.jpg "Luxury Will Make a Slow Recovery in 2026, Bain Forecasts")
After a two-year slump in demand and a return to stabilization in 2025, global luxury spending will continue to grow in 2026, forecasted between 0-2% on a constant currency basis, per a new report from consultancy firm Bain & Co. The base case figure will reach between €1.44 trillion and €1.47 trillion.
Spending on personal luxury goods will also remain stable in 2026, predicted to climb 2-4%, to €365-€373 billion, according to the “most realistic” outcome. For comparison, spending on personal luxury goods in 2025 grew 1% year-on-year at a constant rate, but dropped 2% at current rates, reaching €358 billion from €364 billion in 2024. In 2025, global luxury spending was broadly flat, landing at €1.44 trillion from €1.48 trillion in 2024 (between -1% and 1% on a constant currency basis).
Per the new report, the predicted growth is reliant on a base case scenario: conflicts in the Middle East settling, continued local spending, and the Chinese market’s bounce back, which, according to Bain partner and report author Federica Levato, has grown quarter-on-quarter since Q3 last year. Bain assessed this case with a probability of 70%.
Better circumstances — further geopolitical easing, accelerated demand in China, and a fresh spurt in the US market — would push growth to 4-6% in 2026, Levato says, however the probability for that is lower, at 20%.
“This industry has been not only resilient, but very stable, giving positive signals for the near future, but even the long-term future — of course, with some shifts in terms of categories,” says Levato. “Experiences [are] outperforming personal goods, but personal goods are very resilient, showing a stable performance, positive at a constant exchange rate.”
Still, the more positive findings for 2026 show that, despite geopolitical headwinds in the last six months, the industry is on a slow path to recovery, after a period of macroeconomic challenges. In 2024, the market shrunk 2% for the first time, losing some 50 million consumers. This has happened only twice since the Great Recession, previously in the 2008-2009 financial crisis and the pandemic, in 2020. Then, for 2025, Bain forecasted substantial issues tied to US tariffs. However, luxury players adapted by diversifying supply chains or upping prices to improve margins. “[The issues of the substantial import duties] are completely managed now,” says Levato. “The industry has addressed the topic.” (In February, the US Supreme Court abolished the Liberation Day tariffs. Brands can now apply for refunds on the duties.)
In spite of tariffs, the US has been a focus for luxury labels this year. In line with bright forecasts for the US in Bain’s previously launched report, US luxury and — to a smaller extent — beauty spending rose, with US-based luxury brand revenues up 10% to 15% year-on-year in the first quarter of 2026, compared to that of 2025, at a constant currency rate.
In China, the comeback is tentative: luxury online sales climbed 25% to 35% for Q1 versus the year prior, as consumers prioritize ready-to-wear over leather goods. Bain attributes this trend to an appetite for self-expression over status-signaling goods.
Europe is a pain point thanks to local consumer fatigue, a contraction in Middle Eastern tourism caused by the war — the Gulf consumer base contracted 15% to 25% in Q1 2026 — and reduced US tourism due to a strong euro, reducing pricing advantages in travel shopping. International tourist spend for Europe dropped 20% in February.
While luxury will continue to stabilize, the sector will be stratified by territories, but also categories. So far, in 2026, luxury experiences continue to outperform personal luxury goods for consumer sentiment by 150%, per Bain data, chiming with a broader departure from ownership to experiences. “As customers seek curation and exploration, brands will need to tap in. Consumers now are used to levels of service from other industries — the digital industries, Amazon, hotels — that we interact with every day,” says Levato. “We’ve all raised our expectations from brands.”
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