altagamma

Altagamma Observatory 2025: a study in cautious optimism

/ Leave a Comment
Reading Time: 4 minutes

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?

Altagamma Observatory 2025: a study in cautious optimism Read More »

Altagamma Observatory 2024 & The Luxury Shame

/ Leave a Comment
Reading Time: 10 minutes

Andrea Guerra – Prada Group CEO: “It was a huge mistake to raise prices so much.”


The Altagamma Observatory 2024, one of the most anticipated events for insights into the global luxury market, took place in Milan on November 13. Among the many revelations, a candid remark from Andrea Guerra, CEO of Prada Group, stood out: “It was a huge mistake to raise prices so much.” Indeed, this striking admission highlights a pivotal moment for the industry, sparking discussions about the balance between exclusivity and accessibility in luxury fashion.

Altagamma Observatory 2024 offered an in-depth view of the luxury industry’s evolving challenges and opportunities. Specifically, experts and industry leaders shared insights into the current market climate, highlighting missteps and urging a reevaluation of strategies.

Altagamma Observatory 2024 – 23rd edition


After Altagamma President Matteo Lunelli’s opening remarks, Stefania Lazzaroni, General Director of Altagamma, presented insights into market trends and future forecasts through the Altagamma Consensus 2025, which leading financial analysts developed. Then, Claudia D’Arpizio and Federica Levato, Senior Partners at Bain & Company, unveiled the Altagamma-Bain Worldwide Luxury Market Monitor. Consequently, Industry leaders, including Laura Burdese (Bvlgari), Patrick Chalhoub (Chalhoub Group), Alfonso Dolce (Dolce & Gabbana), Andrea Guerra (Prada Group), Pier Francesco Nervini (Global Blue), and Marco Piscitelli (Molteni Group), discussed the research findings.

President of the Altagamma Foundation, Matteo Lunelli emphasized the significance of the Altagamma research as an international benchmark. Then, he painted a picture of an industry at a crossroads, marked by global uncertainties such as geopolitical tensions, wars, and inflation that have caused consumers, especially the middle class, to lose purchasing power. Also, the slowdown in China and a change in the USA with the Trump election will cause a potential 10-20% increase in duties. But both markets are crucial for Italian products. So, 2025 will be a year of transition, and recovery expected in 2030.
Lunelli’s key factors: Know-how, creativity, technological innovation, sustainability.
In conclusion, he advocates for collective action through partnerships, and collaborations.

Market trends and forecasts: Altagamma Consensus 2025


Stefania Lazzaroni, General Director of Altagamma, presented 2025 data analysts’ estimates on market trends:

1. General Trends:

  • Uncertain global situation, due to inflation and price increases.
  • Moderate overall growth expected.

2. Regional Performance:

  • Middle East: Best performer with +5% growth.
  • Europe: Moderate growth at +2%, impacted by wars and challenges in France, Germany, and England.
  • North America: +3.5% growth expected.
  • Japan: Modest growth of +2%.
  • China: +3%, with the phenomenon of “luxury shame” increasing.

3. Consumer Trends:

  • American consumers show signs of recovery.

4. Distribution Channels:

  • Retail: +5% growth, driven by enhanced customer experiences and entertainment, outperforming wholesale.

5. Best-Performing Product Categories:

  • Cosmetics: +6% (cosmetics and skincare show strong growth).
  • Jewellery: +4.5%.
  • Watches: 1% decline.
  • Leather goods and footwear: Underperforming.
  • Clothing: Stable at +3%.

6. Overall Sector Growth:

  • Cautious growth of +3% is forecasted for the entire high-end sector.

Altagamma Obervatory 2024: industry leaders


Pier Francesco Nervini / Global Blue

Nervini is the first industry leader to speak at the Altagamma Observatory 2024.
Tax-free and tourism sectors have performed well, with Southern Europe showing strong results, while Northern Europe faces a crisis, except for Norway. But the market dynamics have shifted:
Since July, the average spending per transaction has decreased, with travellers spending less on each purchase. However, even high spenders are becoming more cautious, highlighting the need to reconsider pricing strategies. Most importanlty, Nervini emphasized that selling now requires a deeper understanding of data rather than simply having a selling speech in line with the interlocutor.

Regional Performance:
Italy outperforms France, which is struggling despite hosting the Olympics, as high spenders tend to avoid such events. Spain excells due to its effective institutionalization of tourism.

Key Insight: In conclusion, Nervini underscored the importance of cultured choices and price sensitivity in adapting to evolving market conditions.

