Changes in currency exchange rates have discouraged American and Chinese travelers from spending, the paper writes
Luxury brands have reported declining sales in Europe and Japan as American and Chinese tourists, once major drivers of growth, have cut back on overseas spending, according to the Financial Times.
Last year saw a surge in luxury sales fueled by tourist activity, as Chinese shoppers flocked to Japan when the yen was at a 30‑year low, the paper wrote on Monday. Meanwhile, American consumers benefited from a strong dollar and increased their luxury spending in Europe.
Those trends have reversed in 2025, as the yen has strengthened and the US dollar weakened amid tariffs imposed by US President Donald Trump, the FT noted.
Speaking to the paper, Cécile Cabanis, chief financial officer at LVMH, which owns Louis Vuitton and Dior, attributed a 9% organic decline in Q2 sales for its fashion and leather goods division to changing tourist patterns. “Spending by American tourists slowed down very strongly,” she said, adding that declining tourist sales in Japan could not be offset by local demand.
The FT noted that US demand could weaken further amid expectations that imported goods will become more expensive due to Trump’s tariffs. Investment firm Bernstein revised its 2025 luxury revenue forecast from 5% growth to a 2% decline to reflect this outlook.
Bernstein analyst Luca Solca said the downturn in tourist shopping points to broader problems in the industry, which raised prices beyond inflation during years of strong demand. “Luxury consumers are still looking for value – Chinese tourists are not in Japan because they want to go see Mount Fuji,” he is quoted as saying. “Too many luxury brands pushed too many price increases.”
Despite market pressure, brands like LVMH have been hesitant to adopt discounting strategies, maintaining their focus on exclusivity and high margins through premium pricing.
According to a Bain & Company report from last year, the global luxury customer base contracted by roughly 50 million consumers between 2022 and 2024, declining from approximately 400 million to 350 million. It attributed the decrease to economic uncertainty and rising prices.
