The Identity Crisis of Luxury Fashion; A Tale of Trust Issues and TikTok Exposés

For the first time since 2016 (excluding the you-know-what of 2020), global luxury value creation is expected to shrink compared to the previous year. The shine is coming off the surface, and the cracks are starting to show.

Luxury isn’t collapsing, but its certainty is. Its identity? Complicated. Consumers are no longer lulled into hypnosis by price tags and logos; they’re questioning whether the clothes are worth it, or even well made.

What Even Is Luxury Now?

Luxury is having a trust problem.

For years, the term was synonymous with quality. Craftsmanship. Rarity. Now? Many consumers no longer believe that luxury means better. “Customers don’t recognise themselves anymore in the luxury price-value equation,” says Claudia D’Arpizio, a partner at Bain. Vogue Business surveys echo this, highlighting frustration over rising prices, falling product quality, and marketing that’s all spectacle, no substance.

News and rumors (or two of the same) have never spread faster. Earlier this year, we saw TikTok explode in the aftermath of a Chinese manufacturer alleging that a number of designer labels, including Hermes, whose price points are buoyed by the claims of ‘Made in France’ were in fact having their bags being made in China, for a fraction of the cost. This in turn led to a surge of account holders exploring discrepancies and exposing what makes a bag fake. 

That disconnect, and backlash, is key. The luxury client base is now more diverse, informed, and complex than ever. A well-lit handbag with a $8,000 price tag doesn’t cut it anymore. Brands need differentiated value - and stories that mean something.

2025 Luxury Exposures Fuelling and Validating Mistrust 

The recent judicial takeover of Loro Piana after it was revealed workers in its cashmere supply chain were logging 90‑hour weeks, earning just €4 an hour, and even living on factory floors. 

News like this sends shockwaves through the high-end industry. This isn’t just a scandal, it’s a breakdown of the ‘quiet luxury’ myth. When a brand built on discretion is exposed as exploitative, the veneer of craftsmanship wears thin.

This is a kind of unfortunate trend of the past year. Loro Piana is the fifth Italian luxury label caught in this net, along with Dior, Armani, Valentino and Alviero Martini. These repeated failures expose a grim reality - ethical oversight in subcontracted workshops is dangerously superficial. 

It’s becoming increasingly apparent to customers that premium price tags no longer guarantee ethical practices, especially when cost-cutting outweighs accountability. It’s opened up the eyes of many. The court's intervention marks a rare regulatory wake-up call: silent luxury may look refined, but without transparency, it’s hollow.

Deforestation for Luxury

Meanwhile, hidden in plain sight: high-end brands are sourcing leather tied to illegal Amazon deforestation. Investigations by Earthsight and OCCRP reveal that tannery supply chains for Coach, Chanel, Louis Vuitton, Balenciaga, Gucci are linked back to cattle ranches on cleared Indigenous lands and embargoed forest areas. These luxury labels are complicit in ecological disruption all the while they posture about “sustainable quality.”

Certification schemes like the Leather Working Group are exposed as paper shields, failing to trace leather origins beyond the tanneries themselves. And with EU green‑leather regulations on the horizon - France, Italy, Germany demanding deforestation-free sourcing - the luxury sector is on borrowed time. Trust has a shelf life. Once the material source is questioned, the luxury myth unravels.

Austerity With a Side of Apathy

It’s not just about perception. It’s also about reality.

Inflation, rising living costs, and a shaky global economy are reshaping who gets to engage with luxury. McKinsey reports that over 50 million consumers globally are pulling back from luxury spending in 2025. Value is no longer just a price metric - it’s a survival one.

People are choosing experiences over excess, essentials over indulgence. The intangible has never been more important. Luxury is no longer recession-proof - it’s under pressure, and consumers evidently  aren’t afraid to walk away.

So, What Now?

Luxury isn’t over. But it’s not as stable as it once was.

What we’re seeing in 2025 is a consumer that’s more alert, more complex, and more emotionally distant from luxury brands than ever before. They want value, yes - but also meaning, durability, and identity.

A dwindling customer base in the luxury sector, and an audience averse to being duped opens up opportunities for sustainable fashion brands to fill in new gaps. 

• Value over label: Consumers may seek clothes that last, rather than ones that hold the risk of a tarnished name or devalued design. Materials, versatility, durability and long term investment traits need to be authentically projected at as many touch points as possible.

  
  

• Resale boom: The second hand luxury fashion market is growing at a compound annual rate of 10% - resale stores and platforms need strategies in place to elevate products from potential negative connotations, and harness communities to do so.

  
  

• Get in on the conversation: Talk to your community about the issues at hand - what is your take on it and how you set apart or amongst it. Don’t be afraid of radical transparency and talk through your journey. You need to stay relatable and informative to gain credibility and a loyal base.

Want to talk about how your brand can move through the luxury fashion shift?

Contact us.