A nascent rebound in Chinese consumer appetite, paired with resilient U.S. spending, is reigniting the luxury sector, with Richemont , Salvatore Ferragamo , LVMH and Ralph Lauren are emerging as key names to watch. Chiara Battistini, head of European luxury and sporting goods at J.P. Morgan, said the bank continues to favor Richemont, which has been its top pick in the luxury space for the past three years. Shares in the Swiss company jumped as much as 7% in early trade on Friday after it reported group sales of 10.6 billion euros ($12.3 billion) for the six-month period to the end of September — a 5% increase from a year earlier, and ahead of analysts’ expectations. Battistini highlighted how Richemont’s jewelry subsidiaries Cartier and Van Cleef & Arpels have successfully capitalized on recent precious metal inflation. “Jewelry is a category that has generally outperformed over the past couple of years… even in this phase of normalization,” Battistini told CNBC’s “Europe Early Edition” on Wednesday, ahead of Richemont’s results. “They are the two brands in jewelry that are showing some of the best momentum.” Elsewhere, amid cautious market sentiment on turnaround stories, Battistini said Salvatore Ferragamo is now emerging as a standout name to watch. The Italian group has shown increasingly strong signs of recovery — albeit from a depressed base — after posting its first positive quarterly growth since 2022. “The environment and consumer backdrop is not particularly favorable to support turnaround stories,” Battistini explained. “Ferragamo has showed, especially in the last quarter, quite a nice inflection back to positive territory.” Ferragamo shares have advanced 14.3% year-to-date, having been on an upward trajectory since touching a five-year low in August. SFER-IT YTD mountain Salvatore Ferragamo. Battistini said third-quarter trading updates among luxury stocks have been “encouraging,” with the sector starting to show signs of improvement. She was encouraged by the stabilization and “green shoots” emerging within Chinese luxury demand during the period. But she cautioned that it may be too early to describe it as a turnaround and “complete inflection.” However, she added that strong U.S. consumer spending in the third quarter was a “big positive surprise” and “definitely the highlight” of the three-month period. Battistini said the key driving factors behind wealth generation remain solid, pointing to the performance of stock markets, crypto, and precious metals. “All of that is very supportive of the American consumer,” she added. ‘Material opportunity’ Meanwhile, LVMH said Wednesday that its watches division — home to TAG Heuer and Hublot — will take a minority stake in Swiss manufacturer La Joux-Perret. Bank of America noted that the Paris-listed group — the world’s largest luxury conglomerate — saw a 13% acceleration in Chinese luxury demand in the third quarter, rising from a -16% low point in the second quarter to -3%. Shares in LVMH, whose extensive portfolio includes Louis Vuitton, Christian Dior, Moet & Chandon and Givenchy, were up almost 0.7% on Friday, approaching a six-month high. The group posted 1% organic year-on-year growth in the third quarter, rebounding from two consecutive quarterly declines, with revenues reaching 18.3 billion euros. CFR-CH YTD mountain Richemont Matthew Boss, head of U.S. retailing research at J.P. Morgan, highlighted Ralph Lauren as having done “a really great job.” Speaking to CNBC’s Charlotte Reed at J.P. Morgan’s Luxury conference in Paris on Thursday, Boss said that the bank’s top-down view on luxury is more positive than the broader consensus. Singling out Ralph Lauren, Boss said the brand continues to have “a lot of runway looking forward,” holding just 2% market share in “a very fragmented backdrop.” “If you think about what Ralph has really built out, women’s is still a material opportunity, handbags and outerwear [and] growth opportunities on top of this strength with mens.” A complex sector As the U.S. and Switzerland edge closer to a deal that would lower President Donald Trump’s 39% tariffs, luxury will continue to be keenly watched by investors. Bruno Verstraete, founder of Nautilus Wealth Management, said luxury remains a complex sector, noting the ongoing tariff discussions and the important role played by Asian demand. “Because of the tariffs being announced, there has been quite some pre-emptive purchases and stocks that were put in the U.S. that will influence the sales and profit margins going forward,” Verstraete told CNBC’s “Europe Early Edition.” “But when that normalizes, luxury is still in a good place to continue to grow because, in the end, the global wealthy people are still growing quite substantially and there Asia is clearly playing a role as well. Seeing that there is an uptick in the growth in Asia, this sector will continue to do well given the big decline it saw earlier in the year.”
