Current Downturn

From 2023 through 2025, the personal luxury market dropped 3% from $435 billion (€369 billion) to $422 billion (€358 billion). The decline was most pronounced in the industry’s flagship leather-goods segment, which fell nearly 9% from $96 billion to $87 billion during the two-year period. Apparel, the second largest category at $86 billion, was flat, according to Bain.

Yet, this market downturn needs context: since the pandemic, luxury brands have increased prices on average by 20% to 30%—and some, like Chanel and Dior, considerably more—meaning real demand has weakened far more than the topline numbers suggest.

Even the core affluent consumers, who account for nearly half of total spending, are losing patience with continued price increases and little to no discernable increase in value.

“You cannot target only the top customers,” Levato said. “Because they are starting to really be upset and to feel betrayed in this industry.”

While Bain predicted the luxury goods industry could rebound between 3% and 5% in 2026, that was before the current Iranian conflict disrupted business and travel in the Middle East—last year’s fastest growing region. The Middle East, accounting for about 6% of the global market, grew around 7% at current exchange rates. By contrast, Mainland China (12% of the market) dropped some 7%, Japan (9%) was off about the same and Europe (30%) fell 2%.

Along with the Middle East, the Americas (28% of the global market) was another bright spot last year, up roughly 3%. So far, the latest conflict hasn’t significantly impacted the U.S. economy, but that could change depending on how long it lasts and the potential long-term effect on energy prices.

Effectively, the luxury goods industry has dug itself into a hole and climbing out will take time and course correction.

“Some of the brands have realized that they made mistakes, but most of them think that they can fix the mistakes with new creativity,” Levato shared. “So, increasing the level of creativity at the same price they have today, in our belief, won’t be enough.”

Gen Z Is Skeptical Of Luxury’s Promises

Today, Gen Z (born 1997 to 2012) accounts for about 19% of the industry’s global performance—a figure that feels high to me, but I’ll defer to Bain’s authority—compared with 46% by Millennials (1981 to 1996), the original DWP/SATC generation.

Yet, unlike Millennials 20 years ago, Gen Z arrives with far greater awareness of luxury brands at the same age. They don’t need an introduction. On the contrary, much of what they know has turned them off, not onto the market.

Luxury Under The Microscope

Kantar’s Gina Logan and her insights team wrote, “For decades, luxury lived in glass boxes—immaculate, distant, and mysterious. You could look at it. You could long for it. But few ever questioned it—reverence was the ritual.” This describes the view of the original DWP/SATC generation.

But that was then, this is now: “That glass is cracking—and being reshaped into a new lens by a generation that doesn’t just consume luxury, they interrogate it. This generation isn’t turning away from luxury. They’re turning it inside out.”

Transparency and authenticity are the new cultural codes, and Gen Z is finding much of luxury wanting. This generation expects a clearly defined statement of purpose—heritage for heritage’s sake isn’t enough—and they expect brands to align with the values they hold dear. They do research before making purchases and expect luxury brands, given their elevated status, to operate according to the highest ethical standards.

“If Gen Z are disenchanted, most of the fault comes from managerial mistakes: unreasonable price hikes, scandals related to supply chain and some ludicrous advertising campaigns. All this led to a dangerous disengagement,” shared Alessandro Balossini Volpe, professor of marketing and brand management at INSUD and Milan’s Università Cattolica del Sacro Cuore. “Even among my luxury fashion students, many are suspicious and uncomfortable with industry practices.”

Kantar finds that widening income inequality, the use of child labor, sweatshops and worker exploitation and over-exploitation of the planet’s resources, including waste, overproduction, overconsumption, plastics and microplastics pollution, remain a perennial drag on Gen Z’s perception of the luxury industry.

Not Worth It

After interrogating luxury brands on values and principles, Gen Z is going deeper to product quality, materials and workmanship. Here too, they are underwhelmed.

In a Business of Fashion podcast entitled, “Gen Z isn’t buying luxury’s story,” correspondent Lei Takanashi pointed to Louis Vuitton’s logo-laden canvas tote bag as a prime example. “It’s not even leather. Should I really spend a thousand dollars for that? There’s an alternative,” she said.

And for Gen Z, there are far more alternatives than there were 20 years ago. Luxury-for-less brands have become a powerful counterforce in the fashion market, including Quince, ASOS, JW Pei, Arket, Reformation, Lulus, Atrizia, Everlane, Cos and Mango. Even fast-fashion brands, previously scorned for their poor environmental track record, like H&M, Zara and Uniqlo, have been cleaning up their act and gaining traction as a responsible, more affordable alternative.

