STORY: Luxury brands have endured their biggest slump in years.
There was some hope wealthy Americans might pull the $400-billion-a-year industry out of its current lull…
But fears have grown President Trump’s tariff blitz will plunge the world into recession, and hit the luxury sector.
One Wall Street analyst now expects worldwide sales of luxury goods will fall by as much as 2% this year.
That’s down from a previous forecast for 5% growth.
If it proves accurate, it would mark the industry’s longest downturn in more than two decades.
Trump’s tariffs were more sweeping than many market players feared, and led to retaliation from China.
Shares in luxury sector leader LVMH are down 2% since the start of the year.
While Gucci owner Kering has dropped close to a third, and Hermes and Cartier owner Richemont have also sunk.
All eyes will be on LVMH when it kicks off first-quarter financial reports on April 15.
Key rivals follow soon after with their own numbers.
LVMH’s Louis Vuitton had hoped sales growth from wealthy Americans would help offset weak demand in China.
But signs of weakness emerged even before Trump’s tariffs.
Citi data released Tuesday showed U.S. credit card spending on luxury brands fell 5% in March and February, year-on-year.
Some market watchers had warned at the start of April about growing “luxury fatigue” and falling U.S. consumer sentiment.
Groups like LVMH, Kering and Richemont are expected to draw on their brands’ pricing power to shield profits from tariffs.
But investors worry shoppers who can afford $10,000 leather handbags and gold bracelets could tighten their purse strings against a darkening economic backdrop.
