Top-tier luxury brands are set to win in 2025

The news: Ultra-luxe brand Brunello Cucinelli had a “beautiful” end to an “enchanting” year, management said, as it escaped the luxury downturn unscathed.

• Sales rose 11.6% YoY in Q4 to €358 million ($387.4 million), marking the company’s best quarter ever in absolute terms.
• Total revenues in fiscal 2024 rose 12.2% YoY, exceeding the high end of its growth expectations of 11% to 12%.

The big picture: Brunello Cucinelli’s success epitomizes the widening divide between top-tier brands and retailers and the rest of the field—a dynamic that is hardly unique to the luxury sector.

• While Brunello Cucinelli has no problems getting its wealthy clientele to splash out for $890 T-shirts and $2,100 jeans, brands like Burberry, which have a higher proportion of aspirational customers, are facing a dire slump in sales.
• Attempts by Burberry and other brands to work their way up the luxury ladder by reworking their assortments and raising prices have largely failed to resonate—and resulted in the alienation of their main customer base.
• Instead, affluent shoppers are sticking to labels like Hermès, Chanel, and Brunello Cucinelli that can offer that elusive mix of quality and exclusivity.

Looking ahead: Demand for luxury will continue to be uneven in 2025, particularly given China’s consumption crisis and US consumers’ emphasis on value. The brands best equipped to succeed will be the ones that have built strong relationships with their wealthy customers and have enough prestige to keep even aspirational shoppers engaged.

Go further: Read our latest report on luxury ecommerce.

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