2025: The year luxury lost its sheen?

If 2025 will be remembered for anything in fashion, it may be as the year luxury brands discovered that belief in the idea of luxury itself is not infinite. After more than a decade of uninterrupted growth, price inflation and relentless “newness,” the social contract between luxury houses and their customers began to fray. Factory and marketing scandals, the carousel of creative director appointments, and a fatigue-inducing churn of collections all contributed. But more fundamentally, 2025 marked the year consumers pushed back.

This was not a rejection of luxury per se. It was a rejection of being taken for fools.

For years, price increases were justified through familiar narratives: rising costs, craftsmanship, heritage, inflation. Yet the numbers increasingly failed to align with real life. Between 2019 and 2024, leading luxury brands raised prices by an estimated 50–70 percent on core leather goods, according to HSBC and Bernstein analyses. Chanel’s classic flap bag, once a benchmark of aspirational luxury, more than doubled in price over a decade. Meanwhile, Eurostat data shows that EU labour costs in manufacturing rose by around 20 percent in the same period, substantial, but nowhere near commensurate.

Consumers push back

The result? Cognitive dissonance. When a winter coat costs more than a set of dining chairs, when a handbag rivals the price of a family holiday, or when shoes equal a monthly mortgage payment, consumers inevitably ask: what am I actually paying for?

In 2025, many decided the answer was “not enough.”

This shift was most visible among two groups luxury brands once relied on most: aspirational shoppers climbing the ladder, and loyal, full-price clients. Armed with unprecedented access to information, from fabric sourcing breakdowns to factory gate pricing, consumers began questioning margins openly. Platforms like TikTok and Reddit demystified cost structures, while viral videos dissected stitching quality, leather grades and hardware failures in real time.

Scrutinised consequences

That scrutiny has consequences. According to Bain & Company, the global personal luxury goods market contracted by an estimated 1–3 percent in 2024, with 2025 remaining volatile, particularly in China and the US. At the same time, the second-hand luxury market continued to grow, with platforms like Vestiaire Collective and The RealReal reporting double-digit increases in active users. The message was clear: value matters again.

But value does not necessarily mean cheap. What emerged alongside resale was a new generation of brands offering high-quality materials, transparent pricing and restrained margins. These labels may lack century-old archives, but they deliver consistency, and that consistency resonates. In an environment where trust has eroded, reliability has become a luxury in itself.

Equally significant was the collapse of one-way communication. Luxury once spoke from the pages of glossy magazines, commanding desire through imagery alone. Social media initially extended that model, replacing editors with influencers. But by 2025, the power dynamic had flipped. Influencers, private clients and everyday consumers became critics, unafraid to post when zippers failed, coatings peeled or craftsmanship disappointed.

Peer reviews

Instagram and TikTok now function less as aspiration engines and more as accountability platforms. According to McKinsey, over 70 percent of Gen Z consumers say peer reviews influence their luxury purchases more than brand advertising. When quality falters, the feedback loop is immediate, and unforgiving.

The result is a slow but undeniable erosion of the luxury veneer. For some houses, the shine was always surface-deep. Strip away the logo, and what remains is indistinguishable from mass-market production with a luxury price tag attached. Like a metal buckle rubbed smooth, the lustre dulls, revealing what lies beneath.

This reckoning does not spell the end of luxury. But it does signal a redefinition. In 2025, value overtook price as the primary currency. Craft, durability, honesty and restraint regained relevance. The brands that endure will not be those that shout the loudest, but those that deliver quietly, consistently and authentically.