Boomtime for luxe and it's likely to stay

The post-pandemic revenge shopping and growing appetite for the good things in life are working well for the luxury goods markets worldwide. Some brands have even witnessed unforeseen winners in the first half of the financial year 2025. Global data and business intelligence platform and data aggregator Statista has revealed striking data for the luxury industry in the current fiscal, projecting an anticipated growth of the market at 3.22 per cent (CAGR 2024-2028).

An immediate highlight is Milan-based Prada which owns the luxury labels Prada and Miu Miu. The company has registered a 17 per cent year-on-year net revenue growth with retail sales increasing by 18 per cent. Prada’s performance outperformed average estimates of $2.71 billion for the first half of 2024. The retail sales growth of Prada was up by 6 per cent on a year-on-year basis, while Miu Miu’s retail sales increased by 93 per cent on a year-on-year basis. 

Double-digit growth has been witnessed by the company in Asia Pacific, Europe, Japan, and the Middle East with some upward movement in the Americas as well, as disclosed by the company. Despite higher investments towards expansion, the company has also witnessed an EBIT margin of 22.6 per cent. The balance sheet too is cash positive.

In a company release, Patrizio Bertelli, Prada Group Chairman and Executive Director, commented: “The solid results recorded in the first half of the year reflect the strength of our brands and the disciplined execution of the Group’s strategy. We are satisfied with the above market performance and high-quality, like-for-like growth trajectory that we have achieved in an increasingly uncertain market environment. The flexibility of our organisation gives us confidence in the Group’s ability to navigate the months ahead, as we continue to invest across our business.”

What made Prada tick despite heavy inflationary pressures worldwide? The company has claimed “creative approach to breaking new consumer ground” as two primary reasons that worked well for its brand buoyancy. The brands have invested heavily in engagement as well. What seems like a novel brand-engagement device, Miu Miu has even launched a select Literary Group to start a discourse on modern literature. 

According to the Statista projections of the luxury goods markets the luxury goods market globally reflects a cumulative revenue generation of $368.90 billion in 2024. The market is anticipated to grow at an annual rate of 3.22 per cent (CAGR 2024-2028). 

The largest segment within this market is luxury fashion, which is expected to reach a market volume of US$115.90bn in 2024. When comparing revenue on a global scale, in the United States leads the way with US$77,280m in 2024. 

The report also projects that online sales will account for 15.4 per cent of the total revenue in the luxury goods market by 2024. Luxury goods sales in the United States have rebounded strongly, driven by increased consumer confidence and a growing appetite for high-end fashion and accessories. For the brand agnostic, be ready to see more Guccis, Pradas and Chanels popping up in the lounges as the trend for luxe moves up the charts.