Declining Consumer Demand Pushes Luxury Brand Valuations Down

With Bain projecting the personal luxury market will contract between 2% and 5% in the personal luxury market this year after falling 1% in 2024, Interbrand’s “Best Global Brands 2025” report reveals the fading fortunes of some of the world’s top luxury brands.

Against a backdrop where the top 100 global brand valuations rose 4.4% overall, the combined valuations of the 13 personal luxury brands in that group fell by 5%, from $263.3 billion to $249.6 billion in 2025. Just two years ago, in 2023, luxury was one of Interbrand’s fastest-growth segments, up 6%. In 2025, it ranks among the weakest.

Luxury Supercycle Ends

German-based investment firm Berenberg just released a note announcing that the “luxury supercycle is over,” adding, “2025 is set to mark only the third time in three decades that global luxury revenues decline for two consecutive years – the previous instances being during the dot-com bust and the global financial crisis.”

Seeing a “perfect storm” forming in the luxury market from weakened Chinese consumer spending, a retreat of aspirational consumers and the failure of luxe brands to engage next-generation customers, Berenberg said the industry faces a “structural demand problem” that will not be resolved quickly.

In response, Berenberg downgraded LVMH from buy to hold and Gucci-owner Kering went from hold to sell, even as both companies showed slight improvement in the most recent third quarter. Yet, through the first nine months of the year, LVMH is off 2% and Kering is down 12% on a comparable basis.

Top Luxury Brands

Six of the 13 brands ranked in Interbrand’s top 100 global brands saw their value decline this year. In 2024, only three of the leading brands experienced a value decline – Nike, Adidas and Gucci – though Burberry dropped off the list to be replaced by Pandora jewelry brand.

This year, Nike and Gucci continued to fall, while Louis Vuitton, Chanel, Dior and L’Oréal Paris joined the downward-trending group. However, Adidas reversed its slide and Hermès led the pack with its valuation up 18%.

Interbrand bases its brand valuation on three components: financial performance, the role the brand plays in consumers’ purchase decision (based on quantified research) and the brand’s competitive strength across 10 measurable factors. Interbrand states that its brand valuation methodology meets the ISO 10668 international standard measuring the monetary value of a brand.

However, Phillipe Mihailovich, co-founder and CEO of luxury brand advisory firm HauteLuxe, is leery of comparing luxury brands, many of which are unfamiliar to the general public, against widely popular and well-known brands, such as Apple, Microsoft, Amazon, Google, Samsung, Toyota, Coca-Cola, Instagram and McDonald’s, all of which rank in the top 10.

“It’s the same as comparing a TV chef with a Michelin-starred chef’s restaurant that the greater public is not aware of,” Mihailovich shared. While the Interbrand list provides value in analyzing a luxury brand’s balance sheet, it may not be a reliable measure of brand loyalty that is of critical importance to luxury brands.

“I wouldn’t discard Interbrand’s list altogether, but I very much doubt that luxury clients are being interviewed,” he advised.

Fashion Winners And Losers

Hermès continues to gain momentum, with its brand value up from $30.1 billion in 2023 to $40.9 billion in 2025, the highest percentage and dollar gain over the past two years.

Hermès has held fast to its true luxury status and hand-crafted heritage. With revenues up 15% at constant exchange rates to $17.7 billion in 2024 and 8% growth in the first half of 2025, it has relied less on price increases to lift results compared to other luxury brands, such as Chanel, Louis Vuitton and Dior.

On the other hand, Mihailovich believes some of the decline in Chanel, Louis Vuitton and Dior valuations may be a consequence of their aggressive price hikes. “We have seen a big rejection by some customers who feel that they were duped into buying over-priced, industrially-produced goods, wrongly believing these goods were hand-crafted,” he said.

However, Mihailovich is optimistic that Chanel will recover its mojo, judging from the enthusiastic reception of newly-appointed creative director Matthieu Blazy’s first collection earlier this month.

While Prada has wind at its back – its value up from $7.3 billion to $9 billion over the last two years– Gucci was in free fall, dropping from a brand value of $19.8 billion in 2023 to $11.6 billion this year.

Kering has been working overtime to get Gucci back on track. A month ago, the company appointed Francesca Bellettini as brand CEO and moved up newly named creative director Demna’s debut show from March 2026 to this fall. According to reports, it was well received.

