Luxury demand shows cracks
LVMH shares fell about 28% in the first quarter, and retailers in Dubai reported steep March declines—Mall of the Emirates sales down 30–50% and Dubai Mall footfall reportedly off by about 50%—as geopolitical tension cut tourist spending. Analysts highlighted the Iran conflict as a material pressure on tourist‑driven luxury revenues heading into earnings season ( ).
LVMH entered April under pressure after its shares fell about 25% to 28% in the first quarter and Dubai luxury sales weakened sharply. (marketscreener.com; vogue.com) In Dubai, brands at Mall of the Emirates reported March sales down 30% to 50% from a year earlier, according to a person cited by Reuters. Dubai Mall footfall was also down about 50%, the same report said. (usnews.com; businessoffashion.com) Reuters reported the drop was tied to the Iran conflict, which cut tourist traffic into a market that depends heavily on visiting shoppers. Analysts told Vogue the conflict had become a material risk for tourist-driven luxury revenue heading into first-quarter earnings. (usnews.com; vogue.com) That hit lands in one of luxury’s most important growth regions. Bain and Altagamma estimated the Middle East accounted for about 8% of global luxury spending in 2024, and Dubai has been one of the industry’s strongest tourist hubs. (vogue.com) The pressure also arrives after a longer slowdown in the sector. LVMH reported 80.8 billion euros in 2025 revenue, down from 84.7 billion euros in 2024, according to its investor materials. (lvmh.com; lvmh.com) Investors now have a near-term checkpoint. LVMH scheduled its 2026 first-quarter revenue release for April 12, 2026, putting fresh attention on whether weakness in travel retail and tourist-heavy cities is spreading. (lvmh.com) Business of Fashion reported the March pullback was not uniform across the Gulf, with Abu Dhabi’s Galleria mall described as more resilient than Dubai’s tourist-heavy centers. That split points to how much luxury demand in the region still depends on cross-border travel rather than only local spending. (businessoffashion.com; businessoffashion.com) For luxury groups heading into earnings season, the question is no longer only whether Chinese demand recovers or United States shoppers keep buying. It is whether Dubai, one of the few bright spots of the past two years, can still absorb a geopolitical shock. (vogue.com; usnews.com)
