Are luxury stocks back in fashion?

Luxury stock valuations have endured a rollercoaster period over recent years due to inflation concerns, China’s recovery, and post-pandemic demand. Investors currently see US consumer appetite and China’s demand recovery as the main factors affecting the sector. Demand for the rest of 2025 is predicted to be low, as fixed costs and increased marketing spend continue to impact companies’ margins. Additionally, there is pressure on brands to manage inventories and avoid discounting. Experts believe that these issues will not continue into 2026, breaking the cycle of weak demand and making...