Middle East War Fires, Burning into Hermès

The first quarter of the luxury goods industry experienced a historic plunge in stock prices. Gucci's first-quarter sales fell by 8%, and after the earnings report was released, the parent company Kering's stock price dropped by 10%. Of course, this is not the biggest loser. The biggest loser is Hermès, down 14%.
As of the end of March, the total market value of the luxury giants evaporated by nearly $100 billion. The fundamental reason is the Middle East war.
The ongoing conflict in the Middle East directly triggered a global luxury cold wave. The once bustling Dubai luxury shopping district saw a sharp decline in foot traffic, becoming quiet and desolate.
Not only Dubai, but also Paris. On March 7, 2026, in downtown Dubai, United Arab Emirates, a man sat alone at an empty outdoor café.
The Middle East was originally the fastest-growing market for luxury goods worldwide. The war caused local sales to plummet, and Middle Eastern wealthy individuals reduced their trips to Europe, leading to a significant drop in consumption at stores in Paris and other European cities.
Additionally, inflation increased the cost of living for ordinary people, stock market volatility squeezed the spending of the wealthy, and geopolitical conflicts pushed up energy raw material costs. The luxury industry is under pressure from both ends.
Once upon a time, myths like "bags cure all diseases" and "buying bags is equivalent to wealth management" created an illusion: that top luxury brands could withstand cycles and resist risks. Now, as the Middle East war rages on, people suddenly realize that true top luxury is never leather and metal, but peace.