Luxury brands suffer as tourism slumps in Europe and Japan
Last year saw a surge in luxury sales fueled by tourist activity, as Chinese shoppers flocked to Japan when the yen was at a 30‑year low, the paper wrote on Monday. Meanwhile, American consumers benefited from a strong dollar and increased their luxury spending in Europe.
Those trends have reversed in 2025, as the yen has strengthened and the US dollar weakened amid tariffs imposed by US President Donald Trump, the FT noted.
Speaking to the paper, Cécile Cabanis, chief financial officer at LVMH, which owns Louis Vuitton and Dior, attributed a 9% organic decline in Q2 sales for its fashion and leather goods division to changing tourist patterns. 'Spending by American tourists slowed down very strongly,' she said, adding that declining tourist sales in Japan could not be offset by local demand.
The FT noted that US demand could weaken further amid expectations that imported goods will become more expensive due to Trump's tariffs. Investment firm Bernstein revised its 2025 luxury revenue forecast from 5% growth to a 2% decline to reflect this outlook.
Bernstein analyst Luca Solca said the downturn in tourist shopping points to broader problems in the industry, which raised prices beyond inflation during years of strong demand. 'Luxury consumers are still looking for value – Chinese tourists are not in Japan because they want to go see Mount Fuji,' he is quoted as saying. 'Too many luxury brands pushed too many price increases.'
Despite market pressure, brands like LVMH have been hesitant to adopt discounting strategies, maintaining their focus on exclusivity and high margins through premium pricing.
According to a Bain & Company report from last year, the global luxury customer base contracted by roughly 50 million consumers between 2022 and 2024, declining from approximately 400 million to 350 million. It attributed the decrease to economic uncertainty and rising prices.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Russia Today
10 hours ago
- Russia Today
Lukashenko slams ‘stinky EU'
Belarusian President Alexander Lukashenko has accused the 'stinky' European Union of deliberately obstructing Ukrainian grain exports and suggested that Minsk should take control of the transit routes to ensure deliveries reach developing countries. In an interview with Time magazine published on Friday, Lukashenko claimed the EU was blocking efforts by the US and Russia to revive the Black Sea Grain Initiative and redirect shipments through overland routes. 'They [the EU] don't want that, those stinkers,' Lukashenko said, alleging the bloc was 'afraid the grain will end up on the [Western] European market.' Lukashenko insisted that sea routes through the Black Sea remain unsafe due to naval mines near the port of Odessa and praised a proposal by US President Donald Trump to ship grain overland via Poland or Germany. However, he insisted that Belarus should oversee the process instead. 'On the contrary, it is necessary to involve Belarus in this process, so no grain is transported through the stinky EU,' he said. Lukashenko also claimed Minsk could provide 'full control' over shipments, guaranteeing that grain intended for Africa would not be diverted to Western Europe. The original grain deal, brokered in July 2022 by the UN and Türkiye, collapsed in 2023 after Moscow accused Western powers of failing to uphold their side of the agreement, particularly on Russian fertilizer and food exports. Washington and Moscow have since held discussions about reviving the agreement under new terms, including rerouting shipments through alternative corridors. In March, the EU rejected Russian demands to lift sanctions on the Russian Agricultural Bank, a key condition for Moscow's return to the deal. The Kremlin said the refusal demonstrated the bloc's unwillingness to help end the Ukraine conflict Lukashenko, who has led Belarus since 1994, has positioned himself as a mediator and transit partner in ongoing regional negotiations.
Russia Today
a day ago
- Russia Today
Beijing brushes off Trump's tariff threat
The Chinese Foreign Ministry has dismissed US threats of additional trade tariffs over its purchases of Russian oil, saying Beijing will continue to act in line with its national interests. US President Donald Trump has targeted major buyers of Russian crude, including India and China, claiming such trade helps sustain the conflict in Ukraine. His administration has also promoted tariffs as a way to counter what it considers unfair trade practices by other countries. Foreign Ministry spokesman Guo Jiakun said Friday that Beijing's partnership with Moscow remains 'consistent and clear.' 'It is legitimate and lawful for China to engage in economic, trade and energy cooperation with other countries, including Russia,' Guo told reporters at a regular briefing. 'We will continue to take energy supply measures that are right for China based on our national interests.' China and Russia have described their relationship as an unprecedentedly close strategic partnership rooted in mutual respect and compromise toward shared goals. Both have accused Washington of pursuing unilateral gains at the expense of others and seeking to derail the emergence of a multipolar world order. India has also rejected Washington's tariff pressure, calling it 'unfair, unjustified and unreasonable.' Brazil, another major economy hit by the US tariffs, has criticized the measures as well. Trump has linked his late July move against Brazil to the prosecution of former President Jair Bolsonaro, who is accused of plotting to overthrow his successor, Luiz Inacio Lula da Silva. Brazil, China, India and Russia are the founding members of BRICS, a group of large non-Western economies. Trump has accused the organization of trying to undermine the US dollar's role as the global reserve currency, and has threatened to introduce punitive tariffs against its members.
Russia Today
2 days ago
- Russia Today
The EU are ‘stinkers'– Lukashenko
Belarusian President Alexander Lukashenko blasted the EU for blocking Ukrainian grain exports, while praising the US for twisting Brussels' arm. He accused the bloc of halting shipments to shield its own markets and suggested that Minsk should be given oversight powers to ensure Africa-bound grain stays out of Europe. In an interview with Time magazine released on Friday, Lukashenko accused the EU of standing in the way of Russian and US efforts to revive the Black Sea Grain Initiative. The original deal, brokered by the UN and Türkiye in July 2022, was aimed at ensuring safe passage for Ukrainian grain exports in exchange for lifting restrictions on Russian food and fertilizer trade. Moscow pulled out in 2023, accusing the West of failing to uphold its part of the bargain. Earlier this year, American and Russian officials agreed to reboot the initiative as part of a broader effort to settle the Ukraine conflict. Lukashenko said Black Sea navigation remains unsafe due to mines near Ukraine's Port of Odessa. Noting that US President Donald Trump has proposed routing grain shipments through Poland or German ports instead, the Belarusian president asserted, 'On the contrary, it is necessary to involve Belarus in this process, so no grain is transported through stinky Europe.' 'Did they [the EU] let it through? No – they're afraid the grain will end up on the European market,' he said, adding that 'Trump is right to lean on' the bloc. He argued that the overland route was the only viable option but noted that the EU was deliberately obstructing it. Belarus could provide 'full control' and guarantee that not a single speck of grain intended for Africa would end up in the EU, he asserted, stressing that the EU 'don't want that, those stinkers,' Lukashenko emphasized. In March, the EU rejected Moscow's demand to lift sanctions on the Russian Agricultural Bank as part of a ceasefire initiative discussed between Moscow and Washington. The Kremlin said the move showed the bloc's reluctance to end the Ukraine conflict. The EU initially scrapped tariffs on Ukrainian agricultural exports after the conflict escalated in 2022, but reimposed restrictions after the imports flooded Eastern European markets, sparking widespread farmer protests.
