What will happen in 2026 to the world of luxury and designer brands? Investment banks and financial analysis companies attempt to answer this question in their forecasts, which we summarise in this article. The wait-and-see attitude continues, but – at least – with a little more confidence than in the recent past
by Massimiliano Viti
Cloud Dancer is Pantone’s Colour of the Year 2026. It was chosen for its neutrality and its ability to represent a new beginning. Although many have turned up their noses (with rather sensible reasons, among other things), Cloud Dancer seems perfect for offering a blank canvas this year to the many new creative directors who took office in 2025. But 2026 will also have to provide other answers to questions that pique everyone’s curiosity.
Will Gucci manage to relaunch itself? Who will take over Armani? Will Inditex and Zara continue to chip away at market share in the high-end segment? How will the trade war evolve with tariffs? What will be the trend in the US and Chinese markets? Will consumers prefer to buy handbags or jewellery? Investment banks and analysis companies have already drawn up their forecasts. With a pinch of confidence, here is what is expected to happen in 2026, which is estimated to be better than 2025.
What will happen in 2026?
BAIN & CO
The starting point is set at €358 billion (-2% on 2024). This is the estimated amount of personal luxury goods sales (including fashion) in 2025, as indicated in the report “The longevity issue” by Bain & Co. For 2026, the report forecasts growth of between 3% and 5%, relying on sustained momentum in the United States, resilience in Europe and Japan, and a steady recovery in China. North America and the Middle East are identified as the markets with the highest growth potential: +4.5% for North America and +6% for the Middle East. The dangers for luxury? Penetration is at an all-time low: out of 100 potential customers, only 40-45 purchase luxury goods. The rise of Chinese brands and Inditex-Zara will continue. The Spanish group/brand is winning over aspirational consumers and has contributed to luxury losing 70 million customers since its peak in 2022.
MCKINSEY
The report “The State of Fashion 2026 by McKinsey & Company and Business of Fashion Insights” predicts that luxury will see modest improvements in all markets in 2026. This is all thanks to the creative reset, which should instil new enthusiasm among consumers. However, this reset may not be enough, as high prices remain a barrier for aspirational customers, while regular luxury consumers are shifting their spending towards personal wellbeing: body, mind and health. The same report predicts that demand for jewellery will remain strong until 2028. Luxury brands are investing heavily and focusing on growth in the US.
BERNSTEIN
Bernstein analysts predict luxury growth of between 4 and 5% in 2026. According to analyst Luca Solca, the markets to focus on are the US and the Middle East. In fact, the latter market is already seeing the highest increases. Then come Europe and Southeast Asia. However, once again, China will make the difference. “If Chinese consumers return to spending, next year we will be talking about a luxury boom,” says Solca. Who has the best chance of winning? Those with a strong stylistic identity and large groups/brands. Niche brands only stand out if they ride the right trend. Otherwise, they become irrelevant. Large groups are better off as they have more room for manoeuvre to meet consumer demands. Bernstein highlights the cumbersome presence of the luxury industry’s uninvited guest: Inditex-Zara.
GAM AND DEUTSCHE BANK
“The reversal of the luxury trend is beginning to materialise. It will take time, but in the absence of further macroeconomic shocks, we expect a gradual but sustained reversal,” comments Flavio Cereda of GAM. The new year will pave the way for a full normalisation of organic growth trends, which should arrive in 2027. This outlook is based on China maintaining the momentum it has built since the beginning of 2025 and the US confirming its resilience, which has been severely tested by price increases due to tariffs. Deutsche Bank forecasts revenue growth of 6% in 2026, with an acceleration in the summer. The percentage is an average between winners and losers in an “all or nothing” competition.
UBS and PwC
UBS is also consolidating its hope that the worst is behind us. It forecasts +5% sales and +12% profits next year, thanks to China and creative innovations. PwC, on the other hand, outlines the challenges facing the sector. It cites consumer patriotism in the US and China, the development of the second-hand and outlet markets, tariffs, the dollar exchange rate and the revolving door of creative directors, the benefits of which are yet to be seen. “The brands that will thrive over the next 30 years will be concrete, transparent, and desirable,” says analyst Erika Andreetta.
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