There is a window in town with a bag on a pedestal, lit as if it were a small painting. I do not want the bag. I want to understand why the lighting is so sure of itself, and why I slow down anyway.
On 27 July, LVMH — Louis Vuitton, Dior, Tiffany, Bulgari — said second-quarter sales rose 3% organically, in line with what people had expected. US sales were up 6%, helped by newly rich tech and AI money. Watches and jewellery jumped 11%. Europe was weaker because the Iran war hit tourism. Revenue for the first half of 2026 was €38.6 billion. A year earlier, full-year 2025 revenue had slipped to €80.8 billion. Bernard Arnault had already warned that 2026 “won’t be simple.”
It has not been simple. Holiday flights got more expensive and more awkward, which is a strange background for a shop window that still looks calm. And still the handbags sold, especially in America, to people whose money arrived recently and wanted a logo to prove it had arrived.
In Business this is branding, and it is also income elasticity, a phrase I liked as soon as it stopped sounding like a rubber band. Elasticity here means how much demand moves when income moves. Extra income does not make you eat twice as much ordinary bread. Extra income can make you buy the watch you were only looking at. Demand for luxury can hold up, or even jump, when other spending cracks, because the point of the object is not only the object. The point is to be seen having paid, or to feel, privately, that you are the sort of person who can.
I keep putting that next to the supermarket own-brand tin. Same species of decision, different lighting. One fight is to stay cheap so nobody leaves. The other is to stay expensive on purpose, so the right people stay. Both are about who you think you are in the aisle, except one aisle has a pedestal.
Europe being weaker makes sense in a grim way. If tourists cannot fly in, or will not pay the new fares, the shops that live on people passing through a city go quieter. The US number is the other half of the same year: some people got richer from tech and AI, and they still wanted jewellery. I do not know those people. I know the window, and I know the difference between a logo bag and a bag that only has to carry books.
I thought of the girl in The Nightingale and the Rose, the one who wanted jewels, not the flower that cost a life. She would have understood the pedestal. She would not have understood the flight prices, and she would not have cared. That used to annoy me as a character note. Now it looks like a customer group.
I am not going to buy the bag. I am going to keep walking past the glass and asking the finance question I also ask in literature: who is this priced for, and what do they think they are buying when they say yes?
Arnault said the year would not be simple. He was right. For some tills, it was still good enough.