Analysts may be too optimistic about luxury. According to RBC Capital Markets, there’s little basis for saying that luxury will improve in 2027. That view echoes Renzo Rosso of OTB, who said at the Milano Fashion Global Summit that “there’ll be no luxury recovery. Consumer spending has changed”. Aspirational consumers remain the hope, with expectations focused either on the American market, which appears to be the strongest, or on China, where the market is slowing. So, what separates them from high spenders? Kering offers some clues.
Aspirational consumers are the hope
During the Luxury Executive Roundtable organized by BCG-Boston Consulting Group in Manhattan, Beatrice Lemucchi, managing director at BCG, presented the findings of the BCG/Altagamma report. According to the report, the luxury sector is expected to grow by between 2% and 5% in 2026, driven by an 8% rise in North America, supported by the performance of technology stocks and income generated by AI.
For RBC, however, this analysis, together with other forecasts pointing to a stronger luxury recovery in 2027, looks too optimistic in light of weakening demand and purchasing trends. Moreover, as reported by Borsa Italiana, creative resets may not be enough to drive growth in a tougher environment. RBC analysts downgraded LVMH and Burberry to “sector perform” from “outperform” and reduced 2027 earnings-per-share estimates for Kering, Moncler, Hermès, and Swatch. RBC favors the strategies of Ferrari and Richemont.
Cultural relevance
At the New York meeting, summarized by WWD, Lemucchi pointed to “positive numbers” among aspirational consumers after the declines of recent years. Ewa Abrams, president of Kering Americas, outlined some of the differences between high-spending and aspirational customers. High spenders, she explained, look for “high-level personalization, experiences, things money can’t buy, as well as elements of surprise and gratification”. Aspirational consumers, by contrast, are more motivated by cultural relevance, particularly artists and musicians. “It’s a different kind of engagement”, Abrams said. They also tend to buy less deeply across categories than high-net-worth customers. “It’s important to stimulate them through the right product categories, such as eyewear or fragrances”, which are priced lower than apparel.
The price issue
Of course, the discussion then turned to prices. Lemucchi noted that even the wealthiest consumers are sensitive to price increases. About 70% of the report’s 12,000 respondents said they had decided at least once not to buy a product because its price had gone up. “The good news”, the BCG managing director concluded, “is that when they don’t complete this type of purchase, in most cases they shift toward another category, such as beauty”.
Photo from Louis Vuitton’s website
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