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The RealReal is upbeat about its prospects as tariffs and the uncertain environment boost resale鈥檚 appeal. While the company is not yet profitable, it is winning over more shoppers who see the circular economy as an opportunity to snag a good deal on luxury merchandise. Demand for resale is accelerating as consumers look for ways to escape tariffs and find better deals鈥攏ot to mention shop more sustainably. While shoppers worried about saving money are unlikely to patronize a luxury-focused resale platform, The RealReal is in a good position to win spending from aspirational customers who are interested in luxury but are otherwise unwilling鈥攐r unable鈥攖o pay retail prices.

The luxury sector is facing a 鈥渃hallenging鈥� and 鈥渟omewhat unprecedented鈥� environment, Prada Group chairman Patrizio Bertelli said鈥攃ausing even once-hot brands like the company鈥檚 namesake label to lose momentum. Luxury companies for the most part view the current downturn as a cyclical blip in an otherwise robust industry. But the prolonged slump is revealing structural challenges鈥攏amely, heavier reliance on American and Chinese consumers, as well as a tendency to lean on price hikes rather than innovation to drive sales.

Saks Global has yet to make good on its pledge to resume payments to vendors, per Retail Dive, despite CEO Marc Metrick鈥檚 promise to tackle overdue balances starting in July. Saks鈥� acquisition of Neiman Marcus is looking increasingly like a costly misstep. The current environment is unfavorable to both luxury and department stores, as shoppers prioritize retailers and goods that deliver value. With numerous headwinds working against it, Saks will need to find a way to woo big spenders and reassure vendors鈥攁nd investors鈥攖hat it has the funds to cover its obligations.

The luxury industry has a counterfeit problem. Counterfeits pose a serious challenge for brands and the growing number of secondhand platforms that specialize in luxury resale. The more convincing these superfakes get, the harder it will be for companies like LVMH to justify their high price points鈥攁nd harder still for platforms like Vestiaire and The RealReal to keep fake goods off their marketplaces.

LVMH鈥檚 sales fell more than expected in Q2 in yet another sign of trouble for the luxury industry. 2025 is shaping up to be another difficult year for the luxury industry鈥攁nd not only because of tariffs. While the duties are certainly hitting consumer sentiment and buying power, limited innovation and a perceived lack of value are diminishing luxury鈥檚 appeal, even among shoppers who can afford it.

Only 28% of US luxury consumers felt optimistic about the economy in April 2025, down from 41% in January 2025 and 45% in April 2024, according to data from Saks.

The insight: The gulf between top-tier luxury brands like Brunello Cucinelli and the rest of the market is widening as ultra-wealthy consumers become the primary growth driver for the industry. Our take: Luxury brands have to work harder than ever to win over cautious consumers. While many are chasing the money by recalibrating their assortments鈥攁nd price points鈥攖o woo high net worth individuals, this strategy could backfire by making brands even less appealing to the aspirational shoppers who still account for the majority of luxury sales.

Louis Vuitton鈥檚 forthcoming beauty launch will test its pricing power. The brand is betting that premium packaging and high-quality products designed by makeup maven Pat McGrath will convince shoppers to spend $160 on a single lipstick鈥攁 risky assumption given the headwinds plaguing the luxury industry. In order for La Beaut茅 Louis Vuitton to succeed, the brand will have to prove to customers that its products are worth the hefty price tag. That鈥檚 easier said than done, given waning enthusiasm for premium beauty and the growing popularity of low-cost dupes.

Michael Kors owner Capri credited a sequential improvement in demand for its better-than-expected quarter and upgraded FY forecast. In an otherwise difficult quarter for luxury, Capri鈥檚 bullishness stands out. But it has a lot of work to do to revive its brands鈥攑articularly Michael Kors, which, following the sale of Versace, now accounts for nearly 70% of revenues.

The news: American Express renewed its partnerships with AEG, expanding Amex鈥檚 rewards reach over venues, festivals, tours, ticketing, and sports. Our take: Amex鈥檚 dedication to building the breadth and depth of its luxury offerings allows it to maintain its premium branding against competitors like the Chase Sapphire Reserve鈥檚 offerings like Chase Experiences

Ralph Lauren posted higher-than-expected quarterly results and raised its full-year revenue outlook, though it warned that tariffs could pressure consumer spending in the second half. Amid economic uncertainty, Ralph Lauren鈥檚 performance highlights the resilience of brands that sit at the intersection of aspiration and accessibility. The company appears better positioned than some of its luxury peers to weather volatility. Its quarterly results offer a blueprint for its retail peers, showing the value of a diversified supply chain and brand equity over aggressive discounting and heavy dependence on a single market.

Coach plans to open more than 20 of its Coach Coffee Shops in retail and outlet stores this year, per Business of Fashion. There鈥檚 a reason so many luxury brands are turning to hospitality concepts: They are an excellent way to get shoppers through the door, and to keep them spending鈥攅ven if it鈥檚 just on a cup of coffee or branded baseball cap.

Aldi will open a store in New York City鈥檚 Times Square next year as part of its aggressive expansion strategy, per media reports. The 25,000-square-foot shop will be located in The Ellery, a new luxury apartment building near the edge of the highly-trafficked neighborhood鈥攎aking clear the discount grocer鈥檚 intentions of wooing more affluent shoppers as it grows its presence in major US cities.

The volatile macroeconomic environment is causing most shoppers to be more cautious with their spending, but it鈥檚 also driving a subset to spend more in search of comfort. Roughly 2 in 5 shoppers (38%) say that the current stress of economic uncertainty is making them spend more, according to a June LendingTree survey. Consumers may be choosing to spend more of their money on essentials, but that doesn鈥檛 mean they can鈥檛 be swayed to spend a little extra on the occasional indulgence鈥攑articularly if there鈥檚 an element of novelty, or if the purchase offers a sense of emotional comfort. While the Labubu craze is likely to fizzle out as quickly as it started, shoppers will remain as eager as ever to splurge on small luxuries that bring them satisfaction.

The news: New account openings were down 5% across Wells Fargo, Citi, Bank of America, and American Express during Q2 2025, per The Wall Street Journal. Our take: Issuers are going to chase opportunities to increase their payment volume, which explains targeted efforts to boost luxury travel and dining rewards. But looking long-term, banks need to think strategically about loosening their credit guidelines.