Is luxury fashion declining?

When we think of high-end fashion brands, we often associate them with timeless pieces meant to last for decades. Household brands like Gucci and Louis Vuitton have long symbolized more than just clothing or accessories—they represent success, status, and the rewards of hard work. Luxury fashion has always carried the idea that what you wear is a reflection of who you are and the image you project to the world. Yet, despite this legacy, the industry now faces tremendous challenges. Escalating prices have left many consumers questioning the value of their purchases, while the rapid rise of fast-fashion has introduced cheaper, trend-driven alternatives that mimic luxury styles at a fraction of the cost. At the same time, weakening demand in key markets, particularly China, has created additional pressure for iconic fashion houses. Together, these forces are reshaping the luxury landscape and forcing even the most established brands to adapt.

Prices

Average luxury prices have risen by 25% since 2019, driven by a combination of inflation, higher production costs, and fluctuations in global currencies. Luxury goods are especially costly in China, where steep taxes and strict regulations on imports add significantly to retail prices. These pressures have rippled across the industry, affecting even its biggest players. LVMH, the world’s largest luxury conglomerate, is not immune—its shares dropped 5.2% after missing analysts’ financial expectations for the second quarter. Meanwhile, the market capitalization of its arch-rival Kering has nearly halved over the past year, largely due to a 25% slump in sales from its flagship brand, Gucci. Burberry has also felt the impact, with retail sales plunging 22%.

The downturn can be traced to several overlapping factors. First, post-pandemic spending fatigue has reduced consumer appetite for discretionary purchases. Second, persistently high inflation rates have eroded purchasing power across major markets. Third, the slowdown of China’s economy—exacerbated by mounting debt, a real estate crisis, and weaker consumer confidence—has weighed heavily on sales in one of the luxury sector’s most critical regions. With rising costs also hitting wholesalers and manufacturers, much of the financial burden is expected to filter down to consumers, further pressuring demand.

These dynamics can be better understood through the lens of the law of supply and demand. When demand for luxury goods exceeds available supply, prices rise, encouraging suppliers to expand production and capture greater profit margins. Conversely, when supply outpaces demand, prices fall, often stimulating more consumer interest. However, this economic principle relies on several key assumptions: the presence of a competitive market, distinct buyers and sellers, equal access to market information, stable production costs, and consistent government policies. In reality, these conditions are often disrupted by external forces such as inflation, currency instability, and regulatory intervention, which complicate the balance between supply and demand in the luxury sector.

Tariffs

Tariffs on imported goods represent a significant factor influencing contemporary fashion businesses. These trade regulations increase production costs and consequently result in higher retail prices for consumers. Apparel items that are entirely sourced and manufactured within the United States remain unaffected by these tariffs. Governments implement tariffs to protect domestic industries from foreign competition by increasing the cost of imports, thereby encouraging consumers to purchase domestically produced goods. However, because many American-made apparel products depend on imported components, the impact of tariffs extends throughout the supply chain.

Fashion brands are preparing for persistent challenges and are closely monitoring policy developments, although many have not yet made definitive strategic decisions. For instance, Hermès increased prices in May in response to the 10 percent import tariff and continues to evaluate the situation. The US Fashion Industry Association’s 2025 Benchmarking Study found that all respondents identified United States trade policy and tariff uncertainty as primary concerns. More than 70 percent reported increased sourcing costs, reduced profit margins, and higher consumer prices, while nearly half experienced declining sales. Furthermore, 22 percent of respondents have already reduced staff as a direct result of the tariffs.

Successful Campaigns

While many luxury brands have struggled under the weight of rising prices, shifting consumer behaviors, and weakening demand in key markets, several standout campaigns from summer and fall 2025 demonstrate how creative marketing and strong brand storytelling can still capture attention and drive momentum. These campaigns show how houses are balancing heritage with innovation, appealing to both loyal customers and a new generation of fashion consumers.

Givenchy Fall/Winter 2025 Campaign

Givenchy: Fall/Winter 2025 – Sarah Burton

Sarah Burton continues to define her vision for Givenchy with a Fall/Winter 2025 campaign that celebrates the women who inspire her, both in front of and behind the camera. Featuring iconic faces such as Adut Akech, Vittoria Ceretti, Nyaduola Gabriel, Kaia Gerber, Eva Herzigova, Emeline Hoareau, and Liu Wen, the campaign stands out for its acknowledgment of the creative team—makeup artist Lucia Pieroni, hairstylist Olivier Schawalder, casting director Jess Hallett, nail artist Ama Quashie, and photographer Collier Schorr. By weaving these collaborators into the narrative, Burton emphasizes fashion as a collective art form, where shared creation and community define true beauty.

