Luxury brands are more expensive than ever. They’re telling you why they’re worth it

More than ever, high-end brands want you to know exactly how, and where, their goods are made. They are producing enormous glossy coffee table books showing white-coated workers hand-stitching products in glamorous workshops, and creating marketing campaigns emphasizing the exquisite materials and dedicated handiwork that go into the making of their very, very expensive products. These companies are trying to explain the value of their creations to consumers because their profits are slowing, even as their prices are increasing. While the personal luxury goods market was worth €363 billion (about $415 billion) in 2024, up from €223 billion ($242 billion) a decade prior, according to the global management consultancy Bain, the sector has been struggling with some of its slowest growth in years. Luxury companies began to charge more during the pandemic as greater personal savings and financial stimulus led shoppers to spend heavily on high-end products. Now, luxury prices in Europe are at least 52% higher than they were in 2019, according to HSBC. Prices are now testing even the most ardent of luxury supporters. “I mean, it’s outrageous,” David Fischer, founder and CEO of the youth culture platform Highsnobiety, told CNN over a call. “For the most part, it’s not that their quality has gotten 52% better. The prices have gone up tremendously, yet the quality hasn’t.” “Some of these price tags are just wild,” is one typical comment on the Reddit forum called Handbags. “I get that you’re paying for the brand name, but when it comes to actual quality, it feels like we’re getting ripped off sometimes.” Sharp markups seem to have subsequently impacted sales, with several companies reporting disappointing numbers. Chanel, for example, saw its operating profit fall 30% to $4.48 billion in 2024 — and while the brand typically increases prices twice yearly, it won’t this year. “I think people are now waking up and saying, ‘well, I’m not really willing to spend that much money on something that doesn’t hold value,’” said Fischer. What makes a product luxurious? What constitutes a luxury product is also broader than ever. No longer is the term confined to traditional categories such as clothing, wine and cars. In the past few years, anything with a high price point that promises quality — a $759 Le Creuset cast iron oval casserole dish, or a $1,270 Acqua di Parma jumbo candle — can also be marketed as premium. Now subdued demand for some luxury brands across all these sectors in the first quarter of 2025 is among the signs that there is a limit to how much people will spend. That’s why brands are increasingly leaning into deeper storytelling around craftsmanship – as well as heritage and origin — to rebuild trust and re-establish an emotional connection with consumers. Just this week, Italian brand Ferragamo commissioned Volkan Yilmaz, the content creator behind the viral online persona Tanner Leatherstein, who takes apart and scrutinizes leather products from luxury brands and evaluates their worth. In a sponsored ad, Yilmaz can be seen dissecting one of Ferragamo’s top sellers, the €2,400 (about $2,783) Hug bag, and sharing his review of the product. (Yilmaz gave the handbag top marks across craftsmanship, before going on to add: “The Italian government should set this bag as a benchmark for the ‘Made in Italy’ label requirement.”) The appeal is obvious. The “emotional factor of being part of a brand” is not to be overlooked, said Gab Waller, a personal shopper with high-profile clients such as Hailey Bieber and Sofia Richie Grainge. Over a call, Waller pointed to the popularity of Prada’s sister label Miu Miu — whose retail sales were up 60% in the first quarter of the financial year — as an example of a brand that is driven not only by a “brilliant way of marketing” that resonates with customers, but also by its association with “pieces that will last the test of time” — a requirement for many of her current clients. Damaging the brand The notion of craftsmanship itself was thrown into question last July when high-end labels, including Armani and Dior, which is owned by the world’s biggest luxury company LVMH, were probed by Italian authorities over worker exploitation claims. Valentino, too, became entangled this year, when one of its units was placed under judicial administration for a year after worker abuse inside its supply chain was reported. At the time, both Armani and Dior said they would cooperate with authorities and denied wrongdoing. Valentino also said it would cooperate with the authorities to better understand what prompted the investigation. Many luxury brands typically employ independent factories around the world to make their garments, though a growing number, including Chanel, Brunello Cucinelli and Burberry, have been snapping up suppliers to ensure access to high-quality materials and greater operational control. But those issues alone aren’t what prompted brands to assert their value in this way. Claudia D’Arpizio, senior partner and global head of fashion and luxury at consultancy firm Bain & Company, observed: “While recent controversies like labor scandals or price inflation may have accelerated scrutiny, this shift is less a reaction to individual episodes and more a response to a broader erosion in trust and perceived value.” “In a context where consumers are questioning what justifies premium prices, brands are going back to what made them meaningful in the first place: their savoir-faire, their narrative, and their cultural relevance,” she said. Scrutiny on luxury supply chains heightened once more in April after