By Andrea Figueras

Shares in European luxury companies fell after some of the industry's big players said that war in the Middle East weighed on sales, dimming hopes of a sector rebound.

Parisian fashion house Hermes on Wednesday reported first-quarter revenue below market expectations, citing geopolitical tensions and reduced tourism stemming from the Middle East conflict. The Birkin-bag maker's results came days after LVMH, the French luxury conglomerate that houses Louis Vuitton and Dior, flagged a disrupted environment mainly due to the war.

Kering, the parent group of Gucci and other luxury fashion brands, meanwhile said geopolitical tensions weighed on store traffic as it reported no growth in revenue over the first quarter.

Hermes shares fell as much as 14% in European morning trading, the sharpest intraday fall since the group first listed more than 30 years ago. Shares in Kering dropped around 9.5%. Italian rivals Moncler and Salvatore Ferragamo slid more than 2%, while Swiss companies Richemont and Swatch Group traded around 2.4% lower. Other peers in the sector including Brunello Cucinelli, Prada and Burberry also recorded losses.

This was meant to be a recovery year for the luxury sector after a lengthy period of falling demand and sluggish sales. But that hasn't transpired, Interactive Investor's Victoria Scholar said.

"The Iran war and currency fluctuations have proven to be painful headwinds for Hermes," she wrote. A slowdown in global tourism spending, coupled with a squeeze on consumer sentiment as inflation spikes once more, is creating a perfect storm for the sector, Scholar said.

Hermes said its performance in the Middle East has been "significantly impacted" by the war, while a slowdown in tourism also hit its results in France, where more than 50% of sales are linked to travelers.

The conflict has also weighed on sector-leader LVMH, which said this week that its overall revenue fell around 1% over the first months of the year.

Write to Andrea Figueras at andrea.figueras@wsj.com

(END) Dow Jones Newswires

April 15, 2026 05:48 ET (09:48 GMT)

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