By Mimosa Spencer

Paris (Reuters) – The fears of an economic recession caused by the customs duties of Donald Trump shower the hopes of the luxury industry, which was counting on the wealthy Americans to straighten the growth of its sales.

On Monday, the Bernstein broker said he is now expecting the world sales of luxury products to retreat by 2% this year while he touted previously on a 5% growth, explaining this revision downwards by the dropouts of customs duties announced by Donald Trump on April 2.

“The uncertainty and probable pursuit of the routing of the stock markets create a self-fulfilling prophecy: a global recession”, writes Luca Solca, analyst at Bernstein, in a note addressed to customers.

The customs duties imposed by Donald Trump, more important than many financial players feared, shaken scholarships around the world and launched a trade war, in particular with China.

The values ​​of luxury have not escaped the sales movement: the title of the world champion of luxury, the French group LVMH, is now down 2% since the start of the year. That of Kering, the parent company of the Gucci brand, is down 31%.

Considered as better placed than their competitors to cope with a slowdown because exposed to a richer clientele, Hermès and Richemont, owner of the Cartier jeweler, are down 8% and 6% respectively.

“The upheaval linked to customs duties has fed concerns,” observes Mario Ortelli, director of the Consulting Cabinet Ortelli & Co, specialized in luxury. “It does not help the feeling of luxury consumers”.

In the first quarter, sales growth in the luxury sector should slow down to 0.5%, compared to around 3% in the fourth quarter of 2024, according to HSBC estimates established before the recent stock market diving.

LVMH will be the first in the sector to take stock of its quarterly accounts on April 15. Its fashion and leather goods division should record stable sales, according to a visible alpha consensus.

Moncler, who will publish his results on April 16, should record an increase of 1.3% of his sales, against 10% for Hermès, whose publication is expected the next day.

Kering sales, which will publish its results on April 23, should conversely fall by almost 10%, still sealed by the difficulties of its Gucci flagship brand.

Analysts warn, however, that it will not be easy to draw conclusions for the rest of the year from these quarterly figures.

On Tuesday, Jefferies analysts said they were waiting “a minimum of stability” before adjusting their forecasts for the sector.

Especially since groups like LVMH, Kering and Richemont could compensate for customs duties by modifying their prices.

According to UBS estimates, US customs duties of 20% on products from the European Union and 31% on those from Switzerland should encourage European luxury brands to increase their prices in the United States by around 6% on average to protect their profits.

It remains to be seen whether even the easiest consumers will be able to follow the movement if an economic recession should happen.

(Written by Mimosa Spencer in Paris, with the contribution of Elisa Anzolin to Milan and Tassilo Hummel in Paris, Florence Loève, edited by Blandine Hénault)

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