Luxury Sector Faces Deepening Slowdown as Brands Look to Fashion Weeks for a Boost

As Milan and Paris host their marquee fashion weeks, the glamorous runway shows mask a growing sense of unease among luxury executives. The sector is grappling with a significant slowdown in demand that shows signs of worsening, prompting investors to scrutinize the growth prospects of an industry struggling to regain its post-pandemic momentum.

Investor Sentiment Sours

Investor concern is mounting as the recovery for high-end goods remains elusive. A combination of persistent inflation and fading consumer enthusiasm is weighing on sales. The market performance of industry leaders reflects this pressure:

• Shares in LVMH, the world's largest luxury group, have fallen 37% since the beginning of 2026.
• Gucci-owner Kering has seen its stock erase all gains made over the past year.

"I believe this year and next year will likely be a holding period while the market stabilises and becomes more predictable again," Diego della Valle, chairman of luxury brand Tod’s, told reporters in Milan.

A High-Stakes Strategy

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With sales slowing, brands face increased pressure to justify their high price points and generate a return on lavish marketing events. Runway shows, which industry experts told Reuters can cost up to €10 million ($11.47 million) to produce, are now a critical tool for enticing shoppers.

According to Federico Bazzani, a partner at Deloitte Advisory, the market is polarizing. "Fewer than half are growing, while the rest are losing ground," he told Reuters. This has intensified competition for the wealthiest clients, with brands like Prada investing in revamped flagship stores with exclusive spaces for top spenders.

Shifting Consumer Priorities

Industry insiders increasingly point to a fundamental shift in consumer behavior as a key driver of the slowdown. Renzo Rosso, chairman of Diesel-owner OTB, said at a conference that he does not see an imminent recovery for the sector because shoppers are prioritizing spending on wellness, health, hotels, and restaurants.

This trend leaves luxury groups in a difficult position. After implementing significant price hikes in recent years, they are hesitant to offer discounts that could damage brand prestige and margins. "They don’t want to reduce prices because that says we were overcharging you," said David Watts, a London-based luxury business adviser. "But they don’t want to reduce production because that’s going to hit revenue."