Twenty percent of high-net-worth individuals (HNWIs) intend to spend less on designer fashions over the next 12 months. For leather goods, 31% are not purchasing at all. For watches, the number climbs to 44%.

These are not aspirational shoppers priced out of the market. These are the wealthiest consumers globally, surveyed in Q3 2025 by research firm Altiant and analyzed by Paris-based luxury consultancy MAD.

And the trend is accelerating. In 2019, only 15% of HNWIs made no purchases of designer fashions. By Q3 2025, that figure had grown to 25%. For leather goods, the "no-purchase" segment swelled from 23% to 31% over the same period.

According to Veronique Le Bansais, senior analyst at MAD, "The data signals a structural slowdown in luxury discretionary spending by affluent and HNWI consumers worldwide, marked by declining purchase frequency, rising non-buyers, and erosion of category penetration, especially in leather goods."

Structural. Not cyclical. This is the critical word.

For the first time in years, the luxury industry is confronting a demand problem that cannot be solved by raising prices, opening new stores in emerging markets, or waiting for Chinese tourists to return. The wealthiest consumers, who have historically been immune to economic headwinds, are actively choosing to spend less.

The question is: why? And what does this mean for luxury brands navigating 2026?

The 80/20 Problem: Growth From Prices, Not Product

Between 2023 and 2025, approximately 80% of luxury market growth came from price increases rather than volume gains, according to the State of Fashion 2026 report by McKinsey and Business of Fashion.

Read that again. Eighty percent.

Luxury brands did not sell meaningfully more products. They charged meaningfully more for the same products. And for a while, it worked. Demand remained robust. Margins expanded. Shareholders were satisfied.

But as Bain & Company warned in its November 2025 luxury study, customers began to feel "betrayed." Prices climbed 50-60% over three years at brands like Dior and Chanel, but the product quality, service experience, and creative innovation did not keep pace.

The implicit contract of luxury, that premium pricing reflects exceptional value, started to break down.

Now, even HNWIs, who can afford the price increases, are questioning whether the value proposition justifies continued spending. According to the Altiant/MAD survey, the issue is not affordability. It is perceived value.

As Jean Revis, MAD cofounder, explained in a January 2026 interview with WWD, "There's clearly an issue of accessibility with leather goods, given steep price increases in the post-COVID luxury boom."

But accessibility here does not mean financial access. It means emotional and rational access. Does this $6,000 handbag offer $6,000 worth of differentiated value compared to alternatives at $3,000 or $1,500? Increasingly, wealthy consumers are answering: no.

The Shift to Experiences Over Objects

One category bucked the trend in the Altiant survey: travel.

Intent to purchase for travel improved over the past year, making it the only category showing positive momentum among HNWIs. The implications are profound.

Luxury consumers are not reducing total discretionary spending. They are reallocating it. From consumable objects (handbags, watches, clothing) to experiences (travel, wellness, education, cultural engagement).

This shift, which Jean Revis describes as the move "from consumer goods to experiential luxury," is not new. But its acceleration among the wealthiest cohort is striking.

According to the Hurun Chinese Luxury Consumer Survey 2026, published in February, over half of Chinese HNWIs plan to reduce spending on luxury goods, with enthusiasm for watches noticeably declining and interest in second-hand luxury falling sharply.

At the same time, planned spending on travel, health, and children's education is increasing significantly. The average Chinese HNWI household expects to reduce annual material consumption (watches, jewelry, collectibles) by $35,000, while increasing spending on health and wellness by $7,000 and entertainment and tourism by $7,000.

Material luxury is being deprioritized in favor of service experiences and emotional value. For fashion houses and leather goods brands, this represents a fundamental challenge. They are competing not just with other luxury brands, but with entirely different categories of expenditure.

The Polarization of Performance: Hard Luxury Wins, Soft Luxury Struggles

Not all luxury categories are experiencing the same dynamics.

