This podcast episode, recorded at the Morgan Stanley Luxury Conference in Paris, discusses the moderation of the luxury goods market's post-pandemic boom. Eduoard Aubin, head of the Luxury Goods team at Morgan Stanley, explains the market's contraction, citing factors such as a shift towards experiences over material goods, overstocked closets from the pandemic, and potentially excessive price increases pricing out middle-income consumers. Key debates among companies and investors center on the economic outlook for China and the U.S., the impact of reduced international travel by Chinese and American consumers, and the affordability of luxury goods for the middle class. Arunima Sinha, from Morgan Stanley's Economics teams, adds macroeconomic perspective, noting that tariffs and economic uncertainty will weigh on growth and consumer spending, particularly impacting luxury consumption due to its reliance on wealth effects and consumer confidence.
