The global personal luxury goods sector is showing early signs of recovery in the second quarter as stronger-than-expected U.S. demand helps offset weakness in other regions, consultancy Bain & Company said in an update to its annual outlook.
In its refreshed baseline projection for the year, Bain now expects personal luxury sales to rise between 2% and 4%. That is lower than the 3% to 5% increase the firm forecast in November, a projection that predated the outbreak of the U.S.-Israeli war on Iran.
Bain and Italian luxury industry group Altagamma estimated the personal luxury goods market at 358 billion in 2025. The market contracted over the prior two years and registered a 2% decline at current exchange rates in 2025, while showing a 1% increase when measured in constant currencies.
The update highlights divergent regional dynamics. Growth in the United States - propelled by domestic brands and higher spending among younger consumers - is partly counterbalancing slower sales in the Middle East and in Europe. China is showing a gradual recovery, with that rebound driven more by ready-to-wear than by leather goods.
Europe continued to feel the effects of depressed tourist flows, although Bain noted signs of stabilisation emerging in May.
Market composition and consumer trends
Bain s analysis also shows that experiences within the broader luxury industry continue to outpace sales of tangible goods. The consultancy estimates the sector has lost roughly 70 million consumers since 2022 - a decline attributed to higher prices and a strategic shift by many brands toward top-spending clientele.
On that point Bain urged firms to rebuild and broaden the consumer base rather than concentrate solely on the highest-spending segment.
Technology and the resale channel
The study underscored a rapid integration of artificial intelligence into luxury shopping habits. About half of luxury consumers now use AI in the purchasing process, employing it for product discovery and comparison. Parallel to this, the second-hand market is expanding: roughly 50% of luxury shoppers consult the resale market before making new purchases.
The updated outlook reflects a market that is adapting to macroeconomic and socio-political uncertainty while showing pockets of resilience. Bain s base-case growth range - 2% to 4% for the year - incorporates these mixed regional trends and evolving consumer behaviours.