Has luxury fashion lost its appeal? Signs of shopper fatigue persist
LVMH and Kering are expected to report another drop in quarterly sales, deepening investor worries about a prolonged downturn in the US$400bil (approximately RM1.7tril) luxury market as brands face the threat of hefty US import tariffs.
The results, kicking off with LVMH on Thursday (July 24), will likely show that any revival in demand for pricey fashion in the key US and Chinese markets remains elusive.
Uncertainty unleashed by US president Donald Trump's trade war has caused volatility in stock markets, weighing on consumer confidence.
Trump's threat of 30% tariffs on imported EU goods risks hurting luxury houses that make products in France and Italy.
They will be wary of lifting prices for US consumers after signs that previous rounds of price hikes slowed demand.
"The level of price increases has been too much" at a number of brands, alienating the "aspirational" middle-income shoppers, said Caroline Reyl, head of premium brands at Pictet Asset Management.
Read more: Fashion's new power move? Turning away from influencers and the overhyped
Decline in sales
LVMH's fashion and leather goods division, home to Louis Vuitton and Dior, is expected to show sales down 6% year-on-year, its fourth consecutive quarterly decline, according to a Visible Alpha consensus forecast.
Gucci, Kering's main earner which is undergoing an overhaul, has struggled for twice as long and is seen reporting sales down nearly a quarter from a year earlier.
After two years of slowing sales, unease about the health of the industry is growing, with customers baulking at higher price tags.
Shares of LVMH are down nearly 27% since the start of this year, while shares of Kering are down 15%.
Shares of Hermes and Richemont, which cater to mostly wealthy clients, were little changed, with the former down 0.9% and the latter up 1.6% over the same period.
LVMH, Europe's most valuable listed company as recently as January, has slipped to fifth place.
"It seems that investors are starting to worry about the long-term structural attractiveness of the industry," UBS analysts said last week.
Sales of handbags – previously a growth engine – have been weak as shoppers opt for timeless, investment-grade jewellery.
Brands including Dior, Gucci and Chanel have recruited new designers, but it takes time for fresh styles to enter stores.
Read more: Less-expensive luxury fashion brands are slowly gaining ground, but why?
Lower-priced products
Brands like Louis Vuitton and Prada are offering more products below $1,000, like a new hybrid ballerina-sneaker shoe, for example, and emphasising beauty products, said Bain consultants.
But that carries risks.
"The aspirational skew of the brand is unhelpful currently," said HSBC analysts, highlighting problems at Louis Vuitton. "Some inconsistencies, we feel, are likely starting to have consumers wonder."
Consensus forecasts peg organic sales of LVMH down 3%, while Kering is seen down 13%; Hermes and Prada are expected to show a 10% rise, as Prada's Miu Miu label takes market share from rivals.
Kering will report its results on July 29, while Hermes and Prada are due to report on July 30. – Reuters
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Borneo Post
40 minutes ago
- Borneo Post
Chinese startup brings cutting-edge AI glasses to the masses
Zhu Mingming, founder and CEO of Rokid, a Hangzhou-based technology company, poses for a photo at Rokid's flagship store in Yujiang District of Yingtan, east China's Jiangxi Province, July 10, 2025. (Xinhua/Liu Jinhai) NANCHANG (July 28): A decade after founding Rokid, entrepreneur Zhu Mingming turned heads at an economic forum in February with a simple remark: 'My speech is in my glasses, so I don't need a transcript.' Standing casually behind the podium in a hooded sweatshirt, Zhu confidently told the audience he was using a smart ring to flip through virtual slides on his AI glasses. Within hours, the clip went viral on Chinese social media, sparking a wave of inquiries from viewers eager to know where they could buy the product. Zhu, known as 'Misa' in tech circles, recently showcased the same model, Rokid Glasses, at an experience store in his hometown, Yujiang District of Yingtan City, in east China's Jiangxi Province, a region long regarded as a trade and production hub for eyewear. What made that February moment stand out wasn't just the technology; it was how seamlessly the glasses blended into everyday life. 'While I'm speaking here, I'm also checking my WeChat messages on a virtual screen right in front of my eyes, and you probably didn't even notice,' he said at the store. 'In the past, many people wanted smart glasses, but they were either too bulky, too clunky, or their AI capabilities were not strong enough, so in the end, they were little more than a Bluetooth headset,' Zhu said. Unlike those early models, the new-generation Rokid Glasses weigh just 49 grams, resemble regular eyewear, and offer robust battery life. Zhu credits much of this progress to rapid AI advancements in recent years. Zhu encouraged visitors at the store to try on the smart glasses. 'Give them a try, and you'll decide for yourself whether they could become an everyday device like smartphones in the future,' he said. 'A good product should first be a good pair of glasses,' Zhu added. 'Then a good headset, a good camera, and ultimately, a great AI device.' In addition to browsing social media and watching videos, the device can project real-time captions, translations, navigation prompts, and AI-generated answers directly onto the lens, powered by leading Chinese AI models such as DeepSeek and Doubao. With simple voice commands, users can ask for directions, identify objects, receive call notifications, or even solve math problems, without ever reaching for their phone. A staff member demonstrates a pair of smart glasses developed by Hangzhou-based technology company Rokid at Rokid's flagship store in Yujiang District of Yingtan, east China's Jiangxi Province, July 10, 2025. (Xinhua/Liu Jinhai) 'It's rare, even globally, for a company to develop such a highly integrated and fully functional product in such a lightweight form,' Zhu said. 