The global luxury goods sector is facing a major downturn as the combined market value of 10 leading companies has fallen by almost £75 billion (RM446 billion) since US President Donald Trump announced new tariffs on imports from the European Union (EU) in April, which he dubbed “Liberation Day”.
Data analysis by AJ Bell and Hargreaves Lansdown revealed that famous brands such as LVMH, Hermes and Estee Lauder have suffered significant share price declines.
LVMH, the world’s largest luxury goods group, recorded a share fall of 17%, while Prada, the Italian fashion brand once modeled by famous actress Emma Watson, has now lost more than a quarter of its original market value.
The market situation has worsened as consumer spending in China and the US, the two main markets for the luxury industry, has also reportedly declined amid uncertainty over the trade war.
According to Hargreaves Lansdown analyst Susannah Streeter, while the latest trade deal has managed to avoid a sharp increase in tariffs, the 15% tariff on EU exports to the US remains a significant burden that could potentially slow the sector's recovery.
The luxury goods industry now faces the dual challenge of maintaining brand exclusivity and prestige in an increasingly cautious market, while devising new strategies to mitigate the impact of tariffs and global economic uncertainty.
