European luxury stocks climb as Gucci, Dior and Bottega Veneta debut new collections

Shares of European luxury players rose on Tuesday, pushing the European luxury index to its highest level since late May this year, as creative debuts at fashion houses and a push for affordability gave investors hope that the sector was set for a gradual comeback.

The rally was led by the major French groups, with Kering, Christian Dior and LVMH rising between 3% and 7% as of 12:20 p.m. GMT, while most of the remaining index constituents gained 1% to 3%. Luxury groups in Europe have been seeking to turn around their fortunes, which had soured as U.S. tariffs and slower demand in China dented their profits. 

New collections were presented last week at Milan and Paris fashion weeks—Gucci and Bottega Veneta in Milan, and Dior in Paris.

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“Investors are very pleased with the new collections that have been presented during the fashion weeks because one of the reasons for the sector’s turmoil since early 2024 has been, among other things, a creativity crisis,” Kepler Cheuvreux analyst Charles Louis Scotti told Reuters.

Equity analysts from Morgan Stanley also bet on the “burst of creativity,” upgrading their recommendations for Kering and LVMH in a note to investors.

Some luxury brands are also reworking their pricing strategies, with more affordable products being pushed onto store shelves, Scotti added.

“All those factors point to a gradual organic sales growth recovery, which will confirm the worst is behind us,” he said.