Global Luxury Spending Splits Further Between Affluent and Middle-Class Consumers
Luxury spending continued to diverge in the first half of 2026: affluent consumers remained active, while middle-class “aspirational” consumers stayed weak.
Luxury spending continued to diverge in the first half of 2026: affluent consumers remained active, while middle-class “aspirational” consumers stayed weak.
The report says soft-luxury leaders such as LV need to use innovation to adjust their product mix downward and reattract mass-market consumers. Gucci has already seen results from lowering prices. Jewelry is gaining momentum because of its high perceived value for money, supporting a favorable view of Richemont.
The report highlights overweighting Richemont, Hermès and Brunello Cucinelli. It says LVMH and Kering need to advance product-mix and pricing adjustments to reverse their weakness.
In the report’s view, the polarization of global luxury consumption is intensifying. High-end jewelry and hard luxury are outperforming soft luxury, with Richemont and Hermès identified as the strongest current allocation picks.
Potential beneficiaries include Richemont (CFR.SW), Hermès (RMS.PA) and Brunello Cucinelli (BC.MI). Potential laggards include LVMH (MC.PA) and Kering (KER.PA). The polarization trend has continued for several quarters, but the weakness in middle-class consumption could be greater than the market expects.
Catalysts identified by the report are data showing a recovery in Chinese luxury demand, changes in consumer-tax policy in Europe and the United States, and divergence in same-store sales growth in brands’ second-half earnings reports.
The report says soft-luxury leaders such as LV need to use innovation to adjust their product mix downward and reattract mass-market consumers. Gucci has already seen results from lowering prices. Jewelry is gaining momentum because of its high perceived value for money, supporting a favorable view of Richemont.
The report highlights overweighting Richemont, Hermès and Brunello Cucinelli. It says LVMH and Kering need to advance product-mix and pricing adjustments to reverse their weakness.
In the report’s view, the polarization of global luxury consumption is intensifying. High-end jewelry and hard luxury are outperforming soft luxury, with Richemont and Hermès identified as the strongest current allocation picks.
Potential beneficiaries include Richemont (CFR.SW), Hermès (RMS.PA) and Brunello Cucinelli (BC.MI). Potential laggards include LVMH (MC.PA) and Kering (KER.PA). The polarization trend has continued for several quarters, but the weakness in middle-class consumption could be greater than the market expects.
Catalysts identified by the report are data showing a recovery in Chinese luxury demand, changes in consumer-tax policy in Europe and the United States, and divergence in same-store sales growth in brands’ second-half earnings reports.