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Luxury sector: What’s at stake as nationalist policies gain ground?

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2 weeks ago

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Nazia BIBI KEENOO

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March 27, 2025

For decades, globalization has been the driving force behind the luxury industry’s expansion. However, this long-standing framework is now under pressure as nationalist sentiment gains momentum across major markets, including the U.S. and China. According to analysts at Bernstein, this shift could slow the progress of luxury brands already navigating a fragile economic landscape in the context of rising geopolitical and trade tensions.

U.S. tariffs shake up the luxury industry – Ph Caleb Woods – Unsplash

Luxury has long relied on globalization to fuel its growth, steadily reaching new markets across the world. So far, the sector has proven resilient—even amid the war in Ukraine and resulting European sanctions against Russia, which once served as a key market. Wealthy Russian consumers continued to access luxury products through alternative destinations such as the Gulf, Israel, Switzerland, or London.
But with tariffs on global exports to the U.S. now increasing, the landscape is shifting.

“If tariffs rise to 20–25%, it could hinder China’s economic recovery and weaken American consumer demand. If they reach 200%—as former President Donald Trump suggested for spirits—it would effectively shut the U.S. market to European alcohol producers,” Bernstein stated. In its recent “State of Luxury” report, McKinsey estimated that import tariffs could slash U.S. luxury spending by $46 billion to $78 billion annually.

Luxury brands are already exploring ways to adapt, with geographical rebalancing emerging as a key strategy. While China has yet to impose major tariffs on luxury goods, many brands have scaled back their presence in the market since the pandemic. A combination of COVID-19-related restrictions, a more nationalistic tone, and slowing economic growth has prompted several players to reduce investment in what was once among their most profitable markets.

At the same time, brands have expanded their footprint in the United States, opening stores in cities beyond traditional hubs like New York and Los Angeles. Locations such as Detroit, St. Louis, Nashville, and Austin are now part of its growth strategy. Looking ahead, companies must focus on generating revenue from a more diverse and balanced mix of national markets. Some, including Bulgari, are already exploring new destinations, such as India, to support long-term growth.

Schiaparelli launched a high-impact pop-up in Shanghai at the end of 2024.
Schiaparelli launched a high-impact pop-up in Shanghai at the end of 2024. – DR

Another strategy Bernstein recommends is stronger local engagement, particularly through storytelling and globally resonant partnerships. Sports offer a powerful universal language that luxury brands are actively leveraging. Notable examples include LVMH‘s sponsorship of the Paris 2024 Olympic Games and its decade-long global partnership with Formula 1.

Offshoring could also become a solution. To mitigate the impact of high U.S. tariffs, some companies may consider producing locally—especially if supported by federal or state incentives.

Louis Vuitton is a notable case: In 2019, the brand opened a factory near Dallas, Texas, to manufacture handbags and leather goods exclusively for the American market. However, this approach risks weakening a major selling point—the prestige of “made in France” or “made in Italy.”

With the United States remaining the top market for luxury brands—and luxury spending in China dropping 18–20% in 2024, according to Bain & Company—the current year may be more turbulent than anticipated, despite earlier hopes of a rebound in the second quarter.

“Results for fiscal 2024 confirmed an improvement in cyclical demand,” Bernstein analysts concluded. “But recent political decisions in the United States have made the outlook far more uncertain.”

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Dior, Jo Malone, L’Oréal, Sephora and Garnier are social media influencer winners – report

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19 minutes ago

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April 7, 2025

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A new report from WeArisma has revealed the “top-performing beauty brands among influencers on social media”. The influencer and social intelligence platform has launched its Beauty State of Influence Report and said that “authentic influential voices” are hugely important to beauty brands’ marketing strategies with some brands having harnessed this very successfully.

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In fact, Sephora and L’Oréal “win make-up” with the brands overcoming “the overall decline in engagement with make-up content through activations at the Olympics”.

Meanwhile, so-called skinfluencers “love Garnier” and content from influencers about the brand generated the highest earned media value (EMV), engagement, impressions and mentions in the category.

And perfumeries leverage star power. Dior and Jo Malone saw high engagement levels on the back of campaigns with Rhianna for Dior and Tom Hardy and Olivia Culpo for Jo Malone. 

