Luxury goods giants are pinning their hopes on a revival in the US following Donald Trump’s return to the White House.
As the industry gathers at Paris Fashion Week, bosses hope his arrival will kick-start a recovery.
The importance of the US to the industry was reinforced when LVMH supremo Bernard Arnault, one of the world’s richest men, attended Trump’s inauguration in Washington with members of his family.
But concerns about demand for high-end products in China continues to cast a shadow over the sector.
Strong sales at Richemont boosted confidence about a wider recovery last week, causing shares in the sector to soar.
The Cartier owner’s update even saw bellwether LVMH regain its spot as Europe’s most valuable company, after being number two to Ozempic-maker Novo Nordisk for almost a year-and-a-half.
Analysts think companies that have a strong presence in the US will reap the rewards of a rebound in consumer confidence.
As nearly two-thirds of US adults hold shares, Wall Street rallies ‘can feed quickly into wealth perceptions,’ said Susannah Streeter of Hargreaves Lansdown.
‘If rafts of Americans feel that little bit richer, there’s a chance that appetite to spend on luxury goods will increase,’ she said.
Mamta Valechha, an analyst at Quilter Cheviot, noted that in the past ‘a rally in the US stock market and cryptocurrency has generated a positive wealth effect, boosting consumer sentiment’.
But she said potential tariffs on European-based businesses could encourage Americans to buy luxury items abroad, rather than on home soil for a steeper price tag.
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