US President Donald Trump announced stiff tariffs on China and social media erupted with videos of Chinese manufacturers claiming to expose where luxury goods come from. Many declared that they were the origin of the luxury goods that most of the world had been spending on, not Italy. Those videos garnered so much attention globally that, at best, people no longer knew what to believe, and at worst, believed the claims entirely. The incident demonstrated how easy it was to sway public opinion, observed Audrey Dahmen, brand strategy and marketing lead for TwentyFirstCenturyBrand, a global brand consultancy with clients including Zalando, Everlane and Depop. “It’s especially damaging when something like that happens to luxury brands, because (you’re) spending a much higher price point than (you would with) other brands,” Dahmen added, over a call. “It’s part of the image, right? Your aspirational image is part of the justification for the price.” Dahmen attributed the public reactions to a new “consciousness” that is being “driven by the rise of platforms like TikTok.” She explained: “If customers notice something, they are going to talk about it. Last year, it was just someone noticing ‘hey, your bag cost something like 35 euros to make, so why am I paying $2,000? We’ve always known it as the experts, but it’s becoming more clear to the actual consumer, especially as they are being squeezed on money and are starting to make better decisions.” For Highsnobiety’s Fischer, recent big changes in luxury’s creative leadership also add to the uncertainty: Chanel, Dior, Balenciaga, Gucci, Celine, Bottega Veneta and Loewe are among the brands whose new creative directors will present their debut collections in the fall. Meanwhile, Givenchy, Tom Ford, Lanvin and Calvin Klein also have new-ish designers at their helm. “Some brands are cycling through multiple creative directors and (shoppers) might not even like the (designs) being put out,” said Fischer. “All of these things happening has ultimately led to mistrust. ‘Luxury’ is a word that sounds a bit gimmicky at this point.” Gorgeous testaments to craft In June, Italian high-end shoemaker Santoni put out a hefty new hardcover with book publisher Assouline. The tomb, which features more than 180 images, charts the label’s journey over five decades — from its humble beginnings in Corridonia, in Italy’s Le Marche region, to becoming a global multi-million-dollar business that now also sells bags, belts and other leather goods. “It felt like the right time to tell our story – not just through products, but through values, vision, and identity,” chairman and executive president Giuseppe Santoni told CNN over email. “We believe that true value lies in what a product gives back over time – in its quality, longevity, and the emotion it carries.” He added: “There’s a growing appreciation today for authenticity, craftsmanship, and human touch — qualities that have always been part of our DNA. This book is our way of opening a window into that world.” Fellow Italian label Tod’s is also celebrating the launch of a new book: Published in April during Milan’s designer furniture fair, Salone del Mobile, the 286-page tomb features a series of intimate portraits and conversations that shine a light on the country’s artisans. They range from designer Walter Chiapponi (the brand’s creative director since 2019) to a fishmonger in Santa Margherita and a glassblower in Murano. A series of events to promote the book has also been rolling out worldwide, from New York to London. Meanwhile, luxury label Bottega Veneta, which shares the same owner as Gucci and Saint Laurent, has a new marketing campaign that doubles as a love letter to slow craft and tactility in the digital age. Titled “Craft is our language,” and featuring moody black and white endorsements from celebrities such as Julianne Moore, Zadie Smith and Lauren Hutton, it celebrates 50 years of the brand’s classic “intrecciato” leather weave. While an onslaught of craft marketing has hit consumers now, the playbook is not new. Tod’s, for example, has long featured its artisans as part of its presentations at Milan Fashion Week. In 2011, it also committed to funding the restoration of Rome’s Colosseum, setting a precedent for such stewardship that would later be followed by luxury peers. See the Trevi Fountain, which reopened in 2015 after a restoration funded by Fendi; the Spanish Steps, which were restored in 2016 thanks Bulgari; and the Grand Palais in Paris, which reopened in January after a spectacular renovation — of which €25 million ($28.6 million) was contributed by Chanel. Loewe, which was founded by a collective of leather-making artisans, has since 2016 run the Loewe Foundation Craft Prize, which is annually awarded to two craftspeople. In March, the Spanish brand introduced a new book, “Crafted World,” to celebrate a decade of work by its former creative director Jonathan Anderson. At Paris Fashion Week that same month, the designer’s final collection for the brand was on show. However, there was no star-studded runway — just the designs, displayed on mannequins, which guests could view and appreciate up close. While the focus on craft makes a lot of sense for luxury companies because “it’s so close to the core business,” it’s also “one of the safest spaces,” in the view of the brand strategist Dahmen’s. “DEI or sustainability — two hot topics in luxury in recent years — is ultimately politically charged,” she explained. “You cannot get politically annoyed by someone talking about crafts. It feels like (luxury brands) are going back to taking a neutral stance and exploring safer territories — (with minimal) legal repercussions.”