'That's only possible because we've stayed committed to this path for the past 10 years.' Around 90 percent of Rokid's funding goes into research and development (R&D), which makes it a highly R&D-driven company even by global standards. 'Our booth is very popular in the Consumer Electronics Show in Las Vegas,' Zhu said. He noted that Rokid aims to make smart glasses an affordable everyday tech product. Priced at around 3,000 yuan, they are far more accessible than many international models that cost over 10,000 yuan. While similar products from other companies failed to win over consumers, Rokid is now facing the challenge of fulfilling orders on time, with over 300,000 units already sold. 'We didn't expect to be overwhelmed this quickly,' Zhu admitted. He is convinced that smart glasses are set to become the next transformative platform after smartphones. However, he acknowledges the industry is still in its early stages, with the main challenge being educating the market to attract more users. With a series of Rokid's innovative products in tow, Zhu is taking his next big step in his hometown. Yujiang is home to over 260 eyewear companies and ranks among China's top five optical manufacturing bases. But most of its industry remains focused on trade and conventional manufacturing. Rokid has signed a strategic agreement with the local government and plans to establish a production base, integrate the local supply chain, and forge cooperation with local colleges to train a new generation of technicians. 'The talent is already here,' Zhu said. 'People in Yujiang understand eyewear. Now we just need to help them understand smart glasses.' Zhu acknowledged the journey won't be quick, but he remains optimistic. 'If we can help transform the local traditional eyewear industry into a more innovative one, that would be the most rewarding outcome of all.' – Xinhua AI glasses artificial intelligence China technology
The Star
2 hours ago
- The Star
2nd LD Writethru: U.S., EU seal trade deal amid concerns over tariff imbalance
LONDON, July 27 (Xinhua) -- U.S. President Donald Trump and European Commission President Ursula von der Leyen claimed Sunday that they had reached a trade deal under which the United States would impose a baseline tariff of 15 percent on European Union (EU) goods. The announcement was made at a joint press briefing Sunday afternoon following trade talks at the Trump Turnberry in South Ayrshire, Scotland. Although both leaders described the deal as a step toward restoring "trade balance" and promoting more equitable two-way commerce, the agreement allows the United States to impose a broad 15 percent tariff on EU goods while securing zero-tariff access for a range of strategic American exports. In contrast, the EU has pledged to purchase 750 billion U.S. dollars' worth of American energy and commit an additional 600 billion U.S. dollars in investments in the United States. At the press briefing, Trump claimed the agreement would enable American cars to re-enter the European market and make U.S. agricultural exports more accessible in the EU. He also said that pharmaceuticals were excluded from the agreement, while existing 50 percent tariffs on EU steel and aluminium exports to the United States will remain in place. However, at a separate press briefing, von der Leyen clarified that the EU and the U.S. had agreed to include pharmaceuticals under the 15 percent tariff framework. She did not rule out the possibility of further U.S. trade actions in the future. When asked whether a 15 percent tariff for EU carmakers-up from 2.5 percent under the Biden administration-was a favorable outcome, von der Leyen responded that, prior to this agreement, European vehicles faced a total tariff of 27.5 percent when entering the U.S. market. This included a 25 percent levy imposed during Trump's previous term in addition to the original 2.5 percent. The new 15 percent rate, she argued, represents a reduction from that level. Bernd Lange, chair of the European Parliament's Committee on International Trade, criticized the newly reached deal as "unsatisfactory" and "significantly imbalanced," warning that it could undermine the EU's economic stability and job security. "This is a deal with a slant. Clearly, concessions have been made that are difficult to bear," Lange said in a statement on Sunday. Prior to the agreement, over 70 percent of EU exports to the United States were subject to tariffs, including 50 percent on steel and aluminium, 25 percent on automobiles and parts, and a 10 percent duty on most other goods. Trump had warned that if no deal was reached by Aug. 1, the 10 percent tariff would be raised to 30 percent.
The Star
3 hours ago
- The Star
1st LD: U.S., EU reach trade deal: Trump, EU chief
LONDON, July 27 (Xinhua) -- U.S. President Donald Trump and European Commission President Ursula von der Leyen claimed Sunday that they had reached a trade deal under which the United States would impose a baseline tariff of 15 percent on European Union (EU) goods. The announcement was made at a joint press briefing Sunday afternoon following trade talks at the Trump Turnberry in South Ayrshire, Scotland. Pharmaceuticals were excluded from the agreement, while existing 50 percent tariffs on EU steel and aluminium exports to the United States will remain in place. Although both leaders described the deal as a step toward restoring "trade balance" and promoting more equitable two-way commerce, the agreement allows the United States to impose a broad 15 percent tariff on EU goods while securing zero-tariff access for a range of strategic American exports. In contrast, the EU has pledged to purchase 750 billion U.S. dollars' worth of American energy and commit an additional 600 billion U.S. dollars in investments in the United States. At the press briefing, Trump claimed the agreement would enable American cars to re-enter the European market and make U.S. agricultural exports more accessible in the EU.
