Europe’s luxury industry, producing handbags, shoes, fashion items and champagne among other prized goods, is highly exposed to the U.S. market, which was seen as the sector’s best hope for growth this year as Chinese demand lags.
The sector’s largest groups sell roughly a quarter of their products to U.S. consumers, while exposure among smaller brands varies, from 14% at outerwear company Moncler to 46% at sandals-maker Birkenstock.
“If you want to create a factory in the U.S. to overcome the problem of the tariffs, it’s just impossible right now ... you don’t have the people, the know-how,“ Bain partner Claudia D’Arpizio said at an industry event on Thursday.
“We therefore believe that pricing will likely be the luxury goods industry’s main way of mitigating tariffs,“ S&P analysts said in a recent note.
France’s luxury industry - the world’s largest - employs over 600,000 people, data from the economy ministry shows.
The two countries are the largest exporters of most luxury products to the United States.
In 2024, France shipped sparkling wine including champagne worth 890 million euros ($1 billion) as well as grape brandy, mostly cognac, worth 1.27 billion euros to the U.S., United Nations data shows. Italy meanwhile exported 770 million euros worth of leather handbags.
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