European luxury market leaders have lost $350 billion since the beginning of the year

The ten largest European manufacturers of luxury goods have lost about $350 billion in total market value since the beginning of 2026. The reason was a prolonged decline in the industry and weakening demand in China, Reuters writes, citing market data.

These are the companies in the STOXX Europe Luxury 10 index. Investors’ hopes of reviving the luxury goods market have not materialized, and China, which has long provided sales growth, continues to experience economic difficulties.

Spanish industry publication Modaes also reported a reduction in the capitalization of European luxury goods manufacturers. The publication notes that companies for several years increased prices for their products, which allowed to increase revenue, but at the same time made goods less affordable for buyers.

Especially noticeable is the fall in shares of the French concern LVMH, which owns the brands Louis Vuitton, Dior, Tiffany, Bulgari, Moët and Hennessy. Since the beginning of the year, the company’s securities have fallen by more than 40%, showing the worst dynamics compared to other major market participants.

This week, LVMH presented results for the third quarter. According to its results, revenue of the LVMH fashion and leather goods division amounted to €8.24 billion, a decrease of 2.96% in annual terms. Organic sales fell by 5%, which was worse than analysts’ expectations. The group's total revenue reached €18.5 billion, an increase of 1.22%, and organic growth was 1%, Vogue reports, citing the company's reporting.

According to the publication, sales of LVMH in Asia excluding Japan decreased by 5%, while in the United States grew by 5%, in Europe - by 4% and in Japan - by 6%. Even before the publication of the quarterly report, Vogue drew attention to the scale of the fall in the value of the largest manufacturers of luxury goods. Since the beginning of the year, LVMH shares have fallen by 40%, Hermès by 39%, and Kering by 30%. At the same time, the value of Richemont's shares remained virtually unchanged.

HSBC analysts, whose estimates Vogue refers to, predicted a slowdown in sales growth of the eight largest luxury companies in the third quarter to 2.7% against 7% a quarter earlier. Excluding Richemont, expected growth was only 1.1% after 5.1% in the second quarter.

Reuters notes that the decline has been going on for several years. The combined capitalization of Europe’s four largest luxury goods manufacturers – LVMH, Hermès, Gucci’s owner Kering, and Richemont – has almost halved from around 2024.

At the same time, Richemont, which specializes mainly in watches and jewelry, was more resilient to the overall decline in the value of companies in the industry. According to Modaes, the group, which owns Cartier and Van Cleef & Arpels, has benefited from a more favorable situation in the jewelry segment.

The fall in LVMH shares also affected the state of the head and main owner of the concern Bernard Arnault. According to Forbes, which refers to Reuters, the French billionaire lost several billion dollars.

In May, the Financial Times reported that LVMH, amid declining demand for luxury goods, was considering selling a number of assets, including fashion house Marc Jacobs and a stake in cosmetics brand Fenty Beauty. The publication called the decline, which has continued since 2023, a "winter of luxury." Among its reasons are the end of the consumer boom after the pandemic, the decline in disposable incomes and the multiple rise in prices.