European luxury companies have lost approximately $350 billion in combined market capitalisation since the beginning of 2026, as hopes of a sector recovery fade amid persistent weakness in China. The downturn has weighed on leading fashion houses, jewellery makers and other luxury brands, highlighting the challenges facing an industry that has struggled to regain momentum. Shares across the sector came under further pressure on Tuesday after French luxury giant LVMH reported weaker-than-expected third-quarter sales in its key fashion and leather goods division.
The decline has been particularly severe among Europe’s four major luxury groups — LVMH, Hermès, Kering, which owns Gucci, and Richemont. Their combined market capitalisation has nearly halved since around 2024, although Richemont has shown greater resilience due to its focus on watches and jewellery. LVMH has been among the worst performers, with its shares falling more than 40% this year, underperforming several rivals. The company’s portfolio includes Louis Vuitton, Dior, Tiffany, Bulgari, Moët & Chandon and Hennessy. The sustained decline has also significantly reduced the wealth of Bernard Arnault, LVMH’s chief executive and controlling shareholder.
China’s economic slowdown remains a major concern for the luxury industry. The country, once a key engine of global luxury spending, has lost momentum amid a challenging economic environment, affecting demand for premium fashion, leather goods and other high-end products. With consumer appetite yet to recover sufficiently and leading companies reporting disappointing results, the European luxury sector continues to face mounting pressure. Investors are closely watching sales trends in China and other major markets for signs of stabilisation, as companies navigate weaker demand and uncertain prospects for a sustained recovery.
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