Key Takeaways
- • 75% of private equity funds intend to invest in fashion and luxury in 2026, according to Deloitte's Global Fashion & Luxury Private Equity and Investors Survey, signaling sustained sector commitment despite near-term deal slowdown.
- • Deal activity declined 6.2% in H1 2026 to 152 transactions versus H1 2025, while personal luxury goods fell 19.7%, reflecting increased selectivity rather than sector retreat as investors tighten investment discipline.
- • Private equity buyers are shifting away from brand prestige alone, prioritizing businesses with stronger margins, scalable platforms, domestic demand exposure, and credible expansion strategies.
- • Luxury revenues grew only 0.6% in H1 2026 compared with a 12.4% decline in H1 2025, while profitability remains challenged—sector EBITDA fell 9.5% across full-year 2025, with luxury automotive dragging performance.
- • Despite 2025 deal activity reaching 345 mergers and acquisitions (up 3.6% from 333 in 2024), the sector faces a profitability headwind as investors demand operational improvements beyond historical brand value.
Summary
Luxury private equity funds remain strategically committed to fashion and luxury assets in 2026, but are exercising heightened selectivity on valuations and operational fundamentals. According to Deloitte's Global Fashion & Luxury Private Equity and Investors Survey 2026, three-quarters of surveyed private equity funds plan to deploy capital in the sector this year, confirming renewed confidence despite near-term transactional headwinds. This stance reflects a recalibration rather than abandonment of the luxury sector as a core alternative investment theme.
Transaction velocity has contracted meaningfully in 2026. Deal count fell 6.2% in the first half to 152 transactions, compared with the same period in 2025, while personal luxury goods—a subset of the broader category—experienced sharper deterioration with deal activity declining 19.7%. These declines follow a modest recovery in 2025, when 345 mergers and acquisitions were completed, a 3.6% increase from the prior year, indicating that the current slowdown reflects investor cautiousness rather than structural disinterest. Elio Milantoni, Senior M&A Partner at Deloitte Advisory, attributed the sustained 75% allocation intent to "renewed investor interest and confidence," positioning current selectivity as disciplined capital deployment.
The operational case for luxury remains strained. Luxury and fashion revenues expanded just 0.6% in H1 2026 relative to a 9.8-percentage-point improvement year-over-year from the prior-year decline of 12.4%. Personal luxury goods grew 0.9% while other luxury segments advanced 0.4%. However, this revenue stabilization masks a profitability crisis: full-year 2025 saw sector EBITDA contract 9.5%, with luxury automotive particularly pressured. Private equity investors are now demanding that acquisition targets demonstrate stronger margins, scalable operating platforms, and credible domestic demand dynamics—metrics that transcend brand equity alone. This represents a fundamental shift in deal selection criteria, with PE sponsors prioritizing operational leverage and margin expansion over reliance on heritage brand prestige as a standalone value driver.
Transaction velocity has contracted meaningfully in 2026. Deal count fell 6.2% in the first half to 152 transactions, compared with the same period in 2025, while personal luxury goods—a subset of the broader category—experienced sharper deterioration with deal activity declining 19.7%. These declines follow a modest recovery in 2025, when 345 mergers and acquisitions were completed, a 3.6% increase from the prior year, indicating that the current slowdown reflects investor cautiousness rather than structural disinterest. Elio Milantoni, Senior M&A Partner at Deloitte Advisory, attributed the sustained 75% allocation intent to "renewed investor interest and confidence," positioning current selectivity as disciplined capital deployment.
The operational case for luxury remains strained. Luxury and fashion revenues expanded just 0.6% in H1 2026 relative to a 9.8-percentage-point improvement year-over-year from the prior-year decline of 12.4%. Personal luxury goods grew 0.9% while other luxury segments advanced 0.4%. However, this revenue stabilization masks a profitability crisis: full-year 2025 saw sector EBITDA contract 9.5%, with luxury automotive particularly pressured. Private equity investors are now demanding that acquisition targets demonstrate stronger margins, scalable operating platforms, and credible domestic demand dynamics—metrics that transcend brand equity alone. This represents a fundamental shift in deal selection criteria, with PE sponsors prioritizing operational leverage and margin expansion over reliance on heritage brand prestige as a standalone value driver.
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