Supporting luxury brands' price discipline amid slowdown

Despite the sales slump, many analysts argue that luxury brands are right to hold the line on prices and avoid markdowns. The strategy protects the exclusivity and cachet that underpin the industry's profit model. 'Discounting would be a betrayal of the brand's DNA,' said a luxury retail consultant. In past downturns, brands that slashed prices struggled to regain prestige later. The current quiet period, while painful for sales staff, allows houses to clear inventory without damaging their image. Moreover, the slowdown is partly cyclical: China's economy is expected to recover, and the euro may weaken, bringing tourists back. Brands like Hermès still command waiting lists for their most coveted products, suggesting demand at the top remains solid. The pain is concentrated in mid-tier luxury lines that had overexpanded. By maintaining discipline, the industry is betting that patient shoppers will return, and that those who do will appreciate the unchanged quality and status signals. This view holds that short-term sales volume matters less than long-term brand equity, and that the current adjustment is a necessary correction after the overheated post-pandemic rush.