What: Bernstein report reveals sharp deterioration in luxury spending intentions among wealthy consumers, with US market showing greatest vulnerability to economic headwinds.

Why it is important: The decline in HNWI spending intentions, combined with Trump's trade policies and market volatility, suggests a potentially significant restructuring of luxury retail dynamics, particularly impacting European luxury suppliers.

A new Bernstein report based on Agility Research and Strategy's latest survey reveals a significant shift in luxury spending patterns among high-net-worth individuals. The study indicates that macroeconomic uncertainty, President Trump's trade policies, and volatile financial markets are increasingly affecting wealthy consumers' spending intentions, particularly in the United States. This trend represents a notable departure from post-pandemic patterns when ultra-high-net-worth customers drove luxury sales growth. The impact is already visible in secondary market indicators, with Hermès Birkin and Kelly bags now selling for 1.8 times their retail price, down from peak pandemic multiples. While this level remains above 2020 figures, it signals a cooling in the luxury resale market, particularly for larger models like the Birkin 30 and Kelly 28, which have experienced steeper declines.

IADS Notes: The luxury market's transformation has accelerated throughout 2024-2025. December 2024 data showed the sector experiencing a 2% decline to €363 billion , while April 2025 revealed European suppliers' vulnerability to Trump's proposed tariffs, controlling 70% of global luxury production . This downturn coincides with broader market changes, as Bain-Altagamma's February 2025 study highlighted the industry's loss of 50 million consumers over two years . The resale market's dynamics further reflect these changes, with secondary market prices normalizing after pandemic peaks.

Big spenders are losing their appetite for luxury