Luxury Fashion Shares Plunge, Hermès Drops Double Digits Due to Middle East Conflict

Jakarta, VIVA – Shares in top-tier luxury fashion companies uniformly weakened during Wednesday’s trading session on 15 April 2026. The slump in luxury goods issuers followed disappointing first-quarter 2026 performance reports, particularly sales declines amid the unresolved Middle East conflict.

The impact was evident in Hermès shares, which corrected by 14%. Pressure also dragged down shares of other fashion issuers within the LVMH group, such as Burberry, Christian Dior, LVMH, and Moncler, which were recorded on the Stoxx 600 index as weakening between 2% and 3%.

Hermès reported sales of €4.1 billion in the first quarter of 2026. The company observed a decline in tourists linked to the geopolitical tensions in the Middle East.

“Despite the slowdown in tourist flows related to the situation in the Middle East, group store sales increased by 7%. However, wholesale activity was significantly affected by the drop in sales to concession stores, particularly in the Middle East and airports,” said Hermès management, quoted from CNBC International on Wednesday, 15 April 2026.

Meanwhile, Kering also posted performance below market expectations. First-quarter revenue was recorded at €3.57 billion, down 6% year-on-year. The greatest pressure came from its flagship brand, Gucci, which reported sales plunging 8% or more than analysts’ estimates.

The French luxury fashion giant Kering, which owns Gucci, Saint Laurent, and Balenciaga, booked an 11% sales decline in the first quarter of 2026, despite recording growth in the first two months of the year. The Middle East contributes about 5% of the company’s total retail revenue with 79 operating stores.

“Gucci remains our top priority. A comprehensive transformation is underway, with decisive steps on the customer side, distribution, and especially product offerings,” said Kering CEO Luca de Meo.

Pressure on the luxury fashion sector occurred after a period of rapid growth that ended in 2022. The surge in demand during the pandemic once drove price increases, but subsequently led to weakening consumer purchasing power, especially in major markets like China.

Amid global uncertainty and unrelenting geopolitical conflicts, market players are now watching the recovery strategies that Kering will outline at its upcoming Capital Markets Day.