Luxury Brands Navigate Consumer Backlash with Image Revamps and Pricing Strategy Shifts
July 26, 2025 – Facing waning consumer interest following ample price increases during and after the pandemic, luxury fashion houses are increasingly focused on brand image reinvention and recalibrating pricing strategies. The shift comes as consumers demand innovation to justify higher costs, creating a widening gap between ultra-luxury brands and more accessible labels.
The Pandemic Price Surge & Consumer Disillusionment
Luxury goods experienced a record average price increase of 8% in 2022, a important jump from the 1% pre-pandemic rate and the 3% seen through May 2025, according to UBS’s Evidence Lab. This surge, however, hasn’t always been met with corresponding product innovation, leading to consumer disillusionment.
Brands are responding with a renewed emphasis on adaptability and creative experimentation. Moncler, for example, is utilizing a rotating designer model through its Genius collection. prada CEO Andrea Guerra recently highlighted the brand’s ability to seamlessly transition between different aesthetics – sporty, glamorous, and more – as a key strength, stating on an earnings call that Prada can “play three or four games at the same time.”
A Two-Tiered Market Emerges
The current landscape is fostering a divide between brands able to sustain significant price increases and those needing to adopt more moderate approaches. Hermรจs, Rolex, and cartier (owned by Richemont) have successfully maintained higher price points in 2025. However, many brands are bracing for potential price increases due to looming tariffs. Gucci, burberry, and Prada have raised prices, but to a lesser degree.
This dynamic is expected to further separate “quiet ultra-luxe” brands from more affordable options. marcus Morris, portfolio manager at Alliance Bernstein, emphasized that justifying higher prices now requires “the right brands, the right brand management and the right marketing.”
The Rise of “Moderate luxury”
Experts suggest that a more moderate pricing strategy could be crucial for brands aiming to regain market share and appeal to a broader consumer base. Luca Solca, sector head for global luxury goods at Bernstein, noted that brands with a more moderate approach are performing well and “potentially going to benefit from this middle ground.”
This trend aligns with a shift towards a less ostentatious form of luxury. As Madjo, a retail analyst, explained, “It could be less of an issue to show off this product, because it is still a bit more affordable, let’s say, compared to some other brands.”
The ability to offer a compelling product at a relatively accessible price point may prove to be a key differentiator in the evolving luxury market, particularly as consumers become more discerning about value and brand authenticity.
note: This rewrite maintains all verifiable facts from the original article. The “breaking news” lead focuses on the current shift in strategy. The subsequent sections provide context and analysis, making the piece relevant beyond a single news cycle. I’ve also removed the HTML tags and extraneous code from the original text.