Jewelry grew an estimated 4-6% in 2025, according to Bain. The category "stood out as the clear winner," with momentum broad-based across regions. Jewelry extended its role as an emotion-driven asset beyond traditional gifting occasions, and younger consumers embraced customizable and modular pieces.

Watches remained broadly flat, but within the category, polarization was extreme. High-end watches for jewelry maisons performed particularly strongly. Entry-price assortments also saw demand. But the middle collapsed.

As Michael Zakkour, founder of 5 New Digital, told CNBC in December 2025: "High-end jewelry, watches, the hard luxury, the ultra-luxury, is doing well. But the middle has fallen off, and the bottom is falling out."

Leather goods and footwear, by contrast, "continued to contract sharply," according to Bain, "reflecting growing price sensitivity among aspirational consumers and a perceived lack of creative renewal."

The pattern is clear. Categories perceived as investment assets or emotion-driven (jewelry, high-end watches) are resilient. Categories perceived as fashion consumables without corresponding creative innovation (leather goods, ready-to-wear) are under pressure.

What Changed: From Logos to Values

The psychology of luxury consumption has shifted.

J.P. Morgan's fieldwork in China, published in their Global Luxury Market Outlook, found that HNWIs are becoming "more sophisticated, opting for understated style over ostentatious logos, marking a shift toward quiet luxury."

This is not just a Chinese phenomenon. Globally, conspicuous consumption is losing appeal among wealthy consumers. In China specifically, social attitudes have evolved such that "conspicuous consumption by those of average means can attract criticism," leading to what analysts describe as rising "luxury shame."

But even among those who can clearly afford luxury, the preference is shifting toward brands that offer substance over status signaling. Quality, heritage, craftsmanship, and values alignment matter more than logos.

According to the Altiant/MAD survey, only 56% of affluents and HNWIs consider sustainability important. But 74% will pay more for sustainable luxury products.

Le Bansais suggests one explanation: wealthy consumers are willing "to pay more to make sure that they have safe products for themselves," especially in categories like beauty. Sustainability is reframed not as altruism but as personal value and risk mitigation.

This creates both challenge and opportunity for brands. Those that can credibly deliver on quality, values, and substance will capture disproportionate wallet share. Those relying on logo recognition and heritage alone will struggle.

The Geographic Split: US Resilience, China Caution, Europe Stagnation

The HNWI spending freeze is not uniform across geographies.

The US market has remained relatively resilient. J.P. Morgan attributes this to robust financial markets supporting the wealth effect. When stock portfolios and real estate valuations are strong, HNWIs feel wealthier and maintain spending.

But as UBS analysts cautioned in December 2025, this resilience is fragile. If the stock market corrects, or if concerns about an AI bubble materialize, luxury demand could reverse quickly. Nearly 46% of US HNWIs rely on investment portfolios as a primary source of income, making them sensitive to market volatility.

China presents a different challenge. While recent quarters have shown signs of stabilization, analysts are cautious about declaring a full recovery. Chiara Battistini, J.P. Morgan's head of European luxury, noted that improvements came "against an easy comparison base" and that it is "early to call it a turnaround."

Chinese HNWIs are displaying consumption fatigue. According to the China luxury market outlook published in December 2025, many wealthy Chinese have "ample alternatives (real estate, art, investment products) that compete for discretionary capital," and some appear to be experiencing "consumption saturation."

Europe faces persistent challenges. Tourist spending has decreased as the weaker US dollar makes Europe less appealing as a shopping destination for American tourists. Local demand remains subdued amid economic uncertainty.

For brands, this geographic divergence requires differentiated strategies. A one-size-fits-all approach will not work in a market where US HNWIs are wealth-effect driven, Chinese HNWIs are values-shifting, and European HNWIs are economically cautious.

What Brands Are Doing: Tactical Adjustments and Strategic Recalibration

Facing this structural shift, brands are responding with both tactical and strategic moves.