Athletic Luxury Brands

Nike has dropped sharply since 2023, from $47.9 billion to $33.7 billion in 2025. In 2024, Nike’s Jordan brand made a pop appearance in the top 100 ranking at a $6.4 billion valuation, but dropped off in 2025.

On a positive note, Nike’s revenues have been improving. After declining 9% to $44.7 billion in fiscal 2025 ending in May, Nike brand grew 2% in first quarter 2026 to $11.4 billion.

By contrast, Adidas’s valuation rose since 2023, up from $16.5 billion to $17.4 billion, after slipping 6% in 2024. Buoying its valuation was 13% revenue growth for the Adidas brand and through the first half of 2025, Adidas brand has advanced 14%.

Luxury Jewelry Brands

In jewelry, both Cartier and Tiffany & Co. gained value at the high end, while affordably-priced Pandora surprisingly reached parity with LVMH-owned Tiffany. Overall, the jewelry sector has performed better than the fashion and accessories segment in the luxury market over the past two years.

Cartier, part of the Richemont group, reached a valuation of $11.2 billion, up from $9.9 billion in 2023. While Richemont doesn’t report brand revenues – it also owns Buccellati and Van Cleef & Arpels jewelry brands – its jewelry segment grew 8% in 2024 to $17.7 billion and 11% in the first quarter 2025 ending June 30 to $4.6 billion.

Likewise, LMVH doesn’t report brand revenues, so the Interbrand report provides some visibility into how its various brands, like Tiffany, are performing. In the past two years, Tiffany’s brand value rose from $7 billion to $7.6 billion. LVMH acquired Tiffany in 2021 and has been elevating the brand’s luxury quotient by downplaying its lower-priced sterling silver offerings.

Pandora took a place on Interbrand’s top 100 list in 2024, with a valuation of $ 7.1 billion, which rose to $7.2 billion this year, putting it on equal footing with Tiffany. Pandora was powered by 13% organic growth in 2024 to $4.9 billion in sales and is up 7% in the first half of this year to $2.2 billion.

In other Pandora developments, CEO Alexander Lacik has retired and turned over the reins to Berta de Pablos-Barbier, who hails from LVMH’s wine and spirits division with time as vice president of marketing and communication for Kering’s Bucheron jewelry brand. She has big shoes to fill after Lacik grew revenues 45% during his seven year tenure.

Luxe Beauty

Rounding out the top luxury brand value list, L’Oréal Paris took a modest step back this year to $14.7 billion, but is up from $13.6 billion valuation in 2023.

LVMH’s Sephora beauty retail brand and the only exclusive retailer in the top 100 luxury space, has been on a roll, rising from $6.4 billion valuation in 2023 to $7.7 billion.

Sephora, reporting in LMVH’s selective retail segment, along with DFS (Duty Free Shops) and Le Bon Marché, posted 3% organic growth through the third quarter to $14.7 billion and rose 2% last year to $21.2 billion.

Surviving Luxury’s Downturn

Marching to its own drummer, Berenberg believes the luxury industry suffers under a “persistent optimism bias” and that instead of a temporary downturn, it is facing a “structural shift” in demand.

It points to a slowdown in China, which Berenberg figures accounts for 21% of luxury spend by nationality. Chinese consumers are “structurally impaired by debt, demographics and inflation,” it contends.

Adding insult to injury, the world’s lower-income aspirational consumers, also called HENRYs – high earners not rich yet – which account for about 60% of luxury industry revenues, have been forced to cut spending in the face of inflation, housing costs and employment insecurity, as AI threatens cultural-creative jobs.

In addition, GenZ consumers (aged 13 to 28 years old) haven’t displayed an appetite for many luxury brands and have instead have opted for the second-hand market, fast fashion and dupes. Notably, Uniqlo made it to Interbrand’s top 100 list this year with $17.7 billion valuation and Zara was up 9% to $19.4 billion.

While the affluent wealthy continue to indulge in luxury, they can’t hold up the entire industry. In addition, they tend to favor more exclusive, top-tier brands. The luxury brands that have spread their value proposition too broadly across entry-level price points are likely to continue to see an erosion in sales and valuation in the near term.