How Luxury Learned Being Omni Isn’t For Everyone

As digital storefronts shutter and luxury platforms file for bankruptcy, the promise of democratized online shopping confronts the reality of margin compression, return exploitation and a luxury customer exodus. After a decade of aggressive online expansion, luxury is confronting a hard truth: scale dilutes exclusivity. In 2025, a sector once synonymous with limitless growth is facing the limits of digital scale. Multi-brand luxury platforms are collapsing, e-commerce growth is flattening, and brands are rediscovering that ubiquity and exclusivity rarely coexist. What went wrong, and who’s surviving?

A Reckoning For Luxury E-Commerce

In August 2025, Montreal-based SSENSE filed for bankruptcy protection with $152 million in debt and severe liquidity constraints. By that point, the company’s sales had already fallen 28% year-over-year in the first half of 2025. Creditors moved to force a sale, prompting SSENSE to file its own restructuring application to maintain control of its operations and assets. A court-approved restructuring plan allowed SSENSE to continue operating while seeking new investors. It will continue under Ernst & Young’s oversight, supported by a $15 million emergency loan which is a fraction of its outstanding debt. The full list of creditors detailed in their restructuring documents includes over $12 million (CAD) owed to conglomerate brands like Kering and LVMH alone.

Just weeks later, Highsnobiety announced it would permanently close its e-commerce division by year-end and lay off 50 employees, refocusing on editorial content, brand consulting, and cultural activations. Owned by Zalando, the Berlin-based company cited operational challenges, slowing consumer demand, and changing market dynamics.

They are not alone. Farfetch, Matches Fashion, LuisaViaRoma, and Yoox Net-a-Porter have all undergone bankruptcies, restructurings, or fire sales since 2024. For some, restructuring reflects recalibration, not extinction. But collectively, the trend signals fatigue in the multi-brand luxury model. Even conglomerates such as Saks Global and Neiman Marcus are struggling with liquidity and vendor payment delays. What was supposed to be the future of luxury, always on, everywhere available, has become a cautionary tale.

E-Commerce Growth Has Plateaued

Beyond luxury, e-commerce overall has entered a mature phase of slower growth. In the United States, online sales grew only 5.3% year-over-year in the second quarter of 2025, representing 15.5% of total sales. The first quarter of 2025 saw one of the slowest performances in a decade.

Globally, online sales are projected to reach 6.4 trillion dollars this year, but growth has slowed to under 7%, the lowest since 2022. The slowdown stems from several intersecting trends facing the channel.

• Logistics expenses – Major carriers such as UPS, FedEx, and USPS have implemented average general rate increases (GRIs) of approximately 5.9% for 2025, with some services like Parcel Select seeing hikes up to 9.2%.
• Legislative changes – The end of de minimis, eliminated the duty-free import exemption for imports below $800. Although that threshold has little impact on the luxury sector, it will significantly impact cross-border e-commerce sales. And of course new tariffs are squeezing margins.
• Return policy changes – An increasing number of retailers have modified their return policies to include fees in a tradeoff reducing convenience to minimize costs in response to tariffs. Online purchases face the highest return rates at an estimated 19.3%, nearly double that of in-store purchases.
• Market maturity – Nearly every consumer segment is already online, leaving little new ground for rapid expansion given market saturation.
• Consumer shifts – Shoppers are rediscovering the appeal of physical retail, with 61% of U.S. consumers saying they now prefer in-store experiences

The omnichannel model that once promised exponential reach has become an expensive balancing act. For luxury, which thrives on scarcity and mystique, this model can be fundamentally misaligned.

The Luxury Slowdown

The broader luxury market is also cooling. Global personal luxury goods sales are expected to decline by as much as 5% this year, marking the steepest contraction since the global financial crisis. After years of pandemic-era acceleration, this correction reflects normalization as much as crisis. Overpricing, credibility concerns, slowing demand in China, and consumers redirecting spending toward experiences and wellness are driving these downturns. Roughly 50 million customers have exited the luxury category since 2022.

There however have been a few exceptions. The most notable standout remains Hermès,

which continues to outperform peers through limited production, steady pricing discipline, and masterful storytelling. Hermès avoids digital discounting and maintains a controlled supply that ensures demand exceeds availability. Its success underscores a lesson the rest of the industry is relearning: exclusivity cannot be mass-distributed.