The report uses WeArisma’s proprietary analytics metric ‘Ripple Impact’ that shows how “the impact of influencers’ content is significantly further-reaching and engaging than brands’ owned content”. 

Across the highest-performing make-up, skincare and fragrance brands worldwide, Ripple Impact generated up to 19 times more EMV, 26 times as many impressions, 83 times more engagement and 73 times more content than content from the brands’ accounts.

But while it has majored on high-budget events and strategic celebrity partnerships, the report said “the make-up industry has struggled to keep pace with fragrance and skincare, experiencing a year-on-year decline of 10% in mentions”. 

The brands bucking this trend are the aforementioned industry giants LVMH’s Sephora and L’Oréal, whose engagements saw increases of 27.3% and 35.1%, respectively. Both brands tapped into the cultural moment of the Olympics with immersive, on-the-ground activations, highlighting the growing synergy between beauty and sports. Sephora’s ‘Hot on Social’ edit also continued to drive TikTok buzz, while must-have make-up and product launches contributed to the brand’s massive $1.9 billion EMV. 

WeArisma said “understanding customer needs, such as the rising cost of living, is crucial for make-up brands’ success on social media, but these campaigns must be executed with authenticity. As prices rise and economic uncertainty presses on, we have seen brands appeal to their Gen Z customer base by normalising dupes, and influencers play a huge part in building trust in more budget-friendly products”.

As for skincare, its content has jumped in popularity over the last year, experiencing an impressive 38% year-on-year increase in EMV. L’Oréal’s Garnier continues to appeal across all demographics, particularly among skinfluencers, securing the top spot across EMV, engagement, impressions, and mentions. 

But it’s not alone at the top of the tree with the report saying that “an ingredient-focused strategy that leverages recommendations from dermatologists with strong social followings proves popular”, making other L’Oréal-owned brand Vichy “stand out in Virality grade alongside CeraVe and Garnier”. The beauty giant’s La Roche-Posay brand also performed well, “driven by its position as the official sunscreen partner of the US Open and a content strategy that leans towards informative messaging”.

WeArisma’s report said the top-performing fragrance brands use “star-driven campaigns to dominate the conversation on social media”. Traditional luxury brands, such as Dior, Prada and Mugler, “do this most effectively, generating high amounts of EMV and engagement. However, new-age brands are also driving significant buzz in the fragrance space”.

Dior has the highest overall influencer impact, but Jo Malone comes a close second for engagement. With fragrance at more accessible prices and strategic partnerships including Tom Hardy and Olivia Culpo, influencer content about Jo Malone generated 4.7 times more EMV, 3.1 times more impressions and 3.8 times more engagement than brand-owned content. 

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Beijing to impose 34% tariffs on all U.S. imports starting April 10

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52 minutes ago

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April 7, 2025

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By

Reuters

Translated by

Nazia BIBI KEENOO

Published



April 7, 2025

Beijing will implement a 34% tariff on all U.S. imports beginning April 10, the Chinese Ministry of Finance announced Friday—escalating tensions in the ongoing trade standoff between the two countries.

Donald Trump and Xi Jinping. – Reuters

The announcement, which sent Wall Street futures tumbling following a $2.4 trillion drop in market capitalization for U.S. companies the previous day, is seen as a direct response to Donald Trump‘s 34% tariff increase on Chinese goods on Wednesday. The new tariffs are in addition to the 20% already imposed in recent weeks.

China also announced it will tighten controls on rare earth exports to the United States beginning April 4.

The Ministry of Commerce described the move as a way to “better safeguard national interests” and “uphold China’s international commitments, including non-proliferation obligations.”

In a separate development, the Chinese government added eleven more entities to its “unreliable entities list,” a tool it uses to take retaliatory measures against foreign companies.

(Written by Mei Mei Chu; French version by Zhifan Liu and Tangi Salaün; edited by Sophie Louet)

© Thomson Reuters 2025 All rights reserved.



