European luxury brands have hit an inflection point that may impact the sector’s entire life cycle – and US tariffs on China could accelerate M&A.

Many European luxury brands have long operated on a Euro-branding model while actually producing their high-end goods in China. While many companies have been pushing to move production closer to home already, US tariffs on China could speed up that process.

Chanel, for example, recently purchased two textile manufacturers out of Italy, Mantero and Grey Mer, to secure supply chains. But the US, one of the luxury sector’s biggest markets, is still threatening tariffs on Europe itself, potentially leading to a shift not in just manufacturing, but in consumer sales and regions of focus.

Arezki Yaiche, Mergermarket’s France bureau chief, joins Dealcast host Julie-Anna Needham to discuss the outlook for the European luxury sector including:

• Why luxury brands could shift to focus on new markets like the UAE and Singapore
• Which deals follow the trend of localizing manufacturing, like Prada’s recent purchase of Versace
• Which brands may consider moving production to US manufacturing sites
• Why we could see more non-core asset divestitures and who could consider those divestitures

All this and more in this week’s Dealcast.