Finance
Holiday test looms as luxury brands chase elusive rebound
Published by Global Banking & Finance Review®
Posted on November 13, 2025
4 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on November 13, 2025
4 min readLast updated: January 21, 2026
Luxury brands face a crucial holiday season as they aim for recovery. Stocks have risen, but challenges in China and the U.S. remain.
By Mimosa Spencer
PARIS (Reuters) -A surge in luxury stocks has piled pressure on fashion houses including LVMH and Gucci owner Kering to show that signs of recovery in the third quarter can translate into a sustained turnaround in the key holiday season.
Kering's shares have soared around 49% from three months ago, while Louis Vuitton owner LVMH is up 42%, Moncler up 28%, and Cartier owner Richemont up 27%.
Although some of that is linked to a broader equity market rally, there are also growing hopes among investors that the $400 billion sector is emerging from two years of sliding sales.
Third-quarter results showed some improvement in China - once the key engine of growth - and buzzy design debuts from newly-appointed creative directors have buoyed sentiment too.
RISKS FOR THE FOURTH QUARTER
But new styles will not hit the shops until next year and the jury remains out on China's economic recovery. Spending in another key market - the United States - also remains closely linked to a volatile stock market.
All of that raises the stakes for the December holiday season which accounts for as much as 30% of annual sales for some brands, according to Vincent Redrado, founder of luxury industry consultancy Digital Native Group.
"I think there's a risk for the fourth quarter," said Olivier Abtan, a partner specialised in consumer and retail at consulting firm AlixPartners. "China remains pretty quiet, without a positive evolution - while the United States had a post-election bump last year," making comparisons tougher.
The prolonged downturn in China has hurt brands with high exposure there, such as Burberry and Gucci, prompting broad overhauls and CEO replacements.
Although Louis Vuitton's Chinese sales turned positive in the third quarter, economic conditions remain challenged, LVMH finance chief Cecile Cabanis told investors in October.
HIGH-END BRANDS FOCUS ON AMERICA
With brands more confident about future U.S. growth, many are expanding there.
Hermes recently opened stores in Scottsdale, Arizona, and Nashville, Tennessee, and is planning more.
LVMH's Dior inaugurated its first U.S. spa on New York's Madison Avenue this summer, while Louis Vuitton's Fifth Avenue flagship has been closed for an extensive refurbishment, with a lavish temporary store opened nearby.
Luxury Parisian department store Printemps, which this year expanded to the U.S. with an upscale outpost in New York, has seen brisk business in Paris, thanks in part to U.S. tourists.
"We've had double-digit growth rates since the summer" with some international shoppers, notably from the U.S. and Gulf countries, said Laetitia Henry, chief executive officer of Printemps Haussmann.
"The American clientele has strong buying power."
But the latest U.S. credit card data from Citi shows that spending on luxury brands fell 3% year-on-year in October, marking a retreat after three months of improvement, as a government shutdown contributed to consumer jitters.
Among industry heavyweights, LVMH, Zegna, Kering and Richemont are most reliant on the U.S. market, while Burberry, Hermes, Moncler and Prada are less exposed, analysts say.
NEW COLLECTIONS OFFER HOPE
Luxury houses are also banking on new creative direction to bring back shoppers turned off by high prices.
Gucci, which has underperformed rivals in recent years, has tested styles from new creative director Demna at some stores even ahead of the designer's first runway show expected in February.
The strategy seems to be helping, with year-on-year spending at Gucci in the three months to early October showing its best performance versus peers since early 2022, according to Consumer Edge, which analyses U.S. consumer credit and debit card data.
"There was a pretty meaningful sequential improvement," said the consultancy's Michael Gunther.
Louis Vuitton, meanwhile, created a buzz at the end of August by launching new refillable makeup products including lipstick priced at $160 - much higher than Hermes or Chanel, which charge just over $80 and $50, respectively.
"It doesn't really matter that it's the most expensive lipstick on the planet," said HSBC analyst Erwan Rambourg.
"What matters is it will bring people in. If you get sticker shock, then it'll be the sales associate's job to tell you, ‘okay, you don't have any interest in the lipstick. Why don't you look at these sneakers or small leather goods?’ or whatever"
(Reporting by Mimosa Spencer. Editing by Lisa Jucca and Mark Potter)
A luxury brand is a high-end brand that offers premium products or services, often associated with exclusivity, quality, and high price points.
Market performance refers to how well a company or sector performs in terms of sales, revenue, and stock price over a specific period.
Consumer perception is how customers view a brand or product, influenced by their experiences, marketing, and social factors.
Retail trade involves the sale of goods and services directly to consumers, typically through stores or online platforms.
The financial community encompasses individuals and organizations involved in finance, including banks, investors, and financial institutions.
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