It’s been one quarter after another of more of the same for the luxury sector. In the first quarter of 2025, the sector experienced a notable slowdown, continuing the trend that began in 2024. This decline is mainly attributed to a significant drop in demand in China, where sales fell by 18% to 20%, returning to 2020 levels.
In addition to a sluggish Chinese market, other factors may explain this slowdown in the global luxury market, such as a partial disengagement of long-standing customers, an erosion of loyalty, and macroeconomic constraints such as customs duties.
Several studies, notably those by Bain & Company and McKinsey, show that the luxury sector has lost between 30 and 50 million customers worldwide since 2022, mostly among mid-range buyers (those who only buy occasionally).
With the first quarter corporate earnings season coming to a close, we review the results of the sector’s major players.
Prada and Hermès remain the sector’s driving forces, while Brunello Cucinelli impresses
Prada has once again had an excellent start to the year, maintaining double-digit growth and defying the headwinds of the market. Miu Miu’s solid performance (+60%) fully offset Prada’s slowdown. The group showed strong resilience in Asia-Pacific, despite a more difficult basis for comparison and a cautious consumer environment, with double-digit growth in all regions.
Hermès, meanwhile, remains on a clear growth path, but this time with single-digit growth (+7%), compared with 13% for the full year 2024 and 17% in the last quarter of 2024. Sluggish consumption in China and the crisis in the watchmaking industry are impacting the group, whose sales in this sector fell by 10% in the first quarter, in line with most of its competitors. Fortunately for the brand, the group’s business is still driven by its core business, leather goods and saddlery, which grew by 10%. With €1.8 billion, it accounts for 43% of sales in the first three months of 2025. By comparison, watchmaking accounts for only €151 million. The other major division of the company, clothing and accessories, which includes clothing, shoes, belts, jewelry accessories, and hats, grew by 7% to €1.14 billion. Hermès shares have remained up 11% since January 1.
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Read also > [CHRONICLE] What remedies for the current “luxury fatigue”?
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