Luxury Fashion Might Still Have a Chance, Despite Downturn in Sales

Economic conditions, TikTok reviews and uptick in resale have caused luxury shoppers to retreat

The fashion industry has experienced a downturn in sales over the last two years, and everyone seems to have a different explanation for why. 

The economy is the easiest answer. Inflation has left consumers with less disposable income, interest rates remain high and confidence in spending has weakened. Those factors certainly matter, but they do not explain everything. Luxury brands have historically relied on affluent consumers who are far less affected by economic slowdowns than the average shopper. If the industry’s problems were purely financial, the biggest luxury houses would likely be weathering the storm far better than they are. Instead, many are facing slowing sales, leadership changes and pressure to rethink their strategies. 

Analysts increasingly point to a combination of economic conditions and structural problems inside the luxury industry itself. Years of aggressive price increases have pushed many aspirational customers away, while consumers have started questioning whether the quality, craftsmanship and exclusivity still justify the price tag. Between 2019 and ’23, more than 80 percent of luxe growth came from higher prices rather than increased sales volume. That model has become increasingly difficult to sustain.

Consumer awareness has also changed. Luxury shoppers today have far more information than they did even five years ago. A handbag or pair of shoes no longer exist behind the carefully controlled image created by a fashion house. 

Within hours of a product launching, it is dissected on TikTok, YouTube, Reddit and Instagram by leather experts, longtime collectors and everyday buyers. Viral videos comparing stitching, materials and construction have exposed products that many consumers believe no longer match their premium prices. The growth of resale has also forced brands to compete with their own archives, as older products are often viewed as higher quality than their modern equivalents. Luxury still represents status, but consumers are becoming more selective about what deserves that status.

At the same time, environmental concerns continue to influence purchasing decisions. Younger consumers are increasingly seeking vintage or secondhand luxury as products they view as better made, while avoiding the environmental cost of purchasing something new. As shoppers become more conscious of fashion’s impact on bad labor practices, emissions, water use and textile waste, they are placing greater value on brands that can back up their sustainability claims with meaningful action rather than marketing alone.

That does not mean luxury fashion is in permanent decline. History suggests it is remarkably resilient. What may be ending is the strategy that fueled its recent boom. Price increases alone are no longer enough, and exclusivity cannot survive if consumers feel they are paying substantially more for substantially less. Brands will likely need to return to the qualities that built their reputations in the first place: craftsmanship, originality, and products that genuinely feel worth the investment. They will also have to communicate those values differently. Sustainability can no longer exist as a marketing campaign that appears once a year, and authenticity cannot be manufactured through influencers alone. Consumers want transparency about sourcing, production and quality, but they also want brands that feel connected to the world around them rather than detached from it. 

Luxury has always been built on aspiration. The challenge now is convincing consumers that aspiration is still worth the purchase.

Related: Making the Cut: Editor Chad Sipkin on Sofia Coppola’s New Fashion Doc