Impossible to Repeat (a new cycle for the luxury industry)

By Tancredi Cordero di Montezemolo It was a weekday afternoon in Rome, early October, the kind of golden hour the city produces so effortlessly. I was walking down Via Condotti towards a jeweller, a gift I had been meaning to buy for some time, and I was struggling to walk. Not metaphorically; physically struggling, like someone trying to enter an arena for a concert (or a gladiator fight, in this case), shoulder against shoulder, in a crowd that moved with the slow patience of people who have nowhere better to be than exactly where they are. I recall thinking of a possibly apocryphal comment from a famous historian, who said that if there were no other reason, among the very many, why the Romans proved to be a great civilisation, then surely you could point to the fact that they built Rome in such a wonderful location, with such wonderful weather. Clearly everyone there in Via Condotti that day would have agreed with him. In all my life frequenting Rome I have never experienced such a dense mass of people cramming the street.

And yet, through the windows I passed, the great boutiques stood strangely still. Beautiful, lit, perfectly attended; and quiet. Sales associates arranged things that did not need arranging. The street was overflowing and the shops, mainly fashion stores, were not. The one exception, I noticed when I finally arrived, was the jeweller, where, having no appointment, I waited.

Afterwards I wanted to recover with a Campari Soda, and I made for the rooftop of the Hôtel de la Ville, above the Spanish Steps (which felt like climbing a human pyramid), for an aperitivo. No space; not a stool, not at six o'clock, not without a booking, not even if you were staying in the hotel. We tried the terrace of the Hotel Eden instead. The same. Luckily here we knew the manager, which rather proves the point; the currency that worked was not money but access. Nevertheless, two of the most expensive terraces in Rome, on an ordinary Wednesday, turning people away, a hundred metres from streets lined with half-empty high fashion stores.

Somewhere between the second refusal and the walk home it occurred to me that I had just spent an afternoon inside the next decade of the luxury industry. Almost nobody was buying objects. Everybody was buying experiences: space, time, something to eat, something to drink; always a table with a view. The crowd had not stopped spending; it had changed what it was spending on. And the only shop with a queue was the one selling objects that outlive their owners, not just a few seasons.

The liturgy of the waitlist

Every luxury cycle runs on an operating system of its own, and for the better part of fifteen years the system was scarcity, incarnated in objects. The waitlist was its liturgy and the allocation its sacrament. You did not buy a Birkin; you were granted one, after a courtship of purchases you did not especially want. You did not order a Rolex Daytona; you entered into a relationship with an authorised dealer the way one once entered a private members' club: with patience, with tribute, and with no guarantee of being accepted. The logic was gloriously inverted. The harder a thing was to buy, the more people wanted it, and the houses that understood this (chiefly, among the famous ones, the likes of Hermès, Ferrari and the great Swiss watchmakers with their quiet lists) compounded value at rates that made technology investors look twice.

It worked because the object did something no experience could: it stood there. It could be photographed, inherited, resold at a premium, carried into a room as a credential. In a decade when wealth was being created faster than taste could keep up with it, the scarce object was the fastest possible education; a shortcut to belonging that could be bought, provided you were first made to wait for it.

Drunk on scarcity

Then came the pandemic, which did to the scarce object what leverage does to any good idea: it turned a discipline into a mania. Confined at home with liquidity and nowhere to spend it, the wealthy bought supercars they could not drive, watches they could not wear anywhere, boats on which to hide away from the rest of the world. The garage became a portfolio and the safe became a trading desk. For a strange moment, pre-owned Ferraris traded above new ones, which is the market's way of announcing that something has gone wrong with space and time itself.

Every operating system is eventually killed by its own adoption. When every maison learned to manufacture scarcity, scarcity became abundant; an oxymoron with a P&L. Prices rose far beyond any conceivable improvement in the product (sometimes the product actually worsened while prices and demand rose, and nobody complained; aka what happened at Gucci), the aspirational customer was squeezed out by inflation and by pride, and the knowing customer, the one the whole system was built to flatter, began to notice that exclusivity issued in unlimited editions is simply marketing. Boredom did the rest. The post-pandemic years were the hangover's first act; what we are entering now is the second, and it looks nothing like the first.

