altagamma observatory 2025

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While the luxury market is apparently stable, the report’s own data reveals a sector in profound transition

The recent Altagamma Observatory 2025 report, presented in Milan, offers a seemingly positive outlook: a stable global high-end market of €1.44 trillion and a forecasted +5% recovery in 2026. However, a closer reading reveals a more complex and less reassuring picture. 

The report adopts what we could describe as a form of cautious, institutional realism. It is a framing that often feels softened, designed to reassure the industry rather than deliver unvarnished truths.

While confidence may attract investors, change can only come from a clear-eyed assessment of the challenges. The industry’s preference for good news should not come at the expense of truth, which is the real foundation of credibility and meaningful transformation.

The core contradictions: stability versus a sector in crisis

The report’s central narrative of stability is undermined by its own data. In fact, these data paint a portrait of a market defined by polarisation, where opposing realities coexist.

1. The myth of a monolithic market

The headline figure of €1.44 trillion masks severe divergences. While the ultra-wealthy continue to spend on jewellery (+4/6%) and experiences, the aspirational consumer is retreating. This is starkly reflected in the collapse of leather goods and footwear (-7/-5%)—the heart of accessible luxury. This isn’t a slowdown. It is a clear signal that the customer who once bought bags and shoes as status symbols is now struggling or has shifted priorities.

2. A fragmented and defensive fashion sector

This polarisation is acutely felt in fashion. The moderate +4% growth in apparel hides a reality where only a few brands thrive while others suffer—a dynamic the report itself describes as “highly polarised among brands.” This fragmentation is exacerbated by:

• The threat of ultra-fast fashion. Carlo Capasa (CNMI) explicitly identifies the “growth of ultra-fast fashion products imported from China” as a “crucial issue to address,” framing it as an existential risk.
• A crisis in distribution. Traditional wholesale channels and department stores are confirmed to be “in crisis,” undermining the foundational sales model for many brands.
• Defensive brand strategies. The reliance on outlets to clear unsold stock and the forecast that high-end brands will introduce “lower price proposals” in 2026 are not signs of health. They indicate an inability to sell at full price and a risk of brand value dilution.

3. Geopolitical optimism versus ground-level realities

The reported “recovery” in the Americas (+0/+2% in 2025) feels tenuous against the backdrop of a weak dollar, tariffs, and a climate of uncertainty. This growth stems not from a buoyant general economy but from the resilience of the Top Tier. High Net Worth Individuals drive this, with their domestic spending and higher average transaction values propping up the figures.

Altagamma Observatory 2025: the “sugar-coated” lens of the report

These contradictions are presented through a specific, mitigating lens, which explains the report’s softened tone.

1. A partisan purpose. 
   As a foundation for Italian luxury, Altagamma’s primary role is to defend and promote the sector. Its objectives—to reassure investors, signal resilience to the government, and promote the Made in Italy system—naturally discourage alarmist messaging.
2. Corporate lexicon.
   The consistent use of terms like stable, resilient, and consolidate serves to normalise stagnation and decline. Yet the report presents a -7% drop in a core category as part of a broadly stable landscape.
3. The “Yes, but…” rhetoric.
   The report consistently employs a technique of admitting a problem only to immediately counter it with hope. For instance: “Yes, China is down, BUT HNWIs are increasing”. So, this creates a glass-half-full narrative that can obscure the severity of the situation for many players.
4. Long-term faith over short-term pain.
   The emphasised +5% growth forecast for 2026 acts as a lifeline, encouraging the industry to view current difficulties as “temporary headwinds” on the path to a “bright future.”

Final thoughts

The Altagamma Observatory 2025 provides the most realistic photograph yet of a luxury market that is no longer a monolith, but a collection of micro-markets with opposing dynamics. So, is it sugar-coating the situation? Yes, in part.

However, for the attentive reader, it also highlights undeniable structural shifts, even if wrapped in boardroom language. It makes clear that the aspirational consumer is in crisis, the old model of endless price increases is broken, and the new drivers are value, ethics, and experiences.

In conclusion, the report is convincing in its diagnosis of key trends. But remains overly optimistic and diplomatic in its tone. For a truly dispassionate analysis, one must cross-reference its findings with reports from investment banks and independent analysts who are not tasked with safeguarding an entire ecosystem. 

Ultimately, Altagamma is doing its job. It is presenting Italian luxury as resilient and forward-looking, despite the evidence of a painful and fundamental restructuring.

But one question arises: do investors truly fall for data so cleverly dressed up?