After years of slow sales, the global luxury goods industry is projected to see a significant recovery by 2027, with major brands expecting a 7% revenue increase.
A new report by Goldman Sachs highlights the United States as a key driver of this resurgence.
The luxury sector has faced numerous challenges, including China’s property market slump, geopolitical tensions, and rising interest rates. However, the report indicates that sharp price hikes post-Covid-19, which saw high-end luxury prices jump by an estimated 60% between mid-2019 and mid-2026, played a major role in the slowdown. This created an opening for more affordable luxury brands.
Despite past hesitations, American consumers are now showing a strong appetite for luxury. Goldman Sachs notes a shift in US buying habits, bridging a long-standing gap between the country’s wealth and its luxury spending. This change, observed since the pandemic, suggests a growing demand for premium products.
Several luxury companies have responded by appointing new CEOs and creative directors, with fresh collections showcased last year, aiming to rekindle consumer interest. Longer-term growth, according to Goldman Sachs, will depend on factors like brand creativity, consistent identity, and the spending power of wealthy consumers, who are less affected by economic downturns.