Luxury Market Faces Turmoil Amid Tariff Threats and Declining Sales
The luxury market braces for another decline in sales, influenced by U.S. import tariffs and dwindling demand in key markets. Brands like LVMH and Kering report sales drops, while others adapt with lower-priced products. Investor confidence wavers amid uncertainty and changing consumer preferences.
LVMH and Kering are poised to reveal further declines in quarterly sales, exacerbating concerns around a downturn in the $400 billion luxury market due to potential U.S. import tariffs.
As LVMH prepares to release results this Thursday, it appears that a resurgence in high-end fashion demand in pivotal U.S. and Chinese markets is still unattainable. Economic uncertainty tied to President Trump's trade policies has roiled stock markets, impacting consumer confidence adversely.
The looming 30% tariffs on EU imports pose a significant threat to luxury brands producing in France and Italy. Although they hesitate to raise U.S. prices after previous hikes dampened demand, brands like Louis Vuitton and Prada are pivoting to offer more affordable products. Experts indicate this adjustment might add to worries about brand consistency.
(With inputs from agencies.)
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