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LVMH names new CEOs at Fendi and Kenzo, both culled from Vuitton

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1 hour ago

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April 7, 2025

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LVMH has named two new CEOs at its leading fashion houses, with Ramon Ros taking over at Fendi and Charlotte Coupé appointed at Kenzo.

Both senior executives come from positions in LVMH’s flagship brand, Louis Vuitton. They will report to Sidney Toledano, senior advisor to the LVMH Group chairman and the conglomerate’s controlling shareholder, Bernard Arnault.

In a separate move, Daniel DiCiccio has been named president and CEO of Mainland China for Louis Vuitton, effective April 28, 2025. He will be based in Shanghai and report to David Ponzo, chief commercial officer of Louis Vuitton.

Ros’ new position takes effect on July 1, succeeding Pierre-Emmanuel Angeloglou, who joined Fendi in May 2024 but will become deputy CEO of Christian Dior Couture on April 15, as reported.
 
In November, the house’s creative director, Kim Jones, left Fendi. A successor to Jones has yet to be named. In the interim, Silvia Venturini Fendi has designed the runway collections of Fendi.

Ramon Ros, new CEO of Fendi. – Photo Credits: LVMH

“Throughout his proven track record of success within LVMH, especially at Louis Vuitton, where, as president and CEO of Mainland China, Ros has been instrumental in developing the brand desirability, as well as building and nurturing a talented local team. Ramon’s deep expertise in luxury retailing, coupled with his passion for product excellence and collaborative leadership, will enable him to elevate the Roman maison to new heights, preserving Fendi’s unique history and commitment to artisanal craftsmanship,” LVMH said in a release Monday morning.

Ros began his career at Marks & Spencer in the UK before moving to Diesel and Tous, where he held various senior management positions in the headquarters. He joined the LVMH Group in 2013 as the managing director of Givenchy China and spent three years in Shanghai building up the business. In 2016, he was named international director of Givenchy, based in France. Since 2020, Ros has worked at Louis Vuitton in China. He is a graduate of the University of Barcelona and IESE.

While at Kenzo, LVMH predicted that Coupé “will capitalize on her extensive fashion experience and leadership to further expand brand desirability and continue the modernization and expansion of the French maison. Her genuine passion for product, deep fashion knowledge, and proven ability to collaborate with iconic and innovative creative directors, particularly at Louis Vuitton, where she managed the men’s ready-to-wear business unit, significantly contributed to the impressive growth of that category.”

Charlotte Coupé, appointed CEO of Kenzo.
Charlotte Coupé, appointed CEO of Kenzo. – Photo Credits: LVMH

Coupé starts her new job on May 1, succeeding Sylvain Blanc, who “after initiating a new chapter at Kenzo and laying the ground for its ambitious development… is leaving the group to pursue new projects.”

During his tenure, Blanc worked with Japanese designer Nigo, who also collaborated with Pharrell Williams to create men’s collections for Louis Vuitton.

Coupé began her career at Ralph Lauren in 2006, first in the customer service department, then in menswear merchandising. In 2013, she joined Lacoste as a senior product director for menswear before joining Louis Vuitton in 2016 as men’s ready-to-wear director. She holds a master’s degree from ISC Paris and another from the Sorbonne University.

Over at Vuitton, DiCiccio joins LVMH after an accomplished international career, where he spent 12 years in Asia, holding regional leadership positions across entertainment, fashion, and retail. Since 2018, Daniel has been leading global worldwide retail for Apple.

Daniel DiCiccio, appointed president and CEO of Mainland China for Louis Vuitton.
Daniel DiCiccio, appointed president and CEO of Mainland China for Louis Vuitton. – Photo Credits: LVMH

“His extensive expertise in retail and merchandising, passion for client experience, and deep knowledge of Asian markets and customers, alongside his extensive experience in talent development, will be instrumental to empowering our local teams and continuing Louis Vuitton’s growth in China,” LVMH said of DiCiccio.

DiCiccio began his career at Sony Music in New York City, eventually becoming president of Asia. He then moved to Coach as president and CEO of Japan/North Asia and later transitioned to Apple, overseeing business in Japan and Korea. He holds a Bachelor of Arts degree from Harvard University and has completed the AMP program at Harvard Business School.

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