European luxury brands face valuation drops amid Chinese market slowdown

The European luxury goods sector is facing significant economic headwinds, primarily driven by a slowdown in the Chinese market. LVMH, the owner of Louis Vuitton, has seen its valuation drop by nearly 40% since the beginning of 2026. This decline is part of a broader trend affecting the industry's largest players; Hermès has decreased by 38%, and Kering has fallen by 30%. Collectively, the ten most valuable European luxury companies have lost approximately $350 billion in market value.

Data indicates a major shift in market composition. While Chinese consumers accounted for 47% of luxury sales in 2019, that figure dropped to 26% by 2025 due to domestic economic challenges and weakened consumption. Conversely, the US market share grew from 30% to 43% during the same period, and European consumers increased their share from 24% to 31%.

Despite these macroeconomic challenges, specific segments of the luxury market show resilience through resale. The Louis Vuitton Speedy bag has been named the most resold luxury bag for the second consecutive year according to the Fashionphile Ultra-Luxury Resale Report 2026, seeing a 16.2% increase in value. Other notable trends in the resale market include a massive 751% surge in searches for ballet flats and increased interest in pony hair textures.