Luxury Sector Won't Go Back to Boom Years Anytime Soon -- Market Talk

Dow Jones10-16

1139 GMT - Luxury companies have hit an inflection point after enjoying strong growth in the 2010s, Berenberg analysts write in a note. Chinese shoppers and less affluent consumers, who have fuelled the sector's growth in the past, have cut their spending on luxury goods. "We believe that the industry faces a structural demand problem," the analysts say. "Consensus expects the Chinese to be a critical driver of sector growth in the medium term. We disagree." American consumers could potentially offset some of the Chinese weakness, which stems from the country's economic woes. Berenberg downgrades the stock rating for LVMH to hold from buy and for Kering to sell from hold. Brunello Cucinelli and Hermes remain its top picks, as they target the wealthiest shoppers who continue to spend money on luxuries. (andrea.figueras@wsj.com)

(END) Dow Jones Newswires

October 16, 2025 07:40 ET (11:40 GMT)

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We disagree.\" American consumers could potentially offset some of the Chinese weakness, which stems from the country's economic woes. Berenberg downgrades the stock rating for LVMH to hold from buy and for Kering to sell from hold. Brunello Cucinelli and Hermes remain its top picks, as they target the wealthiest shoppers who continue to spend money on luxuries. 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Chinese shoppers and less affluent consumers, who have fuelled the sector's growth in the past, have cut their spending on luxury goods. \"We believe that the industry faces a structural demand problem,\" the analysts say. \"Consensus expects the Chinese to be a critical driver of sector growth in the medium term. We disagree.\" American consumers could potentially offset some of the Chinese weakness, which stems from the country's economic woes. Berenberg downgrades the stock rating for LVMH to hold from buy and for Kering to sell from hold. Brunello Cucinelli and Hermes remain its top picks, as they target the wealthiest shoppers who continue to spend money on luxuries. 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