Fashion resale has also emerged as a respected alternative for consumers of all ages and incomes. The global fashion resale market reached $257 billion in 2025—60% the size of the luxury market—and is projected to grow 12% in 2026 to $289 billion, according to Thredup.

In ThredUp’s survey among 3,000+ American consumers, nearly 60% of Gen Z said they regularly check secondhand offerings before buying new, with greater affordability the key driver. Nearly half turn to resale to access higher-price brands.

The RealReal, specializing in luxury fashion resale, ended fiscal 2025 with GMV up 16% to $2.1 billion and in this year’s first quarter, it surged a remarkable 24% over previous year. By comparison, LVMH—the luxury industry’s undisputed leader with revenues than four-times larger than its closest rival Richemont—reported its flagship fashion and leather goods segment fell 8% last year on a reported basis and 9% in the first quarter. This segment makes up about 50% of LVMH’s total revenues.

Speaking to Gen Z’s perception of luxury brands, BoF correspondent Jessic Kwon observed: “There’s this pervasive idea that luxury conglomerates are trying to squeeze as much profit as possible from the consumer with regard to the house’s own heritage and its story quality. There is a real ire and resentment about Gen Z around price hikes,” she said, adding “We’re a generation that cares a lot about value for the dollar.”

BoF concludes that when the price, materials and narrative don’t add up, Gen Z defaults to “vintage, resale or opting out.”

Celebrities Losing Influence

“Resonance today comes less from legacy and more from delivering the right product at the right cultural moment,” wrote the authors of a white paper from WWD and BCG on how next- generation consumers are “rewiring” the fashion industry.

But, resonance can backfire, as seen in the widespread criticism of the recent Met Gala’s hypocritical celebrity excess. Case in point was actor Sarah Paulsen, wearing a dollar bill blindfold to accessorize an outfit in protest of the one-percenters, despite being a card-carrying member of that club with a reported net worth of $12 million. Other celebrities, notably Katie Perry and Rachel Zegler, also arrived wearing face masks, suggesting they were trying to hide their participation an event that cost $100,000 to attend.

Indeed, WWD/BCG reports that social media influencers with authentic voices—from micro-influences with less than 100,000 followers to macro-influences up to one million followers— are now “almost” as influential as celebrities with million-plus followers.

Younger consumers are looking for authentic connections. While digital brand advertising and retail/in-store experience (both 23%) are the leading channels for discovery, community influence is not far behind (17%).

This year’s returning Devil Wears Prada 2 stars, Anne Hathaway and Emily Blunt, appeared at the Met Gala, looking appropriately elegant—as in previous years, Meryl Streep did not attend. However, 20 years ago when DWP first appeared, Hathaway and Blunt were 23 years old and perfectly aligned to influence the millennial audience. Now they are over 40, outside Gen Z’s sphere of influence.

“The cultural impact of the original movie was definitely very strong on a global level, and it surely enhanced the awareness and image of several fashion and luxury brands. It could happen again,” said Professor Balossini Volpe. But then again, it might not because the next generation luxury consumers are in a different cultural climate.

Macy’s May Have Found The Authentic Connection

One of the first to capitalize on the Devil Wears Prada 2 is Macy’s with a collection designed by Molly Rogers—the film’s costume designer and long-time protégé of Patricia Field. Together they worked on Sex and the City and The Devil Wears Prada, but Rogers carried the sequel alone.

Called “On 34th & Molly Rogers” collection, it is an homage to New York City fashion, tapping the codes she’s explored throughout her career. The collection spans 44 pieces across apparel and accessories and is affordably priced between $50 and $140 for apparel and $20 to $130 for accessories.

It includes a pink tiered skort for $69.50, hearkening back to Carrie Bradshaw’s signature pink tulle skirt from SATC, and a pair of red slingback pumps for $79.50 with a sole in “cerulean blue,” a shade made famous in Miranda Priestly’s monologue in the original DWP film about how the fashion industry works.

This collection hits all the right notes for Gen Z and where she is now. And because it is offered by Molly Rogers— the creative fashion force behind the movie—it doesn’t lean on celebrity fame or DWP brand licensing. It is, in the truest sense, authentically Molly Rogers.

“Through this collection with On 34th, I wanted to capture the city’s cinematic spirit and bring my work in costume design to everyone who loves to tell their own story,” she said.

See Also: