The Gulf Lost Up to a Quarter of Its Luxury Shoppers. The Brands Responded by Moving Further Upmarket

Above it sits luxury proper, which has pricing power because it sells scarcity and craft. Below it sits fast fashion and now Shein, which competes on a cost base nobody in the middle can match. The middle used to sell aspiration, and aspiration has stopped paying.

The brands caught there are not obscure. Coach, Michael Kors and Burberry have all spent recent years being described in exactly these terms by analysts. What they share is a position that made complete sense when a growing middle class wanted a visible step up, and makes very little sense now that the same customer can buy a well-made bag from Polene or Toteme at a third of the price, or a convincing dupe at a tenth.

Are dupes really the problem?

Partly, though not in the way the industry says.

The genuine shift is not that dupes exist. Copies have always existed. It is that buying one has stopped carrying any social penalty. A shopper who once hid a counterfeit now posts the comparison video, and the framing has moved from embarrassment to competence. Finding the dupe is presented as being good at shopping.

That is a reputational problem no enforcement budget can solve, because there is nothing illegal about a well-made unbranded bag with a similar silhouette. And it lands hardest on brands whose value was mostly the logo, which is precisely the squeezed middle again.

The other half of the same shift is secondhand. Around half of luxury shoppers now check the resale market before buying anything new, a habit we examined in our piece on preowned becoming a style signal. A brand competing with its own back catalogue is competing with something it cannot discontinue.

What are the brands actually doing about it?

Leaving. Almost every brand with the option is moving upmarket, and the BoF and McKinsey State of Fashion work for 2026 describes the logic plainly: elevate, so you are not fighting Shein at the bottom, and so you can catch the shoppers priced out of luxury above you.

The trouble is visible as soon as you say it out loud. If everyone elevates, nobody has elevated. And the customer the strategy is designed to capture is the same aspirational buyer whose disappearance caused the problem, now expected to pay more for a brand that has just told the market it is worth more.

The more credible version of the same strategy is the one that gives the customer something back. The industry's own language this year has moved from price to craftsmanship, newness and creativity, which is a polite way of admitting that a decade of charging more for the same object has run out of road.

What does this mean if you are the one buying?

Better conditions than you have had in years, if you are unsentimental.

The middle of the market is competing hard for you and losing, which is where value tends to appear. The premium contemporary brands at $300 to $800 are making genuinely good products because that is the only way in. Resale has never been deeper. And a brand that has just raised prices while its customer base shrank is a brand with a discounting problem coming, whatever it says now.

What has actually ended is the idea that a logo at a mid-market price buys you standing. That was the product, more than the leather was, and the customers worked it out before the boardrooms did.