Behind luxury fatigue, brands' aspirational dissonance

In 2026, after two difficult years, the luxury industry is talking about recovery again. Bain estimates that the global market slipped by around 2% in 2025, before forecasting a return to growth of 3 to 5% in 2026. The first months of the year have brought some signs of recovery in Asia.

Between 2019 and 2023, however, around 80% of the sector's growth came from price increases and not from higher volumes, according to McKinsey and the Business of Fashion, a point rarely highlighted. That growth rested on a model built over forty years, during which the major groups extended luxury's client base by applying some of the rules of the mass market at their own level: wider ranges, entry-level products, store networks in every major city and marketing budgets on the scale of consumer brands. To reach this wider audience, the houses increasingly shifted their investment towards visibility, with global shows, celebrity ambassadors, campaigns designed for social media and flagships conceived as landmarks. As desire for luxury spread to a far wider public, and in a period of credible social mobility, buying from a great house became conceivable for a rising middle class, and offered a certain guarantee of quality.

Yet the middle classes on which this model depends are seeing their purchasing power erode. In France, for instance, inherited wealth now accounts for around 60% of total wealth, against 35% in the early 1970s, which makes work a less effective route to prosperity than it once was. China is living a similar story, compressed into a single generation. The aspirational class that carried the boom of the 2010s held most of its wealth in property, where real prices have fallen by about a quarter since 2021. The next generation is struggling too, with youth unemployment at 18.9% in August 2026.

This is the aspirational dissonance behind luxury fatigue. Beyond the fact that part of their clientele can no longer afford to buy, the houses keep selling a dream in societies where social mobility has slowed and the horizon of possibilities has narrowed. They now face some of the problems of mid-market brands, raising prices while quality has, in some cases, come under pressure. The bet on the brand equity inherited from the heritage houses was not a mistake in itself, and it would probably still pay off if the middle classes could afford to keep buying. Visibility, which has never automatically translated into sales, does so even less in this context.

Tellingly, houses that broadened their client base far less than their competitors are holding up better. In 2025, Hermès grew 9% at constant exchange rates, while Kering fell 10% and LVMH 1% on a comparable basis, and Brunello Cucinelli, with its selective distribution, grew 13.3% in the first half of 2026. At the same time, a new generation of designers is emerging from local scenes in Shanghai, Bangkok or Ho Chi Minh City. These signals suggest that the base the major houses spent decades enlarging is now stretched between two ends that are drifting apart. At one end, the wealthiest clients seem either to remain loyal to houses that have diluted their client base less, or to turn towards those that embody a more exclusive form of luxury. At the other, a middle class under pressure no longer recognises itself in the promise of the great houses and appears more inclined to turn towards designers whose rise it can identify with.

For the major houses, this broad base is becoming a gap to bridge, and identity may matter more than product. Most large houses now communicate in very similar ways, with the same activations and the same spectacular flagships, distinguished mainly by the size of their budgets. Many also seem to follow trends, watching what younger audiences adopt before moving in their wake, when luxury has long drawn its authority from setting the direction others would follow. Gucci's recent decision to produce some sneakers in China, presented as a technical choice while the house was also lowering some prices, could have become a statement if carried by a stronger identity, at a moment when China is reclaiming its place as a source of craft and design.

Fashion has known houses that built a world through communication as much as through clothes, where buying a piece meant entering a culture, from Martin Margiela in the 1990s to Phoebe Philo's Céline or the early Vetements. Recovering that clarity, with sobriety applied to the machine around the clothes rather than to the clothes themselves, could appeal to the wealthiest clients while remaining meaningful to those who no longer believe in the promise of wealth. Sobriety does not necessarily mean turning towards quiet luxury, and confidentiality does not have to mean exclusion, nor a retreat from the local cultures that houses can draw on, particularly in Asia. It is hard to imagine such an approach not resonating with Gen Z, a generation more aware of social and environmental issues, and looking for authenticity as much as for a sense of belonging.