Signs of a recovery in the luxury sector: the top brands remain in the lead
In Milan, since the outbreak of the conflict in the Middle East, Salvatore Ferragamo shares have risen by 50 per cent, Zegna by 16.5 per cent, Cucinelli have fallen by 0.34 per cent, and Moncler by 12 per cent
Following two particularly challenging years, which came on the heels of the excesses seen in the post-pandemic period and the highs reached in 2023, the luxury sector is showing concrete signs of recovery in 2026. “However, that ‘feel-good’ factor which usually underpins discretionary spending in the sector is missing,” says Manuel Lang, an analyst at Vontobel. The conflict in the Middle East has added a further layer of pressure to a sector already grappling with macroeconomic uncertainty and a challenging Chinese market, where we expect any stabilisation to remain volatile. The luxury sector is also still facing weaker aspirational demand, particularly in China, as well as the consequences of several years of aggressive price rises that have severely tested consumers’ willingness to pay.”
A brighter outlook
Despite geopolitical tensions and the conflict in the Middle East, the sector is expected to close June with estimated growth of around 4 per cent. “But the recovery is not uniform,” echoes Flavio Cereda, Investment Director for Luxury Brands at Gam. “There is a marked polarisation, with performance varying significantly depending on the brands’ positioning and their target customer base.” As the expert explains, brands most exposed to high-spending consumers continue to post positive results, as do those fashion houses that manage to tap into current trends in the more accessible segment of the market. “In several cases, we are still seeing double-digit growth rates,” Cereda adds. Companies positioned in the mid-range segment or characterised by a weaker aspirational appeal are facing greater difficulties. This structural complexity of the market appears more evident than was observed up until 2019.”
Supporting evidence
Among the factors underpinning the resilience of US consumers are wealth creation linked to the technology sector – clearly evident in markets such as South Korea – and signs of a gradual recovery in Chinese demand. However, weaknesses remain in Europe, where consumers continue to show greater caution, as well as in the Middle East, which is inevitably affected by the current geopolitical context. “Looking to the medium term, the wealth effect generated by future valuations in the artificial intelligence sector could, on its own, contribute around one percentage point to the sector’s growth in 2027, with benefits concentrated mainly in the United States,” Cereda adds.
From jewellery to hospitality
“In our view, the next phase of the cycle will reward brands capable of balancing a disciplined pricing policy with sustainable volume growth, without undermining brand value,” concludes Lang. Richemont remains, without doubt, the group with the highest quality, underpinned by strong demand for Cartier and Van Cleef & Arpels. Conversely, the more fashion-oriented groups remain vulnerable, with weaker brand appeal and greater exposure to the aspirational consumer. Finally, the high-end experiential sector merits consideration. Sectors such as hospitality, travel, cruises, wellness and health continue to record particularly strong growth rates – in many cases unprecedented in history – accompanied by outstanding stock market performance. This dynamic should be considered an integral part of the evolution of the luxury market.
Among the stocks that have performed best since the start of the conflict in the Middle East are Salvatore Ferragamo (+50%), Zegna (+16.5%), Cucinelli (-0.34%) and Moncler (-12%), whilst the situation is more critical for Hermès (-20.55%) and EssilorLuxottica (-25.84%).
