Kering's lagging US sales shows market is normalising

Luxury sales in the US are showing signs of normalisation after the frenzy of post-Covid buying fever last year. Double-digit increases in demand for luxury goods have given way to a decline, which is countering the recovery in China. While China's easing of Covid lockdowns has significantly reawakened the recovery of shopping for luxury products, the US market has not fared as well.

The accounts of luxury groups Kering and LVMH showed the US weighing like a ballast on their revenues, with retail sales down by 18 percent at Kering and a slowdown in impulse buying after the pandemic interlude.

However, the lone voice of Hermès stands out, with the brand's results revealing a continued growth in US shops and positive trends in April.

Analysts have suggested the US slowdown is more a matter of normalisation than decline. Retail is returning to normal after the exceptional post-pandemic revenge spending. The first and second quarters of each year are typically difficult in terms of comparison with previous similar periods.

US luxury market is normalising

China, on the other hand, is catching up and showing a faster-than-expected rebound following the lifting of anti-Covid restrictions earlier this year. LVMH recognised the key role played by China in the achievement of its latest financial results. Reuters also provided a similar reading, speaking of regularisation rather than regression, an almost physiological process for a market that grew spasmodically in an unprecedented momentum and then destined to return in the ranks in the new normal.

In the midst of this normalisation, new markets are emerging that could further shake up the global luxury chessboard, with South Korea eyed by big names in luxury and becoming a protagonist in dictating trends and phenomena with a global influence. With significantly increasing purchasing power, South Korea could become a major player in the luxury market.