Even as Hermès posted strong Q3 2025 results with sales up 9.6%, and LVMH managed modest 1% overall growth, the broader e-commerce ecosystem has been decimated. LVMH’s fashion and leather goods division actually contracted 2% in Q3, following a 7% decline in the first half. Although Hermes, LVMH, Kering, and Richemont have each posted positive results, can this be sustained?

When Scarcity Meets Scale

Scarcity is luxury’s defining value proposition. Yet the logic of omnichannel distribution is rooted in scale, convenience, and constant availability. Selling “everywhere, to everyone” erodes the very essence of what makes luxury desirable.

In e-commerce, the more visible a product becomes, the less rare it feels. The constant accessibility of luxury goods undermines the sense of privilege that exclusivity depends on. The friction that once made luxury thrilling, the waitlist, the boutique appointment, the limited drop, has been replaced by an infinite scroll.

Luxury e-commerce platforms, by contrast, attempted to scale the unscalable. This tension explains why digital-first luxury platforms like SSENSE and Farfetch are faltering. Their multi-brand assortments and price transparency made once-aspirational goods feel transactional. When everything can be compared, the brand loses control of the story.

Not every multi-brand e-tailer suffered the same fate. Mytheresa, the Munich-based luxury platform that went public in 2021, has become the sector’s outlier success story. In the final quarter of its fiscal 2025 ending June, net sales grew 12 % for the quarter and 9% for the full fiscal year, while adjusted EBITDA surged 73%. Gross merchandise volume from its highest-spending clients, those shelling out 6 figures or more annually, jumped 16%. The company’s stock price climbed 17% in pre-market trading following the earnings release.

CEO Michael Kliger attributed the success to focus: “We didn’t know that this big slowdown in aspirational demand would happen, but we were well prepared.” Rather than chasing volume, Mytheresa doubled down on its top customers, and avoided the trap of competing on price. The company invested in building an algorithm to support this focus by identifying customers most likely to remain loyal long-term. It’s a radically different approach in an industry that typically measures success in conversion rates and customer acquisition costs.

The contrast is stark. While Mytheresa thrived by narrowing its focus, other players tried to be all things to all luxury shoppers, diluting positioning and competing on breadth rather than depth.

Why Omni Isn’t For Everyone

1. Managing ubiquity comes with risk. When consumers can buy a luxury item anywhere, it ceases to feel rare. The perception of privilege evaporates when accessibility increases.
2. Channel conflict and margin erosion. Managing pricing and inventory across retail, wholesale, and digital channels creates complexity that undermines profitability.
3. Capital intensity. The infrastructure behind omnichannel, warehouses, logistics, IT, data systems, is costly to maintain and difficult to justify in a low-growth environment.
4. Evolving consumer values. High-net-worth shoppers are increasingly prioritizing experiences and social signaling through travel, art, and wellness over material goods.
5. Curation over catalog. In luxury, smaller assortments paired with storytelling outperform endless digital shelves. Discovery has more value than convenience.

A Digital Divide In Luxury

The luxury industry’s next chapter will not be defined by being everywhere. It will be defined by being exactly where it matters most. The platforms that survive will be those that answer a simple question: Why would a customer buy from you instead of going directly to the brand? Having a selective digital presence, focusing on experience-first retail, and the curation of access through events like limited drops and waitlists will fuel loyalty.

The digital divide in luxury is no longer about who sells online and who does not. It is about who understands that digital scale and exclusivity are often incompatible. The failures of SSENSE, Highsnobiety, and Farfetch highlight a philosophical clash between luxury’s DNA and mass-market dynamics.

Physical retail, meanwhile, is rediscovering its purpose. Stores are no longer just points of sale but brand expressions, places to build relationships and create memories. Luxury brands are investing in flagship experiences such as Gucci’s Cosmos exhibits, Loewe’s Crafted World, Dolce & Gabbana’s Paris exhibition, Du Coeur à la Main, Prada’s cultural collaborations. These aren’t retail in the traditional sense. They’re brand-building exercises that happen to include a shop.

Luxury will not abandon digital. But its future lies in controlled access, not constant access. The most valuable channel is not the one with the widest reach, but the one with the most meaning.