On a positive note, South Korea is also worth highlighting. Eye-popping bonuses in the tech sector, particularly those awarded to Samsung employees, have made headlines, reflecting the strong performance of the company and other chipmakers amid booming AI-driven demand.
“The tech industry is thriving and driving a pretty strong wealth effect in the country right now,” Madjo says. Department store sales in South Korea jumped 24.5% year-on-year in May 2026, with growth led by international luxury brands. Rising tourist numbers and stronger consumer confidence boosted spending, according to the Ministry of Trade, Industry and Resources. The increase marked the 11th consecutive month of growth, extending department stores’ growth streak that began in July 2025.
South Korea accounts for approximately 6% to 10% of luxury sector sales, with Burberry, Moncler, Bottega Veneta, and Prada among the brands with the highest exposure to the market, according to Madjo.
South Korea could help offset weakness in the Middle East. “The Middle East accounts for around 5% of the sector’s sales, while South Korea represents around 7%. If South Korea performs particularly strongly, it could help offset softer demand in the Middle East,” Bismuth of HSBC notes.
Is the creative reset working?
The Q2 earnings calls will provide an update on the creative reset, with the first collections by the new designers at multiple luxury brands fully rolled out in stores during Q2.
All eyes are on the Dior recovery, led by creative director Jonathan Anderson. Dior is expected to return to growth in Q2, with sales forecast to rise 4%, according to HSBC estimates. This would represent a meaningful improvement on Q1, when sales declined by around 2%. Already in Q1, “Dior improved quite a lot versus previous quarters,” LVMH CFO Cécile Cabanis told analysts during the group’s earnings call. Momentum is expected to strengthen in the second half of the year.
