Four separate sets of 2025 figures, published by four unrelated institutions, describe the same market. Value is holding at the top of luxury. Volume is falling underneath it. The category is not shrinking so much as separating.
The evidence, from four sources
| Market | 2025 reading | Source |
|---|---|---|
| Swiss watches | Value down 1.7 percent, volume down 4.8 percent, highest price segments steady | Federation of the Swiss Watch Industry |
| Global art | Sales up 4 percent to $59.6 billion after two down years, still below the 2022 peak | Art Basel and UBS / Arts Economics |
| Laboratory-grown diamonds | Prices down about 70 percent in two years on falling production cost | Bain & Company, via GIA |
| LVMH | Revenue €80.8 billion, Q4 organic growth 1 percent, 22 percent margin | LVMH |
Volume falls faster than value
That single relationship recurs everywhere. When units fall faster than revenue, the average transaction is getting larger. The watch industry sold about 740,000 fewer watches and gave up only 1.7 percent of its export value, which arithmetically means the watches it did sell were dearer.
Apply the same test to the diamond figures and the mechanism becomes visible. Laboratory-grown material took the volume end of the jewelry market by being cheaper, and then got cheaper still. What it could not take was the part of the market where the point was rarity, because manufacturing more of something is the opposite of rarity.
Manufacturing more of something is the opposite of rarity. That is the whole dividing line.
Rich & Richer
Where that leaves the middle
The top is defended by scarcity and the bottom is defended by price. The middle is defended by neither. A mid-tier watch, a mid-tier stone or a mid-tier handbag competes with a cheaper substitute below and an aspirational purchase above, and in a slower year the buyer resolves that choice by trading up or waiting.
This is why the art market’s recovery arrived through the auction room rather than private sales, and why the craft end of the market keeps working when the industrial middle does not, as we saw with makers who built practices on individual commissions.
What follows for a collector
- Scarcity has to be demonstrated, not asserted. Production capacity that can expand is not scarcity, whatever the marketing says.
- Buy for ownership. Resale is a bonus on a small number of items and a fiction on most.
- Expect less discounting, not more. A category earning a 22 percent margin has no need to clear stock.
- Treat the middle carefully. It carries the most substitution risk and the widest gap between retail and resale.
None of this argues against buying beautiful things. It argues against buying them on the assumption that someone will pay more later, which is a claim the 2025 numbers support for a narrow slice of the market and contradict for the rest.
Frequently asked questions
What is happening to the luxury market?
It is separating. Across watches, art, jewelry and the large groups, value is holding at the top while volume falls, which means fewer, more expensive transactions.
What is the clearest evidence?
Swiss watch exports fell 1.7 percent by value in 2025 while unit shipments fell 4.8 percent, so the average exported watch got more expensive as fewer were sold.
Is the middle of the market disappearing?
It is under the most pressure. Entry and mid-tier products face substitution, while the scarcest goods face none.
What should a buyer do differently?
Buy for ownership rather than resale unless the specific item has demonstrated scarcity, and treat any resale narrative attached to a manufactured good with suspicion.