Luxury Brands Target Middle-Class Shoppers With Lower-Priced Items

Facing declining demand, high-end labels are introducing products under $500 to attract aspirational consumers, but risk profit margin erosion.

Luxury brands like Gucci, Louis Vuitton, and Burberry are emphasizing more affordable products such as small leather goods, scarves, and homewares priced under $500.
Global luxury spending has slowed, with U.S. spending on high-end goods dropping 6% year-over-year in November, influenced by economic pressures and shifting consumer priorities.
China, a key market for luxury goods, has seen reduced demand due to a property crisis and youth unemployment, contributing to the sector's challenges.
Analysts warn that the focus on lower-priced goods could harm profit margins and dilute brand exclusivity, with some executives cautioning against over-expansion in this category.
The luxury market is increasingly competing with the growing consumer preference for experiences over material goods, leading to a shrinking client base.