In 'an uncertain world', luxury groups wary of 2026

Paris (France) - Following a "turbulent" 2025 and in "an uncertain world", caution is the watchword for 2026 in the luxury sector, where major French groups have published mixed results.

"The past year was 'turbulent economically and geopolitically (...) and 2026 will not be very simple either, but one thing at a time'," stated Bernard Arnault, the chief executive officer of the world's number one luxury group LVMH, during the presentation of the group's results at the end of January. "In the short term, it is very difficult to make a serious forecast," he added.

"With the ongoing geopolitical crises, economic uncertainty, and the policies of certain states—including our own—that are rather anti-business, taxing them to the maximum and thus creating unemployment, I think there is reason to be a little reserved" for 2026, Arnault continued.

LVMH (Louis Vuitton, Dior, Moët Hennessy, Tiffany...) announced a 13 percent drop in net profit for 2025, to 10.9 billion euros. This was notably penalised by the exceptional surcharge imposed on large companies to restore French public finances. The group's turnover in 2025 fell by 5 percent to 80.8 billion euros.

Competitor Hermès expressed similar caution. "It would take a very clever person to have such a precise plan in this very uncertain world," replied the group's executive chairman, Axel Dumas, to a journalist asking if the Asian market could take over from the United States as a driving force for the year 2026.

China, long a driver of luxury sales, has been experiencing a slowdown for some time. In 2025, the United States was disrupted by tariffs imposed by President Trump.

Something is always happening somewhere

"I cannot make a projection for 2026," added Dumas. "We have returned to a world where every two years there is a problem somewhere, a region that stalls," according to the group's executive chairman. The group published a net profit decrease of 1.72 percent to 4.5 billion euros, also penalised by the exceptional surcharge, and a sales increase of 5.5 percent to 16 billion euros.

"At one point, there was a major change: Covid-19, where all regions came to a standstill, and post-Covid-19, where all regions were operating simultaneously," he explained. Today, "I find myself back in what was the beginning of my career, where something is always happening somewhere," he noted.

Meanwhile, Kering, which is undergoing a major restructuring and owns brands such as Gucci, Yves Saint Laurent, Bottega Veneta and Balenciaga, announced a 13 percent drop in sales and a net profit that was more than ten times lower.

"This does not mean that China will not be an important market, but we need to understand how they will spend their money. We no longer see the kind of almost bulimic consumption that existed ten years ago," according to the new chief executive officer Luca de Meo.

According to a study by the firm Bain and Company, "2025 was a year of recalibration for the Chinese luxury market, with consumers becoming more selective". "Experience-based consumption, particularly travel and wellness, continued to be favoured" over bags or clothing. For 2026, the firm anticipates "moderate growth in the Chinese personal luxury goods market".

"What I am sure of is that the desire for high-quality products goes hand in hand with the evolution of living standards worldwide. And that, I believe, will continue," assured Bernard Arnault, describing himself as "optimistic in the medium term".

This article was translated to English using an AI tool.

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