Sentiment rebound lifts luxury chains

Luxury brands are seeing renewed momentum in China on improving consumer sentiment, selective retail expansion and stronger demand in key cities.

LVMH Moet Hennessy Louis Vuitton — the world's largest luxury group — reported that Asia, excluding Japan, delivered strong growth in the first half of this year, confirming an improvement in trends that began in the second half of 2025.

The company said accelerating growth in the second quarter was supported by stronger performance in China and the success of new flagship stores in major Asian cities.

Louis Vuitton's newly opened stores in Beijing were among the highlights for LVMH, while Hennessy cognac also benefited from improving momentum in China following the Chinese New Year period. The group's wines and spirits division recorded organic revenue growth of 5 percent in the first half, with recurring operating profit rising 11 percent.

Cecile Cabanis, chief financial officer of the group, said in the earnings call that in the Chinese market, local demand outperformed in the first quarter, and onshore demand, which involves Chinese travelers spending money overseas, outperformed in the second quarter.

Apparel brand Moncler also reported a sharp rebound in China-related markets. The Italian luxury outerwear brand generated 592.9 million euros ($673 million) in revenue across Asia, including China, Japan and South Korea for the first half of 2026, representing a 19 percent increase at constant exchange rates from a year earlier.

Growth remained broad-based in the region, with China and South Korea outperforming other markets. Moncler said second-quarter regional revenue increased 12 percent year-on-year at constant exchange rates, despite continued macroeconomic uncertainty and weaker international tourism flows.

The recovery is also reflected in luxury retail expansion across China. According to LuxeCo Intelligence, luxury brands opened 45 new stores in the country during the first half of 2026, highlighting renewed confidence in long-term Chinese demand. Hangzhou in Zhejiang province, the country's e-commerce capital, emerged as the leading destination for new luxury openings, followed by Hong Kong and Shanghai.

Rolex, Laopu Gold and Miu Miu ranked among the brands with the largest number of new store openings during the period, signaling continued investment in China's affluent consumers despite a more selective spending environment, according to the ranking by LuxeCo.

The shift in China's luxury market is also changing how brands compete. Rather than relying solely on broad retail expansion, companies are focusing on flagship experiences, cultural relevance and deeper engagement with high-net-worth consumers.

The latest Bain & Company and Altagamma luxury market report points to a broader transformation in global luxury spending. After a 2 percent contraction in 2025, when the personal luxury goods market reached 358 billion euros, Bain expects the sector to return to growth in 2026, reaching between 365 billion euros and 373 billion euros.

The recovery is being driven less by traditional product purchases and more by demand for experiences, personalization and lifestyle-driven luxury. Spending on luxury experiences, including hospitality and private travel, is growing faster than spending on physical goods.