By Manfredi Ricca, Global Chief Strategy Officer at Interbrand
After many years of post-pandemic turbulence, and in some fashion houses’ cases, years of brand missteps and mismanagement, it is time that luxury fashion undergoes a decisive strategy reset.
Luxury fashion houses shouldn’t look to 2026 as a year to be tentatively hopeful; they should move into the new year with clear, decisive reinvention. With the new found energy and clarity of thought a new year brings, luxury fashion brands can seize great opportunities in 2026 as long as they evolve their traditional strategies.
Many brands have tried to stay the course through continuity, but it isn’t providing the biggest rewards possible. Our 2025 Best Global Brands saw report shows many luxury brands declining in value, from Louis Vuitton down by 4.9% in brand value to Gucci falling a dramatic 35%. Only a few came through unscathed; Hermès, for example, managed to grow its brand value by over 17%.
Luxury brands need to place sensible pricing, supply-chain discipline, and design-led creativity back at the heart of the luxury experience. It’s time for these decades- and centuries-old brands to try their hand at something new and embrace genuinely new strategic thinking.
Pricing and expansion — but at what cost to the brand.
For much of the past decade, some luxury brands have relied on aggressive price increases in order to meet ambitious targets. Combined with rapid expansion, especially into the Middle East, brands have had a laser focus on financial growth.
This strategy, in many cases, has worked, delivering short-term gains and some record profits. But it also distanced some brands from their core value propositions, from their heritage, and their brand narratives.
Questions subsequently appeared: Were these escalated prices justified by true craftsmanship and/or innovation?
With economic confidence still fragile across the globe, brands are finding this playbook can no longer be relied upon.
Rebuilding consumer trust
Luxury fashion’s rebound will not come from high-volume hype and trend-chasing; instead, it will come from rebuilding consumer trust.
The aspirational middle-class customer, who once had their eyes and hearts set on one or two specific items a year, has been priced out of luxury fashion by indiscriminate price inflation. A whole category of luxury customers has been eradicated and effectively displaced. This is where a new generation of local brands, such as Laopu Gold or Songmont in China, have set their roots, offering credible products, relevant cultural associations, and curated experiences at a more widely accessible price point.
This strategy must give way to a much more thoughtful approach in 2026. One that aligns value, quality, and brand equity.
Even for those with more disposable income, buying a luxury fashion item can now come after months of investigation and a highly discerning attitude. They want their item to be an investment, and it must tell a story of exceptional craftsmanship, unique materials, and timeless design
The new year must also see luxury fashion reset, rethink and reinforce their supply chain. The pandemic exposed deep vulnerabilities in luxury’s supply-chain systems, but beyond the operational headache, it raised deeper questions about authenticity, sustainability, and the true meaning of luxury.
Supply chains should be repositioned as a key differentiating factor for luxury fashion houses; they are no longer just operational necessities. They can be used as a real storytelling tool, reinforcing provenance and exclusivity while providing transparency. The latter, transparency, is especially important for eco-conscious consumers and younger generations who may purchase an item based on knowing where and how it was created.
Commit to creativity
The most powerful tool that luxury fashion has at its disposal is creativity.
Leaning on familiar motifs, branding tropes, or design-trend-chasing might secure some quick wins for the brand but it does nothing for long-term brand value. The pendulum must swing back to originality and innovation, even if it means taking bigger bolder design risks.
Luxury must be “design-led” again. Creativity has always been the engine of luxury’s cultural relevance; its lead has produced red-carpet and catwalk moments that are talked about decades after the runway ended. But not all brands have protected or prioritized it equally.
Hermès, a standout performer in our 2025 Best Global Brands, has a commitment to creativity that has set it apart. Craftsmanship, product excellence, and a seamless brand experience has all contributed to it being a leading performer in this year’s report, and one of the only luxury fashion houses seeing positive brand-value growth.
Regional demands in luxury fashion
While the U.S. remains an essential market for luxury fashion, growth is increasingly fuelled by the Middle East, Asia, and India.
Consumers in these regions bring different expectations: they’re looking for traditional and culturally significant craftsmanship that blends with global modernity. Brands that adapt their narratives and offerings to resonate authentically will be best positioned to capture long-term loyalty.
In 2026, the luxury sector is poised to regain its sparkle, but only for the brands willing to rethink the fundamentals. The strategy reset is not about abandoning heritage or chasing novelty for its own sake. It is about restoring balance: pricing that reflects real value, operations that reinforce integrity, and creativity that inspires shapes culture.
