NEWS / Global Scoop

War in the Gulf Is Crushing Luxury Sales as LVMH Loses $100 Billion in Market Value

Published Apr 15, 2026

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Summary:

LVMH reported a 2% drop in sales at its fashion and leather goods units, missing analyst expectations for 1.5% organic growth.
European luxury stocks have shed $176 billion in market value since the start of the year, with LVMH down 26%, Hermes down 22%, and Richemont down 17%.
The Middle East accounts for about 6% of LVMH's sales, but tourism drops and flight

cuts are making the hit worse. Seven weeks of war in the Middle East are showing up in the numbers at Europe's biggest luxury companies. LVMH - the parent of Louis Vuitton, Dior, and dozens of other brands - reported Q1 organic sales growth of just 1% on Sunday, missing the 1.5% analysts expected. Its most important division, fashion and leather goods, posted a 2% drop.

Losses Across the Sector

The damage goes beyond LVMH. Kering's retail revenue in the Middle East fell 11% in the first quarter, sending Gucci sales down alongside it.

The combined market value of 10 major European luxury companies has dropped $176 billion since the end of last year, with LVMH losing close to $100 billion. Hermes is off 22%, Richemont 17%, and Kering 12%.

Why the Gulf Matters More Than It Looks

The Middle East makes up about 6% of LVMH's total sales, but the war's impact reaches further. Tourism has dried up, flight schedules to the Gulf have been slashed, and the broader mood around high-end spending has shifted. Watchmaker Breitling pulled back on shipments to the region because of the lack of tourism. Hermes offered a brighter note, with its CEO saying Middle East sales are starting to pick up in the current quarter.

What to Watch

Luxury stocks tend to bounce fast when geopolitical clouds clear. But as long as the Strait of Hormuz is closed and flights to the region are being cut, the spending slowdown in the Gulf will likely keep dragging on the sector's biggest names.

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