Shares of Europe’s leading luxury conglomerates have suffered significant declines since the start of 2026, with LVMH posting a year-to-date loss of 23% as of Monday, July 6.
Hermès and Kering have also faced downward pressure, reflecting broader investor caution toward the sector despite favorable macroeconomic tailwinds in key consumer markets.
The sell-off comes even as wealth effects in the United States and parts of Asia, particularly South Korea, have strengthened.
South Korea’s equity markets have surged, driven by a boom in artificial intelligence and semiconductor stocks, spilling over into property and consumer confidence.
Outstanding overdraft balances for stock investments in South Korea recently hit their highest level in nearly four years, signaling robust retail investor activity and potential disposable income growth.
Despite this backdrop of rising asset values, luxury brands have struggled to translate wealth gains into proportional sales growth.