LVMH Shares Drop 16%, Hermès Loses Roughly 20%, and Ferrari Drops 15% amid Iran conflict

The ongoing Iranian war has sent shockwaves through the global luxury goods market, erasing nearly $100 billion from the market value of major luxury companies, analysts report.

Shares of top luxury brands have plummeted between 15% and 20% since the conflict began. 

LVMH fell 16%, Hermès lost roughly 20%, and Ferrari dropped 15%, prompting the Italian automaker to temporarily suspend deliveries to the Middle East. Other luxury carmakers, including Bentley and Maserati, have also paused shipments due to logistical and security concerns.

Frank Steven Walser, CEO of Bentley, told investors in a recent call, “At the moment, production is unaffected, but people in the Middle East are understandably focused on other matters rather than buying a new Bentley.”

The turmoil underscores the increasing importance of the Middle East for luxury sales and the wealth economy. While the region accounts for only about 6% of global luxury sales, it is now growing fast enough to rival Japan’s 9% share. Dubai, in particular, drives 80% of the UAE market’s growth, which in turn contributes over half of the region’s luxury sector expansion, according to Morgan Stanley research.

Luca Solca, luxury goods analyst at Bernstein, noted, “The Middle East was the fastest-growing luxury market last year, expanding 6%–8%, compared with relatively stable global growth.”

The conflict comes at a sensitive moment for luxury brands, which had hoped 2026 would bring a recovery after two years of sluggish sales. While the Chinese market is showing slight improvements, and U.S. consumers remain strong due to wealth gains from AI and stock market growth, geopolitical uncertainty now casts a shadow over near-term profits.

UBS analysts led by Zuzana Busch described investor sentiment as “the most pessimistic in years,” warning that heightened uncertainty could delay expected recoveries in key performance indicators.

Volatility has resulted in massive valuation losses, with LVMH and Hermès alone shedding over $40 billion each. Solca warned that if Middle East sales drop by half in March,  the worst-case scenario,  quarterly growth could decline by roughly one percentage point for several luxury firms. However, he added that the impact might be less severe, as many companies continue direct sales to affluent clients and delivery services, while wealthy consumers who have left Dubai may still spend on luxury goods elsewhere.

“Even if the drop is limited to March, it would be a relatively ordinary event,” Solca noted.

The Iranian conflict has thus revealed the fragility of luxury stocks to geopolitical shocks and highlighted the growing strategic importance of Middle Eastern markets for global luxury brands.