“Luxury must be comfortable, otherwise it’s not luxury,” fashion designer Coco Chanel once said. When it comes to the ‘nice-to-haves’, not only does one need to be comfortable with the price tags, but also with the way items are acquired. Your collecting intent, art knowledge and social circle all play a part in passing the vetting process the art world can sometimes be guilty of. The luxury world, in most cases, is relatively straightforward - anyone is welcome, so long as you have deep enough pockets.
To many, from the upper echelons to young entrepreneurs, collectables serve simultaneously as a symbol of wealth, and a vehicle of alternative investment. What one collects in their wine cellar or jewellery box reflects more than just their personality. It could be leveraged to diversify their portfolio against unforeseen equity fluctuations, such as the post Covid-era when the luxury auction market experienced exponential growth (up 55% in total sales value in 20211). Now that the global economy once again faces unprecedented threats, is the luxury market still a safe haven for the art world, or a springboard to a greater good?
First of all, what is luxury? It encompasses jewellery and watches, wine and spirits, handbags, sneakers, celebrity-worn jerseys and more recently Pokémon cards - essentially anything that you are willing to spend your spare cash on for the sake of passion, ownership and enjoyment. Of which, wine and accessories saw the strongest demand in the first quarter of this year.
In Q1 2025, the total sales value of wine auctions recorded a 83.4% year-on-year increase to $24.7 million2, based on ArtTactic’s findings. “There appears to be a trend among consumers of trading up, and drinking less but more expensive wines. So I believe the fine wine auction market will continue to prosper,” comments Francis Belin, President of Christie’s Asia Pacific and Global Head of Luxury Departments. That rings true on both ends of the retail market as well, with the US$200-400 range driven by millennial consumers who prioritise quality over quantity, and the US$1000+ range favourable to veteran investors and collectors3.
By the same token, the handbag category shows resilience against the broader industry's slowdown. French luxury goods company Hermés, for example, is reported to raise its global retail prices by an estimated 6.5% for 20254, marking the 4th consecutive year of price hike. Coupled with their sales strategies that boast exclusivity, the brand yielded a 14.7% year-on-year rise in revenues last year5, and a value retention rate of 100% in 2024, according to Rebag, a resale accessories platform6. Taken together, the uptick in market performance demonstrates two different buying motivations: one that values heritage and experience, and another that values peer-recognition and scarcity. Ironically, the primary luxury business seems to be behaving closer to what the secondary luxury business is trying to move away from.
“Digitisation has had a huge democratising effect; younger people were often too intimidated to cross the threshold into Sotheby’s in the past,” says Josh Pullan, Global Head of Sotheby’s Luxury Division. The attempt to make the auction sector more relevant and approachable through digital channels emerged as a wake-up call during the pandemic, and stays as a necessity ever since. “With more than 50% of sales taking place online, we recently expanded our watch offerings to include a new online platform, Christie’s Shop, which enables buyers to immediately purchase watches curated by our specialists.” Belin explains. This see-now-buy-now proposition is appealing, especially to the next generation of buyers who crave for instant gratification and may not like the traditional auction calendars - something the luxury fashion sector had toyed with and seen mixed results from. So far, the strategy is well-received. Online-only luxury auctions in Q1 2025 posted a robust sell-through rate of 89.3%, with 5,971 lots sold, marking the highest quarterly total in eight years and an 18.9% increase from the previous year.
That is not to say in-person interactions have lost their flair. How do you get people’s attention when there’s constant distraction online? Unsurprisingly, getting creative with premium experiences to pump up the adrenaline of spending might just be what it takes to tip the purchasing decision. “Last year, we organised several concept sales to bring clients together, such as an avant-garde watch collection conducted underground in a wine calve,” Pullan recounts. If not that, bringing the conversation closer to home can be influential too. “This year, we have expanded our watch highlights tours to Riyadh for the first time, to strengthen relationships with collectors across different regions and backgrounds.” notes Alexandre Ghotbi, Phillips’ Deputy Chairman, Watches, Head of Watches, Europe and the Middle East.
Either way presents an opportunity for the auction houses to broaden their client base. But that’s merely the beginning; incorporating them into the core fine art business remains a tough nut to crack. Bear in mind that even the most recognised luxury brands offer relatively palatable entry points, like a cashmere scarf, or a gemstone ring, or a manual-wind watch. However, artworks by the most recognised artists are almost certainly formidable for most people, unless you fancy fame instead of brilliance. While the top spending clients by nature are more comfortable to roam freely across categories, the new-comers will need more nurturing to do the same in the years to come. “Our relationships with clients are always built for the long-term. What people are interested in their 20s is always going to evolve and adapt over the years. And we want to be there for the whole of that journey.” Belin concludes.
Moving forward, we are likely to see more of the two worlds meeting somewhere in the middle to keep things fluid and trend-setting, such as artist-branded luxury merchandise (Louis Vuitton x Murakami), lifestyle-led collaborations (Victoria Beckham x Sotheby’s), or technology-powered experiences in virtual reality (perhaps a cross-over between immersive institutions and metacommerce?!) On that note, the luxury industry will always need to redefine what comfort is for a generation that is constantly redefining what comfort means to them.
1 ArtTactic's Luxury RawFacts Auction Review Q1 2025, p.5
3 Knight Frank's The Wealth Report 2025 p.67
5 https://www.cnbc.com/2025/02/14/hermes-rms-fr-earnings-q4-2024.html
6 https://staticfiles.rebag.com/rebag-fe/prod/img/clair-report-2024/Rebag-The-2024-Clair-Report.pdf