Hilfiger Racing Club Campaign Shot

Tommy Hilfiger: Fall 2025 – Hilfiger Racing Club

Tommy Hilfiger’s Fall 2025 campaign, “The Hilfiger Racing Club,” draws inspiration from the high-octane world of racing, photographed by Glen Luchford and starring Nicholas Hoult and Claudia Schiffer. The campaign fuses contemporary style with classic American prep, presenting tartans, water-resistant barn jackets, and responsibly sourced wool trench coats against racetrack backdrops. Relaxed yet polished styling—Oxfords paired with rugby shirts and crest sweatshirts—reinterprets New York prep codes for a new generation. This campaign also launches the broader narrative, You’re Invited, No RSVP Required, continuing Hilfiger’s tradition of reinventing preppy culture.

JACQUEMUS BEACH CLUB IN MONTE CARLO 2025

Jacquemus: Monte-Carlo Beach Club

Jacquemus leaned into playful fantasy with its Monte-Carlo Beach Club campaign, released as a tongue-in-cheek Instagram video in May 2025 to celebrate the opening of its new Monte Carlo store. The lighthearted, self-aware approach created a dreamy utopia that blurred the lines between reality and imagination, reinforcing the brand’s unique digital presence and engagement with its online audience.

Actress, Julianne Moore in Bottega Veneta

Bottega Veneta: Craft Is Our Language

Bottega Veneta embraced minimalism and artisanal craft with its Craft Is Our Language campaign, marking 50 years of the house’s signature intrecciato weave. A quiet 60-second teaser highlighted artisans at work, accompanied by a whispered voiceover of the campaign mantra. By eschewing flashy marketing, Bottega reinforced its dedication to timeless luxury, celebrating craftsmanship and tradition as the essence of the brand.

Saint Laurent Spring / Summer 2025 Campaign

Saint Laurent: Spring / Summer 2025

Saint Laurent’s Spring/Summer 2025 campaign, captured by Glen Luchford, exudes quiet cinematic intensity. Featuring Anok Yai, Penelope Ternes, Ella Mccutcheon, and Justino Gonzalez, the imagery emphasizes poised stillness in dark, intimate interiors, evoking fragments of an unmade film. Creative director Anthony Vaccarello’s vision comes alive through subtlety: velvet, satin, and lacquered surfaces frame elongated silhouettes, and the chosen settings function almost as characters themselves, shaping narrative alongside the models. Every fold of fabric, trace of light, and even bare feet feels deliberate, underscoring Saint Laurent’s mastery of measured elegance and evocative storytelling.

Miu Miu: L’Été 2025 Campaign

Miu Miu: L’Été 2025 Campaign

Miu Miu, one of the industry’s most consistent trendsetters, leaned into softness and introspection with its L’Été 2025 campaign. Photographed by Siân Davey in her first fashion project, the campaign features familiar faces like Diana Silvers and Callina Liang in a garden setting alive with natural beauty. Moving away from the rigidity of runway imagery, the visuals embrace stillness, youth, and freedom, resonating strongly with Gen Z audiences whose spending power continues to shape the luxury market.

Conclusion

Together, these campaigns highlight the resilience of creative storytelling in an industry facing economic and cultural headwinds. As inflation, fast fashion, and declining Chinese demand continue to reshape consumer behavior, strong marketing has become more than a complement to product—it is now a vital strategy for survival. By leaning on heritage, innovation, and digital engagement, luxury brands are finding ways to remain relevant, proving that while the business landscape is uncertain, the emotional power of fashion still holds its influence.

The Outcome

In fashion, perhaps more than in any other sector, actions are met with immediate responses. Take, for example, shoppers in Manhattan who, discouraged by the soaring prices of luxury boutiques, often turn to their smartphones in search of more attainable options. The continual price increases imposed by major fashion houses have opened the door for a new generation of ecommerce brands. These labels mirror the style and appeal of prestigious designers but sell their products for a fraction of the cost.

What allows these companies to remain accessible without compromising quality is their approach to production and business strategy. They use high-end fabrics yet eliminate many of the traditional expenses associated with luxury fashion. Unlike heritage houses, they do not invest in lavish flagship stores, costly advertising campaigns, or elaborate runway presentations. Instead, they adopt direct-to-consumer models, rely heavily on digital marketing, and run streamlined operations. This strategy enables them to offer competitive prices while still sustaining profitability.