Bain & Company – Claudia D’Arpizio


2024 marks a year of significant changes, with a challenging future shaped by many open scenarios. Consumers, when engaged, react to brand strategies.
Key insights:

  • The year is expected to end with flat growth, marked by a shift from products to experiences.
  • The top-tier luxury segment remains the most resilient, while the aspirational segment faces greater challenges.
  • Experiences are growing faster than products, and within products, the experiential aspect is becoming increasingly vital.

Despite current difficulties, the market is holding steady rather than collapsing. In essence, brands must reignite consumer connection by placing them at the heart of their strategies.

Bain & Company – Federica Levato

  • Tourism Drives Growth: Luxury market growth is fueled by tourism, especially in Japan, Europe, and the Middle East. But other regions, including China, are experiencing a decline.
  • Shift in Retail Dynamics: Outlets outperform full-price stores, and online sales are stabilizing, incorporated with mono-brand strategies. Consumers spend less time engaging with products, increasing the focus on content over goods.
  • Category Trends:
    • Beauty and eyewear remain strong entry-price categories, alongside jewellery.
    • Footwear is losing its entry-price appeal due to rising costs.
    • Categories like clothing, bags, and watches are in decline, although watches are seeing a natural slowdown after booming during COVID-19.
  • Pricing & Volumes:
    • Significant price increases occurred in 2022/2023.
    • Volumes have decreased by double digits; but excluding beauty and eyewear, the decline would be even more pronounced.
  • Consumer Dynamics:
    • 50 Million Consumers Exit Luxury: Rising prices and broken trust have driven many away from the market.
    • Focus on Top Customers: High-spending customers, who make up nearly half the market, feel less valued due to a lack of unique, personalized experiences. Gen Z is the most affected generation.
  • Value Perception:
    • Consumers demand more value for money, expecting creativity, quality, and emotional resonance to justify rising prices.
    • Customer advocacy has sharply declined, with even affluent individuals struggling to perceive the value of luxury.
  • Key Strategies for Recovery:
    • Regain customer trust through creativity, brand purpose, and cultural relevance to justify premium pricing.
    • Strengthen relationships by offering tailored experiences and expanding emotional connections with diverse consumer tools.
    • Address the rise of local brands in the USA and China, as they threaten to capture market share.
    • Leverage the growing second-hand market, which grew by 6–7% in a year of stagnation.

Alfonso Dolce (CEO of Dolce & Gabbana) and Marco Piscitelli (CEO of Molteni)


Alfonso Dolce:
This year marks Dolce & Gabbana’s 40th anniversary, as the brand evolves into a lifestyle entity encompassing beauty, eyewear, home, furniture, food, and hospitality.
The transformation is rooted in the vision of its two founders, whose curiosity drives innovation while preserving heritage. Specifically, their focus on the pleasure of beauty enables them to tell a story of Italian culture, fostering increased consumption.
Today, their strategy prioritizes high-quality tourist flows, emphasizing key cities rather than broad geographic areas.
A commitment to sustainability focuses on quality and creativity to produce durable goods. As members of Associazione Ricrea, they collaborate with other brands in a continuous effort to improve sustainability practices.

Marco Piscitelli:
Molteni‘s approach is rooted in long-term planning and diversified programming, with projects designed for extended duration.
The Molteni Museum serves as a source of inspiration and innovation.

“Sustainability means responsibility, we make high-quality durable goods” – said Piscitelli.

Stefania Lazzaroni emphasized that brands act as cultural operators, investing in sustainability initiatives, enriching projects, and youth development. Collaboration, especially in sustainability, is key to driving progress.

Patrick Chalhoub – President, Chalhoub Group


In 2025, the Chalhoub Group will celebrate its 70th anniversary. As a leader in the Middle Eastern retail market, the company was founded to promote luxury in a region where it was once unfamiliar.
2024 Outlook:
A challenging year ahead reflects a need for the luxury sector to refocus on creativity, added value, services, and excellence.
There is a pressing need to engage younger generations and understand how to win their loyalty.
Growth is expected to be around 6–7%, driven mainly by the beauty and watch sectors, with clothing lagging behind.
2025 Projections:
Anticipated to be stable yet dynamic, with Gen Z comprising more than 30% of the luxury consumer base. Understanding their priorities is essential.
In the Gulf region, skincare remains underutilized, presenting an opportunity for growth.

