Tax rules affecting some wealthy owners of offshore trusts in China, weaker performance figures from shopping centres in the country, and a third consecutive monthly decline in card spending on luxury goods in the US are heightening uncertainty for global luxury brands. This is reported by Reuters ahead of the quarterly results announcements by LVMH, Kering and Hermès.
Briefly about the main points
- Reuters attributes the new risks facing the luxury sector to weak demand in China and the US.
- The deadline for declaring and paying certain taxes in China is 22 October.
- Citi has recorded its third consecutive decline in luxury card spending in the US.
- LVMH will publish its quarterly revenue on 12 October, whilst Kering and Hermès will do so on 22 October.
Tax deadline for some wealthy Chinese
Pros. data According to Reuters, at the end of July, China tightened the rules on the taxation of assets and income held in offshore trusts. For some high-net-worth individuals who have used such structures, the deadline for declaring and paying taxes for previous years is 22 October 2026. Reuters had previously reported that a 20 per cent levy was involved; however, no primary legislation is available in the materials provided.
Chinese shoppers account for around one-fifth of global luxury goods purchases. The head of the Shanghai-based consultancy Trinity Asia Alexis Bonhomme believes that, in the run-up to the deadline, some customers may have more limited liquidity and may postpone purchases. This is an expert’s assessment, rather than an established cause-and-effect relationship between the new rules and brand sales.
What shopping centres in mainland China reveal
Analysts at Bernstein reported a sharp slowdown in growth within their sample of shopping centre sales in mainland China in June–July. In July, according to the specialist financial publication, the sample showed a year-on-year decline of 12%. This indicator reflects data from a specific sample of shopping centres, rather than the country’s entire retail market.
Two unnamed sources speaking to Reuters, who are familiar with sales at Chinese shopping centres in the third quarter, described overall conditions as weak, but pointed to significant differences between brands. According to them, Brunello Cucinelli and Loro Piana outperformed the better-known brands Louis Vuitton and Gucci. These figures have not been independently verified in the companies’ quarterly reports.
The market weakness has a background: Bain & Company estimated that the market for personal luxury goods in mainland China would contract by 3–5% in 2025. At the same time, the firm had observed signs of stabilisation from the third quarter onwards, so this backdrop alone does not explain the trends seen in 2026.
US spending is also sending a weak signal
Data from Citi provided a further boost to the sector: Americans’ credit card spending on luxury goods fell for the third consecutive month in September 2026. According to Reuters, the decline in September stood at 6% year-on-year, following a fall of 4% in July and August. Card data is an indicator of a portion of consumer spending, rather than a complete measure of all luxury sales in the US.
Reuters estimates the global luxury goods sector to be worth $350 billion. The publication also reported that, since the start of the year, shares in LVMH and Hermès have fallen by approximately 40% each, whilst shares in Gucci’s parent company, Kering, have fallen by 29%. Reuters identifies the high-end jewellery segment as one of the relatively more resilient sectors, where buyers favour items made from gold and other precious materials, which are perceived as assets with enduring value.
The next figure to look at is companies’ quarterly turnover
LVMH is set to be the first of the major European players to publish its third-quarter revenue figures — on 12 October. Kering and Hermès have scheduled their announcements for 22 October. It is these reports that will enable us to compare preliminary demand indicators with the companies’ actual revenue.
According to Reuters, the consensus forecast among analysts predicts quarterly revenue of €18.5 billion, or $20.7 billion, for LVMH, which is 1% higher than a year earlier. This is a forecast, not an official result. Reuters also reported that Kering had already warned analysts of a further decline in Gucci’s figures.
