Luxury Fashion Industry Hit by US-Iran War, Gucci and LVMH Sales Decline

The global luxury goods industry is beginning to feel the pressure from the intensifying geopolitical conflict between the United States (US) and Iran. Several global fashion giants have reported declines in performance, particularly in sales in the Middle East region directly affected by these geopolitical tensions.

Kering, the French fashion group that owns Gucci, Saint Laurent, and Balenciaga, reported a decline in sales in the first quarter of 2026. Kering’s sales in the Middle East plummeted 11% across 79 retail stores.

This decline has also pressured Gucci’s performance, the backbone of the group’s business, which contributes around 60% to the group’s profits. Gucci’s sales fell 8% year-on-year, worse than analysts’ expectations of a 4.7% correction.

Gucci is considered to face significant challenges in the Chinese market as it seeks to rebuild its image and improve store quality in that country. Kering recorded a decline of around a dozen percent in the first quarter of this year.

“Gucci remains our top priority and a comprehensive transformation is underway,” said Kering CEO Luca de Meo, quoted from ChannelNewsAsia on Wednesday, 15 April 2026.

Despite facing pressures, Kering was still able to post relatively stable revenue of 3.57 billion euros in the first quarter of 2026. This performance was supported by solid sales in jewellery and eyewear.

LVMH Also Dragged In, Sales Miss Expectations

Similar pressures are being felt by another luxury fashion giant, LVMH. The company, which owns brands such as Louis Vuitton, Dior, and Fendi, reported quarterly performance that missed market expectations.

LVMH’s organic sales grew only 1% in the first quarter of 2026, still below analysts’ projections of 1.5%. The company stated that the Middle East conflict had a negative impact of around 1% on that growth.

“LVMH continues to maintain strong innovation momentum and demonstrates resilience amid a disrupted geopolitical and economic environment, exacerbated by the conflict in the Middle East,” LVMH management wrote, quoted from CNBC International.

The fashion and leather goods division, the largest contributor, recorded a 2% decline to 9.2 billion euros. Overall, LVMH’s revenue was recorded at 19.1 billion euros, slightly below market expectations.