FT spoke about the “Chinese cooling” in the European luxury market

European luxury goods manufacturers have lost around €250 billion in market value since early 2026 amid weakening demand in China and stock market swings linked to concerns around AI. This writes the Financial Times (FT), citing data on the capitalization of companies, as well as comments from managers and analysts.

The newspaper's calculation included six European public groups - LVMH, Hermes, Kering, Richemont, Prada and Moncler. Their total capitalization decreased by €251 billion. The biggest losses came from LVMH and Hermès, at €131.6 billion and €93.3 billion, respectively.

Published in October, the results of LVMH, Hermès and Kering were worse than market expectations, although the forecasts have already significantly reduced. According to the newspaper, the reports confirmed fears that the industry is not yet emerging from a multi-year recession.

For more than a decade, Chinese buyers have been the “growth engine” of the industry. However, a protracted decline in the real estate market and weak stock dynamics have undermined demand. "The recovery in demand from Chinese luxury buyers that the industry had hoped for has stalled," Bernstein analyst Luca Salka said. According to him, this turned into a deterioration in results and pressure on quotes.

LVMH reported a 15% drop in sales of clothing and leather products to Chinese customers worldwide. “The slowdown is obviously largely driven by Chinese buyers. We hope it weakens. When — we are not sure, — said the financial Director of the group Cecile Cabani.

Kering, which owns Gucci, Saint Laurent and Bottega Veneta, saw sales to Chinese buyers drop 15-20 percent in the third quarter. In the second quarter, the decline was about 15%.

“Chinese cooling” affected including Hermès, writes the FT. Global sales of the Group’s ready-to-wear and accessories business decreased by 2%. CFO Eric du Algue attributed the complication of the situation, including the fall of the Chinese stock market and tightening control over foreign assets of wealthy citizens.

Berenberg analyst Nick Anderson said Hermez's reporting left him "more questions than answers." He expressed fears that dependence on China and buyers seeking to join the luxury will continue to restrain the company's revenue.

At the same time, certain categories continue to grow, writes the FT. Sales of Birkin bags and other high-end Hermès models increased by 10.8%. Jewelry brands Tiffany, part of LVMH, and Boucheron, owned by Kering, posted double-digit sales growth for the quarter.

In the U.S., which supported the industry earlier in the year, demand also weakened amid cooling stock markets and rising gasoline prices. According to Citi Bank’s data on bank card transactions, luxury spending fell by at least 4% in each of the three months of July, August and September. Hermès said its U.S. customers continued to spend about as much as before.

In mid-October, Reuters estimated the capitalization reduction of ten European luxury companies at about $350 billion since the beginning of the year. It was about participants in the STOXX Europe Luxury 10 index - a wider range of companies than in the FT calculations.

On October 22, Hermez shares were down 5% in early trading after the publication of quarterly results, Reuters reported. Group revenue excluding currency fluctuations increased by 4.3%, to €4.1 billion, while analysts polled by Visible Alpha expected growth of 5.2%. Du Algue described the situation in the Chinese market as “very difficult”, but stressed that the company remains confident in its long-term prospects and will continue to invest in China.