Luxury brands like Louis Vuitton, Dior, and Gucci are known worldwide. They belong to big companies like LVMH and Kering, which dominate the luxury market. This industry is worth $397 billion, with products ranging from clothes to jewelry. These brands are powerhouses. For example, LVMH’s CEO, Bernard Arnault is one of the richest people in the world, surpassing even Elon Musk at times.

But who really buys these luxury items? Surprisingly, it’s not the super-rich. The main buyers are the upper-middle class.

Jean-Jacques Guiony, LVMH’s CFO, said that most Louis Vuitton products are sold to people who want to treat themselves, not the ultra-wealthy. So, why don’t the super-rich buy these items as much?

What Defines Luxury?

Luxury items are expensive, well-crafted, and symbolize wealth. The biggest luxury brands, like Louis Vuitton and Gucci, lead the trends.

They make billions every year. Louis Vuitton, for example, made history by earning $20 billion in a year. These brands push creative boundaries.

Then there are smaller luxury brands. Some, like Saint Laurent and Balenciaga, are well-known and make billions. Others, like Loro Piana and Bottega Veneta, are lesser-known but still significant. They often cater to niche markets and focus on high quality and exclusivity.

The Quiet Luxury Trend

Many super-rich people prefer “quiet luxury.” This style is understated, with subtle designs and no flashy logos. It’s about looking wealthy without showing off.

This trend reflects a desire for a more refined, traditional image. Old money families prefer this style to show their long-standing wealth.

Even the LVMH family, despite their new wealth, adopts this simple style. This shows that the old money versus new money idea is more about mindset than actual wealth. Today, many new rich people also prefer quiet luxury to fit in with the old money image.

Middle Class and Luxury

During the pandemic, the upper-middle class drove luxury sales. Many indulged in luxury items with their extra savings. They wanted to enjoy life despite the uncertainty. This spending helped luxury brands like LVMH and Gucci see record sales.

Post-pandemic, the story is different. The middle class is now saving more and spending less on luxury due to rising costs and economic uncertainty. This shift has caused major luxury brands to struggle. Brands like Gucci have seen a drop in sales.

In contrast, niche luxury brands that cater to the super-rich are doing well. Brands like Brunello Cucinelli and Loro Piana continue to thrive because their wealthy clients are unaffected by economic downturns. Even some major brands like Hermès, which maintains an exclusive image, are doing well.

The Rise of Quiet Luxury in Pop Culture

The concept of quiet luxury is gaining popularity. Social media trends highlight “quiet luxury” and “old money” styles.

This influence is making some middle-class people shift their luxury preferences to more niche brands. Even though the broader population often opts for cheaper imitations, the desire for understated luxury is clear.

Luxury is more than just flashy brands. The true wealth lies in quiet, understated elegance. This trend is reshaping the luxury market.

As more people, including the upper-middle class, lean towards quiet luxury, the industry is evolving. Whether the super-rich will shift their style again remains to be seen. But one thing is clear: luxury is about more than money; it’s about making a statement, quietly.