After a year of contraction in 2024, the Canadian luxury apparel market is seeing a sharp rebound in 2025. According to new data from Trendex North America, total apparel sales increased 9.7 percent through August, far exceeding earlier forecasts of a modest 1.5 percent gain.
Luxury apparel sales, originally expected to rise between 1.6 and 2.2 percent this year, are now projected to grow between 3.9% and 5.6% by year-end.
Randy Harris, President of Trendex North America, said the turnaround was both welcome and surprising. “We thought growth of around two percent was reasonable, but the data now show a much stronger market than anyone expected,” he said. “The Canadian luxury apparel market is performing well above our early-year projections.”
A Surprising Upswing in Apparel and Accessories
The latest Trendex report attributes much of this momentum to surging specialty store and accessory sales. Through August 2025, specialty apparel store sales were up 10.9 percent, while women’s accessories climbed 11.5 percent — both strong indicators of renewed consumer spending on premium products.
At the same time, tourism is regaining traction. Visits from non-U.S. markets rose 6.0 percent year-to-date, with European tourism up 6.3 percent and Asian tourism 6.0 percent.
“These tourism gains matter,” said Harris. “Overseas visitors are vital to the performance of Canada’s luxury sector. Their spending power is a key factor in the rebound we’re seeing this year.”
Luxury imports from Germany, Italy, and France also stabilized in 2025. While import volumes remain lower than pre-pandemic levels, the rate of decline slowed compared to 2024, easing pressure on retailers dependent on European brands.
2024: A Year of Setbacks and Headwinds
The strength of 2025 follows a challenging 2024 when the Canadian luxury apparel market contracted 2.5 percent to C$2.7 billion. Trendex estimates women’s luxury apparel sales fell 8 percent to C$1.47 billion, while men’s luxury grew 7.6 percent to C$835 million. Purses and leather accessories accounted for C$418 million — or 15.3 percent of total luxury apparel sales.
Several factors weighed on last year’s performance. Economic uncertainty prompted aspirational consumers to delay purchases or trade down, while rising prices eroded value perceptions. Although non-U.S. tourism increased 5.7 percent, it failed to reach pre-COVID volumes.
“The luxury retail pipeline continued to expand last year, but demand did not keep pace,” said Harris.
Despite setbacks, 2024 did see several bright spots. New international luxury retailers entered Canada, Yorkdale Shopping Centre’s luxury wing neared full occupancy, Royalmount opened in Montréal, and both Holt Renfrew and Harry Rosen have advanced with renovations and new brand partners.
Industry Factors Driving the Rebound
Tourism and Urban Retail Momentum: Canada’s luxury retail recovery in 2025 is being driven in part by a sustained increase in international visitors, particularly from Europe and Asia. Tourist spending in urban centres such as Toronto, Vancouver, and Montréal has accelerated, benefiting flagship luxury stores and downtown shopping districts.
“The recovery in long-haul tourism is finally visible in sales data,” Harris noted. “It’s a leading driver for the Canadian luxury apparel market.”
Specialty Store Growth: Specialty retailers, including both mono-brand boutiques and high-end department stores, have been key beneficiaries. The segment’s 10.9 percent sales gain underscores that consumers are again gravitating toward premium shopping experiences.
“Specialty retail has been one of the strongest channels of the year,” Harris said. “The environment is more positive than it’s been in several years.”
The U.S. Market Effect: Trendex’s analysis of the U.S. luxury apparel market also influenced its revised Canadian forecast. During Q3 2025, major luxury groups including LVMH, Kering, Hermès, Zegna Group and Prada all reported higher U.S. sales. The spillover from American demand, Harris said, reinforces confidence among global luxury brands operating in Canada.
Projecting 2025 and Beyond
With retail performance strengthening and tourism improving, Trendex now expects Canadian luxury apparel sales to rise 4.5 to 6.1 percent in 2025. That would mark one of the strongest years since before the pandemic and a clear reversal from 2024.
Looking further ahead, Trendex projects the Canadian luxury apparel market will grow between 12.2 and 14.1 percent from 2024 through 2029.
Key variables include:
- The performance of new mixed-use luxury developments such as Oakridge Park in Vancouver.
- Continued recovery of European and Asian tourism.
- Growth in online luxury sales and its impact on in-store transactions.
- Expansion of resale luxury channels, which could draw spending from full-price stores.
- Evolving attitudes among millennials and Gen X consumers toward conspicuous consumption.
- The pace of economic growth and the value of the Canadian dollar.
“The combination of these factors will determine how much the market can sustain this new momentum,” said Harris.
Regional and Channel Dynamics
Luxury retail growth in 2025 remains concentrated in major urban centres, led by Toronto, Vancouver, and Montréal. However, Harris pointed to growing potential in Calgary and Edmonton, where consumer demand for luxury goods is rising.
He added that the luxury market is becoming increasingly polarized between two dominant channels: luxury large-format stores and mono-brand boutiques. Holt Renfrew and Harry Rosen together accounted for 45 percent of luxury apparel sales in 2024, while specialty chains such as Michael Kors represented 16 percent.
“The large-format store remains the anchor of Canada’s luxury apparel retailing,” Harris explained, “but the mono-brand channel continues to grow as global brands deepen their Canadian footprints.”
Industry Outlook
The new data signal renewed optimism for luxury brands operating in Canada after a difficult two years marked by inflation, higher costs, and retailer exits such as Nordstrom and Saks. While challenges remain, the current rebound suggests that Canada’s affluent consumers and visiting tourists are once again spending confidently on high-end apparel.
“The market has regained its footing,” Harris said. “Canada’s luxury apparel market while only 8.3% of the comparable U.S. market, however is performing well above expectations. The luxury apparel market here is more resilient than many realized.”
