Q1 2025 PRMC Luxe Index
Review & Prospect

Jun 18, 2025

Empowering investors to navigate evolving market trends, respond agilely to short-term fluctuations, capture key opportunities, and chart a new course for luxury growth guided by long-term value.

Luxury in Transition:
Defining the Next Chapter of Growth

In the first quarter of 2025, the global luxury industry operated under mounting pressure amid escalating geopolitical tensions and fluctuations in international trade. The inauguration of the new U.S. administration brought a pronounced shift in policy direction, with unilateral foreign strategies exacerbating geopolitical frictions and aggressive tariff measures further destabilizing global supply chains. Against a backdrop of intensifying external risks, consumer confidence among global high-net-worth individuals (HNWI) and the middle class weakened once again. Coupled with rising operational and sales costs, the luxury sector faced mounting pressures for valuation recalibration. As a result, related indices entered a new phase of volatility, and overall market sentiment turned increasingly cautious.

The PRMC Luxe Index closed the first quarter at 1,626.94 points, declining by 22.44 points (-1.36%) over the period. Its performance lagged behind the MSCI ASIA PACIFIC and EURO STOXX 100 indices but outperformed major global benchmarks such as the MSCI ACWI and S&P 500. At the sub-index level, the Core Luxe Index (+2.05%) recorded a counter-trend increase, the Mass Luxe Index (+0.65%) remained stable, the Ultra Luxe Index (-4.10%) edged lower, while the Experiential Luxe Index (-12.79%) saw a notable retreat.

At the individual stock level, performance divergence among companies became increasingly evident during the quarter. Dassault Aviation, Richemont, and Hermès delivered strong results, with share prices rising notably, whereas Tesla, Burberry, and Rémy Cointreau underperformed relative to the beginning of the year.

Those who discern the trends prosper; those who capitalize on them advance. As the macroeconomic environment continues to evolve, global economic uncertainty is expected to intensify further in the second quarter, potentially leading to greater fluctuations in investor confidence. Index performance is likely to experience periodic volatility as a result. Meanwhile, Hermès has recently announced plans to raise prices across its U.S. portfolio in an effort to offset rising costs through pricing adjustments. As the impact of new tariff policies gradually takes hold, more luxury brands may follow suit by recalibrating their regional pricing strategies.

Looking ahead, whether global economic stability can be restored and whether the Federal Reserve maintains its tightening stance will be pivotal variables influencing luxury sector valuations and capital market sentiment. The ongoing evolution of index performance, shaped by macroeconomic policies and market expectations, remains a critical area for continued close observation.