Despite the disruptions due to the recently concluded Middle East war, the global personal luxury goods market has maintained its path to recovery in the second quarter of 2026, as demand in the United States was stronger than expected, consultancy Bain & Company said recently.
In an update to its closely watched annual outlook for the sector, Bain said its base-case scenario now points to a 2% to 4% rise in personal luxury sales in 2026. That compares with a previously forecast 3% to 5% increase published in November 2025, before the outbreak of the Iran war and the Strait of Hormuz blockade.
The personal luxury goods market, valued at 358 billion euro (USD 406 billion) in 2025, has contracted over the past two years. Despite shrinking by 2% at current exchange rates in 2025, the sector edged up 1% in constant currencies.
“Looking at the broader luxury industry, experiences continue to outpace tangible goods,” said the study, which Bain & Company produced with Italian luxury industry group Altagamma.
“We see growing uncertainty and turmoil at the macroeconomic and socio-political levels, but the market is there. Geographically, the growth in the United States, led by native brands and younger consumers’ spending, is partly offsetting a slowdown in the Middle East and Europe. China is slowly recovering, with growth led more by ready-to-wear products than leather goods,” said Bain partner Federica Levato while interacting with Reuters.
“America is growing more than expected, and China is recovering faster than expected,” she added further.
As per Bain and Altagamma, Europe was impacted by depressed tourist flows amid the Iran war, though signs of stabilisation emerged in May.
As per Levato, the industry has lost around 70 million consumers since 2022, as brands raised prices and focused more heavily on top-spending clients.
“The industry should refuel the growth of the consumer base rather than focus only on the top 1%,” the Bain partner noted.
The study also found an active by artificial intelligence (AI), in terms of rapidly reshaping how consumers discover and evaluate luxury brands.
“About half of luxury consumers already use AI in making purchases, relying on it for discovery and to compare products. The second-hand market is on the rise, with half of luxury shoppers now consulting that market before buying new things,” the report concluded.