Luxury goods sector faces longest slowdown in two decades as Chinese spending stalls

The world's biggest luxury goods groups are cutting wholesale orders and scaling back store expansion plans after Chinese consumer confidence fell to its lowest point since the pandemic, delivering the sector's most sustained revenue slowdown in twenty years.

China's Consumers Pull Back

For much of the past decade, Chinese shoppers both at home and travelling abroad were the engine of luxury growth. Their spending accounted for roughly a third of global luxury revenues at the sector's 2021 peak. That share has now contracted for six consecutive quarters.

Analysts point to a combination of factors: a still-depressed property market that has eroded household wealth, persistently high youth unemployment, and a cultural shift away from visible status consumption among younger urban professionals.

Several groups have quietly begun reducing their exposure to department store concessions in second-tier Chinese cities, a retreat that would have been unthinkable at the height of the China growth story.