The money changes postcode

The money has not gone anywhere. Global luxury spending reached roughly €1.44 trillion in 2025 and is expected to hold between €1.44 and €1.47 trillion this year. What has changed is its postcode. Bain and Altagamma, in their latest worldwide study, find demand for experiences outgrowing demand for tangible goods by one and a half times in 2026. Experiences are expanding at around 4%, led by hotels, fine dining, cruises and wine, against roughly 2% for the sector as a whole, and bookings for immersive experiences in dining, leisure and entertainment are up 30% in a single year. Personal luxury goods, the category that was the whole story for two decades, slipped to €358 billion in 2025 and is expected this year merely to win back what it lost.

I did not need the study. Among my own friends the conversation has turned completely. Five years ago it was the rare car, the bigger boat, the next house, the Paul Newman Daytona; now it is the catered safari with its own sommelier, the small branded ship to the Galápagos, the picnic at the poles, the week that cannot be photographed into a commodity because only twelve people were there. The cruise lines, of all people, are gearing up like couture houses. Travel has become what the handbag used to be: the purchase through which you explain yourself. And on a feed, if you ask me, a safari (as long as it's only photographic) reads far less crass than a chronograph.

The object must transcend its matter

None of this means the end of the object; it means the end of the object as a sufficient answer. What survives the turn are objects that behave like experiences and objects that behave like assets, and ideally both at once.

Jewellery is the proof. Richemont closed its fiscal year to March 2026 up 11% at constant rates, with the jewellery maisons up 14% at an operating margin above 30%, and in the following quarter jewellery jumped another 24%. A high jewel is worn at the dinner, present in the photograph, passed to a daughter; it attends the experience rather than competing with it, and it is the only product category whose natural unit of time is the generation. In an age newly suspicious of accumulation, the object that escapes suspicion is the one that was never entirely yours; you were merely its custodian between two generations.

Craft is the other survivor, and the leather ledger makes the point with brutal clarity. In the third quarter of this year, LVMH's fashion and leather goods division fell 5% organically while Hermès grew leather goods by 10.8%. Houses built on apparel are struggling because fashion is the most perishable claim a house can make; houses built on craft hold because craft is the least. And craft, properly told, is itself a story, which is to say an experience: the atelier visit, the saddle stitch, the eight-month wait are the theatre for which the object is merely the ticket stub. The physical product is not dying. It is being asked, for the first time in a generation, to mean something.

Digesting the garage

The casualties are where the last cycle's excess was greatest. The secondary market for exotic cars has given back between 18 and 35% from its 2022 peaks, as the pandemic's speculative buyers unwind positions they never truly intended as cars; Lamborghini's profits rise while its volumes fall, which is a house choosing margin over a thinning crowd. Sadly, they do it mainly by selling Audi SUVs with a raging bull on the bonnet; but that's another story for another article. The market for supercars and large toys is small, and it consumed several years of demand in two; it will spend several more digesting.

Yet even here the turn shows its logic. The same Altagamma-Bain research finds mega-yachts among the most resilient segments in all of luxury, precisely because a great yacht is not really an object at all; it is a floating venue for the only currency now appreciating, which is private experience. Mobility will do well selectively: well where the machine is a platform for events, memberships and pilgrimages; badly where it is just inventory with a big engine.

Arnault calls the removal men

I was bearish on LVMH in the last cycle, and said so. Credit, then, where it is due: no one has restructured harder for the next one. In the space of a year the great acquirer became a seller, disposing of DFS's Greater China travel retail in January, selling Marc Jacobs in September, reviewing Fenty; pruning, for the first time in living memory, rather than collecting. Meanwhile the creative benches have been rebuilt across the maisons, and the capital is flowing into how customers encounter the brands (places, tables, residences, theatres of retail) rather than into more logos to shelve.

