As Markets Waver, Strategy Sharpens –
Parsing the Numbers Behind the Headlines
I always find it disheartening when media plays into the drama of declines without appreciating that declines are simply a part of the process. Life has ups and downs, not all ups. Otherwise it would be a bore.
So… are we in a decline? Yes.
Will we all be ok? Yes.
Will media perpetuate a decline with dramatic headlines? Certainly.
Media often forgets that your success is tied to theirs. We’re all part of the same ecosystem. And frankly, media has never done your job—well, not true in my case. I’ve been in that spot far too often in my career, and I’ve seen boardrooms turn into war rooms at the first sign of economic crisis. And yes, those lights are blinking red again thanks to the tariff turmoil.
Right now, two things are happening simultaneously. First, brands are talking about streamlining expenditures—completely understandable when forced price increases hit and consumer behavior becomes volatile. Easier to manage your own budget than try to influence one in flux. Second, others are scouting for opportunities—whether it’s circumventing tariffs with new industrial strategies or finding untapped sales channels. The same truth holds for both: you’re not paid to swing a hammer, you’re paid to think. Think of how to make money or how to save it. That’s where the value lies.
It’s needed now more than ever.
The latest figures from LVMH aren’t exactly comforting. The Dior-to-Dom Pérignon luxury powerhouse reported a 5 percent drop in fashion and leather goods revenue for Q1—its third consecutive decline. Outside of the pandemic, that’s never happened. Unsurprisingly, the market didn’t love it: shares fell 7 percent on the news. Arnault may be staying on until 85, but the nearterm path ahead won’t be an easy stroll.
Kering continues to wobble, with Gucci still in freefall and the group’s market cap nearly halved over the last 12 months. Burberry hasn’t been able to spark a turnaround either, despite the appointment of Joshua Schulman and a renewed focus on British outerwear.
And then there’s Switzerland, where the Federation of the Swiss Watch Industry reported an 8.2 percent year-on-year decline in exports for February, only marginally improving in March. If that wasn’t enough, diamond traders are sounding the alarm as Trump’s 10 percent tariffs on imports grind their business to a halt—tough news considering the US accounts for half of global diamond jewelry sales.
On the macro front, the US and China—the dual engines of luxury consumption—are both misfiring. In China, the luxury appetite is curbing under economic slowdown and a housing crisis. In the US, Trump’s sweeping new tariffs are poised to hit European and Swiss luxury goods hard. Hermès will add a tariff premium across its U.S. stores starting May 1, stacking it on top of the usual 6–7 percent price increase. LVMH is mulling a shift in production stateside to skirt future duties. Arnault has even floated the idea of a US-EU free trade zone, noting that if Europe can’t negotiate cleverly, the fallout won’t just be Brussels’ problem—it’ll hit every boardroom.
Meanwhile, the industry is still managing to eek out some green. Brunello Cucinelli posted a 10.5 percent gain in Q1, driven by strong retail and wholesale performance. Moncler was up a modest 1 percent, beating expectations, with Asia and direct-to-consumer channels pulling more than their weight. Valentino slipped 2 percent last year, with operating profit down 22 percent as it funneled resources into Alessandro Michele’s vision. Shein and Temu, caught in the same tariff dragnet, announced price hikes beginning April 25—right on time for the end of the de minimis tax loophole on May 2.
As we parse these numbers, one thing becomes clear: volatility isn’t going anywhere. But volatility is not defeat. It’s friction. And friction, when channeled, can create energy.
Let others chase headlines. We’ll chase clarity. Because while media may dramatize downturns, we know better. The fashion business has always been a long game—an endurance sport fueled by ideas, resilience, and tenacity.
So take a breath. Take stock. Think. Reimagine. Refocus.
You’ve got this—and we’re here to help.
Warm Regards,
Kenneth Richard
Chief Impressionist
