Why are aspirational luxury buyers disappearing?

Rising living costs and job security worries have reduced discretionary spending for aspirational buyers, impacting their ability to purchase entry-level luxury items.

Which luxury goods are performing well in 2025?

Hard luxury items like high-end jewelry and watches are performing well, driven by the ultra-wealthy consumer base.

What is J.P. Morgan's outlook for the luxury sector in 2026?

J.P. Morgan predicts the luxury sector will stabilize and return to growth in 2026, with performance varying significantly by company.

Home / Business and Economy / Luxury Sector Faces Bifurcated Future: Hard vs. Soft Goods Divide

Luxury Sector Faces Bifurcated Future: Hard vs. Soft Goods Divide

3 Dec

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Summary

Aspirational luxury buyers have significantly diminished, impacting soft luxury goods.
Market watchers predict luxury sector growth returning in 2026.
Hard luxury items like jewelry and watches are performing well.

Luxury Sector Faces Bifurcated Future: Hard vs. Soft Goods Divide

Luxury market analysts are optimistic about a return to growth in 2026, following a challenging period of sales declines. This recovery is expected to be driven by increased Chinese consumer confidence and ongoing product innovation. However, companies will likely see vastly different results based on their exposure to various customer segments. Hard luxury items, including high-end jewelry and watches, are performing robustly, signaling resilience among the ultra-wealthy.

Conversely, 'soft luxury' goods, encompassing items like leather goods, handbags, and apparel, are facing significant headwinds. The "aspirational luxury buyer," who previously saved for high-value purchases, has notably decreased. This demographic shift creates a polarized market where companies catering to the ultra-affluent are expected to outperform those reliant on broader consumer spending power.