China's wealth tax push deepens the luxury sales slump

China's push to tax offshore wealth is compounding an already difficult stretch for luxury brands in the country, according to CPP-Luxury, with sales at the 25 largest luxury names showing renewed declines. The tax campaign appears to be prompting wealthy Chinese consumers to pull back broadly, with effects visible not just in luxury boutiques but in stock market activity and casino revenue, suggesting a wider chilling of discretionary and status-linked spending among the country's richest households.

This matters because China has been the single biggest swing factor in global luxury demand for over a decade, and the industry's recovery narrative for 2026 had rested partly on hopes that Chinese consumption would stabilise after several rocky years. A policy-driven pullback, rather than a purely cyclical one, is harder for brands to plan around. Discounting, store rationalisation and diversification into other markets such as the Gulf, Japan and the US have all been tried, but none replaces the scale of Chinese demand at its peak.

The read for maisons and groups reporting later this year is that China guidance will likely stay cautious, and that any recovery could be delayed further if enforcement of the wealth tax intensifies or spreads to other forms of asset scrutiny. Watch for how LVMH, Kering, Richemont and other majors address China explicitly in upcoming results commentary, and whether any brands announce further store closures or repositioning in the market as a direct response.

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