aspirational consumers struggle. The pricing dynamics require brands to be extremely careful, as they face tariffs, a weak dollar and high energy prices”.

Lunelli went on to say that “we expect organic growth of 5% in 2026. In this scenario, Italy's high-end sector, which represents more than 7% of the national GDP, continues to show its resilience, thanks to the creativity and manufacturing excellence of the entire industry. It is a sector that, now more than ever, must be defended in the name of legality, transparency and the rule of law, to protect its global reputation. We are active with the government and other associations to establish a new pact for the entire the industry, confident that our companies work diligently and responsibly. Italy must continue to promote the luxury sector, safeguarding a virtuous ecosystem that combines entrepreneurship, craftsmanship, innovation and culture: a true economic and cultural heritage that must be valued.”

D'Arpizio and Levato, senior partners at Bain & Co. and authors of the Luxury Market Monitor 2025, stated that “after the era of unbridled shopping, a new season begins for the luxury sector, in which experiences, emotions and values ​​are the true engine of growth.” They went on to say that “the market remains strong, but moves within an increasingly complex and interdependent global context. The next phase will be driven by quality, ethics and innovation: less expansion, more relevance. Brands are redefining their boundaries, expanding into adjacent territories – from food to wellness – and are being called to re-establish a genuine link with aspirational consumers, while preserving coherence and meaning.”

D'Arpizio and Levato added that “the future of luxury will belong to those who will be able to evolve from scale to precision, from following trends to dictating them. This is the moment of truth: luxury stands at a crossroads between exclusivity and inclusivity, between profit and purpose. Only those who are able to combine creativity and responsibility will manage to transform the transition into long-term performance. The fundamentals of the industry are solid: the expected annual growth rate of the 4% to 6% for personal luxury items, reinforced “By expanding demand, it means the market could be worth between €525 billion and €625 billion by 2035, while total luxury spending could be worth between €2.2 and €2.7 trillion.”

Altagamma was founded in 1992 as the association of Italy's leading companies in the high-end cultural and creative industries, promoting excellence, uniqueness and the Italian lifestyle around the world. Altagamma has a unique cross-membership, comprising 124 brands from the fashion, design, jewellery, food, hospitality, automotive and yacht building industries. Altagamma's mission is to contribute to the growth and competitiveness of Italy's cultural and creative industries, helping the country's economic development. The luxury products and services sector in Italy is worth 144 billion euros and contributes 7.4% of the national GDP. More than 70% of the sector's income comes from exports. The sector has a direct and indirect workforce of 1,922,000 people, which is equivalent to 8.2% of total employment in Italy.