A Van Cleef & Arpels store at Lotte Department Store's main branch in central SeoulLOTTE DEPARTMENT STORE
The global luxury market is shifting away from designer handbags and toward high-end jewelry as steep price hikes and persistent inflation reshape consumer spending.
Revenue at luxury houses is shrinking while that of jewelry brands is gaining ground, and department stores are moving quickly to keep pace with the shift.
Overall luxury sales at Lotte, Shinsegae and Hyundai department stores rose by around 35 percent on year in the first half of 2026, while sales of luxury jewelry and watches at each retailer jumped more than 60 percent over the same period, according to the department store industry on Wednesday.
As interest in luxury jewelry grows, department stores are responding by competing to bring in new luxury jewelry brands and expand existing stores.
Shinsegae Department Store opened a Louis Vuitton jewelry and watch store on the first floor of its main branch in central Seoul in March and expanded its jewelry section on the first floor of its Gangnam branch in June. Across its branches, Shinsegae now has stores from five major luxury jewelry brands, including Cartier and Tiffany & Company, as well as three major luxury watch brands, including Audemars Piguet and Patek Philippe.
Hyundai Department Store brought jewelry brand Chaumet to its Pangyo branch in Gyeonggi in December last year, renovated the Rolex store at its Trade Center branch in southern Seoul in January and opened a Van Cleef & Arpels store at its Apgujeong flagship in Gangnam District, southern Seoul, in August.
Lotte Department Store added jewelry brands Van Cleef & Arpels, Graff and Omega to its main branch in Jung District, central Seoul, last year. This year, it introduced more jewelry brands, such as Arthus Bertrand and L'Epée 1839.
Department store Galleria is also targeting the market by displaying and selling billions of won of ultra-high-end jewelry and watches each month at its luxury section.
A Louis Vuitton store in a department store in SeoulYONHAP
The trend extends beyond Korea, as figures show.
The market capitalization of LVMH, best known for brands including Louis Vuitton, stood at 210.3 billion euros ($245 billion) as ofTuesday, according to market research firm Stock Analysis onWednesday. This is less than half of the 454.5 billion euros it reached at the height of its share-price rally in 2023.
The shift comes as persistent inflation and changing consumption patterns have weakened demand for luxury handbags.
LVMH saw revenue and operating profit fall 3 percent and 4 percent, respectively, in the first half of this year from the same period a year earlier. Revenue from its fashion and leather goods division, which includes luxury handbags, fell 1 percent, while operating profit dropped 7 percent.
High-end jewelry, by contrast, remains resilient.
Richemont, which owns jewelry brands Cartier and Van Cleef & Arpels, instead moved upward. Its revenue rose 20 percent on year from April through June, while its share price has climbed 28 percent over the past six months.
Luxury stores on the first floor of Hyundai Department Store's Pangyo branch in GyeonggiHYUNDAI DEPARTMENT STORE
One direct reason for weakening demand for luxury handbags is the sharp rise in prices.
Luxury handbag prices have risen 50 to 70 percent since 2019, according to global consulting firm Bain & Company. High-end bags from popular brands such as Louis Vuitton, Chanel and Dior now cost more than 10 million won ($7,470).
At the same time, prolonged inflation has eroded the purchasing power of middle-class consumers, who had accounted for a significant share of luxury handbag purchases. Weak consumer spending in China, which drove much of the luxury industry's growth over the past decade, has also weighed on the sector.
The outlook for jewelry, however, remains strong. Consulting firm Mckinsey & Company forecasts that luxury jewelry sales volumes will grow by an annual average of 4.1 percent from this year through 2028.
Analysts attribute the trend in part to consumers choosing jewelry made with gold and other precious materials for their perceived asset value when prices are comparable with those of luxury handbags.
Jewelry also comes in a relatively broad range of prices, from ultrahigh-end pieces to products priced at around 1 million won, which gives consumers more options. Demand has also expanded as consumers increasingly buy jewelry as a reward for themselves on birthdays and other special occasions or as a way to express their individuality.
“Millennials and Gen Z are rapidly shifting away from flashy, expensive purchases toward products that offer better value and reflect their individuality,” said Lee Jong-woo, a professor of distribution marketing at Namseoul University. “The luxury industry needs to find new avenues for growth.”
This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.
