Sales of personal luxury goods are set to fall 2% this year, making it one of the weakest on record, with price hikes and economic uncertainty shrinking the industry’s customer base, according to consultancy Bain & Company. In its closely-watched report on the $386 billion global market, Bain estimated a 20-22% sales drop in China, which has turned into a drag after a years-long boom before the pandemic fueled by the wealthy and growing middle-class. The forecasts include the effect of currency moves. “This is the first time the personal luxury goods industry has declined since the 2008-09 crisis, with the exception of the pandemic,” Bain partner Federica Levato told Reuters. The study released on Wednesday will likely heighten concerns among investors that the sector’s current downturn, which has knocked shares in the likes of LVMH and Kering, may be longer and deeper than anticipated. Global sales of luxury personal goods – spanning clothing, accessories and beauty products – are expected to be flat at constant exchange rates during the holiday season, with China’s performance still negative, Levato said. A shift by brands to position their products within a higher price band, coupled with weaker consumer confidence amid wars, China’s economic woes and elections across the globe, has led many customers, especially younger ones, to forgo purchases. “The luxury consumer base has declined by 50 million over the last two years, from a total of approximately 400 million consumers,” Levato said. Growth prospects for the market hinge partly on the strategies brands choose to pursue, including on pricing, she added. In a further sign that higher prices are holding back consumers, Bain said the outlet channel was outperforming, driven by shoppers’ quest for value. The personal luxury goods sector is expected to grow by between 0% and 4% at constant exchange rates in 2025, supported by sales in Europe and the Americas, with China seen recovering only in the second part of 2025, Bain said. Levato said Donald Trump’s victory in the U.S. presidential election had removed one uncertainty, while possible interest rate and tax cuts could encourage Americans to spend more. In contrast to personal goods, luxury spending on experiences, such as hospitality and dining, is expected to increase this year, Bain said.