In 2019, a Chanel Classic Flap cost €5,200. In 2024, it cost €10,800. In five years the price increased 108%. The quality of the bag remained the same. Customers started asking questions.
Federica Levato, Bain & Company partner and one of the world's leading experts on the luxury market, used a precise word when presenting the annual Bain-Altagamma report at the end of 2025: customers feel "betrayed."
Not disappointed. Not distanced. Betrayed.
The Numbers Behind the Silent Disaster
The Bain 2025 report contains data the luxury industry prefers not to amplify:
- The global luxury customer base shrank from 400 million in 2022 to 340 million in 2025
- Sixty million buyers abandoned the sector in three years
- Bain estimates another 20–30 million could exit in 2026 if brands do not correct course
- The global personal luxury market fell to €363 billion in 2024 after peaking at €387 billion in 2023
For scale: losing 60 million customers is equivalent to losing the entire combined population of Italy and Spain.
How We Got Here: The History of Price Increases
Between 2019 and 2024, the major luxury brands raised prices systematically, justifying the moves with production cost inflation and the need to "protect brand exclusivity."
The data tells a different story. The increases far exceeded real inflation:
- Chanel Classic Flap: +108% in 5 years
- Louis Vuitton Neverfull: +65% in 5 years
- Hermès Birkin 30 (primary market): +45% in 5 years
- Gucci Dionysus: +72% in 5 years
- Rolex Submariner (official price): +38% in 5 years
The brands' logic was clear: if the customer keeps buying, the price is not yet high enough. Every increase that did not generate a sales decline was read as a signal to push further.
The model works until it stops working. In 2023, it stopped working.
Who Paid the Highest Price
The crisis did not hit all brands equally. 2025 data shows a clear polarization:
Brands that raised prices without investing in creativity and perceived quality suffered the largest losses. Gucci is the most visible case: down 22% in revenue in 2025, after years of price increases and divisive creative decisions.
Brands that maintained consistency between price and perceived value held steady or even grew. Hermès, which raises prices gradually and maintains real waiting lists, closed 2025 with 7% growth. Brunello Cucinelli, which never participated in the aggressive price race, reached €1.4 billion in revenue with double-digit growth.
The distinction is subtle but fundamental: raising the price of a bag does not create luxury. It just creates a more expensive bag.
The Chinese Market: Amplifier of the Problem
The pricing dynamic intersected with the Chinese market slowdown in a particularly devastating way.
During the post-Covid boom, brands raised prices knowing that Chinese demand would absorb the increase. When Chinese demand slowed in 2023–2024, brands found themselves with high prices and without the market that had sustained them.
The European and American markets, meanwhile, had developed resistance to increases. An American consumer who bought three Gucci bags a year in 2019 bought one in 2024. Not because they could not afford it. Because it was no longer worth it.
How Brands Responded: Between Correction and Denial
Faced with the data, the major conglomerates responded differently.
LVMH, which closed 2025 with slight revenue growth (+2%), publicly communicated it does not intend to reduce prices. The strategy is "hold": maintain high prices and wait for the market to adapt.
Kering took the opposite path. With Gucci in crisis, the group launched a price rationalization program on some entry-level lines, restoring accessibility on specific segments. Result: down 22% in revenue in 2025, with the Demna uncertainty weighing on brand perception.
Chanel announced it intends to slow the frequency of increases, without reversing those already applied.
Hermès declined to comment, and continues to grow.
What Is Happening in the Secondary Market
The pre-owned luxury market recorded the direct consequence of the primary market price crisis. With primary prices at historic highs, many consumers shifted to the secondary market.
But even there the signals are contradictory. Some categories, like sport Rolex models, saw a secondary market decline of 23% from 2021–2022 peaks. Chanel bags lost 15% of secondary market value relative to 2023.
The signal is clear: when the primary market is overvalued and demand falls, the secondary market corrects faster.
The 2026 Outlook: Correction or Continuation?
Bain forecasts a partial recovery of the market in 2026, with estimated growth between 2% and 5%. But the conditions are clear: the brands that recover will be those that know how to rebuild trust with the customer, not those that simply wait for the cycle to improve.
The "betrayal" that Federica Levato describes is not resolved with a discount. It is resolved with credibility.
Frequently Asked Questions
Why did luxury prices increase so much?
Between 2019 and 2024, luxury brands used price increases as a positioning tool, not just as a cost adjustment. The logic: if the customer pays, the price is not yet high enough. This strategy worked in the short term but eroded trust in the long term.
Which luxury brands lost the most customers?
The brands that suffered the largest losses are those that raised prices without maintaining creative and qualitative consistency: Gucci (down 22% in 2025 revenue), Balenciaga, and the mid-tier segment of Kering brands. Brands with strong identity such as Hermès and Brunello Cucinelli held up better.
Will luxury recover in 2026?
Bain forecasts a partial recovery of 2–5% in 2026, but conditional on brands' ability to rebuild customer trust. It is not an automatic recovery: it is one that brands must earn.
