Jewelry Sales Outshine Fashion, Becoming Key Growth Driver for Luxury Sector

A significant shift in consumer spending is reshaping the luxury goods market, with high-end jewelry emerging as a critical growth engine while sales of fashion and leather goods falter. This trend is becoming a key differentiator for the sector's major players, rewarding companies with strong portfolios in 'hard luxury' as they navigate slowing demand and geopolitical headwinds.

A Shift in Luxury Spending

The luxury sector, which had been projected to return to growth in 2026 after two years of contraction, continues to face challenges, according to industry analysts. Traditional profit drivers like high-end handbags are losing momentum, viewed by some as overpriced and less appealing to younger demographics. Claudia D’Arpizio, a senior partner at consultancy Bain & Company, noted that bags and shoes face "meaningful headwinds" due to a significant softening in consumer desirability.

In contrast, jewelry is proving more resilient. Analysts at Vontobel noted earlier this year that the segment "punches well above its weight" with steady growth and stronger margins. The appeal is further bolstered by a recent rally in gold, which has enhanced jewelry's status as an investment, according to Carole Madjo, head of European luxury research at Barclays.

Jewelry Brands Drive Growth

Recent performance figures highlight the growing importance of jewelry divisions for luxury conglomerates.

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• Richemont, owner of Cartier and Van Cleef & Arpels, reported a 24% surge in jewelry sales for the quarter ending June 30, significantly outpacing analyst expectations.
• LVMH, which owns Bulgari and Tiffany, is also expected to see strong results. Barclays recently raised its 2026 growth forecast for LVMH's Watches and Jewellery division to 8%, up from 7%. The division accounted for 13% of the group's €81 billion turnover in 2025.
• Kering, owner of Pomellato and Boucheron, saw its new jewelry division's sales grow 22% on a comparable basis in the first quarter, outperforming all of its other business segments.

Challenges for Fashion-Centric Maisons

The pivot towards hard luxury presents a challenge for brands historically centered on fashion and leather goods. Hermès, renowned for its exclusive Birkin bags, saw its stock fall about 10% after missing first-quarter growth estimates, prompting questions about the resilience of its scarcity-driven model.

While Hermès' own jewelry segment has posted a compound annual growth rate of nearly 30% since 2019, Vontobel analysts noted it is expanding from a very small base. The broader trend is forcing fashion-focused houses to adapt. "Everybody’s putting a bit more emphasis on jewellery because that’s where the growth is coming from right now," said Madjo of Barclays.