The combined market capitalisation of LVMH, Hermès, Kering, Richemont, Prada and Moncler has dropped by €251 billion since the start of the year, according to Financial Times calculations.

LVMH has taken the largest hit at €131.6 billion, followed by Hermès at €93.3 billion. The Hermès figure stands out because the Paris house has long been treated as the sector’s safe haven, the name investors held when everything else wobbled. Its shares fell almost 5% on Thursday after quarterly numbers showed weaker than expected growth, held back by soft demand in China.

China remains the core problem. For more than ten years, Chinese shoppers drove luxury’s expansion, and the recovery that many analysts expected has stalled. Luca Solca at Bernstein said the pause in Chinese consumer demand has fed through into poorer results, pressure on share prices and a sweeping reassessment of valuations across the industry.

The picture in the US is less comfortable than it was. American spending has helped carry European houses this year, supported by a surge of wealth linked to artificial intelligence. But Citi data shows luxury spending there fell by at least 4% between July and September, and analysts have questioned how long the market can lean on a narrow group of very wealthy buyers while fewer aspirational shoppers come through behind them.

The scale of the slide becomes clearer over a longer period. Goldman Sachs figures put the sector’s total market value at €888.9 billion at its 2024 peak and €499.4 billion in 2026. Geopolitical tension, US tariffs, a weakening Chinese economy and unsteady equity markets have all contributed.

Broader market volatility has added to the pressure, but the underlying issue is more basic. Two of luxury’s biggest sources of demand are cooling at the same moment, and so far no group has found a way around it.