Europe's major luxury goods groups have experienced a sharp decline in value since the beginning of the year due to weakening demand in China and volatility in stock markets. According to calculations based on Financial Times market data, company executives, and analysts, the total market value of LVMH, Hermès, Kering, Richemont, Prada, and Moncler has decreased by 251 billion euros since the beginning of 2026.
LVMH and Hermès accounted for the largest share of the losses. Among the six companies, LVMH's market value saw an erosion of 131.6 billion euros, while Hermès' market value fell by 93.3 billion euros. The results announced by LVMH, Hermès, and Kering in October fell short of market expectations, even though forecasts had been lowered previously.
RECOVERY IN THE CHINESE MARKET HAS WEAKENED
The slowdown among Chinese consumers, who have been the main source of growth for the luxury sector for many years, has begun to reflect more clearly in balance sheets. The prolonged stagnation in China's real estate market and the weak performance of stocks are suppressing the spending appetite of the high-income group.
Bernstein analyst Luca Solca assessed that "the recovery in Chinese luxury consumer demand, on which the sector pinned its hopes, has stalled." According to Solca, this situation is both weakening company profits and creating pressure on share prices.
LVMH reported that its global sales of clothing and leather goods to Chinese customers have declined by approximately 15 percent. The company's Chief Financial Officer, Cécile Cabanis, stated that the slowdown is "largely due to Chinese buyers" and noted that they are unsure when this will ease.
Sales to Chinese customers also continued to decline at Kering, the owner of Gucci, Saint Laurent, and Bottega Veneta. Following a decline of approximately 15 percent in the second quarter, the drop increased to the 15 to 20 percent range in the third quarter. In Hermès' ready-to-wear and accessories division, global sales fell by 2 percent.
Hermès Chief Financial Officer Eric du Halgouët described the picture in the Chinese market as "very difficult." According to Reuters, Hermès shares lost 5 percent of their value at the start of the session following the quarterly results announced by the company on October 22. Although currency-adjusted revenue rose 4.3 percent to 4.1 billion euros, analyst expectations were for 5.2 percent growth.
Despite the general pressure in the sector, some categories are diverging. While sales of Hermès' Birkin bags and other high-priced models increased by 10.8 percent, Tiffany, under the LVMH umbrella, and Boucheron, owned by Kering, recorded double-digit sales growth throughout the quarter. In the US market, it is stated that the cooling in stock markets and rising gasoline prices are curbing spending on expensive products.
News Source: 12punto