Tactically, many are introducing more accessible price points to maintain entry into the category. Dior and Chanel have expanded assortments under €4,000, as we analyzed in Week 4. The goal is to rebuild the "ladder of aspiration" by offering products that keep the brand culturally present even when customers are not purchasing core items.

But as we noted then, this tactic does not solve the structural problem of eroded trust. If customers believe the brand offers poor value at €6,000, offering them a product at €2,500 does not necessarily restore confidence. It might simply shift sales to lower-margin items without rebuilding the relationship.

More strategically, some brands are refocusing on product innovation and creative renewal. Bain's 2025 luxury study notes that "brands used capsule collections, limited drops, and newness-focused storytelling to respond to rapid shifts in customer trends and cultural signals."

The apparel market held steady in 2025, especially among top customers, with "occasion-driven subcategories such as eveningwear and resort wear and statement pieces supporting value perception." Categories that offered newness and creative energy performed better than those perceived as stagnant.

Second-hand luxury also grew, reaching an estimated €50 billion in 2025 with 4-6% sales growth, according to Bain. AI-powered authentication tools and digital product passports increased trust in online platforms. The growth of resale reflects both value-seeking behavior and the "treasure hunting" appeal of archival pieces that offer uniqueness.

The Organizational Challenge: Capabilities to Rebuild Trust

Rebuilding trust with HNWIs who have pulled back requires organizational capabilities that many brands do not currently have in place.

It requires understanding why specific customer segments have reduced spending, what would restore their confidence, and how to deliver that through product, service, and experience.

It requires pricing discipline: resisting the temptation to keep raising prices when volume softens, and instead focusing on demonstrating value.

It requires creative renewal: ensuring that product innovation is genuinely differentiated and culturally relevant, not just incremental line extensions.

It requires customer relationship management: deepening engagement with existing top clients while finding ways to re-engage lapsed customers. According to Bain, more than 70% of lapsed luxury customers intend to resume purchasing within the next three years. Brands that proactively rebuild these relationships will have an advantage.

And it requires agility to navigate geographic divergence, category polarization, and rapid shifts in consumer psychology.

These are not capabilities that can be built overnight. For brands that lack them internally, accessing external expertise in customer strategy, pricing optimization, and brand repositioning can accelerate the path to recovery.

This is precisely the type of organizational challenge that platforms like MyFashionManager.com, founded by Federica Resta and Assiya Daribekova, were designed to address. Brands do not need to build every capability in-house permanently. They need access to senior expertise when specific challenges arise.

Looking Ahead: 2026 and Beyond

The consensus forecast for 2026 is cautious optimism. J.P. Morgan, UBS, and Bain all predict a return to modest growth, in the range of 3-5%.

But growth will not be evenly distributed. As J.P. Morgan analysts noted, "heightened macro volatility as well as low visibility on the wealth effect will lead to a polarization of performance."

Brands with strong exposure to hard luxury, geographic diversification favoring the US, and credible value propositions will outperform. Brands over-indexed to soft luxury, dependent on aspirational customers, or perceived as offering weak value will struggle.

The structural fundamentals remain solid. Younger generations are entering luxury earlier, older cohorts are staying engaged longer, and 90% of current buyers plan to continue purchasing, according to Bain. The market is not collapsing. But it is recalibrating.

For the first time in years, luxury brands cannot rely on price increases to drive growth. They must earn customer spending through product, creativity, experience, and trust.

The brands that succeed in 2026 and beyond will be those that understand this shift and have the capabilities to execute against it.

What is your organization doing to rebuild trust with customers who have pulled back? And do you have the internal capabilities to navigate this structural shift, or would external expertise accelerate your response?

If your company is facing challenges in customer re-engagement, pricing strategy, or brand repositioning in a more value-conscious luxury market, MyFashionManager.com connects fashion and luxury brands with senior strategists who have successfully managed similar transitions.

SOURCE CITATIONS

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