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Berenberg analysts warn that the luxury sector is facing a deeper slowdown than previously expected, Bloomberg writes. The pressure on buyers who are ready to purchase premium goods but remain price-sensitive is especially noticeable.
Against this background, investors are advised to be cautious in assessing the prospects of luxury companies, even despite their high profitability.
The world’s largest brands are under pressure
LVMH, Hermès and Christian Dior are among the companies most often mentioned in the context of the market slowdown.
For example, Hermès shares fell 14% in a day in April, the biggest drop for the company in its history. LVMH, which operates the Christian Dior, Louis Vuitton, Hennessy and other brands, saw its revenue fall 2% in the first quarter of 2026.
Analysts cite a decline in sales in the Middle East due to the war in Iran as a key factor. Hermès’ sales in the region fell by 5.9%.
An additional trigger was the weakening of demand in China, one of the key markets for the luxury industry. Buyers have become more cautious about expensive purchases, and the effect of scarcity and exclusivity no longer provides the previous level of excitement, notes Bloomberg.
According to analysts, the sector may enter a period of more moderate growth after years of rapid expansion.
Luxury-industry has long been considered one of the most stable segments of the global consumer market. The situation shows that even ultra-premium brands are beginning to depend on changing customer sentiment and global economic uncertainty.
For the market, this is also becoming a signal that endless price increases are no longer a guarantee of profit growth and capitalization.
“Greedoflation” and “luxury shame”
Bloomberg columnist Angelina Rascue names among the main reasons for the cooling of demand the negative reaction of buyers to the sharp rise in the price of luxury goods. In the Western business press, the term greedflation is used for this phenomenon
Luxury brands have often raised prices at a rate that is noticeably higher than natural inflation. From 2020 to 2025, the prices of many premium items increased by 120-200% in the expectation of “exclusivity” and super-rich customers. For example, the price of Louis Vuitton’s Pochette bag tripled from 2019.
Another reason for the fall in sales of luxury brands analysts call “luxury shame”. Even very rich people are less and less willing to distinguish themselves by the level of their consumption. This trend has become especially noticeable in China, where businessmen do not want to draw attention to their wealth.
At the same time, the Bloomberg piece makes a caveat that demand for premium goods continues to grow in the United States and Russia, which remains one of the few factors supporting the market.
For the global luxury market, the beginning of 2026 may mean the end of the era when the status of the brand itself guaranteed steady sales growth regardless of the price level.
