最好的时代，最坏的时代：全球奢侈品——两类奢侈品消费者的故事

Best of Times, Worst of Times: Global Luxury Goods - A Tale ofTwo Luxury Consumers “It was the best of times, it was the worst of times”. The famous opening line of CharlesDickens’ ‘A Tale of Two Cities’ captures a period of contradiction: the French aristocracyindulging in opulence and privilege, the peasantry experiencing poverty and oppression.While 2026 is thankfully not 18th century France, shifting class dynamics remain moretopical than ever, from the US K-shaped economy to the squeezed Chinese middle class. In Luca Solca+41 582 723 126luca.solca@bernsteinsg.com Maria Meita+44 20 7170 0540maria.meita@bernsteinsg.com Consumer polarisation has accelerated post-Covid and would reduce the numberof potential luxury consumers if continues(see Global Luxury Goods: Preparing forConsumer Polarisation - Part 2).Middle-class aspirational consumers in the West haveretrenched under the combined impact of cost-of-living inflation and aggressive luxuryprice increases, while their counterparts in China are facing additional pressure from thereal estate market downturn. In aggregate, this has resulted in c.70 million consumersexiting the market since 2023. Meanwhile, a small cohort of ultra-wealthy VICs, supported Eric Chen, CFA+852 2123 2628eric.chen@bernsteinsg.com Yi-Peng Khoo, CFA+44 20 7676 6822yi-peng.khoo@bernsteinsg.com Alix Turner+44 20 7762 4044alix.turner@bernsteinsg.com This has led the luxury industry to a crossroads(see Global Luxury Goods: The LongView – Social, political and geopolitical dynamics).A recovery of middle class spending,particularly in China, could take the sector back to the historical growth profile of 6-8%OSG, supported by positive volumes and balanced price-mix. However, if the wealthinequality continues to deteriorate, where growth skews toward VICs, brands will like relymore on price and mix, as volume growth will likely be weak or negative. Recent patterns - Selling more to existing consumers will require sustained relevance and a higherinnovation tempo.As the inflow of new middle-class consumers slows, brands mustlean more heavily on their installed base of repeat clients and VICs, who already own theiconic essentials and will only part with additional money for genuinely new and compellingproducts. This is pushing brands to accelerate innovation, whether through categoryexpansion, product refresh or increased brand investment, to remain differentiated, … continued from the first page In a more polarised world, categories that combine strong price depth, highperceived intrinsic value and discretion, while also benefiting from favourablereplacement rates and value/ m3, are likely to emerge as long-term winners.Ashigh-end consumers become more important to overall growth, the ability to offer trulyunique products at the very top of the price spectrum allows brands to substitute tensof thousands of entry-level transactions with a smaller number of ultra-high-ticket sales. Richemont, through its leadership in jewellery, is exceptionally well-placed tothrive under both scenarios (see Richemont: Best Idea First Quarter 2026 - Winner InA Structurally Appealing Category. Outperform).Its flagship houses, Van Cleef & Arpelsand Cartier, combine substantial scale with outstanding price depth, enabling the groupto serve a broad base of aspirational clients at accessible price points while also capturingvery high-ticket jewellery sales that can effectively substitute for lost volumes if polarisation An alternative investment strategy would be to back specialists at both ends of thespectrum.High-end players such as Ferrari, Zegna and Brunello Cucinelli should be wellpositioned to surf the wave of wealth creation and resilience at the high-end (see GlobalLuxury Goods: Preparing for consumer polarisation), while entry-price players, such asInditex, should receive an ocean of consumers that are trading down (see: Retail x Luxury: BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS Questions abound on the long-term rate, trajectory and drivers of global luxury goods demand. If China was to go back to producing wealth to a larger and larger aspirational consumer audience, global luxury goods would goback to being a global middle class play. In that context, best in class mega-brands would once again lead growth and returns(See Global Luxury Goods: The Six Rings of Quality). These would include LVMH with LV, Hermès, Richemont with Cartier and If instead income and wealth inequality continued to increase, the richest consumers would be driving the global luxury marketgrowth, putting smaller and higher brands at an advantage. These would include high-end specialists like Ferrari, Brunello Given its flexibility and credibility to serve both the high-end and the aspirational consumers, we see Richemont thriving in bothscenarios. Which confirms it as our most preferred long-term exposure in the sector. Alternative, investors should also be servedwell by backing specialists at the high end in o