Luxury’s glow dims, pushing designers to refresh or get left behind

After nearly tripling its economic profit from 2019 to 2024, the global luxury market hit a snag last year, shedding nearly 50 million shoppers. In China, once the industry’s shining star, luxury sales dropped 18% to 20% as shoppers shifted their focus abroad and consumer confidence took a hit. Meanwhile, in the West, many aspirational buyers are keeping a tighter grip on their wallets as savings run dry and worries about inflation and tariff-induced price hikes grow. Now, some of luxury’s biggest players are starting to feel the pinch:

• LVMH, owner of over 75 brands including Louis Vuitton, Dior, and Tiffany, posted revenues of $23 billion for the first quarter of the year, a 2% drop year over year, as demand cooled in the US and Japan for its fashion and leather — not to mention the drink that makes up the “M” in its name.

• Kering has had an even rougher ride and reported dismal Q1 sales. Gucci, Kering’s top brand, saw revenue plunge 25%, with steep drops in the US and Asia as the brand struggled to connect with high-end buyers. In a bid to revive Gucci’s buzz, it tapped a controversial new artistic director, which didn’t go great for the stock.

• Hermès stayed in its own stratosphere, posting record Q4 revenue of $4.15 billion. The premium luxury giant now plans to hike US prices to fully offset President Trump’s tariffs, as demand for its iconic $15,000 Birkin bags and $1,000 belts continues to outstrip supply, despite copycats trying to muscle into its leather domain.