Labubu’s craze is fading fast—Pop Mart stock crashes 40%, fashion fatigue hits collectors

Labubu went from unchallenged collector’s item to industry cautionary tale in just months. Pop Mart’s stock has crashed 40% since hitting its August peak, wiping out billions in market value. What started as Gen Z’s hottest trend is now facing harsh economic reality.

The Labubu Bubble Bursts Faster Than Expected

The designer toy phenomenon exploded across social media in early 2025, becoming a cultural obsession rivaling past collectible crazes. Pop Mart capitalized on the hype, with its Hong Kong-listed stock soaring 209% year-to-date by mid-September before reality set in. The company’s first-half revenue skyrocketed to 13.9 billion Chinese yuan ($2 billion), dwarfing the entire 2020 annual sales.

By December 2025, the unthinkable happened. Labubu mania began to fade with shocking speed. The cute wide-eyed dolls that once sold out within seconds of dropping online now sit on shelves. Secondary market prices collapsed, signaling that collectors who paid premium money aren’t seeing returns. The warning signs were there in the data—and investors finally noticed.

Revenue Growth Halved in Brutal Holiday Slowdown

North America performance tells the story of a craze running out of steam. According to YipitData alternative intelligence, the company’s region saw revenue growth decelerate dramatically. In the quarter through December 6, 2025, growth fell to 424%—still impressive by normal standards but a devastating decline from the previous quarter’s 900%+ growth rate.

This wasn’t just a minor slowdown. The halving of growth momentum during peak holiday shopping season—when consumer spending typically surges—raised red flags among analysts. If Labubu couldn’t maintain fever-pitch demand when people had cash and shopping lists, when would it succeed? Short-sellers began positioning themselves against the stock, convinced the worst was coming.

Fashion Fatigue Replaces Frenzy as Collectors Move On

Perhaps most damaging to Pop Mart’s long-term outlook is the emergence of brand fatigue among the core fanbase. Collectors report losing interest not because the dolls lack quality, but because market saturation destroyed the exclusivity. Limited edition drops became less limited. Resale premiums evaporated. The psychological thrill of owning something rare and valuable simply disappeared.

Fashion fatigue is particularly deadly for collectible markets. Unlike traditional toys designed for play, Labubu dolls succeed only when buyers believe they’re acquiring investment-grade assets. Once that belief cracks, sales spiral downward. Consumers who bought at premium resale prices of $100-$300 watched their purchases plummet to retail levels or below. The incentive to buy more vanished overnight.

Industry observers began drawing parallels to the Beanie Babies bubble of the 1990s—a cautionary tale of collectible madness where parents remortgaged homes for stuffed animals that later traded for pennies. The comparison rattled investors just enough to trigger the exodus.

Wall Street Already Warned About This in September

JPMorgan Chase had already sounded the alarm by mid-September 2025 when the stock still seemed unstoppable. The bank downgraded Pop Mart to Neutral, trimming its December 2026 price target from HK$400 to HK$300. Analysts cited valuation concerns, noting the stock was “priced for perfection” and vulnerable to disappointment.

At the time, many investors dismissed the downgrade. Pop Mart stock had surged 209% year-to-date, and the company was still posting explosive revenue growth. Surely this was just a bank being overly cautious? Three months later, JPMorgan’s warnings looked prescient. The bank saw what others missed: unsustainable hype momentum eventually collides with consumer spending reality.

By late December 2025, JPMorgan’s thesis dominated market conversation. Institutional investors, spooked by the slowing North American growth rate, finally capitulated to the bearish narrative.

What Comes Next for Labubu and the Collectible Toy Market?

Can Labubu recover from this fall? Industry experts remain divided. Some argue the dolls will stabilize at lower valuation multiples and continue selling at healthy volumes—just without the speculative premium. Pop Mart would become a profitable but ordinary collectible brand rather than a get-rich-quick scheme for resellers.

Others warn the brand has entered terminal decline. Once collectors detect a downturn, psychology works against recovery. Each new price drop signals to remaining buyers that they’re on the losing side of a trade. Momentum flips from positive to catastrophic.

Pop Mart did maintain strong fundamentals—$4.2 billion projected 2025 revenue still represents extraordinary growth for a designer toy company. But the stock market cares about expectations and trajectory. Four-hundred-percent growth that falls to 400% is a collapse in investor eyes, regardless of absolute scale. The narrative shifted from “unstoppable phenomenon” to “fading fad,” and market psychology is unforgiving.