in Europe. The selloff rippled across the sector. Shares of Kering, Burberry, and Richemont all slid, indicating growing anxiety among investors. It’s not just about softer sales. The industry’s outlook is now clouded by geopolitical tensions, recessionary fears and an unpredictable US trade agenda. Sales slump  While European sales held up, both the US and Asia (excluding Japan) turned negative, down 3 per cent and 11 per cent, respectively.  LVMH’s CFO Cécile Cabanis attributed the drop in US sales to weaker demand for wines and spirits as well as for perfumes and cosmetics, noting that Amazon’s aggressive pricing strategy had slowed Sephora’s e-commerce momentum. The group’s sales of fashion and leather goods, which accounted for 79 per cent of profit last year, were down 5 per cent. The wine and spirits sector saw the steepest decline, down 9 per cent. Meanwhile, sales of the perfume and cosmetics group and the selective retailing group fell 1 per cent.  Still, Cabanis tried to strike a note of calm on Monday’s earnings call, saying there had been “no major change in trend” over the past six months. But even she acknowledged a growing fragility among “aspirational consumers”, a segment that has become increasingly cautious amid rising interest rates and economic uncertainty. Meanwhile, the group continues to place big bets on culture and brand storytelling, especially in Asia. Louis Vuitton’s collaboration with Japanese artist Takashi Murakami, 20 years after their genre-defining first partnership, has been met with enthusiasm. Loewe’s Crafted World exhibit recently landed in Tokyo, while Dior’s Designer of Dreams exhibition drew crowds in Seoul. At Loro Piana, the brand is marking its centenary with an exhibition in Shanghai. Titled ‘If You Know, You Know: Loro Piana’s Quest for Excellence’, the show at the Museum of Art Pudong runs through early May and highlights the house’s intimate relationship with China.  But creative momentum alone may not be enough to counter macroeconomic drag. Tariff threats and recession fears  If sluggish demand weren’t enough, the political climate in the US has introduced a new wildcard. President Donald Trump’s recent announcement of sweeping tariffs on luxury goods from the European Union and Switzerland has introduced fresh uncertainty into an already fragile landscape. The proposed duties, ranging from 20 per cent to 31 per cent, would directly hit flagship products from Louis Vuitton, Hermès, Chanel, and others. Although the rate was later reduced to 10 percent during a 90-day cooling-off period, the damage was already done: investor confidence sank, and luxury groups were left scrambling to reassess their North American pricing and inventory strategies. Luxury brands have historically wielded great pricing power, enabling them to raise prices without denting demand. But this time, the calculus may be different. With middle-class consumers pulling back and affluent shoppers growing cautious, the industry risks a margin squeeze: pass higher costs to consumers, and they may balk; absorb the tariffs, and profitability suffers. A leadership shuffle and a strategic reset Behind the scenes, LVMH has quietly begun reorganising.  Earlier this month, the group made a series of high-profile leadership changes across three of its flagship brands, Louis Vuitton, Kenzo, and Fendi. Most notably, Ramon Ros, previously President and CEO of Louis Vuitton in Mainland China, was tapped to lead Fendi starting this July. Charlotte Coupe has been named CEO of Kenzo, effective next month. Meanwhile, at Louis Vuitton, Daniel DiCicco has been appointed president and CEO of Mainland China, effective this month. Based in Shanghai, he will report to David Ponzo, chief commercial officer of Louis Vuitton.  In March, Frédéric Arnault was named CEO of Loro Piana, the Italian cashmere label majority-owned by LVMH since 2013. He will assume the role on June 10. Further reading: How LVMH is preparing for the future with its latest leadership moves.