The numbers do not yet show it: nine-month revenue of €57.1 billion, organic growth down to 1% in the third quarter, fashion and leather off 5%. But groups are rarely rewarded in the quarter they take the medicine; they are rewarded in the cycle that follows. Bernard Arnault did not become Bernard Arnault by optimising for the cycle he was in. When he tried, and failed, to buy Gucci in 1999, it was because he saw Tom Ford defining the next ten years of luxury, not the previous ten. If the next decade belongs to experiential luxury, then the group that owns Belmond, Cheval Blanc, Bulgari's hotels and the deepest pockets in the industry has, rather quietly, already moved house.

Perfect, and slightly beside the point

And Hermès. I have been bullish on Hermès in these pages to the point of devotion, and the house has not disappointed; the stock has. Growth slowed to 4.3% in the third quarter, the slowest in years; the softer categories, watches and perfume among them, are feeling the air thin; and in early October the shares touched a four-year low of €1,260. Yet leather goods still grew 10.8%, the operating margin still stands at 41%, and €12.3 billion of net cash sits on the balance sheet. Nothing is wrong with the house. What has ended is the regime in which the house was the whole answer.

Hermès is the perfect artefact of the object cycle: the supreme scarce thing, made slowly, sold reluctantly, resold at a premium. It will remain the finest answer to that question for as long as the question is asked. My caution is not about the brand; it is about the question being asked a little less often, and about a valuation that still assumes it will be asked forever. The Birkin is not diminishing. The world in which the Birkin was the summit of desire is simply acquiring other summits. And new brands with new stories might also catch the attention of those buying heritage for the sake of it. History can hardly be rewritten, but luxury is often more akin to good novels than to well-documented history. Over the next five years, do I see Hermès doing better than Gucci? Absolutely yes. Do I see Hermès doing better than in the last few years? Absolutely not (unless they open hotels and cruise lines).

The club you can only spend your way into

Which brings me to Ferrari, a company I will never observe neutrally and have never needed to. On paper Ferrari sells objects; in practice it stopped doing so years ago. Personalisation now exceeds 20% of car revenue, which means a fifth of the business is clients designing their own car rather than buying one; the order book is full through 2027; guidance was raised again this summer. Around the object stands the real product: Formula 1 and its liturgical calendar, Le Mans, the client activations at Monaco, Silverstone and Goodwood, the museums, the pilgrimage to Maranello. You do not buy a Ferrari; you join one. The car is the ticket of admission to a world, and the world, not the car, is what compounds.

They have proved it by launching possibly the ugliest car in the history of the Cavallino Rampante after the Ferrari 400: the Luce, which is ironic, given it is named after light in Italian, because only a blind person could like it. But hey, the order book filled fast; some say mainly because if you don't buy a Luce, you will not get in line for the next hypercar everyone wants. Is it true? It doesn't matter; it just shows the power of the brand.

That is why Ferrari sits so comfortably astride both cycles. It mastered scarcity in the age of the object and had already converted it into belonging before the age of the experience arrived. The houses that will own the next decade are the ones making the same conversion now, in whatever category they inhabit: from product to world, from ownership to membership, from the thing to the time spent around the thing.

Scarcity leaves a forwarding address

Walk down Via Condotti today, or any other major upper-echelon street in Europe, and you can read the whole thesis without opening a single report. The street is full and the shops are quiet; the jeweller has a queue; the terraces have queues of their own, or they turn you away altogether. This is not a contradiction. It is a forecast.

Scarcity has not died; scarcity never dies, because status cannot exist without it. It has simply changed address. For fifteen years it lived in the object: the waitlist, the allocation, the unlisted price. Now it is moving back to where it lived for most of human history, before industry learned to counterfeit it: in time, in place, in rooms that hold twelve, at tables with a view. The great luxury businesses of the next cycle will not be in the business of making things hard to buy. They will be in the business of making moments impossible to repeat. And let me tell you: I like this cycle far better than the last.

The shops will fill again; they always do. But the terraces filled first, and in that order of filling lies the whole of the next decade.