President Donald Trump (Iqra: It has been diligently) has finally diluted It is announcedOpen a new degree of uncertainty in international business. Europe, taking into account a 20 % blanket tariff, will have to prepare after these measures – like its most attractive sector: luxury.

The luxury has a large presence in Europe, where its brands represent at least 70 % of the global luxury goods market and its exports of 260 billion euros annually, European Union estimates. This is about 10 % of all European Union exports.

The huge tax may mean different things for different luxury companies, depending on different factors, including the shopping type that meets the brand. Regardless, it will be great for the sector.

“The effect of the definitions announced on margins may not be only on the basic demand, in the short term in the short term (due to the high level of uncertainty and the fluctuation of the stock market, and both consumer confidence) usually affect and medium -term (due to high inflation).

Qualm for Trump is that European exports to the United States are far away Higher than importsWho harms American jobs and industry. Definitions are his idea of ​​repairing this defect because they will inhibit imports and force companies to transfer manufacturing to the states. Better, that they can force Americans to look inside the alternatives.

But the repetition of what European luxury companies offer will not be a simple delivery and operation in the United States

Take kering, for example. FLAVIO CEREDA, GAM Investments, expects that among those who were struck through customs tariffs. The French bloc faces a crisis that deposits the luxurious slowdown Internal conflictsWeaken his financial feet and reduce pricing salad against competitors.

However, Kering Francois-Heenri Pinault opposed firmness Production transfer For the United States because everything made by the company represents “part of our culture”. That is why everything from the luxury Gucci clothes to the Eve Saint Laurent bags are made in Europe – the company currently does not have a manufacturing in the United States

The new tariff wave is located against the background of the luxurious, shaky appetite, leaving the fate of the different companies to contrast. While some, such as Burberry and LVMH, were ranging in pain for a few years, the likes of Bruno Cucinelli and Hermès were overwhelmed over the rest of the sector. However, the sector’s view is that it will face a Decline.

American shoppers represent The second largest group One of the other personal buyers, which represents a third of the sector’s request. They constitute a critical block of luxury brand customers that serve them, so it is difficult to do both and recover from them.

After the tariff news, LVMH and KERING shares decreased by 4 %, while Burberry shares decreased by 7 % as of 12 noon in London.

How will the brands deal?

The high-end nature of fashion is essential in its attractiveness-and this is also why brands can get thousands of dollars for the most desirable bags and accessories.

Luxurious players often raise prices because their customers are ready to pay for the value of their products. In the event of some brands, a higher price is associated with more strict supplies, which increases demand for demand. This feature is what can turn a luxurious article required to a Vellin is good.

The higher definitions are likely to push luxurious giants to rely on this method that has been tested and the laboratory more.

“We expect most of the European luxury companies to pass definitions in the form of an increase in prices for consumers, who tend to be less sensitive to pricing and usual on regional differences in prices,” wrote the stock analyst at UBS Zuzanna Pusz in a note.

She added, on average, brands will need to raise prices by 6 % in the United States or have 7 % profits.

Hermes CEO Axel Dumas has already indicated that the bag maker will use This approach To defend herself against definitions.

The alternative is for American shoppers waiting for travel to Europe before they exploded on bags and luxury shoes.

Companies with manufacturing in the United States may search to expand the scope of definitions in place.

“LVMH will be hit [because of tariffs]But LV has our manufacture, so it can descend (do not forget three members of the ARNALT family Trump installation“It matters).” luck In an email.

The result is the lowest desire for all increases in prices and a luxurious feeling out of reach Low -cost packaging From luxury brands. They have recently found a follower of young consumers with limited income that can be eliminated, and who find identification and possession of realistic appearance exit operations To some extent skill.

There is no doubt that the other loyalists will continue to flow on it as they always have. But the transformations in the place where they shop and how much they are satisfied with their luxurious whims – and will not stop anytime soon.

This story was originally shown on Fortune.com

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2025-04-03 11:32:00