“We need to innovate to dialogue with young people. We need to create events that have meaning for our audience, micro-events, and one-to-one dialogues, to make the consumer understand that they are at the center of our value proposition. The important thing is to have a direction and follow it. We need to make people aware of what we are doing, even if we are not growing like the others. During this period of time, we need to be determined and patient.” – Patrick Chalhoub

To conlcude Chalhoub’s Altagamma Observatory 2024 contribution, Lazzaroni asks: What are the easiest categories of success in your market? Easy categories: luxury personal goods for high net-worth individuals. Instead, there are great opportunities in residential furnishings and jewellery.

Laura Burdese (Deputy CEO of Bulgari), and Andrea Guerra (CEO of Prada Group)


Laura Burdese (Bulgari):
Bulgari, founded in 1884, celebrates 140 years of legacy, with products designed for an eternal life cycle, enriched by centuries of Roman history embedded in the brand’s DNA.
Brand Elements:
Bulgari’s positioning focuses on Mediterranean style, blending materials, colours, and shapes in a dynamic, ever-evolving way that aims to surprise and inspire.
The Bulgari Foundation has a long-standing commitment to supporting social causes, focusing on restoration works in Rome (e.g., the Baths of Diocletian) and beyond. Foundation’s key pillars:
1. Art & Patronage: Supporting young artists and preserving artistic heritage.
2. Education & Philanthropy: In partnership with Save the Children, Bulgari has donated over 115 million € this year.
3. Investing in Savoir-faire: Bulgari represents one of the largest manufacturing operations in Europe, preserving and promoting artisanal craftsmanship.

Stefania Lazzaroni highlights the social impact that brands like Bulgari contribute to society.

Altagamma Observatory 2024 – best performer:
Both Prada and Bulgari represent the top performers in 2024.

Andrea Guerra (CEO of Prada Group):


Prada was founded in 1913, and with over 100 years of history and 14,000 employees. Therefore, they have a strong heritage. But, history and the transversality with various brands are key to their identity. Guerra starts with two important points:
1. On Pricing and Brand Value:

“Claudia (Bain & Company) spoke at least five times about prices, and I believe this is the most total failure in our industry. When we talk about prices without having made people fall in love with our products, when we fail to tell a compelling story, or when we betray the consumer by not delivering the value we promise, that’s, in my opinion, the total failure of our work. This does not mean we should lower prices. The huge mistake in the last 7-8 years has been raising base prices too much, starting from entry-level prices. You don’t solve the price issue by lowering prices. You solve it by telling a story, being credible, and ensuring your value proposition is reflected in the product. In recent years, raising prices has been too easy.”

2. On Market Challenges in 2024:

“2024 is the first year, after 25 years, of difficulty and tension. Over the past 25 years, the sector has multiplied its value by five or six, and the average price point is no longer relevant. This growth led to a lack of attention to costs. Now, we need to refocus on the fundamentals. We need a sense of measure. In fact, the companies doing better in the sector are those that have focused on long-term brand and creativity management. The tension between brand and creativity is vital. The business is smaller than the brand, so the business must be taken back.”
“For Prada, this moment rewards our deep, long-term work.”

Laura Burdese (Bulgari):

  • “We have our core, we know who we are, and from there, we move forward. We have a clear long-term vision. But we do not expect India to become the new China next year.”

Guerra on Market Evolution:

  • “There are areas where we are underrepresented, like the USA and China. Also, the relationship with the local consumer is more important than the one with the tourist, and this relationship is evolving. The brand is now a reflection of one’s values, and the new generations measure you on assets such as sustainability. When engaging with the local consumer, you must provide hospitality, credibility, and uniqueness. You need to make the consumer feel that this brand or product is truly theirs.”

On the Changing Market Landscape:

  • “The helm in this changing market is, for me, the tension between brand and creativity. It’s one of the most fundamental dynamics in this sector.”

Craftsmanship and Investment:

  • Prada and Bulgari are both committed to investing in craftsmanship and forming new artisans. “Crafts schools are not second-rate institutions,” said Guerra.

Conclusion


In conclusion, Andrea Guerra’s candid remarks at the Altagamma Observatory 2024 highlight the shifting dynamics of the luxury market and the critical need for a balanced approach to pricing and brand storytelling. As global uncertainties continue to influence consumer behaviour, the luxury industry faces challenges in maintaining trust, relevance, and creativity. Moreover, addressing the concept of luxury shame – a growing concern among consumers – calls for aligning brand values with sustainability, and redefining what luxury truly means in today’s world.

Altagamma Observatory 2024 & The Luxury Shame Read More »