Luxury groups eye second-half rebound as VICs and newness cushion a fragile China

Results from Europe's leading luxury groups in the first half of the year pointed to a sector finding its footing again, according to WWD. The common threads across reporting houses were an intensified focus on very important clients, the value of genuine product newness in driving spend, and continued caution around China, where recovery remains patchy and inconsistent across categories and cities.

The reliance on VICs marks a deliberate strategic choice rather than an accident of the cycle. As aspirational and entry-level luxury spending has cooled since the pandemic-era boom, houses have redirected resources toward the smaller cohort of top-tier spenders who account for a disproportionate share of revenue. That means more private appointments, personalised service and exclusive product drops aimed at retention rather than acquisition, a shift that has implications for store formats, staffing and marketing budgets across the industry.

The newness effect is equally telling. Groups that refreshed collections and launched new silhouettes or categories saw better traction than those leaning on continuity lines, reinforcing that creative renewal, not just brand heritage, is what moves the needle with today's luxury consumer. This puts pressure on creative directors and product teams to keep pace with a faster cycle of releases, even in categories that have traditionally prized slow, considered design.

China remains the biggest variable for the second half. Some categories and cities are showing signs of stabilisation while others continue to lag, meaning a single narrative of recovery does not hold across the market. Executives will be watching whether the improved VIC-driven momentum in Europe and the US can be replicated domestically in China, and whether any broader stimulus or consumer confidence shift materialises before year end.

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