Top executives from Prada, Coach, EssilorLuxottica, and Value Retail are observing a stabilization in Chinese luxury demand after months of volatility.

This comes despite broader reports of weaker discretionary spending by Chinese consumers both domestically and abroad.

During the coronavirus pandemic, China was on track to become the world’s largest luxury market.

Since then, high youth unemployment, property downturns, and reduced household confidence have weighed heavily on middle-income shoppers.

Signs of Recovery

Speaking at the JPMorgan Global Luxury and Brands Conference in Paris, Prada CFO Andrea Bonini expressed cautious optimism.

“We do see things stabilizing, indeed,” Bonini said.

He added that structural trends in the industry remain intact and that a fully “normalized” luxury market may only emerge in 2026.

Coach CEO Todd Khan highlighted strong momentum for the brand, noting 20% growth in its China business this quarter.

Khan attributed this to Coach’s appeal to cautious consumers and a longstanding presence in China, including co-design studios and regional hubs such as Wuhan.

“So, 40% of our growth is international. For international, those U.S. tariffs have no impact,” he said.

Broader Industry Trends

Earnings reports from other luxury brands reflect the improving sentiment.

UBS research shows Burberry’s Greater China sales rose 3% last quarter, surpassing expectations, while Richemont’s sales to Chinese customers were almost flat, marking a sharp improvement from previous declines.

LVMH also reported 1% growth in Q3, its first quarterly increase this year, with CFO Cécile Cabanis noting that “mainland China turned positive in Q3.”

Analysts, however, caution against assuming a full rebound.

Chiara Battistini from JPMorgan stressed it is too early to declare a complete turnaround, citing a favorable comparison base and spending repatriation rather than broad acceleration.

Localisation and Innovation Drive Growth

Luxury brands are increasingly localizing strategies to compete with domestic Chinese labels.

Marketing, product cycles, and design choices are being tailored using local consumer data, especially on platforms such as Xiaohongshu and Douyin.

Value Retail, a leading outlet operator, reports strong traction in China, serving aspirational buyers likely to return as full-price customers in the future.

EssilorLuxottica also posted double-digit growth across North America, Europe, and Asia.

“We see consumer not trading down. We see consumers attracted by product innovation,” said CFO Stefano Grassi.

While the market shows stabilization, executives agree that a full recovery is still some way off.