LVMH, the world’s leading luxury group, reported on July 27 a 2% increase in first-half revenue on a comparable basis, with growth accelerating in the second quarter. Hermès delivered a stronger performance, posting sales growth of more than 6% at constant exchange rates. Like its competitor, the maker of the iconic Birkin bag saw momentum strengthen in the second quarter.

Kering, which has struggled in recent years as its flagship brand Gucci lost some of its appeal, also returned to slight growth in the second quarter — its first positive quarterly performance in two years. The announcement triggered an immediate surge in the group’s share price.

Although the conflict in the Middle East continued to weigh on consumer spending, shoppers appear to be returning to luxury boutiques.

According to consulting firm Bain & Company, the luxury market lost around 20 million customers between 2024 and 2025, after already losing some 50 million in previous years. Price increases, concerns over product quality and the slowdown in China were among the main factors behind the decline.

First-half growth was driven largely by strong demand in the United States, supported by buoyant financial markets and continued wealth creation among affluent consumers. Luxury groups are also beginning to reap the benefits of measures introduced in response to the downturn, particularly initiatives aimed at retaining “aspirational” customers — consumers who are not ultra-wealthy but remain crucial to sales volumes. Analysts increasingly view the recent rebound in this segment as an encouraging sign for the sector.

China’s activity rebounds

“Companies that successfully engage middle-class and aspirational customers are outperforming,” Luca Solca, luxury sector analyst at Bernstein, told AFP. “There are still many ‘luxury orphans’ — consumers who aspire to buy luxury goods but no longer have the purchasing power to do so,” he added.

Changes in creative leadership are also beginning to deliver results, according to industry observers. At LVMH, the group said that “accelerated growth in the second quarter was driven notably by the strong reception of Jonathan Anderson’s first designs for Christian Dior.”

“Fashion is recovering thanks to a creative revival led by a new generation of artistic directors — Michael Rider at Celine, Sarah Burton at Givenchy and Maria Grazia Chiuri at Fendi. Fashion houses are refocusing on the fundamentals: product, design and customer experience,” Christophe Caïs, CEO of luxury consultancy CXG, told AFP.

In the first half of the year, luxury companies also reported renewed interest from Chinese consumers, after years of weaker demand in what was once one of the sector’s most profitable markets.

But does this signal a return to the explosive growth seen just a few years ago? Experts remain cautious, noting that the Chinese market has yet to regain its previous momentum.

Indeed, during Hermès’ results presentation, CEO Axel Dumas said he did not “yet see a fundamental rebound” in the region, describing the situation as “stable” while acknowledging that “the momentum of the past has not returned.”

“The sector will not return to the double-digit growth rates seen between 2021 and 2023, and that is a healthy development. Those years were a post-Covid anomaly, driven by excess savings and price inflation. What we are seeing now is a return to a more sustainable growth environment — one that must be earned rather than simply handed to us,” said Christophe Caïs.