Domenica Graci, CEO and founder of Travel Agency One Luxury, wears the Golden Vintage Alhambra Bracelet from Van Cleef & Arpels, Cartier’s Golden Love Bracelet, Cartier’s Golden Just un Clou Nail Bracelet, and Cartier’s Essential Line Bracelet.
Moritz Scholz | Getty Images Entertainment | Getty Images
The luxury retailer was set to carry out a transformation in 2025 after a promising fourth quarter marked by holiday shopping and post-election happiness. Instead, according to Citigroup data, US credit card spending on luxury goods fell during the first five months of the year compared to the same period in 2024.
In May, luxury spending remained above expectations, falling 1.7% year-on-year, compared to a 6.8% decline in April and an 8.5% decline in March. Expenses tailored to top luxury brands such as Hermeswhich extracted an increase of 0.2% each year, according to Citi’s analysis of a subset of transactions by more than 10 million US cardholders in the bank.
However, these benefits are not evenly distributed. Jewelry has proven to be a bright spot, and always outperforms other categories such as leather products and ready-made breeding.
According to City, monthly spending on luxury jewelry has been on the rise every month since September. In May, total luxury jewelry spending rose 10.1% year-on-year.
Furthermore, while other categories were supported by increased average spending by customers, jewelry was the only product type that also saw an increase in individual customers. However, within the jewelry category, the high-end brand cohort lost 2.7% of its customers, while the remaining people spent an average of 11.7% more.
City analyst Thomas Chaubett told CNBC that sales are likely supported by the recognition of gems as investment works. Jewelry can also bring more sentimental value, he said, as a gift or commemorating a milestone in life.
“When you have $3,000 to spend on luxury, are you going to buy jewelry or handbags for the same price?” he said. “Perhaps given the content of precious metals and their excellent emotional value and meaning, some of the jewelry gives you excellent and essential value.”
Chauvet added that the recent gold priced rights offer further justification.
“It’s probably wise to buy a Cartier bracelet, given that gold prices have been above 25% since the beginning of 2025 and the price is below 5%,” he said.
Meanwhile, handbag brands have steadily increased prices from 30% to 40% since the pandemic grew without consumers getting more money, he said.
“Handbags offer limited newness,” Chauvet said in a warning that the fall and winter 2025 collections showed some promise. “In the past five years, the shapes and styles of most bags, from Brand A to Brand B, have been extremely difficult to distinguish from each other.”
Luxury watch spending has earned some profits this year, but it’s less consistent than jewelry spending. All luxury watch brands saw an increase in spending by 14.7% compared to May 2024. However, the results for the Topwatch brand fell 10% per year in May.
The surge in Swiss Watch exports has been headlined, but Chaubet said it is primarily driven by retailers rushing their products to U.S. subsidiaries in response to President Donald Trump’s threatening a 31% tariff on Swiss goods.
The May spending rise may reflect a rise in consumer sentiment, but it is not necessarily a turning point for high-end shoppers, according to Chauvet. The stock market is bounced back, but the US dollar is down around 10% per year.
“We know that US consumers feel better about their lives when the dollar is strong,” he said. “An example of luxury is the ability to travel and spend luxuriously abroad is enhanced by strong dollars.”
Other potential threats to consumer spending are greater. Trump’s 90-day suspension of so-called mutual tariffs is less than two weeks since it expired, and the Iran-Israel conflict is shaking oil prices, Chauvet said.
