U.S. Luxury Market Slows. LVMH, Tapestry, Capri And Ralph Lauren Feel It.

Core Insights - The luxury market is experiencing a slowdown, particularly in China and the U.S., with most brands reporting declining sales, except for Hermès [1][2] - U.S. luxury consumers are cutting back on spending, with high-income spending down 5% in Q2 2024, the lowest since Q2 2020 [4][5] - The overall personal luxury goods market in the Americas saw an 8% decline in 2023 compared to 2022, with U.S. consumers accounting for approximately 30% of the nearly $400 billion market [3][6] Company Performance - LVMH reported a 1% drop in U.S. revenues for H1 2024, with its Fashion and Leather Goods segment down 8% to $3.7 billion [7][8] - Tapestry's revenues were flat year-over-year at $6.7 billion, with a 2% decline in Q4 revenues [11][12] - Capri Holdings experienced a 13% revenue decline in Q1 2025, totaling $1.1 billion, following an 8.4% drop in Q4 2024 [15][16] Market Trends - The U.S. luxury market is showing signs of weakness, with a broadening decline across various brands [6][19] - Multi-brand retailers are seeing a sharper decline in spending compared to direct-to-consumer channels, with a 15% drop in Q2 for multi-brand versus a 10% drop for single-brand DTC [19] - Affluent consumers are increasingly cautious, with 41% planning to spend the same and 35% expecting to spend less on luxury [25][26] Consumer Sentiment - A significant portion of affluent Americans (24%) believe the economy has entered a recession, impacting their willingness to spend on luxury [28][29] - The desire for luxury is fading, with over half of affluent consumers rarely or only occasionally selecting luxury options [29][30]